Bank of England and Financial Services Bill [HL]

Lord Gold Excerpts

Wednesday 11th November 2015 Lords Chamber

[Lord McFall of Alcluith]

The commission valued enormously the contribution of the most reverend Primate the Archbishop of Canterbury. However, if we feel strongly about something, it can be a matter of record. I take the point about the unanimity of the commission, and will come to an area where I disagreed with it. I did not get my way, but signed up to it. So it is a case of tit for tat and one for one with the most reverend Primate.

This measure sends out the wrong signal—that Parliament is unfairly on the side of the banks rather than on the side of the public. The Parliamentary Commission on Banking Standards was very clear on enforcement action. We described it as being,

“as rare as hens’ teeth”.

The public want effective reforms. They want senior managers to be personally culpable. They want fines on individuals, not companies, because when the fines are on companies it is the shareholders—ordinary members of the public—who pay them. So the public are being denied and punished twice. The public—I include the noble Lord, Lord Sharkey, and others—want a fair market where risk is rewarded but where failure is punished. That has not happened.

The point was made about the most reverend Primate the Archbishop of Canterbury. I pushed the concept of duty of care in the Parliamentary Commission on Banking Standards. It did not accept it as a recommendation, although it was in the report. If the Government were serious about this, they would adopt a duty of care, which would transform the financial services industry. My good friend John Kay, who has just written a book on that, Other People’s Money, agrees with me on this issue.

In the absence of the Government doing anything, when we come back to this on Report they will really have to think about how they can make senior executives personally responsible. Otherwise, the value of the Bill and the reforms, the expenditure and the time we have spent on the Parliamentary Commission on Banking Standards will count for naught. It is time for a reassessment by the Government between now and Report. I hope the Minister takes that seriously.

[Lord Gold (Con)]

My Lords, I oppose this amendment. I have listened to the noble Lord, Lord McFall, and I fully agree—I suspect we all agree—that the examples he has mentioned of culpable things that have gone wrong cannot be acceptable. However, hearing his comments on the demands of public opinion makes me even more certain that we should oppose this amendment, because the rule of law must be upheld and we must allow the innocent to remain innocent until proved guilty.

Regulation is terribly important and we must give appropriate powers to the regulators to enable them to undertake their work effectively, including the ability to search out evidence in order to ascertain what went wrong and who was responsible. They must be able to break down any firewall that the institutions might have erected. Employees in financial institutions must fear the consequences of acting badly and know that if they break the rules the consequences could be very severe, including heavy fines and maybe a prison sentence.

If we have failed to achieve these things, however, the answer is not to shift the burden of proof so that the defendant has to prove his innocence. That would be tantamount to giving up the challenge. Instead, we must tighten up the regulator’s powers and create an appropriate and effective regulatory regime, one that can achieve what all of us want, which is to protect those dealing with the financial institutions and punish those who fail in their duties.

In this Bill, the Government are aiming to do just that by extending the regulatory regime to all financial services firms and giving power to the regulator to make and enforce rules of conduct. This materially strengthens the regulator’s position. In so doing, it rightly reverses the burden of proof so as no longer to presume guilt, requiring the defendant to prove innocence, and we should not now allow that to continue.

I welcome the Government’s proposals for several reasons. First, I believe it is right to extend the regulatory regime across the whole financial services industry and thereby strengthen regulation. It is also right that we should not change a fundamental tenet of English law, which is that a person is innocent until proved guilty. As I have indicated, to reverse the burden of proof in this way is an excuse for failing to create an effective regulatory regime. Indeed, it is a lazy way of dealing with a problem and should not be countenanced. The provision that it is now proposed should be reversed, frankly, should never have been enacted. I am pleased that the Government have now recognised this.

In proposing this change, the Government seek to treat all financial institutions in the same way. Surely that must be right and fair. Why should there be one rule for large institutions and another for smaller ones? If a financial institution or someone working there breaks the rules then there should be a consequence, and everyone should be treated equally. Any suggestion that there should be a two-tier system so that the present law presuming guilt applies only to certain institutions, but the burden of proof shifts for those institutions that now come within this regulatory regime, is unfair. We should not discriminate between institutions. This could lead to unfair competition and could prejudice the very people we wish to protect—the consumers and customers.

