§ Mr. Deakins
I beg to move Amendment No. 46, in page 32, line 7, leav out 'is' and insert 'appears to the Board to be'.
§ The amendment is purely a drafting correction.
§ Amendment agreed to.
§ Amendments made: No. 47, in page 32, line 8, at end insert—
§ '2A.—(1) The Board may by notice in writing require any person who appears to them to be an intermediary of any such company as is mentioned in sub-paragraph (a) or (b) of paragraph I above to give to them any information which appears to them to be necessary in order to determine what (if any) persons would be linked with that person within the meaning of section (The exempt income level for the purposes of section 18) of this Act if that person were an intermediary of that company.
§ (2) A person to whom a notice is sent under this paragraph shall send to the Board within one month of the date of the notice a statement—
- (a) giving any of the information required by the notice which he is able to give; or
- (b) informing the Board that he is unable to give any of the information required by the notice.
§ 2B.—(1) Any person who causes or permits to be included in a statement sent to the Board under paragraph 2A above any information which he knows to be false in a material particular or recklessly causes or permits to be so included any information which is false in a material particular shall be guilty of an offence and liable—
- (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;
- (b) on summary conviction, to a fine not exceeding £400.
§ (2) Any person who makes default in complying with paragraph 2A above shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £400. '
§ No. 48, in Page 32, line 23, leave out sub-paragraph (3).
No. 49, in page 32, line 34, at end insert—
4A. A notice under paragraph 2A or 3 above may be sent by post, and a letter containing such a notice shall be deemed to be properly addressed if it is addressed to the person to whom it is sent at his last known place of business in the United Kingdom. '.—[Mr. Deakins.]
§ Motion made, and Question proposed, That the Bill be now read the Third time.
§ 9.42 p.m.
§ Mr. Higgins
I was not expecting to be called at this stage, Mr. Speaker, as I understood that the Government had given an undertaking that they would give an explanation on a particular matter at the conclusion of our deliberations on Report. However, I shall now make my comments on Third Reading.
This Bill has had a singularly chequered career from the moment it started—indeed, before it started—its passage. The entire House, except for the Minister, was against it. That was the position before it was introduced or published. We have done all we can to improve it, but it is still a remarkably complex measure. It is riddled with anomalies and difficulties. I do not think that we can be happy with the result, despite the immense amount of hard work that many hon. Members have put into it. I am still concerned about the possible repercussions it may have on invisible earnings. I hope that that is a matter the Government will be prepared to consider between now and when the Bill goes to another place—the place from which it originated through no fault of that place.
I think that the best thing we can do is to press the Government as hard as we can to introduce regulations which will prevent the collapse of insurance companies. That will mean that the Bill will not be necessary. I have serious doubts about the consequences that will flow if the Bill is ever operated. I am sure that the right approach is to ensure that collapses do not take place. We shall urge the Government in that direction.
§ 9.44 p.m.
§ Mr. Roper
I support a good deal of what has been said by the hon. Member for Worthing (Mr. Higgins). As I have made clear on a number of occasions, I regard this as an unsatisfactory Bill. But in the present state of the industry it would not be right to vote against what must be an unsatisfactory long-stop. It would not be right to vote against the Bill. However unsatisfactory it may be, if an insurance company were to get into difficulties tomorrow the policyholders of that company would look to us with that responsibility.
It is therefore with reluctance that one has to support the Bill on Third Reading. I have never believed that the Bill was significantly improvable, but in so far as it has been improved that is due largely to the efforts of my hon. Friends in the co-operative group in this House and in another place. They have played a useful part in improving what was an extremely difficult Bill to improve.
§ 9.45 p.m.
§ Mr. Moate
I, too, have found the Bill objectionable in principle throughout, and I have felt throughout that it was not capable of being improved to a point where I could support it. I voted against the Bill on Second Reading. I have no intention of rehearsing the arguments put forward then, but I feel that it would be a forlorn gesture to vote against the Third Reading.
I still believe that the Bill will be unsatisfactory in its operation and unfair not just on policyholders but also on those representatives of insurance companies, particularly those operating in the home service area of insurance, who will have greater difficulty in selling the insurance policies of stable, reputable companies against the high pressure selling of the less established and less reputable area of insurance. We do them a disservice, and we do the public a disserve, and I regret that the Bill has proceeded as it has done.
This measure is still full of anomalies. The Government are aware that that is so, and I hope that they will take what opportunity is left to tidy up some of the points that have been expressed as the Bill has proceeded both in Committee and on Report. In particular, some surprise has been expressed at the way in which the Board will apparently live under the umbrella of the BIA. I am glad that there 1902 will be this close rapport and working relationship between this statutory body and the industry or the BIA—because not every company is a member of the BIA.
