Draft Financial Services Bill (Joint Committee)

Thomas Docherty Excerpts

Monday 18th July 2011 Commons Chamber

[The Leader of the House of Commons (Sir George Young)]

I beg to move,

That this House concurs with the Lords Message of 21 June, that it is expedient that a Joint Committee of Lords and Commons be appointed to consider the draft Financial Services Bill presented to both Houses on 16 June (Cm 8083).

That a Select Committee of six Members be appointed to join with the Committee appointed by the Lords to consider the draft Financial Services Bill presented to both Houses on 16 June (Cm 8083).

That the Committee should report on the draft Bill by 1 December 2011.

That the Committee shall have power—

(i) to send for persons, papers and records;

(ii) to sit notwithstanding any adjournment of the House;

(iii) to report from time to time;

(iv) to appoint specialist advisers; and

(v) to adjourn from place to place within the United Kingdom.

That Mr Nicholas Brown, Mr David Laws, Mr Peter Lilley, David Mowat, Mr George Mudie and Mr David Ruffley be members of the Committee.

The Government are anxious to subject more Bills to pre-legislative scrutiny and as a result we are publishing more Bills in draft. The draft Financial Services Bill was presented to the House on 16 June, and we now want to make progress and to nominate the Commons membership of the Joint Committee on the Bill. Our proposal was blocked on an earlier occasion; hence, we have tabled the motion before us.

We believe that the quality of legislation is enhanced if more Bills can be subjected to pre-legislative scrutiny. I am disappointed that a small minority of Labour Members are seeking to stop the effective scrutiny of this legislation by blocking the motion. It is for the parties to nominate who represents them on such Committees, and it is a shame that Back-Bench Members are seeking to frustrate a position that has been agreed between the parties and, with their amendment, to skew the balance of the Committee towards the Opposition.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Does the Leader of the House recall that on four occasions last week Members objected to the motion? There were plenty of opportunities, if he had wished to do so, to engage in a discussion about what the problem was. Surely, if the Government had come to discuss this with relevant Members of the Opposition, this matter could have been resolved before tonight.

[Sir George Young]

No, there is a convention that the nomination of Members to Joint Committees such as this are made by the political parties. That is the procedure that we have followed in this case and I regret that some Members have sought to frustrate that process.

It is the Government’s hope that this very important Bill will now be given the pre-legislative scrutiny it deserves and that these wrecking tactics will stop. I commend the motion to the House.

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[Thomas Docherty (Dunfermline and West Fife) (Lab)]

I beg to move, amendment (a), in line 14, leave out ‘Mr David Laws’. [Hon. Members: “Shame!”] I hear cries of “shame” from the Chancellor’s former chief of staff, from the Liberal Democrat Whip and from many other members of the coalition Government. I took some advice this afternoon about the rules of this procedure because I wanted to be very clear about what I may or may not refer to. I have received clear advice that I may refer to the content of the recent report of the Standards and Privileges Committee and that I may make some general observations, but you will probably agree with me, Mr Deputy Speaker, that I would not be allowed to make accusations about an hon. Member that are not referred to in the report, and I will proceed on that basis.

The Bill is one of the most important Bills that the Government are introducing. I do not say that just because I have had a chance to glance through the weighty tome that the Government have introduced but because one of the great debates that the House will have in this Session is about how we can better regulate our financial industry. Without doubt there was a failure to regulate it in the previous Parliament—[Hon. Members: “Hear, hear!”] I am sure that the hon. Member for Devizes (Claire Perry) will nod away to that.

[Mr Kevan Jones (North Durham) (Lab)]

My hon. Friend says that regulation failed, and there were loud cheers from the Government Benches, but did not Members on the Government Benches call for less regulation of the financial services industry?

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[Thomas Docherty]

Once again, my hon. Friend anticipates my next sentence. I was about to remind the hon. Member for Devizes, if she were paying attention to the debate, that when she was penning speeches for her right hon. Friend the Chancellor of the Exchequer and for the now Prime Minister, they on more than one occasion decried the fact that there was too much regulation of the financial services industry. The House does not need reminding that the hon. Lady and her cohorts believed that if we had less regulation we would have a better financial services industry.

[Claire Perry (Devizes) (Con)]

Rubbish.

