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Lord McIntosh of Haringey: I knew that but I was hoping not to tell the noble Lord, Lord Blackwell, as he does not want all these panels and all this formality and prescription. However, the damage is done now.

The other two amendments in the group address the question of the representation to the authority of the views of particular groups. Amendment No. 74D addresses the way in which the practitioner panel

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might be advised on the way in which the authority carries out its functions. It envisages a tiered approach of consultants and advisers who are able to reflect the interests of particular groups within the practitioner community.

In the light of what I have said about the fact that the authority has funded research for the panel to the extent of £100,000, I hope that it will be recognised that there is no difficulty as regards spending money where that is necessary, but that the kind of formal approach proposed in Amendment No. 74D goes too far. There is no reason why the practitioner panel should not consult industry representatives. Indeed, where members of the panel do not think that they have enough expertise, it would be sensible for them to speak to those with a more direct interest. The authority itself might consult relevant bodies directly. It might, for example, talk with the Association of British Insurers about matters directly related to the insurance industry. Nothing in the Bill prevents the panel from doing any of these things. However, like the noble Lord, Lord Blackwell, we consider that we must avoid excessive bureaucracy.

Amendment No. 74E would put the small business practitioner panel on a statutory footing alongside the practitioner and consumer panels. The noble Lord, Lord Hunt of Wirral, was right to remind the Committee that the panel already exists and appears to be quite active. I would rather not say so in the presence of the noble Lord, Lord Blackwell, but there is a huge list of panels which the authority has set up. I refer to the Financial Advisory Group, the IMRO Training Standards Panel, the Regulation of Market Abuse Practitioner Group, the Handbook Advisory Group, the FSA Lloyd's Steering Panel and the Lloyd's Panel. I shall stop there, although the list is longer.

Lord Elton: Surely the noble Lord has just demolished the whole case for having a big central panel, which I asked for earlier.

Lord McIntosh of Haringey: I have demolished the whole case for having statutory provision for these panels and a degree of bureaucracy in the way they operate which these amendments would introduce. I do not think that there is anything wrong with consulting. It could be done in the way the noble Lord, Lord Blackwell, suggests; that is, that the authority will have a duty to consult tout court. However, this is the way in which the current position has been interpreted, and surely that is right.

I return to the small business practitioner panel. Quite apart from the fact that there are other panels, I do not want to underestimate the important role of small businesses, which is as clear in the financial sector as it is in any other. As someone who has been involved with a small business all my life, I am well aware of that. However, the amendment would simply beg the question of what other kinds of people should have their own voice. I said earlier that I did not think that it was necessary for the practitioner panel to have representatives of every conceivable category of

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person who might be regulated by the authority. We should not place an obligation on the authority to create different statutory panels for every conceivable group of practitioners.

The arrangements in Clauses 7 to 9 were supported by the Joint Committee chaired by the noble Lord, Lord Burns. In response to a specific recommendation of that committee, the position of the panels has been enhanced by the addition of the requirement that appointment and dismissal of the chairmen should be subject to Treasury approval. We believe that we have the balance right. We believe that these amendments would be too prescriptive. I say to the noble Lord, Lord Saatchi, that I am sympathetic to his arguments, but I do not accept them.

Lord Peyton of Yeovil: I was immensely excited when the noble Lord, Lord Burns, said how important it was that those who take part in a consultation exercise should occasionally receive an echo from the authority that they seek to address. I, for one, greatly admire the skill of the noble Lord, Lord McIntosh. However, his remarks gave the impression that he had never heard of Jones. Jones is an important person in our country; everyone wants to keep up with him. If one finds that one is excluded from a list of people to be consulted, or one is excluded from a list of panels, one will probably feel rather affronted and upset. One finds it hard to explain to one's constituents how one allowed the Government to get away with that and not to accord one the recognition that they have given to everyone else.

