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Legislative and Regulatory Reform Bill

I had not intended to intervene, but I wish to raise the subject of investor confidence. These days, investors have no confidence in Ministers. Noble Lords will recall that 40 per cent of essential services—public utilities—are German owned and25 per cent French owned. International investors, who may not understand the complexities of British political and economic life, rely on stability and the independence of the regulators. I return to the bizarre and disgraceful incident of Railtrack. Investors had confidence in it until the Government decided that they would step in. Overnight, the rating of the United Kingdom in the international bond market went from AAA to zilch. That was because the bond market, which is critical to long-term investment in public utilities, wants stability. As noble Lords will recall, the bond market plays an important role in financing most acquisitions or investment in public utilities. We are talking of 25-year money at fixed rates placed with institutions—pension funds and others. Such institutions are not thinking of a five-year change of Government; they are thinking about long-term, secure investment. To some extent, they are institutions acting on behalf of institutions, and they require stability and the knowledge that the regulator not only is independent but is perceived to be independent. Thus, if we do not pass an amendment such as this—and I do not wish to go into the technicalities of one or the other—and if the response of the Minister in this debate is not trustworthy and confidence-giving, there will be a little rattling in the bond market. We are not necessarily talking about equity investors; we are talking about the long-term market, which is very sensitive to security and stability.