FSA Investigation into LIBOR

Debate between Baroness O'Cathain and Lord Sassoon

Thursday 28th June 2012 Lords Chamber

[Lord Sassoon]

My Lords, I am grateful to the noble and learned Lord. As I said, we have concerns about the question of directors, particularly directors of banks, to make sure that the regime is appropriate and tough enough. The regime for directors of banks, because of the special nature of their role, should be looked at on its own merits. That is why it is timely that the RBS report and consultation, going very much to this point, will be published next week by the Treasury. I hope that we will get a debate going about what is appropriate in terms of the special regime that might be appropriate for directors of failed banks if they are shown to have behaved negligently.

[Baroness O'Cathain]

My Lords, the Statement says that this was going on throughout 2005, 2006 and early 2007. Was it stopped in 2007, or has it been going on since then? I wonder whether it has been going on for another five years. If so, what do my Government propose that we should be doing? Can we actually believe these people?

[Lord Sassoon]

My Lords, on the particular case, the FSA report sets out what was going on. The important point for my noble friend is that the point of highlighting the dates which my noble friend gave was that this activity was going on before the financial crisis. It was going on in an atmosphere of greed in what were perceived to be the good times. When the financial crisis hit, the activity of the individuals at Barclays was motivated by something else, which was to do with the reputation and standing of Barclays in the market. The particular relevance of those earlier dates was to distinguish what then happened during the later period, in the financial crisis.

As the FSA and other regulators’ investigations go on, they will tell us more about the extent and duration of these activities. Given that the banks have been on warning of this for a period, I would like to think that they have taken significant steps to clean up their activity. We want to make sure that, as I have described with this ongoing review of the LIBOR system, the system is appropriate to the new market circumstances.

Public Service Pensions

Debate between Baroness O'Cathain and Lord Sassoon

Tuesday 20th December 2011 Lords Chamber

[Baroness O'Cathain]

My Lords—

[Lord Sassoon]

I am sorry—I thought there was a new and welcome procedure whereby Back-Benchers could answer questions on my behalf. That is an excellent idea, but it might require discussion before we do something so radical.

I should first be clear about the interesting analysis of the noble Lord, Lord Lea of Crondall, on how we have got to this point and what else we should be doing. When he talks about an eleventh-hour deal, it is worth reminding the House that the final deal was put on the table by the Government on 2 November. The agreement today is entirely in line with what was put on the table then, well ahead of the strike action on 30 November.

The question around CPI and RPI broadly relates to the nature of the deal whereby individual negotiations were carried out, scheme by scheme, around the level of benefit accrual and indexation rates. That is why we allowed considerable flexibility for the unions to vary the balance of factors within the total cost caps that were set. That is why a variety of different approaches was taken. There was considerable flexibility within the overall parameters set by the Treasury.

As to the question of what people in the private sector should be doing, perhaps we had better stick to public sector pensions, which are very important and should be what we are talking about.

[Baroness O'Cathain]

I must apologise to my noble friend for jumping up. It is just that I was slightly goaded by the noble Lord, Lord Lea of Crondall. I want to come back to him about the CPI versus RPI issue, because I have a pretty long memory, too. In the early stages of the Monetary Policy Committee and the Labour Government, there were endless discussions every month about the RPI. One of the reasons that the statisticians wanted to move to the CPI was so that they could get month-by-month comparisons with mainland Europe—the EU. That is exactly why it happened, and then it all started to go wrong. We should have a discussion off the Floor of the House and go to the Library to look at all that. It was fascinating stuff, and an enormous number of people wanted to go for the CPI, as opposed to the RPI.

Public Expenditure: Review of Commitments

Debate between Baroness O'Cathain and Lord Sassoon

Thursday 17th June 2010 Lords Chamber

[Lord Sassoon]

I thank my noble friend Lady Sharp. I was at Stonehenge last year and it is clearly one of the most inspiring sites in this country. However, we have to be realistic about the predicament in which the economy has been left by the previous Government. There are certain projects that we simply cannot afford and which do not represent good value for money. The £25 million Stonehenge visitor centre is one that fails the test.

[Baroness O'Cathain]

Can my noble friend confirm that the Department for Culture, Media and Sport has stated that, if it could get private funding for this, the project would go ahead? This is yet another important area. There is a lot of money sloshing around in the arts world, but it is directed to projects that are not as important as a good visitor centre at Stonehenge. By implication, I am sure that many people thought today that we were going to let Stonehenge crumble way. The stones are wonderful, but we are concerned about access and the visitor centre. It seems an awful lot of money to spend on a visitor centre.

[Lord Sassoon]

I am grateful to my noble friend Lady O’Cathain for pointing out the pressures within the DCMS budget, as there are within the budgets of other departments. Difficult decisions will have to be made in all departments. This could be a project—I do not know—where there may be a private sector solution.