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Lord Avebury: My Lords, I welcome the close interest taken by the Minister, Alun Michael, in this problem. However, does the Minister agree that the lengthy discussions which he has held with local authorities, MPs and other interest groups demonstrate how hard it is to obtain an agreement piecemeal in the manner that he suggests? Meanwhile, is he aware, as I am sure he must be from the photographs sent to Ministers by Friends of the Ridgeway, of the enormous damage being done by the irresponsible users of four-by-fours? Will the Minister come forward with any alternative proposals or will he accept the amendment which my noble friend moved when the Act was a Bill?

Lord Whitty: My Lords, although it is true that obtaining co-operation between the various authorities has at times been difficult, in this respect I believe that some progress has been made in dealing with the Ridgeway. There are issues of damage to the fabric of the Ridgeway, some of which are being addressed by that group. But, of course, it is not always the case that motorised vehicles are illegal. In some parts of the Ridgeway, the presence of motorised vehicles is illegal, but most of the Ridgeway is open to some degree to motorised traffic. Therefore, it is people's behaviour and the way that those vehicles are used which may be anti-social or illegal. Therefore, it is not a straightforward issue.

EU Investment Services Directive

3.8 p.m.

Lord Hodgson of Astley Abbotts asked Her Majesty's Government:

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, the Government voted against the presidency text for a Council common position on the proposed Investment Services Directive at ECOFIN on 7th October. The Government will continue to work to improve the

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proposed directive, including working through the European Parliament and with the financial sector and other member states.

Lord Hodgson of Astley Abbotts: My Lords, I am very grateful to the Minister for his reply. I begin by congratulating him on his attempt to make a silk purse out of a sow's ear. However, on reflection, does he recognise that the meeting was a stitch-up, which the Government fell for? It was a stitch-up between the smaller European financial sectors to gang up at the expense of the City of London. Does the Minister further recognise that, as a result, there will be a considerable cost to the people of Britain, both in terms of the higher cost to British industry in raising funds and to private individuals in buying and selling shares? Finally, will the Minister comment on the remarks in the Financial Times, which described the results of the meeting as "scandalous", "retrograde" and,


    "a shot in the foot"?

Lord McIntosh of Haringey: My Lords, as I am required to do so, I shall answer the first two questions. I have not attempted to conceal the fact that this was a defeat for the Government. We would have wanted this matter not to have been pressed to a vote by the Italian presidency. We think it was a mistake for them to do so. We believe that there was room for compromise and for agreed solution, which would have been better for financial markets in this country. There is no disguising that fact.

However, this is not entirely the end of the matter. Under the co-decision procedure, the European Parliament can push for amendments to the Council, a common position. There is some hope that it might do so in the light of the fact that the first reading in the European Parliament produced a text which was better than the presidency text adopted by a majority vote last week.

Lord Woolmer of Leeds: My Lords, while agreeing that it is important that the outstanding directives are not rushed through without proper and careful consultation, is the Minister aware of the reported views of the chairman of the Financial Services Authority that the timetable for implementation of the huge amount of legislation involved is unrealistic, will impose very substantial costs and raise major difficulties in the industry? Will he raise that at ECOFIN in November and seek to ensure that revised guidance is provided to the Committee of European Securities Regulators when they seek to implement the single market financial regulations?

Lord McIntosh of Haringey: My Lords, I pay tribute to the work of my noble friend as chairman of the sub-committee carrying out an inquiry into the EU Financial Services Action Plan. Yes, he is right: Callum McCarthy expressed the view that there are too many of these directives going through to be assimilated. We have considerable sympathy with that view and continue to express it to our colleagues in the

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European Union. But they are not all as threatening as the noble Lord, Lord Woolmer, thinks. For example, the prospective directive, on which the noble Lord, Lord Hodgson, expressed grave doubts in an important debate in this House two years ago, and which removes barriers to integration in European social securities markets, is now approaching conclusion on a basis which is very acceptable to this country and has been improved by the action of the British Government.

Lord Lawson of Blaby: My Lords, the Minister has clearly agreed that this is a very serious matter indeed. He called it a defeat for the Government. It was not the Government's fault but it was a big defeat. Did the Government consider invoking the so-called "Luxembourg compromise" on this matter? Indeed, what is the Government's position on the Luxembourg compromise?

Lord McIntosh of Haringey: My Lords, we have always supported the Luxembourg compromise. There are powers which the presidency has and which, unwisely in this case, the Italian presidency used to force a matter to a vote, in our view prematurely. But I do not think we would have been helped by the Luxembourg compromise.

Lord Tomlinson: My Lords, does my noble friend not agree that the Investment Services Directive is a salutary example to many Members of this House of why they should not have a knee-jerk reaction to the proposal from the Convention on the Future of Europe about extending co-decision powers to the European Parliament? This is one case where we shall depend on it, and perhaps people should be a little more cautious about attacking such extensions in future.

Lord McIntosh of Haringey: My Lords, I am reluctant to generalise from the Question which is specifically about the Investment Services Directive. The Investment Services Directive has many positive features, many of which have been introduced as a result of pressure from this Government. However, we remain unhappy about Article 25 on pre-trade transparency and the provision in the directive for the treatment of execution-only business. So, we do have concerns but I do not think it would be appropriate in answer to this Question to seek to address the wider questions raised by the noble Lord, Lord Tomlinson.

Lord Newby: My Lords, does the Minister accept that the Government were taken by surprise by the Italian proposals on this directive and were outmanoeuvred in the Council? Can we have an assurance from the Minister that in all future discussions and measures under the Financial Services

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Action Plan the Government will give these issues top priority at both ministerial and official level? Such a priority was seriously lacking in this case.

Lord McIntosh of Haringey: My Lords, I do not accept that there was a lack of priority given to this issue by the Government. Certainly, I assure the noble Lord, Lord Newby, that we shall give these matters top priority. However, I believe that the phrases "outmanoeuvred" and "taken by surprise" are not appropriate here. The point is that any presidency, and in this case the Italian presidency, has the power to force the matter to a vote. Normally, sensible presidencies do not do that; they seek a compromise which is acceptable towards all parties and pay attention to the fact that the United Kingdom has, rightly, the largest financial services market in the European Union, and that should be given priority.

Lord Jenkin of Roding: My Lords, has the Minister noticed the appeals that were made by some of the trade associations, reported in the Financial Times, that part of the problem could be averted if officials would avoid gold-plating regulations and interpreting them a great deal more strictly than in other member countries in the European Union?

Lord McIntosh of Haringey: My Lords, I have seen those reports. I do not think that that criticism applies in this case. The financial services industry in this country is not unanimous in its views on any defects in the Investment Services Directive. Yes, the larger investment banks are opposed to it, but some other banks and smaller financial houses are not so opposed. I do not think that the criticism raised by the noble Lord, Lord Jenkin, is appropriate in this case.

Household Waste Recycling Bill

Read a third time, and passed.

Criminal Justice Bill

3.16 p.m.

The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Baroness Scotland of Asthal.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.]

Clause 215 [Meaning of "specified offence" etc.]:


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