The effectiveness of these new rules, once in force, should be carefully monitored and scrutinised. If, despite the extension of the regulatory regime now proposed, more is required, the Government must not shy away from a further extension of regulatory powers. However, in so doing, they should not then restore the short cut of shifting the burden of proof.

[Baroness Kramer]

My Lords, I cannot in any way better the speeches of my noble friend Lord Sharkey and the noble Lord, Lord McFall, but maybe I could make a few additional comments.

First, there is the argument in favour of a two-tier system. The regulator is already managing the banks and the financial services industry as a two-tier system. There are different rules for systemically important institutions and for the much smaller institutions whose behaviour cannot disturb the financial stability of the country. If the principle is that the banking industry and the financial services industry should be regulated only under a single tier, the Government are, in a sense, demanding that a great deal of regulation be rolled back, which, they are currently arguing, makes us more secure. We have a two-tier system; we are arguing that that two-tier system should encompass this kind of liability.

I want to also talk about the difficulties in pursuing senior managers when their institutions have been involved in outrageous and illegal behaviour. These are not victimless crimes, although they are often treated as though they are. The collapse of the banking system had a huge impact on people up and down the country: people lost their jobs, had to live through a period of suppressed wages and have seen public services cut. The experiences of ordinary people over the last five years have been wretched, and the trigger for that crisis was a financial crisis created by systemic financial institutions—so many people suffered as a consequence of that.

If I look at the misbehaviour inside the banks, I see that those were not victimless crimes. The families that paid for PPI that they did not need and could not use were often families without large resources—the cost mattered. Small businesses were persuaded to enter into interest rate swaps that were completely inappropriate for them, and some went under as a consequence of the problems generated by those swaps. Money laundering, which was on an industrial scale across many of our institutions, supported the drugs trade, prostitution and people trafficking, all of which did extensive damage to our communities. LIBOR mis-selling and mispriced mortgages and loans for individuals over a long period of time came at a significant cost to them, as well as, frankly, bringing the City of London into disrepute and, for a time, putting it at risk as a financial centre. We know that the United States seriously considered whether or not London could continue to be a major player if it could so poorly regulate its financial institutions as to allow manipulation of a core measure such as LIBOR.

Charities (Protection and Social Investment) Bill [HL]

Lord Gold Excerpts

Monday 20th July 2015 Lords Chamber

[Lord Deben (Con)]

My Lords, the noble Baroness has made a very important point. It is conceivable that we should discuss whether these two forms of charity—the incorporated and the unincorporated—might no longer be entirely fitting for the circumstances of the day. We could discuss wholesale reform, but it seems to me that approaching that in a particular and narrow way is not the right way to do it. Law is not best made that way, not least because if you do it in that piecemeal manner, you can end up with something that is much worse than what you started off with. The law of unintended consequences is very powerful in these circumstances.

The second thing I would say to your Lordships is that Britain has a remarkable reputation around the world for charity, as we have often said in debates. But we have to remember that this is not something that has come about recently; it has happened over a very long period of time. It has resulted in, I have to say, a rather untidy system—there is no doubt about that. There are various different ways of looking at this, and sometimes people want to tidy it up. Perhaps one of the system’s strengths is the fact that there are so many different sorts of charities and so many different groups of people doing things in a slightly different way. With the Charity Commission, we have tried to set some reasonable standards and to ensure that there are very clear reference points.

We have tried hard to do that in a way that corrals people as little as possible. New charities often arise because people feel strongly about something that they have a personal relationship with: something happens, somebody they know has been hurt, they are concerned and they say, “I must do something about that”. Personally, I am a huge supporter of that. When one is canvassing, it always seems the worst thing when you bang on a door and someone says, “Somebody ought to do something about that”. My response is always, “Why don’t you do something about it? It is no good talking about somebody else”. Charities often arise because people say, “I want to do something about it”. That is a really important part of it.

My worry here is therefore, secondly, that we are not just approaching a complex business from a particular, narrow direction but also that we are adding yet again to the complications that face people when they want to turn a spontaneous reaction into a more permanent form. Of course, that leads to duplication of charities and I know that there is a real problem there. However, it is a good, healthy and encourageable part of humanity that people want to do something themselves about a matter they feel strongly about. I fear that if we went down this route without thinking very hard about it, we would—as the noble Baroness, Lady Barker, rightly said—put into the small charities some real concerns.