[Thomas Docherty]

But I refer the hon. Lady to the speeches that she used to pen for the Chancellor of the Exchequer before he got some better speechwriters, when he used to say, “You may say we have too much regulation—and I agree.” So the Bill—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. As hon. Members know, the debate is quite tight and we are stretching it beyond where we need to be. If we can come back to points that are more relevant, I am sure the House will be happier.

[Thomas Docherty]

I am grateful, Mr Deputy Speaker. That allows me to pose a question to the Leader of the House. My understanding of the Order Paper is that the debate may continue beyond 10 pm. I am not sure of the mechanism that would be adopted, but my understanding is that the Government would like the debate to have the opportunity, if necessary, to continue beyond 10 pm. If that has been withdrawn, I would be grateful for clarification from the Chair.

The Leader of the House said in his brief yet succinct remarks that if we were to change the balance of the Committee, that would give the Opposition parties control of the Committee. I did not have the benefits of the wonderful education of many Members on the Government Benches because I grew up under the previous Conservative Government, but by my maths there would still be three members of the Conservative party and two members of the Opposition on the Committee. The Government would still have a majority. They are perfectly entitled to nominate a new member, if they choose to do so, and we would support a suitable candidate. Perhaps in his rush to get his suntan creams and holiday brochures out, the Leader of the House had not quite checked the membership of the Committee.

[John Mann (Bassetlaw) (Lab)]

Would my hon. Friend like to take the opportunity to correct the record and the rather uncharitable statement made by the Leader of the House that those supporting the amendment are in some way attempting to undermine pre-legislative scrutiny? Does my hon. Friend agree that if there had been pre-legislative scrutiny at a much earlier stage in previous Parliaments, some of the issues in the financial sector may not have been as profound as they have been?

[Thomas Docherty]

My hon. Friend is correct. I am baffled—I would happily take clarification from the Leader of the House or the Deputy Leader of the House—as to how removing one member of the Committee is tantamount to seeking to thwart the business of the House. My understanding—I am sure the Deputy Speaker would correct me if I was wrong—is that the Committee would still be quorate and would still be competent.

I look at the names of some members of the Committee and see good, learned and wise individuals from both sides of the House. At least one member, the hon. Member for Warrington South (David Mowat), is present in the Chamber to hear the discussion. The Committee consists of a competent set of Members from both sides of the House. My hon. Friend the Member for Leeds East (Mr Mudie) is a long-standing member of the Treasury Committee.

[David Mowat (Warrington South) (Con)]

I thank the hon. Gentleman for his generosity in referring to me. He is going through the list of people nominated to the Committee. How many of them does he think know more about international financial services than the right hon. Member for Yeovil (Mr Laws)?

[Thomas Docherty]

I will shortly move on to the thrust of my argument and come to the issue of the complications or otherwise for the Committee. We do not seek to thwart the aspects of pre-legislative scrutiny, but we do object to the Government’s choice of one specific individual to sit on the Committee. As I said, this is one of the most important pieces of legislation we will have before us in this Session, and possibly in this Parliament. One point on which both sides of the House would genuinely agree is that over the past few years there was a failing in the scrutiny and regulation of the financial industry. We can argue about who was more to blame for that and about light-touch regulation, or lighter regulation still—[Interruption.] I hear the chuntering from various sedentary positions and, were I to stray too far into the previous Government’s financial regulation regime, I suspect that you, might pull me up on that Mr Speaker.

This is about probity. Ultimately, this comes down to whether or not somebody—I refer to the Standards and Privileges Committee’s report—who was found to have had a serious lack of judgement, who knowingly and wilfully misled the Fees Office and who took significant sums of money, as the report states, is in fact a fit and proper person to sit on a Committee that will scrutinise the new financial services regime. I do not intend to read out the whole report and will stick very closely to the subject of the—

[Mr Speaker]

Order. The hon. Gentleman will resume his seat. I must emphasise to him and to the House that this is not a debate on the right hon. Member for Yeovil (Mr Laws), and it certainly cannot be a rehashing, reworking or reiteration of the contents of a particular report. This is a debate on the establishment of a Joint Committee. Members are entitled to comment on whether they think the Committee should be established and, if they do not think that it should be or wish to amend its composition, to explain why. A general ad hominem attack on a particular individual is not the purpose of the debate and cannot become its substance. I know that the hon. Gentleman will speedily redirect his remarks in an entirely orderly way.

