15:50 - Division on Lord Hamilton’s amendment. - Ayes: 190 / Noes: 186 - Amendment agreed.
Lord Sassoon
That (a) the following provisions of the Financial Services Bill be committed to a Committee of the Whole House—
(i) Clauses 1 to 4 (the Bank of England);
(ii) Clause 5 (the new regulators);
(iii) Schedules 1 to 3 (Schedules relating to the Bank of England and the new regulators); and
(b) the remainder of the bill be committed to a Grand Committee.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, on behalf of my noble friend I rise, unusually, to move this Motion. Perhaps I may give the House some explanation of the Motion.
As the House will know, last Monday night my noble friend Lord Sassoon invited the House to commit the Financial Services Bill to Grand Committee for its Committee stage. A group of Peers, some of whom had played no part in Second Reading, that night raised objections. In the face of those concerns my noble friend Lord Sassoon rightly withdrew his Motion even though it had the support of both the Government and the Opposition. In discussions in the usual channels preceding the Second Reading debate the Government had suggested that it would be appropriate to send the Financial Services Bill to Grand Committee for its Committee stage, building on the success of the Grand Committee that considered the Budget Responsibility and National Audit Bill in Committee last Session. Unlike that Bill, the Financial Services Bill has received pre-legislative scrutiny. It has also been through all its Commons stages, including a Committee stage off the Floor of the House.
The proposal to commit the Bill to Grand Committee was put to the Opposition and secured their full support. In the usual way, dates had been fixed for each day of Committee in the Moses Room, with the agreement of the noble Lord, Lord Eatwell, the opposition shadow Treasury Minister. On Tuesday we resumed discussions in the usual channels to see if we could reach an agreement, and the Motion today reflects a compromise which was put forward.
We propose to commit the clauses in the Bill relating to the Bank of England and the new regulators to a Committee of the whole House for three days and the remainder of the Bill to the Grand Committee for perhaps a further seven sessions, as previously agreed. The Motion for split commitment is a compromise that seeks to dispel the unease which was expressed last Monday by taking the most high-profile parts of the Bill on the Floor of the House. However, it also reflects representations from other Peers around the House who over the course of last week expressed their wish to see the whole Bill continue to be committed to Grand Committee.
It was the Opposition who suggested that we explore split commitment, and on that basis we put this proposal to them last Tuesday. Last Wednesday morning I myself put it to the noble Baroness the Leader of the Opposition. Late on Wednesday, however, we learnt not only that our original usual-channels agreement had been revoked but that the Opposition had also chosen to reject the compromise without explanation. This morning the Opposition found an explanation—that a report from the Treasury Select Committee of the House of Commons had changed its view. It is unfortunate that they did not choose to reveal that view either in the course of the Second Reading debate last week or in the course of the usual-channels discussions that followed. In any event, it is a curious argument given that the Treasury Select Committee’s core recommendations concern Bank of England governance and the objectives and powers of the new regulators—both of which are covered by the very clauses that we propose in the Motion before the House today to commit to the Floor of the House.
In these unfortunate circumstances, and where usual-channels agreement has not been forthcoming, I believe that it is right for the House itself to decide the fate of the Motion before us today. However, we need to take the decision with some perspective. Three Parliaments ago, on the initiative of my great predecessor from the Benches opposite, the late Lord Williams of Mostyn, we agreed to make more use of Grand Committee in return for introducing rising times at 10 pm, with the aim of reducing the need to scrutinise legislation long into the night. If the House does not support the Motion we will have more Bills competing for time on the Floor and there will inevitably be repercussions. We would need to sit later into the night to conduct our scrutiny after 10 o’clock and we may need to return even earlier from our Summer Recess.
Lord Strathclyde
I know that noble Lords opposite are quite keen on that. Reversing the decade-long practice of sending a reasonable proportion of Bills to Grand Committee is not compatible with retaining our current sitting patterns.
Curiously, I have heard it said that the objections raised to the commitment of the Bill have nothing to do with financial services regulation and everything to do with proposals for reform of this House. I have heard it said that the reason for committing the Bill to Grand Committee is to allow the Government to clear the decks for House of Lords reform. Let me speak plainly. To date, the Government have not introduced a reform Bill. Ministers are doing exactly what this House asked them to do: we are reflecting on the report of the Joint Committee, the alternative report and the debates that we had at the end of the previous Session and the start of this one. This House has an enviable reputation for rolling up its sleeves and getting on with the job of scrutinising legislation—we trade on it. It would be both wrong, and even counterproductive, to put that reputation at risk at just the moment when we are under intense scrutiny, when the House should be showing off its work and expertise at its best.
Furthermore, where we choose to commit this Bill has no impact whatever on whether the Government bring forward a Bill to reform this House. Nor would it affect the passage of such a Bill through Parliament. If a Bill were introduced in the House of Commons in the next few weeks, it would not reach this House for many months. Failing to commit at least part of this Bill to Grand Committee would serve only to delay Royal Assent to a piece of legislation that is of great significance to the financial services industry and our economy as a whole. Disrupting our normal sitting patterns would inconvenience not only us but, importantly, the staff who support us in our work. That is the crossroads at which we have arrived.
I hope that I have set out the options clearly and fairly and trust that the House will weigh the arguments carefully. I invite the House to support the Motion to commit part of the Financial Services Bill to a Committee of the whole House and part to Grand Committee. In concluding, I very much hope that the noble Baroness, Lady Royall of Blaisdon, will consider the position that she has got us into with great care.