Thirdly, I would have to be much more convinced about the propriety of putting at risk the funds of a charity given for a particular purpose because of the activities of a particular trustee—which would be the result of the amendment. I can imagine amendments that would not produce that response. I can imagine changing the law in a way that might help to solve the problem that the noble Baroness, Lady Deech, put before the House. However, this amendment does not do that and could put a whole lot of other things into serious default.

The noble Baroness, Lady Barker, is right that to bring forward so complex an amendment in a debate of this kind without having some idea of the size of the problem, or the nature of the different parts of it, is not the way to deal with it. If you do not know how big the problem is, you do not know how dangerous it is to make the change. If it is a huge problem, you may want to risk the change, but if the problem is much more limited, you will probably want to say to yourself, “This is better left to a more mature and serious consideration, and there should be a much bigger one about the legal distinctions between incorporation and unincorporation”.

[Lord Gold (Con)]

I support this amendment. My noble friend Lord Deben spoke of an implicit goodness on the part of those people who set up a charity and want to do something good. I understand that entirely but we are faced here with a different problem, unfortunately, of individuals who may wish to hide behind what seems to be a charity for wholly inappropriate purposes. While they are personally liable for things that may go wrong, those people might vanish into the distance and not be there to compensate those who have suffered badly as a result of charitable money being misused. Unfortunately, at the moment it is difficult to bring an action against an unincorporated association. If a trustee acts outside his powers, it is by no means easy to bring such an action. This amendment would make it easier for those who have suffered, where charitable money has been used for wrongful purposes, to look to the charity. It would make it less easy for those who misused that money to be able to hide in the way that perhaps at the moment they can.

[The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con)]

My Lords, I thank the noble Baroness, Lady Deech, and the noble Lord, Lord Bew, for their thoughtful explanations of this amendment and for sparing the time to discuss this issue with me privately. I also thank the noble Baroness, Lady Barker, and my noble friends Lord Deben and Lord Gold, for their contributions. When we discussed this in Committee I made several points that noble Lords will be glad to know I will not repeat in great detail now as this can be quite a complex matter—as noble Lords will have gathered. I will stick to the principal points.

If an individual or entity commences litigation against an unincorporated charity, usually all the trustees of that charity would be named as parties. That is because an unincorporated charity has no separate legal identity—the point that others made. This would include proceedings for tortious liability against a charity trustee in his or her capacity as a trustee of that charity, or an employee in the course of his or her employment. If damages were awarded against the trustees, the trustees ordinarily would be entitled—if they acted properly and reasonably—to indemnify themselves from the assets of the unincorporated charity under the charity’s governing document. However, they could be jointly and severally liable for any shortfall where the charity’s assets are insufficient to meet the level of damages awarded.

In that respect, a person who sues an unincorporated charity can be in a stronger position than a person who sues an incorporated charity, where the directors’ liability can be limited, as they could seek redress from the assets of the charity and the personal assets of the trustees. For an incorporated charity, in the absence of any charity assets there is limited redress against the directors and members. Also, the unincorporated charity is in the same position as other unincorporated associations—for example, many trade associations. A trade association could make a flawed recommendation to its members that resulted in tortious liability.

It is important to restate that liability should not automatically attach to the charitable association’s assets, as the amendment seems to propose. In all cases, it should be for the court to establish where liability should lie, based on the facts of the case and the charity’s governing document. There may be other unintended consequences resulting from the amendment which we would also want to avoid.

In our view, damages may be met from the assets of the charity, whether it is incorporated or not, under the law as it stands. However, I recognise that a number of people have raised concerns over how the law operates in this area. As I said, I met the noble Lord, Lord Bew, the noble Baroness, Lady Deech, and my noble friend Lord Gold to discuss the nature of these problems. In response to their thoughtful contributions today, while I cannot give any commitments about amendments to the Bill, I will and certainly do commit to look at this issue in more detail over the summer, and in particular to reflect on whether there is a lacuna in the law as it stands that puts victims of unincorporated charities at a significant disadvantage. I will obviously keep the noble Baroness, Lady Deech, the noble Lord, Lord Bew, and my noble friend Lord Gold informed as to my deliberations. I am happy to keep others who spoke on this amendment informed, too. I fully understand that this is a complex area. We do not wish to rush into it.

