Oral question asked in the House of Lords, by Lord Phillips of Sudbury (Liberal Democrat). It was answered on Wednesday, 14 December 2011.

Business: Ethical Values

Question: My Lords, given that highly complex, voluminous regulation is meat and drink to City lawyers and accountants—for example, some of our largest public companies pay a trivial amount of tax by avoidance schemes of the utmost artificiality—might the time not have come to consider in principle legislation rather more like our common law principles, which are more difficult to evade?

Answer: In response to my noble friend Lord Phillips of Sudbury, the Government agree that principles-based regulation will be an appropriate approach in many cases. There are existing examples of principles-based regulation in a variety of areas, as I am sure he well knows, such as the UK Corporate Governance Code, which contains broad principles against which listed companies are required to report. However, we will continue to monitor this and I will continue to talk to him about it.

Secondary information