[Thomas Docherty]

I am grateful, Mr Speaker. Obviously I took some very senior counsel this afternoon from Officers of the House, as you are aware, on how to stay in bounds and perhaps go offside, to use the modern—

[Mr Speaker]

Order. I say to the hon. Gentleman that, whatever senior counsel he sought and obtained, he can on this occasion make do with mine.

[Thomas Docherty]

I always have great respect for your counsel, Mr Speaker, and obviously do not seek a time when you might perhaps be advising other Parliaments in other parts of the country, or other parts of the world. [Interruption.]

[John Mann]

If I could hear myself speak, I would ask my hon. Friend whether he would care to comment on the fact that the constituency of Yeovil is an English constituency, whether he has considered the make-up of the Committee that is proposed, whether he perceives that it will in fact be an English Committee, rather than a United Kingdom one, and what the potential consequences might be, not least for his constituents, of that happening in such a biased way.

[Thomas Docherty]

I obviously look forward to my hon. Friend’s contribution in due course.

I must say that I thought the cracks about monkeys and organ grinders that the hon. Member for Devizes made did nothing to raise the standard of the debate, but as she used to work for the Chancellor of the Exchequer I expected nothing more, because her speeches were never that good when she worked for him. It is important that we look at whether the people who are being put forward in general are of a correct measure. The hon. Member for Warrington South, who I think is now detained elsewhere, asked about the qualifications needed for serving on the Committee, and my hon. Friend the Member for Bassetlaw (John Mann) and I are equally concerned about what qualifications should or may bar an individual Member from serving on the Committee. Having read from cover to cover the Standards and Privileges Committee report, and having read the introduction to the draft Bill prepared by the Chancellor of the Exchequer and his team about the need for financial probity and for a new set of regulations, I have severe doubts about whether one member of the Committee is adequately suited to the task.

In a week when Parliament has had to deal with some very severe accusations levelled against members of the Government and against members of Her Majesty’s police forces, when we have seen former special advisers being placed under arrest, and when Government Members simply argue, as I have heard them do today, that we will take people on the basis of the assurances they have given although they are under active police investigation, the public will look at this Committee and say that it beggars belief.

[Dr Julian Huppert (Cambridge) (LD)]

It has been said several times that the past week has seen Parliament at its best. How would the hon. Gentleman describe what he is doing now?

[Thomas Docherty]

If the hon. Gentleman thinks back over the past 12 months, he will recall that my hon. Friends the Members for West Bromwich East (Mr Watson) and for Rhondda (Chris Bryant) have almost single-handedly ploughed a furrow in highlighting an issue. Government Members heckled and shouted them down, and accused them of launching personal attacks on the Prime Minister.

[Mr Speaker]

Order. The hon. Gentleman must not be led astray into a spontaneous panegyric to his hon. Friends. He must focus very much on the matter in hand, which is the Joint Committee on the draft Financial Services Bill—quite a narrow brief, albeit an important one.

[Thomas Docherty]

Obviously, Mr Speaker, the hon. Member for Cambridge (Dr Huppert) led me down a very tempting path, and I will do my best not to be drawn down it again.

The draft Bill is a phenomenally large document. I am sure that on your evenings off, Mr Speaker, when you are drinking a glass of mulled wine, you will have had a chance to flick through its contents. It is a wide-ranging Bill that seeks, rightly, radically to overhaul our financial services industry. It is therefore right that the individuals from both Houses who are tasked with providing the legislative scrutiny are properly scrutinised themselves, because we are placing a huge amount of trust in their hands. I suspect, Mr Speaker, that if I were to go too far into the issue of trust you would rightly pull me up for it.

[Robert Halfon (Harlow) (Con)]

Members of both parties were implicated in various expenses issues. Is the hon. Gentleman saying that members of his own party who were so implicated should not serve on any Committee either?