I understand that the Charity Commission shares a number of the concerns raised and it would be happy to write to the noble Lord, Lord Bew, in more detail on this point as our deliberations progress. I am sure that the Charity Commission would be happy to meet with the noble Baroness, Lady Deech, and other noble Lords should they so wish. With all that said and in mind, I hope that the noble Baroness will not press her amendment.

Charities (Protection and Social Investment) Bill [HL]

Lord Gold Excerpts

Wednesday 1st July 2015 Grand Committee

[Baroness Deech (CB)]

I will speak briefly in support of my noble friend Lord Bew. I got interested in this area having had some experience of when things may go wrong. When you have a commune, for example, which takes all the assets of its members and something goes wrong, such as abuse, there ought to be recourse against those assets. The same applies to children’s clubs, after-school lessons, youth movements, and even student unions.

Our previous discussions show how far the charitable organisation has spread, reaching into every area of our life. It seems only right that there should be the same protection for those who may be adversely affected by an unincorporated charity as by an incorporated one. The main thrust of the amendment lies in proposed new subsection (2), which would enable a person entitled to damages to recover them from the assets of the charity. It is intended to be prospective and not retrospective in effect, applying only to torts committed after it comes into force.

In sum, the amendment would produce a small but useful improvement, making it practicable for victims to obtain compensation for wrongs committed in the course of the activities of unincorporated associations in circumstances where this is currently not practicable. It would remove disparity between unincorporated and incorporated charities; it would encourage the provision of additional resources to expose misuse of charities. It would strengthen compliance with the law and protect the reputation of legitimate charitable activities.

As my noble friend mentioned, the resources of the Charity Commission, which could be involved in this, are necessarily limited and it is only right to help the Charity Commission in its efforts. In sum, this is a good, useful amendment which seems capable only of doing good and certainly no harm.

[Lord Gold (Con)]

My Lords, as the noble Lord, Lord Bew, has said, the purpose of the amendment is to remedy a deficiency in English charity law which prevents victims of wrongs committed in the course of the activities of an unincorporated charity being able to recover compensation from the charity’s assets. This is of particular concern when an unincorporated charity is used as a mask by those knowingly funding terrorism. Victims may have claims against individual staff or trustees of the charity, but if such individuals are men of straw or vanish from view then, unless the charity is obliged to provide an indemnity for its staff or trustees—and that can be uncertain—the claimant will lose out. Worse, the unincorporated charity can carry on just as before, while the victims or their families are cheated out of justice to which they are entitled.

As the House of Commons Home Affairs Committee stated in its report of 30 April 2014 on counterterrorism, bogus charities are being used as a means of funding terrorist activities. There is a serious risk therefore that, unless there is some redress to the assets of unincorporated charities, this anomaly will protect such charities, which will not be liable for the activities of their staff or trustees. The amendment would give victims of wrongs who have claims arising from the conduct of trustees or employed staff the right to bring a claim directly against the unincorporated charity, just as they can at present against an incorporated charity. This proposal does not affect any personal liability of trustees or employees, but the court would have power to determine what should be paid by the charity and what the wrongful individuals should pay.

For an unincorporated charity presently to be liable to indemnify staff members or trustees, it must be vicariously liable for the wrongful acts of its trustee or staff member. That will apply only if the tort or wrongdoing was committed by the staff member in the course of their employment or, in the case of a trustee, if they were not acting in breach of trust. Only in such a case would it be possible for the claimant to recover damages indirectly from the charity’s assets via this indemnity. Even so, the claimant in such a case would face uncertainty, delay and cost if he or she were to test the position, which would be made harder if the trustees were unco-operative. For example, it may suit the individual wrongdoer not to be able to call for an indemnity so that the charity’s assets are protected and can continue to be used to sponsor terrorist activity. Similarly, any insurance cover which the trustees may have is unlikely to apply where they deliberately or recklessly misapply or jeopardise the charity’s assets.

