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Companies Bill [Lords]

It is true that a number of legitimate concerns have been raised about the practicalities of introducing institutional disclosure in the way proposed in the Bill. The Liberal Democrat team in the House of Lords thought those practical problems serious enough to raise the question of whether these powers should be supported at all. On Second Reading, my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) said that, on further reflection, our view is that there is a case for the reserve powers, but only if the Government make it clear that they will not go for a one-size-fits-all approach and that they will consult carefully with the industry before introducing any regulations under the powers that the Bill will grant. To put it briefly, our view is that it would be highly preferable if amendment No. 435 were agreed to, because it would make it clear that there would be consultation with the industry and careful consideration of the costs and benefits before any regulations were introduced using the new powers. In those circumstances, we believe that the fear expressed by the hon. Member for Huntingdon (Mr. Djanogly)—simply having the reserve power will result in fewer institutions moving towards voluntary disclosure—is misplaced. We believe that as long as the industry is reassured by the Government, preferably by the amendment being accepted, although the Minister could attempt it in other ways, further progress towards voluntary disclosure will continue. The question laid down by the hon. Member for Huntingdon is, why have the reserve powers in the first place? The answer is that it is perfectly legitimate for the Government to take the view that there will be institutions and institutional investors that follow practices that are not as transparent as others, and that there might come a time when, to provide a level playing field for the whole industry, some regulation is necessary. I hope that that time does not come and that the Government will use the powers that the Bill will grant them in a way that helps the industry to move further, although we recognise that there is a legitimate case for those powers as they stand.