[Thomas Docherty]

The hon. Gentleman asks a valid question. As a new Member who unseated a former Member who had to pay back thousands of pounds, I am very much alive to these issues. I absolutely believe that if someone is forced to pay back £56,000 to which they were not entitled because they had knowingly misled the taxpayer—the Fees Office—they should be excluded from being a member of a committee that oversees the new financial services regulation. That goes to the heart of the issue. If the hon. Gentleman does not agree with me, I respect that, but I hope that he will indicate that that is his view. I do not see him indicating dissent, so I assume that he agrees.

[Mr John Spellar (Warley) (Lab)]

My hon. Friend is focusing largely on the Commons composition of the Committee. Does he believe that the Lords composition makes it any broader or, to take the point made by my hon. Friend the Member for Bassetlaw (John Mann), any more representative?

[Thomas Docherty]

rose—

[Mr Speaker]

Order. That is not a matter for debate in this Chamber tonight.

[Thomas Docherty]

I am most grateful, as ever, Mr Speaker, for your counsel. Of course, that is a debate for another time. As the Leader of the House is listening, perhaps we will have a discussion in future about the joint membership of the Committee and both Houses will be required to give their agreement, but that is not the issue before us today.

On no fewer than four occasions over the past seven days, the Government Whips have tried to slip this motion through literally on the nod at the end of the evening. On each occasion, an hon. Gentleman has objected. [Interruption.] It was an hon. Gentleman, as it was me and my hon. Friend the Member for Bassetlaw (John Mann). Unless the hon. Member for Cambridge knows something I do not, I am fairly confident that I can refer to myself and my hon. Friend as gentlemen.

On each of those occasions, a number of brief back-channel discussions took place between various members of the Treasury Bench—I will not name them, even if they are here—about what was going on. They are fully aware of what this has been about. It was entirely a matter for those on the Treasury Bench. If they did not wish to have this debate tonight, they could have approached us to see whether there was substance to our objection, but they chose not to do so. Indeed, one member of the Treasury Bench thought that we were objecting to our own Members.

[Mr Mike Hancock (Portsmouth South) (LD)]

Perhaps the hon. Gentleman can explain what he would have accepted from the Treasury Bench.

[Thomas Docherty]

That is a very good question. I am looking at the many Liberal Democrats who are here tonight. I see the right hon. and learned Member for North East Fife (Sir Menzies Campbell), the hon. Member for Burnley (Gordon Birtwistle), who has a long track record in business, the hon. Member for St Austell and Newquay (Stephen Gilbert), who is a new Member, and the hon. Member for Portsmouth South (Mr Hancock). All of them have had a distinguished service in the House for various lengths of time, all of them have experienced careers outside the House, and crucially, all of them have constituents who have suffered from the failures of financial regulation in the last Parliament. If the Treasury Bench had genuinely offered any other member of the Liberal Democrat party to be a member of the Committee, I would have been happy.

[Mr Hancock]

As that is the case and the hon. Gentleman wants to have the last word on who serves on the Committee, why did he not put another name forward?

[Thomas Docherty]

I am grateful for that question. Obviously, I will not have the last word. Indeed, I imagine that you, will have the last word Mr Speaker when you read out the result of the Division that may occur later. Having taken advice from senior officers in the House, it is my understanding, although I have not checked the latest edition of “Erskine May”—the 24th edition, which was edited by the Clerk of the House, is out now and is a snip at £295—that Labour Members would not be allowed to put forward the name of a Liberal Democrat Member without their express consent. I fully understand why a Liberal Democrat Member would not seek publicly to undermine their parliamentary colleague and I respect that. It would be for the Government Whips to approach Liberal Democrat Members.

[John Mann]

My hon. Friend is getting to the nub of one of the key issues. Is not the dilemma that, when wishing to amend the membership of a Standing Committee or any other Committee of the House, the modernisation of this place has not gone far enough for anything other than the usual channels to determine such things? It is only in the last year that Chairs of Select Committees have been elected by the House. Modernisation has only gone so far. In raising such matters in the House, we are rather trapped in the antiquated systems of how we can object.

[Thomas Docherty]

My hon. Friend is entirely right. He will know that I am a member of the Procedure Committee, which is the successor to the Modernisation Committee. I have the privilege to serve with a number of the members of that Committee. He is right to say that this is something that I take a particularly keen—[Interruption.] I will give way.

[Mr Mike Hancock]

I am interested to know how the hon. Gentleman managed to achieve a place on that Committee.