That leads me to my last point. If one can have that closeness of operations within the City of London, I suggest that the Minister looks again at the proposition advanced on a number of occasions that all the functions embodied in the Bill, in the 1974 Act and in previous Acts should be passed to a Registrar of Insurance Companies who would be far more sensitive and have far greater expertise than the Department could ever command, and not simply because it is staffed by civil servants and not commercial operators. He could operate in the same way as the Minister is proposing the Board should operate, in close conjunction with the BIA.
§ 9.48 p.m.
§ Mr. McCrindle
My main regret as we come to the end of this parliamentary marathon is that the Bill was ever necessary. I regret that it proved impossible for the insurance industry to come to a satisfactory solution which would have prevented our having to sit all these long hours in Parliament. Nevertheless, that was not possible, and I think that one must therefore reluctantly accept that the Bill, by providing a protective cocoon around policyholders, is to be given a qualified welcome.
I do not need to tell Ministers that they cannot and will not be expected to slacken their supervision of insurance companies, but I hope that nor will they suffocate initiative on the part of these companies. I have no wish to defend the failed companies of the last few years whose great besetting sin appears to have been to invest in commercial property at a time when to invest in bricks and mortar was seen as the best protection against inflation. The irony was that it was inflation in the commercial property field that killed so many of the insurance companies. Perhaps I may be forgiven for saying to insurance companies that the moral is to spread investments and never to speculate with policyholders' money. But that is different from saying, "Do not be adventurous, or invest in new companies, or in anything but gilt-edged securities".
The Bill will succeed only if it is never invoked. The insurance companies have 1903 been given fair warning by this Bill and the Insurance Companies Act 1974 that Government control over their activities is becoming tighter and tighter as time goes by and that unless they see the red light which shines forth from the Bill they cannot be surprised if that control tightens still further. I hope that they will recognise this and put their house in order, thereby giving the public the reassurance that they require that this will be the last such Bill to come before the House.
The inclusion of brokers is controversial but I repeat what I said in Committee—that the image of the insurance industry is indivisible. If brokers want this to be the end of it they should work hard, on the voluntary basis that they agreed with the Secretary of State, to put their house in order so that there will be no further need for Government intervention in their activities.
§ 9.51 p.m.
§ Mr. Clinton Davis
It is with some sadness that I wind up after hearing the last words on this subject from the hon. Member for Brentwood and Ongar (Mr. McCrindle), who has given us a great deal of education and the benefit of his experience throughout our debates. I am sorry that this is definitely his last performance for the time being.
My hon. Friend undertook that I would speak about the immediate administration expenses of the Board. There is no requirement for a money resolution, since there will be no expenditure of public funds. The Board can finance its administrative expenditure only by means of a levy, but it can postpone the levy by borrowing and, in the circumstances that we contemplate, when it will not be carrying out immediately any statutory functions, it would be absurd to levy the entire industry to cover its minor expenses.
Clearly, the Board may require some minimal services to begin with, and I am delighted that the BIA has responded. I do not believe that there is any sinister implication in that. The Board has complete freedom to make its own arrangements. It has been helped in this respect, but if a company fails and the Board has to undertake its statutory functions. 1904 it may have to revise its arrangements. That is entirely a matter for the Board. The Department will not interfere, but no doubt the members of the Board will bear in mind the anxieties expressed tonight and ensure that the public are aware of its complete legal separation from the BIA.
I do not wish to rehearse the arguments in favour of the Bill. I have listened to many in the last few months and found it remarkable that the hon. Member for Worthing (Mr. Higgins) should have said that the whole House has been against it. We have benefited from the contributions of hon. Members with expertise and of all sections of the insurance industry and in particular of the companies, the BIA, the Life Offices Association and the Federation of Insurance Trade Unions, with which I had many fruitful meetings.
The Bill has been improved as a result. It represents an important step forward in ensuring that people do not have anxieties and hardships to anything like the extent that they have suffered in recent years. As I have always said, this is simply a long-stop measure. I endorse the hopes of the hon. Member for Brentwood and Ongar that it will never be invoked. I hope it never will be. It is the obligation of the Department of Trade to proceed with the central part of our strategy, which is a more sophisticated method of surveillance to try to ensure that insurance companies do not collapse as they have collapsed in the recent past. The help that we shall obtain from non-statutory advisers will ensure a considerable improvement in the way in which we can undertake those methods of surveillance. That is a new feature. I hope that it will work; indeed, I have every confidence that it will.
I merely say, in conclusion, that those hon. Gentlemen who have urged us to press on with these regulations need have no fear. This is our anxiety as much as it is theirs. We simply believe that the Bill is an essential complement to our supervision of companies, and I commend it to the House.
§ Question put and agreed to.
§ Bill accordingly read the Third time and passed, with amendments.