By supporting the amendment and giving claimants a more direct and certain way of gaining redress, we would also be making it far harder for those seeking to fund terrorism or other wrongdoing to do so while hiding behind a seemingly charitable veil.

[Lord Leigh of Hurley]

I congratulate the noble Lord, Lord Bew, the noble Baroness, Lady Deech, and my noble friend Lord Gold on highlighting this clear loophole; I think it has come as a surprise to many that it exists. I have tried to research this as best I can. I have read the Henry Jackson Society’s written submission to the Draft Protection of Charities Bill Joint Committee, which I found excellent and helpful. In trying to research it, though, I could not make out, and therefore I am not clear, whether there are any other legal remedies to resolve this problem. If that is the case, and if the Minister is not able to allow this amendment because of the necessary legal advice and argument that he must take, I very much hope that he, like me, can offer general support to the principle behind it.

Palestine: Recognition

Lord Gold Excerpts

Thursday 29th January 2015 Lords Chamber

[Lord Gold (Con)]

I congratulate the noble Lord, Lord Steel, not only on securing this debate but on finding a neat way of dealing with the difficult issue of how you negotiate with a terrorist organisation. One thing is sure: if we recognise Palestine as a state now, there will not be any need to negotiate with the terrorists because they will not negotiate with Israel or any other country seeking to broker a settlement. Negotiation inevitably means compromise. Why should the terrorists compromise? They will have achieved their main goal, without giving away anything. They will have statehood without conditions and without compromise, and, most of all, without having to recognise that the State of Israel exists and is entitled so to do. All they need to do is sit back, set off a few more rockets and wait until the UN resolves to give them even more.

Acknowledging that Israel exists and is entitled to exist has been the major stumbling block previously when the Palestinians have been offered a peaceful way to achieve their own state. They were offered and rejected statehood three times. The first occasion was, as the noble Baroness, Lady Ramsay, said, in November 1947, when by Resolution 181 the UN called for the creation of both a Jewish and a Palestinian state. The second was in the summer of 2000, when Yasser Arafat rejected the Barak peace plan. That plan offered the Palestinians all of Gaza, most of the West Bank and no Israeli control over the border with Jordan or the adjacent Jordan Valley. There was a small Israeli annexation around three settlement blocs, but this was balanced by an equivalent area of Israeli territory that would have been ceded to the Palestinians. In 2008, Prime Minister Olmert extended the Barak proposal by offering to split Jerusalem. President Abbas rejected this, too.

In its 1988 charter, Hamas, which controls Gaza, called for the eventual creation of an Islamic state in Palestine in place of Israel and the Palestinian territories, and the obliteration or dissolution of Israel. That demand has never changed. On that issue, Hamas has been and remains uncompromising.

All here want peace between Palestinians and Israelis. Most would support the two-state solution, but this is not the way to achieve it. Just as we are debating here, in this mother of Parliaments, the proposition—

[Lord Dykes]

My noble friend has got up to 1988. Could he not think about the future, as I asked earlier?

[Lord Gold]

I am coming to the future right now. As we are debating here, in the mother of Parliaments, the proposition that we should unilaterally recognise Palestine as a state, I challenge those supporting this resolution to persuade their friends to reconvene the Palestinian Parliament—the future is in the Palestinian Legislative Council, which has not met since the Fatah-Hamas dispute in 2007—and table a similar resolution, that the Palestinians should recognise the State of Israel and its right permanently to exist. However, this is Alice in Wonderland. We all know that such a proposition is fanciful, and that it could never happen. I apologise for my unparliamentary language, but let us get real and acknowledge that, far from making progress, recognising a Palestinian state now would set the peace process back indefinitely.

Like the noble Lord, Lord Dykes, I want to look forward. In this House and in the other place there are many friends both of Israel and of the Palestinians. If we use those friendships and that influence to persuade both sides to resume negotiations, we will be giving peace a far greater chance than through one-sided, unhelpful resolutions that will have the opposite effect, of setting the process backwards.