[Thomas Docherty]

I think that you will correct me, Mr Speaker, if in my youthful naivety I have misunderstood the system. The Committee of Selection considers names, and those are put forward to the House for its approval. I think—again, you will correct me, Mr Speaker, if I am not fully aware of the procedure as a naive new Member—that the House had an opportunity to vote on that.

[Mr Speaker]

Order. I simply say to the hon. Gentleman that I do not think the House requires a disquisition on his career trajectory, which resulted in his ultimate elevation to membership of the Procedure Committee. I am sure it is a matter of very great interest, but it can be kept for the long winter evenings.

[Thomas Docherty]

Perhaps over a glass of mulled wine, Mr Speaker. I was simply answering the question asked by the hon. Member for Portsmouth South, but my point is that my appointment was subject to a vote of the whole House, and it was approved. [Interruption.] I suspect that with my career trajectory going downwards, as hon. Members suggest, that would not necessarily happen again.

My hon. Friend the Member for Bassetlaw is entirely right to say that we need to modernise the procedure. It is unfortunate that Members are being detained, and I do not wish to detain the House any longer—[Hon. Members: “Hear, hear!”] I have never had so much support from the Government parties. All I would say is that it is entirely regrettable that, although the Government Whips may say otherwise, they were intransigent in not being prepared to have even a single formal conversation with Opposition Members to see whether a solution could be found. It is regrettable that Members are being kept from their mulled wine, so with that I will sit down with no further ado.

[John Mann (Bassetlaw) (Lab)]

It is with pleasure that I address such a packed House. Having sat through and participated in a significant number of debates since the general election, I cannot recall on any occasion, even when there have been debates on so-called fundamental reform of the constitution by the Deputy Prime Minister, seeing so many Liberal Democrats present. I heard someone say from a sedentary position that this was Parliament at its worst, but it is a good sign of democracy for this type of debate to have so many active would-be participants. I welcome the Liberal Democrats into the House in such large numbers, and it is good to see that their coalition partners wish to see some balance and to be informed by the debate.

I hope that we can have the full, thorough and proper debate that the House has lacked in relation to the establishment of such Committees, which are a new venture for the House. They should generally be welcomed, but the Leader of the House and his shadow exemplified the bind that we are in, as democratic politicians in this House, when we attempt to amend anything in any way that has not gone through the “usual channels”.

[Thomas Docherty]

I did not get a chance to notice this while I was speaking—following the rules, I was looking at you, Mr Speaker—but has my hon. Friend noticed that one of the chief cheerleaders tonight is a Liberal Democrat Whip?

[John Mann]

We take the view that all Members of the House are equal, which is an important principle, so the ability to participate and influence should be equal. It is ironic, therefore, that when it comes to the selection of Committee members some are more equal than others. It seems to me that as we have started a modernisation process that is very slowly beginning to trickle through the House, after many years of waiting, that issue needs proper attention.

It is rather a shame that someone needs to table an amendment even to get the issue on to the Floor of the House. The Government were not going to allocate any time to debating this important Committee, its make-up, whether we should have it at all, the timetable allocated to it, the role of the House of Lords within it, whether the Lords should have a role in financial matters, or the issue of England versus the rest when it comes to the membership of the Committee. None of that could have been debated had not my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) and myself chosen to learn the rules and object at 10 o’clock on a number of occasions over the past week, and then to table an amendment. By its nature, that amendment has forced the Government to create time for this debate.

It is a little odd that the Government are seeking to have unlimited time for this debate, which can continue till any hour, when we have just debated major energy statements—a fundamental issue for each and every hon. Member and our constituents—with speech limits of five minutes per Member. That seems to me a poor allocation of time, but it is another example of the impotence of the Back Bencher in attempting to influence what goes on in here.

I do not court favour, and I never have, with any side of the House. Indeed, on some issues, on some occasions, I have been in a vocal but rather small all-party minority. When the expenses issue was first emerging, and this House was refusing to deal with it and was still not totally on top of it, the usual channels—or what I termed the “gentleman’s club”—were a hindrance to democracy and to our relationship with our voters.