Lord Strathclyde
I invite her to tell us that, on reflection, we can count on her support for the Motion before the House today.
Amendment to the Motion
Lord Naseby
My Lords, I just make an observation as a former Chairman of Ways and Means and as someone who was responsible for the Finance Bill for five years in another place. In my experience, each Bill was very different. Sometimes the usual channels, and indeed individual Members, chose to make representations that certain clauses should be taken on the Floor of the House, with others—often the majority—being taken in Committee. I remember one occasion when a great deal of a Bill was taken on the Floor of the House, mainly due to representations from the minority parties that went against the proposals from the usual channels. Nevertheless, I reflect that last Monday night the key issue to come out was unanimity across the House that this was the most important financial Bill that this House had seen in probably the living memory of anyone here. The second thing that came out was that it was not a partisan Bill—there was no inter-party challenge—and that this House, with its width of experience, was best able to debate the Bill in depth.
I deeply regret that now, on the first Monday since then, what I thought had been settled by the usual channels in the normal way is not settled. That is a very unsatisfactory situation, and maybe my noble friend, as the Leader, will either follow what my noble friend Lord Wakeham said or recognise that the House as a whole may need 24 hours to quieten down a little. Looking at the noble Baroness, Lady Boothroyd, on the Cross Benches, I am reminded that she once said to me, “You didn’t give them long enough to settle it, Michael”.
Lord Strathclyde
My Lords, the reason we have the usual channels is precisely to avoid the sort of debate that we have had this afternoon. It is a personal sadness to me that the usual channels broke down, which means that the House must make a decision.
The other reason to have usual channels is that we can have these debates behind closed doors where no one sees them. When the public look at this debate and listen to it on the radio and television, what will they see? They will see that the question is a very simple one: either we should have the debate on the Floor of this House or the very same people debating the very same issues should take their debate about 25 yards down that Corridor. That is all this debate is fundamentally about. This is against a background where, until a week ago, the Opposition and the Government were totally unified, as the noble Lord, Lord Barnett, said so well, on the basis that scrutiny would be better placed in Grand Committee rather than here on the Floor of the House.
Before the House is drawn into the seductive speech of the noble Lord, Lord Grocott, noble Lords should recall that only last week he said that this House should always sit when the House of Commons is sitting. I took a view earlier this year, having taken soundings around the House, that the overwhelming view of your Lordships was not to sit in September. I do not mind sitting in September—I have done it in the past and I shall be here—but noble Lords must recognise that if we do not send Bills to Grand Committee and have them on the Floor of the House, we will need more sitting days of the House in order to complete our business. It is a very simple proposition. No one is suggesting sending another major Bill to the Grand Committee.
Lord Strathclyde
My Lords, let us assume that it would take exactly the same hours on the Floor of the House and in Grand Committee. The fact that it was on the Floor of the House would mean that we would be unable to progress on other Bills, which would have to wait their turn. We would therefore need to find other days in which to complete our business.
Like the noble Earl, Lord Erroll, I remember when we used to sit until 1 or 2 am. We got a lot of business done in the early hours of the morning. Before I get another lecture from the noble Baroness, Lady Farrington of Ribbleton, I had endless discussions with Lord Williams of Mostyn about this. He would get quite heated on the subject. He said that it was wrong for legislation to take place late at night or in the small hours, and it was on that basis that we had a Grand Committee. The reason why the House now needs to take a view is that if we are going to go against the practice of the past 10 years and not send complex Bills to Grand Committee, which we have done many times before, we will have to revisit this subject in the Procedure Committee.
Finally, Labour's legislation on the Financial Services and Markets Bill, which was a substantial and weighty piece of legislation of two volumes, was passed through this House in Grand Committee.
Baroness Farrington of Ribbleton
My Lords, before the Leader of the House sits down, Lord Williams of Mostyn was absolutely clear that Grand Committee procedure was for non-contentious Bills. His view was that the House should be able to make that judgment. The Leader of the House has failed to tell the House which major pieces of legislation are waiting in the wings that will now not be able to be debated, because we are not aware of them.
Lord Strathclyde
I urge the noble Baroness to read the record of the debates that we had at the time. If she can find the evidence for that, of course I will withdraw everything that I have said about Grand Committees. I assure her that when I was Leader of the Opposition, we understood perfectly well that Grand Committees were for all or any Bills, and that only constitutional Bills would sit on the Floor of the House.
Lord Hamilton of Epsom
My Lords, I share the concern of many Members of this House about all these massive Bills that will come through in the future to be debated on the Floor of the House. I am not at all sure what they are, but I know that one of them will not be the Civil Aviation Bill because that will be going into Grand Committee when this business has been dealt with.
I very much take the point made by the noble Lord, Lord Grocott, that this is a thin parliamentary Session and that for a Bill of this importance to be shoved into the Grand Committee Room would be absolutely wrong. It will not be understood by the people of this country. It is a major Bill of great significance. I do not accept the view of the noble Lord, Lord Barnett, that somehow these issues are better debated in the Grand Committee Room. I think that the place to debate them is on the Floor of the House. I suspect that the debate would go on much longer on the Floor of the House, but that would improve the Bill at the end of the day and would be for the good all round. It is critical that the Financial Services Bill is got right by your Lordships’ House, and I therefore wish to test the opinion of the House on my amendment.