I am not against the Bill; it is a splendid attempt to deal with a problem. However, it constitutes a fairly large affair now. I do not think that I am breaking all bounds of forecasting when I say that it is quite likely to be a fairly potent and fertile breeder. By the time it is finished, the rules, procedures, customs and so on that it establishes will constitute a large forest for people to find their way around. Some lawyers will enjoy that very much, but the ordinary citizen will not. I see the difficulty that the Government are in, but I should like to be given some indication of how they intend to get out of it. Having produced a huge amount of material, the Government suddenly say, "Goodness, this is getting awfully complicated. We are getting into a bureaucratic tangle and we must stop it". No one else is allowed to turn on the tap. No one else is allowed any of the largesse which has been handed out so freely to others. I believe that many people will have considerable grounds for complaint. I know that the noble Lord wishes to be fair to everyone. I am trying to express my profound sympathy with his efforts and my earnest hopes that he will be successful.

Lord Blackwell: I am grateful to the Minister for reading the list of practitioner groups that have been set up, and for stopping when he did! However, I was reminded of how consultation was conducted in the past. I am thinking particularly of NEDO, as was, and the wonderful principle--that no one could disagree with--that the Government should consult with industry and with the unions. Then we had little

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Neddys and, before long, we had hundreds of people spending hours in all kinds of sector groupings, until one day someone said, "Does anything practical or useful come out of any of this?" The answer was "No". Noble Lords on both sides of the House may need to reflect more on what is being set up and its value, and come back to the matter at a later stage.

7 p.m.

Lord Hunt of Wirral: I am disappointed with the Minister's words. I hope he will not think me unreasonable, but, on behalf of the small business sector--particularly as the noble Lord has widespread experience of that sector--I take some offence at the amendment being dismissed on the grounds that if one extends a panel to small businesses one extends one to every conceivable group of practitioners. Surely the Minister accepts that small businesses have always received special status, not only in legislation but in directives and regulations from the European Community. In that capacity, what is working well must continue. Although I recognise why he is reluctant to accede, I think that when the moment comes I shall test the opinion of the Committee.

Lord Elton: I am not sure whether my noble friend intends to test the opinion of the Committee at this stage or the next stage, but I should like to say a word in his support. I have been engaged with very many small businesses--and with very many very small businesses--in the regulatory field of finance for a number of years and I have witnessed very closely the distress that some of them labour under with the enormous amount of regulatory work, paper and returns required of them under the relatively small agency of the Securities and Investment Board. The FSA is many times bigger and more powerful. It is proper that small businesses should be accorded special protection--or at least the notification of a special interest by Parliament in their affairs--because bureaucracies eat up small businesses quicker than anything.

Turning to my amendment, I should like the noble Lord to tell the Committee two things. First, why should the passage, read out with such pleasure and enthusiasm by the noble Lord, Lord Faulkner, about the good conduct of the authority now, when it is a voluntary agency, make us feel that there is no need to ensure that that good conduct continues after it has become a statutory body--any more than the good conduct of a private mine owner should have been enshrined in the statute which nationalised the mines many years ago?

Lord Faulkner of Worcester: Because the authority will have a statutory duty to maintain the panels listed in the statute.

Lord Elton: Yes, it can maintain them, but will it maintain them to the standard to which they are accustomed--as I remember asking prospective sons-in-law sometimes? In legislation one must not assume the best but prepare for the worst.

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There should be a source of funding. My noble friend Lord Jenkin of Roding is right that that source should not ideally be in the hands of a body with which this panel might quite possibly be at odds. He gave examples of how the authority had funded research by the voluntary panel. Supposing the request was for research to verify a statement which the panel had made to the authority saying that the way it was behaving was grievously damaging to a part of one sector of the market, and the authority was not of that opinion. Would it as liberally provide the resources to make those inquiries? I doubt it.

The noble Lord looks horrified. He keeps thinking of an individual known to him as the conductor of all the affairs of the authority. We know no such person. We know not who will be there in five years or ten; we do not know who will be on the authority; indeed, we do not know who will be appointed to the panel. We are trying to prepare grounds for the proper conduct of an industry vital to this country, and that must be properly financed.

My second question is whether the noble Lord will remind the Committee whence this money comes? I know that he will tell us that we will be dealing with funding later in the Bill, but am I right in thinking that the money that has so far been liberally given is drawn from the practitioners themselves? How much will it amount to in the years to come? I give way to the noble Lord.

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