Terezin Declaration: Holocaust Era Assets

Lord Gold Excerpts

Monday 26th March 2012 Lords Chamber

[Lord Gold]

My Lords, I, too, thank the noble Baroness, Lady Deech, for bringing forward this dinner break debate, although I would have preferred it if we had not been running to Spanish dinner times. The Terezin conference was the last of a series of conferences convened to consider the issue of restitution following seizure by Nazi Germany of so much property in Europe. Forty-three countries drafted non-binding guidelines relating to best practice in property restitution. These guidelines provided the basis for international, intergovernment negotiations. Governments were required to act swiftly to enact laws to create new restitution rules and regulations to assist claimants to retrieve property or obtain compensation.

In the case of heirless property where the family members had been wiped out, states were requested to create solutions for restitution and compensation. They were charged with creating special funds to promote welfare for needy survivors, as well as to create memorials and commemorations of the Holocaust. The guidelines promoted the idea that resolving issues of restitution and title to property is no longer the sole interest of any one signatory country. All signatory nations are called upon to create procedures for restitution and to consult with each other—effectively to move things along and solve problems.

And so we come to Poland. As noble Lords have heard this evening, Poland is the only post-communist European country without restitution or compensation legislation. Poland has had a go—indeed, several goes—at drafting legislation, but it has come to nothing. Poland’s latest attempt at passing a law was earlier this year, when it was proposed that all restitution claims would go through the Polish courts, where claimants would have to prove land ownership in property registries burned down during the Second World War, or to procure testimony from witnesses who were no longer alive. What is more, claimants had to put up a guarantee of 3 per cent of the property value being claimed, which would be forfeited in the event that the claim was rejected. Not surprisingly, the proposed law received much criticism, and so far nothing has been done.

As the noble Baroness, Lady Deech, said, last year’s excuse was an economic one. The economic climate was not conducive, we were told, to a restitutionary law being enacted. Bearing in mind, as we have heard, that Poland’s economic growth exceeded 4 per cent, the excuse no longer hangs together. Where do we go from here? As I said, the Terezin declaration calls for countries to work together to secure restitution or compensation. As the noble Lord, Lord Palmer, said, a lot of pressure has been put on Europe by the Council of Europe, the European Parliament and the US Senate and Congress. Indeed, restitution was to have been a condition of Poland’s entry to the EU, but that went by the wayside. More must be done, and if all European countries and the USA were to join together and put pressure on Poland, I am sure that progress could be made.

The noble Lord, Lord Wallace of Saltaire, in answer to the Question asked by the noble Baroness, Lady Deech, on 5 December last year, said that the Government took,

“the issue of property restitution very seriously”,

and would,

“continue to remind Poland of its stated intention to reinstate a restitution Bill, currently stalled, when its economic situation allows”.—[Official Report, 5/12/11; col. 499.]

I venture to suggest that growth of 4.3 per cent—if only we had that here—allows for restitution. I would ask the Minister once again to remind Poland, this time a bit more loudly, of its duty. If he can encourage some of our friends on both sides of the Atlantic to join in this noble cause, perhaps at last we will make some progress.

On joining the EU, Poland signed the European Convention on Human Rights, which holds that:

“No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law”.

No such law applied when the Nazis seized this property, and it is time for Poland to recognise this. Poland has a moral obligation, and we would like to see it deliver on that morality.

Transparency

Lord Gold Excerpts

Thursday 10th November 2011 Lords Chamber

[Lord Gold]

My Lords, I begin by thanking your Lordships for the warm and generous welcome that I have received since entering the House in February. I would particularly like to thank all the officers and staff here who have assisted me greatly, not least by helping me to find my way around. As I regularly get lost, I fear that their help will be required for some time yet. I also wish to thank my supporters, the noble Lord, Lord Brittan of Spennithorne, and the noble Baroness, Lady Bottomley of Nettlestone, for their guidance on the day of my admission.

Following my admission, I decided that before making my maiden speech I would fully familiarise myself with the work of the House and perhaps pick up some debating tips from noble and experienced Members. That was my first mistake. That is not to say I did not receive tips—I received many. But as I sat listening to debates, I realised what a task lay ahead of me. The quality of debate, the thoroughness of preparation, the skill of delivery, the humour from many noble Members—the passion, as we have seen from the noble Lord, Lord Prescott, this morning—all made me reflect upon my own skills, or lack of them, in this area. My second mistake was not to realise that the longer I delayed, the greater would be my trepidation at the thought of speaking here for the very first time.

