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Public Office (Accountability) Bill

I support the Bill and the purposes behind it. We know that it is a priority for the Labour Government, in particular for my right honourable friend the Prime Minister. More importantly, it is important to the families who have lost loved ones at disasters, not least at Hillsborough. I of course endorse the tributes paid to the campaigners who have led to us being here debating the Bill today.

My concern is with the Bill’s reach, and specifically whether it will reach the financial regulators. Make no mistake: when financial services go wrong, it causes real harm—pain and suffering, in the words of the noble and learned Baroness, Lady Hale. It destroys lives, and there are examples of people who have lost their lives because of the harm that has been caused to them in the area of finance.

I have two problems on which I would like more clarity from my noble friend the Minister. First, there is a need to be clear about what counts as a public authority for the purposes of the Bill. The definition in Schedule 2 turns, in the end, on whether a body has functions of a public nature. From my perspective, to take one, the Financial Conduct Authority plainly exercises such functions. It is also, in form, a company limited by guarantee, as are the Financial Ombudsman Service and the Financial Services Compensation Scheme. I would like the Minister to confirm in the debate that these bodies will be included within scope of the Bill as it is worded at present; if they do not, we will need to return to the issue in Committee. It may well be that some functions of these bodies are within scope and others are not, but we need to be clear.

The definition of what counts as a public authority is the lesser of the two concerns. The larger one relates to Schedule 1. The duty of candour and assistance does not operate at large. It relates to the inquiries and investigations set out in Schedule 1—inquiries under the Inquiries Act, inquests and so on—which does not

include my areas of concern. But there is the power in the section to include such further investigations as may be specified in regulations.

Regulation failure in financial services is almost never examined in any of the ways that have been specified in Schedule 2. The harm is financial rather than physical, so it produces no inquest, and, in truth, successive Governments have declined to establish statutory inquiries where they are plainly needed. But what we do have in financial services might be, for example, an independent investigation directed by the Treasury under Section 77 of the Financial Services Act 2012—which was the route used to initiate the London Capital & Finance inquiry and the inquiry into Connaught—or the report from the complaints commissioner under Part 6 of the same Act, or an inquiry by the Treasury Committee. These do not appear in Schedule 1, so the Bill’s central duty would not apply to the mechanisms by which financial regulators are in practice examined unless it is going to be specified in regulations. How and when will these regulations be made, and what consultation will there be on what is covered in them?

The thing is that it would not be important if the record were reassuring. Regrettably, there are well-founded concerns about delay, the completeness of the material provided and the difficulty of establishing who had been responsible for what when we come across financial malfeasance. Those are exactly the failings that the Bill is intended to address. Investors who have lost money through a whole series of scandals—Connaught, Blackmore Bond, Woodford, and those who were advised to transfer out of the British Steel pension scheme—will recognise the description of what the Bill is intended to address.

I am not asking for the financial regulators to be singled out; I am asking for them to be treated in the same way as any other body exercising this sort of statutory inquiry. Two things would resolve my concerns: first, a clear answer on the definition; and secondly, an undertaking that the power to include additional bases for initiating investigation will be used to specify problems that have arisen in financial services. I suspect that we will need to return to this issue in Committee, but I look forward to my noble friend the Minister’s response.

7.41 pm