Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019

Earl of Kinnoull Excerpts

Monday 18th February 2019 Lords Chamber

[Lord Sharkey (LD)]

My Lords, I can be very brief. I declare an interest as chair of the Hansard Society, which is almost as obsessed with the effective scrutiny of secondary legislation as the noble Lord, Lord Adonis, is. I agree with everything that the noble Lord, Lord Davies of Stamford, has said about scrutiny, but I also have no objection to this SI per se. After listening to the exchanges, I understand the difference between consultation and engagement, and I support the view of the noble Lord, Lord Adonis, that there should have been consultation as well as engagement on this SI and the other SIs that we are considering today.

[The Earl of Kinnoull (CB)]

My Lords, I rise to put the case for poor old business because once again it is the Government who are being blamed. This SI is about access to capital. Without good access to capital, business is constrained and we do not have the means to create the wealth that we need in our country. I have a lot of experience with prospectuses relating to both equity and debt and I am old enough to remember, and have produced prospectuses for, the 2003 prospectus directive. I have been invited, although I have not actually been, to many conferences to discuss the prospectus directive, the transparency directive and CARD—the consolidated admissions and reporting directive. This is very much in UK capital-raising mode. It is the devil that everyone knows, and these SIs grandfather through for British business a very important route to capital. It is not the only route but it is the listed route to capital here.

Here I want to say something very complimentary about the UK Listing Authority, which many noble Lords probably do not know. I have dealt with listing authorities in other countries as well, and the UK listing authority is exceptionally good. It is good at giving clear guidance and responding swiftly when it needs to give comments on a draft prospectus, and that is certainly not the case in some of the landlocked European places that are trying to snaffle our business. Again, it is of absolute importance that this SI goes through.

Turning briefly to the amendment of the noble Lord, Lord Adonis, I think that of the various amendments that he has tabled today, this is very much the back marker, in that I do not think the case for it is nearly as strong. I note that the original policy note for this came out on 21 November last year and the draft SI surfaced on 12 December and was laid on 21 January. So this is the 89th day that this has been around, because the policy note was spot on that there have not been any changes. In fact, the appearance of the policy note produced a tremendous number of emails into my inbox from all sorts of the expensive lawyers that the noble Lord, Lord McNally, was talking about earlier—

[Baroness Kramer (LD)]

Distinguished lawyers.

[The Earl of Kinnoull]

Yes, I am sorry, we have now decided that they are distinguished lawyers—and others of the huge number of advisory people in London who help people get access to capital. There were a lot of notes in November and more in December, and what is interesting is that they have all been positive on this SI. So I am not sure what a full consultation would have produced in excess of the current SI. Anyway, that is what we have, and I very much hope that it too will sail through shortly.

[Lord Leigh of Hurley (Con)]

I very much agree with the noble Earl, Lord Kinnoull. His remarks were spot on. This has been around for some time, everyone in the industry is adamant that it is necessary for ongoing financial services success, and there is no quibble about its importance. The only quibble that I might have with the noble Lord, Lord Adonis—who has explained that he is not a financial services expert—is about what he was focusing on in note 10: the underestimate of 2,113 firms having to bear the cost of £700 each. Of course, the £700 is calculated assuming that firms will use lawyers at £330 an hour in each and every case. I can assure noble Lords that my firm, for one, will not be.