My first appearance in this Chamber was not in February this year. In fact, twice before, I appeared as solicitor to counsel who, wearing a long-tailed wig, silk stockings and buckled shoes, addressed the Law Lords from the Bar of the House, trying not to be distracted by Members of your Lordships' House who just wandered in from time to time to see what was going on. It never crossed my mind then that one day I would have the great privilege and honour to be permitted to cross the Bar and take my seat here.

I was not the first member of my old law firm, Herbert Smith, to be made a Peer. In fact there are now three former partners and one former articled clerk in the House. My noble friend Lord Hart of Chilton sits on the Benches opposite. My noble and learned friend Lord Collins of Mapesbury, will take his seat on the Cross Benches when he returns from the Supreme Court, and my noble friend Lady Shackleton of Belgravia—she is the former articled clerk and she has done quite well since leaving Herbert Smith—sits with me on this side of the House.

The firm has not yet managed to recruit anyone to the Liberal Democrat Benches or, indeed, to the Bishops' ranks, although for some reason there was a steady flow of solicitors who, perhaps having seen the error of their ways, left the law to become clergymen, so perhaps there is still a chance.

On 31 August last year, as part of its plea bargain with the US Department of Justice, I was appointed for three years as corporate monitor of BAE Systems plc to ensure that the company was operating in a compliant and lawful way. In taking up this role I followed in the footsteps of the noble and learned Lord, Lord Woolf, who had been appointed to undertake an inquiry into the way in which the company conducted its business. The noble and learned Lord made 23 recommendations for improvement and change and I have been monitoring the company's progress in advancing these recommendations. I am pleased to say that, with just a few minor exceptions, where work continues all recommendations are now in place.

I mention this work not just to inform but more particularly because it has brought very much into focus the importance of transparency when conducting business, particularly international business, both as to the manner in which that business is conducted and in relation to a company's dealings with its customers. Competition is fierce and, regrettably, sometimes our British businessmen find themselves competing against others, operating to a different code of conduct, who seek to gain market advantage by unfair means and are sometimes assisted in that through a lack of transparency in the way in which other countries operate.

The noble Lord, Lord McNally, has stated that this Government are committed to extending transparency to every part of public life. If I may respectfully say so, that is a commendable, if somewhat ambitious, objective. In his letter dated 7 July this year, the Prime Minister wrote:

“We recognise that transparency and open data can be a powerful tool to help reform public services, foster innovation and empower citizens. We also understand that transparency can be a significant driver of economic activity … with open data increasingly enabling the creation of valuable new services and applications”.

I fully agree with that view. Greater transparency results in Governments being more accountable. If we know how money is spent, we are better able to improve controls on spending and reduce costs. More particularly, companies will have a better opportunity to compete if they have access to public sector contract and procurement data that enable them to make informed decisions.

While there remains a considerable way to go before this society is truly transparent, this aspiration is one by which we here in the United Kingdom can provide a lead to the way in which other countries should operate.

With the passing of the Bribery Act 2010 this country is already leading the way in setting a benchmark for honest trading and dealing and, pleasingly, some countries appear to be emulating our example. I know from my work with BAE Systems that there are many international customers who have truly welcomed this approach to open and honest business. Many countries are raising their standards and demonstrating that they will award contracts to the business that truly deserves to win on merit, not as a reward for bribes or other improper behaviour.

I regret to say that there are some who feel that the Bribery Act goes too far and that for British industry to compete internationally it must be permitted to bend the rules a little, as allegedly happens elsewhere. Nevertheless, I hope and believe that this negative view will be proved wrong. If international companies stand firm against corruption, there will be progress even in those countries where corruption is thought to be rife.

So, just as the Prime Minister sets out what he and the Government want to achieve here, I respectfully suggest that we should be seeking to encourage our international friends to follow our lead and embrace transparency in the way in which they conduct public life. In this country we have many innovative and ambitious businesses ready to compete internationally and able to take advantage of such a change of attitude. Working together, major companies and this Government can achieve a great deal in this area. We should aim to create a new international code of conduct for trade that encourages transparency and outlaws corruption. The assistance that this will provide to British industry and businesses seeking to undertake international trade will be substantial.