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Lord McIntosh of Haringey: The answer to the first question is, as I said, that Clause 7 states that the authority must make and maintain effective arrangements for consultation. That is not a statutory requirement at the moment. The fact that the authority does so before there is a statutory requirement hardly leads us to think that when there is one it is likely to break the statute and refuse funding to either of the panels.

Lord Elton: I am sorry. Again I am asking a question to which the noble Lord obviously thinks I know the answer. Whose money is it that the authority will be giving?

Lord McIntosh of Haringey: The noble Lord asked two questions. I had answered one and before I had a chance to answer the second one the noble Lord stood up again. That is his privilege--we are in Committee--but I should like an opportunity to answer the second question. The answer is that the Financial Services Authority is a company, limited by guarantee, which is funded by fees from the regulated community.

Lord Elton: I am most grateful. The Minister made a small gesture. Like the noble Lord, Lord Peston, I read into his movement that he was sitting down when he was not. I am grateful for that answer.

I shall read with great interest the answers that we have had so far. I reserve the right to come back to this issue at Report stage. In the meantime, I beg leave to withdraw the amendment.

20 Mar 2000 : Column 76

Amendment, by leave, withdrawn.

[Amendment No. 74D not moved.]

Clause 8 agreed to.

Lord Hunt of Wirral moved Amendment No. 74E:


    After Clause 8, insert the following new clause--

THE SMALL BUSINESS PRACTITIONER PANEL

(" .--(1) Arrangements under section 7 must include the establishment and maintenance of a panel of persons (to be known as the "Small Business Practitioner Panel") to represent the interests of practitioners who are in businesses which employ fewer than fifteen persons.
(2) The Authority must appoint one of the members of the Small Business Practitioner Panel to be its chairman.
(3) The Treasury's approval is required for the appointment or dismissal of the chairman.
(4) The Authority must have regard to any representations made to it by the Small Business Practitioner Panel.").

7.6 p.m.

On Question, Whether the said amendment (No. 74E) shall be agreed to?

Their Lordships divided: Contents, 57; Not-Contents, 110.

Division No. 1

CONTENTS

Alton of Liverpool, L.
Astor of Hever, L.
Bagri, L.
Blackwell, L.
Blatch, B.
Boardman, L.
Bridgeman, V.
Burnham, L. [Teller]
Buscombe, B.
Byford, B.
Carnegy of Lour, B.
Colwyn, L.
Cope of Berkeley, L.
Cumberlege, B.
Darcy de Knayth, B.
Dean of Harptree, L.
Denham, L.
Elton, L.
Flather, B.
Fookes, B.
Fraser of Carmyllie, L.
Gardner of Parkes, B.
Geddes, L.
Glentoran, L.
Goschen, V.
Griffiths of Fforestfach, L.
Henley, L. [Teller]
Home, E.
Hooper, B.
Hunt of Wirral, L.
Jenkin of Roding, L.
Kingsland, L.
Liverpool, E.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
Mackay of Ardbrecknish, L.
Mancroft, L.
Marlesford, L.
Monson, L.
Northbrook, L.
Northesk, E.
O'Cathain, B.
Peyton of Yeovil, L.
Saatchi, L.
Saltoun of Abernethy, Ly.
Seccombe, B.
Selborne, E.
Sharples, B.
Stewartby, L.
Strathclyde, L.
Vivian, L.
Waddington, L.
Wade of Chorlton, L.
Weatherill, L.
Windlesham, L.
Young, B.