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[John Mann]

Our colleagues from every corner of Scotland, not just Edinburgh, are always rightly happy to demonstrate the importance of financial services—

[Thomas Docherty]

It may assist my hon. Friend to learn that I have more than 2,000 people working in the banking industry in my constituency, not to mention the thousands who make the lovely commute every morning over the bridges to Edinburgh.

[John Mann]

I put it to my hon. Friend that it would be an own goal by this Parliament, not least considering the job losses in the Royal Bank of Scotland and other institutions in Scotland and elsewhere, to go ahead with this Committee with only English members. One of the niceties—

[John Mann]

I thank the hon. Gentleman for his point. There are other reasons why, when considering altering the balance of the Committee to represent the balance in Parliament more appropriately, we picked a Liberal Democrat to remove, not a replacement from my party. No replacement will be required if this resolution is passed, as I hope it will be. One of the consequences would be that the Government could rethink the membership of the Committee. The question of how many members, and the balance from Scotland, Wales, Northern Ireland and England—

[Thomas Docherty]

And the gender balance.

[John Mann]

I was just about to come to that point.

--- Later in debate ---

[John Mann]

I will not be making frivolous points about the forename or surname of any of the Members put forward for this Committee. However, the question of gender balance is not going to be knocked off the agenda so easily, because it is fundamental to the whole workings of Parliament. If Parliament in the modern era is portraying itself through one of the very first Joint Scrutiny Committees to be established and the elected House of Commons manages to get itself in a bind whereby all the Members put forward are English males, we are letting the country down. We are also letting down the principle of modernisation, which, superficially at least, is shared by those on both sides of the House. If we are really trying to encourage a wider array of people to take an interest in this House and, in future years, to stand for this House, how we portray ourselves in the Committees that we create is a fundamental principle.

I put it to the House: in what other way can the House manifest its commitment to an inclusive Parliament—a Parliament that is representative of all parts of the country, of all sections of the country and of both sides of the gender division within the country? There is a fundamental point at issue, which the Government, in failing to give proper time to have this proposal debated, are shying away from. That is a weakness at the heart of government.

[Thomas Docherty]

My hon. Friend is making a compelling argument. Has he considered the idea that in the future it might be helpful if a statement were attached to each name, spelling out what the usual channels felt were the Member’s qualifications for this Committee or for the Select Committees?

[John Mann]

No, I disagree with my hon. Friend. Others were arguing in interventions—they are welcome to make the point at greater length in debate if they wish—that this Committee should be based on experts, but that is a fundamental flaw of logic. The idea that it has to be bankers and specialist economists who investigate, make decisions on our behalf and carry out pre-legislative scrutiny and that the basis of these bodies should be some academic prowess or past profession is part of the old school and the gentlemen’s club. There is no reason why those from manual working backgrounds or care backgrounds should not also be able to participate in making such decisions as effectively as anyone else as members of these Committees.

When the world looks in, and, in particular, when our constituents look in, and we examine how far we have modernised or not modernised, as exemplified by the failure in the make-up of this Committee, we find, at the very end of the first year of this two-year Parliament and as we go into the summer recess, that the problem is magnified. We are talking about one of the last decisions made by Parliament before the recess. It is a recess that some believe is too long—I tend to share that view—but through which this Joint Committee will apparently be working. If that is the signal we send out to the country of how we see the modern world and financial services and how we intend to influence such services, it undermines our ability to do the kind of things we want to, although we disagree on the precise remedies. Removing such influence from ourselves and weakening ourselves by having such an unrepresentative Committee is a fundamentally flawed policy, but other weaknesses in the make-up of the Committee must be explored.

One such weakness is the fact that the balance between Government and Opposition does not reflect the balance in Parliament. That seems to me to be fundamentally wrong. There may or may not be a desire to have votes in the Committee, but, as regards the contribution, input and perspectives raised when four of the members come from the Government side and two from the combined Opposition side, that distribution does not seem to be democratic or appropriate. It does not reflect the election results.

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[Thomas Docherty]

Perhaps my hon. Friend does not recall the exchange between me and the hon. Member for Portsmouth South (Mr Hancock), who is no longer in his place. I explicitly said that we would expect and hope that the Liberal Democrat party would offer a fresh name in the coming days.

[Sir Menzies Campbell (North East Fife) (LD)]

That is inconsistent.