NOT-CONTENTS

Ahmed, L.
Alli, L.
Amos, B.
Archer of Sandwell, L.
Bach, L.
Barker, B.
Barnett, L.
Bassam of Brighton, L.
Blackstone, B.
Blease, L.
Borrie, L.
Bragg, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Carlile of Berriew, L.
Carter, L. [Teller]
Christopher, L.
Clarke of Hampstead, L.
Clement-Jones, L.
Cocks of Hartcliffe, L.
Crawley, B.
Dahrendorf, L.
David, B.
Davies of Coity, L.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Desai, L.
Dixon, L.
Donoughue, L.
Dormand of Easington, L.
Dubs, L.
Elder, L.
Evans of Watford, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Gale, B.
Gilbert, L.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Grabiner, L.
Hamwee, B.
Harris of Haringey, L.
Harrison, L.
Hilton of Eggardon, B.
Holme of Cheltenham, L.
Hooson, L.
Howells of St. Davids, B.
Howie of Troon, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L. (Lord Chancellor)
Islwyn, L.
Janner of Braunstone, L.
Jay of Paddington, B. (Lord Privy Seal)
Jeger, B.
Jenkins of Putney, L.
Joffe, L.
Lea of Crondall, L.
Lester of Herne Hill, L.
Linklater of Butterstone, B.
Lipsey, L.
Lockwood, B.
Lofthouse of Pontefract, L.
McCarthy, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L. [Teller]
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McNally, L.
Mallalieu, B.
Mar, C.
Massey of Darwen, B.
Morris of Castle Morris, L.
Morris of Manchester, L.
Newby, L.
Nicol, B.
Patel of Blackburn, L.
Peston, L.
Phillips of Sudbury, L.
Ramsay of Cartvale, B.
Randall of St. Budeaux, L.
Renwick of Clifton, L.
Sawyer, L.
Scotland of Asthal, B.
Sharman, L.
Shepherd, L.
Simon, V.
Smith of Clifton, L.
Smith of Gilmorehill, B.
Stoddart of Swindon, L.
Strabolgi, L.
Taylor of Blackburn, L.
Thomas of Gresford, L.
Tomlinson, L.
Tope, L.
Turner of Camden, B.
Uddin, B.
Walker of Doncaster, L.
Warner, L.
Warwick of Undercliffe, B.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Mostyn, L.
Woolmer of Leeds, L.
Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.

20 Mar 2000 : Column 77

7.16 p.m.

Clause 9 [The Consumer Panel]:

Lord McIntosh of Haringey moved Amendment No. 75:


    Page 4, line 35, after ("or") insert ("are or may be").

The noble Lord said: I spoke to this amendment with Amendment No. 62. I beg to move.

On Question, amendment agreed to.

[Amendment No. 75A not moved.]

Lord McIntosh of Haringey moved Amendment No. 76:


    Page 4, line 37, leave out from second ("persons") to end of line 39 and insert ("--


(a) who are consumers for the purposes of section 129; or
(b) who, in relation to regulated activities carried on otherwise than by authorised persons, would be consumers for those purposes if the activities were carried on by authorised persons.").

20 Mar 2000 : Column 78

The noble Lord said: I spoke to this amendment with Amendment No. 62. I beg to move.

On Question, amendment agreed to.

[Amendment No. 77 not moved.]

Clause 9, as amended, agreed to.

Lord Saatchi moved Amendment No. 78:


    After Clause 9, insert the following new clause--

PUBLICATION OF INFORMATION BY THE AUTHORITY

(" .--(1) The Authority shall, subject to subsection (2), publish or disclose information to any person on request with a view to enabling members of the public to make informed judgements about the way in which it is carrying out its functions.
(2) Before deciding not to publish or disclose information, the Authority must decide that the public interest is outweighed by any considerations of confidentiality attaching to it.").

The noble Lord said: On behalf of my noble friend Lady Wilcox, who is unavoidably absent, I shall address Amendment No. 78.

The noble Baroness's amendment seeks to provide the Committee with an opportunity to debate the extent to which the Financial Services Authority will be open about its activities. We should like it to be required to operate under a presumption of openness. That means that everything should be open unless there is a good reason for it not to be. The Minister may like to confirm that the FSA will be among the bodies that will be covered by the provisions of the Freedom of Information Bill. That will be most welcome. There are well-documented concerns relating to provisions in that Bill which we shall no doubt consider in more detail when the Bill comes before this place.

As a general principle, however, we favour the introduction of a more stringent openness requirement on regulatory public bodies. The Food Standards Agency--curiously, another "FSA"--is required to operate more openly than it would be under the freedom of information legislation. So the wording of the amendment deliberately echoes the wording to be found in the Food Standards Act. The public would be placed in a position to make informed judgments about the performance of the Financial Services Authority.

Following the widespread mis-selling of pensions and endowments, the FSA has a vital role in restoring public confidence in the industry. Market confidence is indeed one of its prime objectives in Clause 2(2)(a). An open regulatory system is a fundamental aspect of the attempt to rebuild trust. Because the public need to be satisfied that their interests are being given due weight in decisions that impact on them, recommendations made by the consumer panel to the authority and the authority's response to them ought to be in the public domain. Transparency about information flowing between the FSA and government would also be very welcome.

We think that the new clause is balanced. It recognises that there are sometimes important considerations of confidentiality which may justify a decision not to publish or disclose information. But

20 Mar 2000 : Column 79

the amendment would ensure that the FSA, before reaching such a decision, must first have to have concluded that those interests do outweigh the public right to know. The amendment introduces a general presumption of openness. I hope that the Minister will feel able to give a positive response to this most modest proposal. On behalf of the noble Baroness, Lady Wilcox, I beg to move.


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