Sitting the other side of the table

Lord Norton

55718I have served on committees throughout the ten years that I have been a member of the Lords.  However, I have spent even longer making the occasional appearance before committees.   My first appearance before a parliamentary committee at Westminster was in 1984 and before a committee of an overseas legislature in 1985.

This morning I gave evidence to the Public Administration Committee in the Commons as part of their inquiry into Equtitable Life and the report of the Ombudsman Equitable Life: a decade of regulatory failure.  I was one of five witnesses, the others being distinguished figures – including Sir Howard Davies, former Chair of the Financial Services Authority (FSA) – who knew far more than I did about the particular case.  I was there because when I chaired the Constitution Committee in the Lords we undertook the first comprehensive inquiry into the accountability of regulators.  

My main contribution was to distinguish between fault-finding and lesson-drawing.  The Committee has been concerned primarily with the former and considering what remedy there should be, if any, for a particular regulatory failure.   I was there to draw attention to the latter and to touch upon what Parliament could learn for the future.  Parliament has no structure for examining the regulatory state on any informed and consistent basis.  Individual select committees may have responsibility for examining a particular regulator, but they also have many other responsibilities.  Most regulators fall within the purview of the National Audit Office – which reports to the Public Accounts Committee in the Commons – but not all do.  The FSA, for example, is a notable exception.  

The challenge to Parliament is to put in place a parliamentary means that may help prevent a recurrence of such a regulatory failure.  As we stressed in our committee report, public accountability and the independence of regulators are not incompatible with one another.

9 comments for “Sitting the other side of the table

  1. Bedd Gelert
    13/11/2008 at 10:08 pm

    Lord Norton,
    I was listening to ‘Today in Parliament’ a couple of evenings ago, and they were covering the topic of ‘Equitable Life’. Vanni Treves was ‘in the chair’, as were a couple of people who had lost significant sums of money.

    I can understand the view that they cannot be compensated because it is a ‘market failure’ which is somewhat distinct from the BCCI [Bank of Credit & Commerce International ] as it might set a dangerous precedent, and make people think that whatever they invest in, if it goes ‘pear-shaped’ the taxpayer will be there to pick up the tab.

    Indeed, balancing risk vs reward is something we all have to learn to do in life. But I have to say that while my head told me this was ‘correct’ it didn’t feel right in my ‘heart’.

    The Government had invested considerable sums of money persuading people to ‘save more’, ‘prepare for the future’, ‘Do not rely on the State for your pension and retirement’. And these people had ‘wisely’ followed this advice by not spending all their dosh on fancy holidays and cars. And their ‘reward’ for this was to lose their nest egg, and be told they would have to pursue legal action against Equitable Life and the regulator.

  2. Bedd Gelert
    13/11/2008 at 10:10 pm

    I feel they are entitled to feel ‘hard done by’ in a way that people just speculating on the Stock Market cannot. They put their money in a ‘collective investment vehicle’, which ‘spread risk’ and was a ‘long-term investment’. They did all the ‘right things’ and were understandably annoyed when ‘reasonable’ behaviour in following Government ‘advice’ came unstuck.

    I understand that at the moment when billions [trillions?] are being thrown around there is a danger of control being lost as every ‘good case’ jumps on the bandwagon which will then hurtle down the road to perdition.. and yet.. and yet..

    These are not all ‘comfortable middle-class’ people. Many are people who, if the Government still provided for old people with a pension linked to average earnings, would never have ‘dabbled on the stock market’. They did so because the Government urged them to put their money in investments they might not fully have understood because they would protect themselves against the ravages of inflation.

    Surely a moral obligation is owed at the very least to provide a hardship fund for the hardest hit ?

  3. Bedd Gelert
    14/11/2008 at 9:12 am

    On the same ‘Today in Parliament’ programme there was, if I recall correctly, discussion of ‘morning prayers’ and somebody was whingeing that if they missed it, they wouldn’t get a good seat in the chamber.

    http://archbishop-cranmer.blogspot.com/2008/11/multi-faith-prayers-for-parliament.html

    I now read that there are plans to dispense with this. Is this a plan to remove the Lords Spiritual by stealth ? I’m not sure that removing the prayers altogether is going to help anyone [expect maybe Richard Dawkins] as surely having respect for religion generally starts with having respect for one specifically ?

  4. howridiculous
    14/11/2008 at 2:11 pm

    Dear Lord Norton,

    I am not sure this is the right place but I just wanted to say how much I liked the new design!! A wonderfully atmospheric shot for the ‘troubled’ times in which we live.

    Is this one of the designs suggested by one of the blog readers, was it Liam? If not, what happened about his suggestions and offer to help?

    Howridiculous.

  5. DW
    14/11/2008 at 2:59 pm

    “Parliament has no structure for examining the regulatory state on any informed and consistent basis.”

    I think this is a very important point that you have made! But how do you think that Parliament should regulate the regulator’s though? A Regulatory Committee which solely looks into regulators, or something more creative?

    I suppose it’s a question of how far do you needed to go? I mean, if you are not careful things could take a large leap in the bureaucratic direction, dont you think?

  6. lauramiller
    17/11/2008 at 10:13 am

    A quick response to Howridiculous: we greatly value the feedback we have received from visitors to the site: the changes made to the look and feel of the site reflect a number of suggestions made.

    Our priority is to make it easier for people to navigate around the site, providing better search and archive facilities.

    Further decisions regarding design are pending.

    Anyway – thanks for noticing!

    Laura Miller – Hansard Society

  7. howridiculous
    19/11/2008 at 12:10 pm

    Dear Laura,

    Thanks for your reply; but it did not answer my question about what happened to Liam’s offer to help and the suggestions he made.

    Howridiculous.

  8. lauramiller
    19/11/2008 at 12:21 pm

    Hello again – we have been in contact with Liam.

    At this stage, there are no plans afoot for a full redesign, but we took his suggestions (and those of other contributors) on board in refreshing the site and improving the functionality.

  9. howridiculous
    20/11/2008 at 11:30 am

    That’s great, Laura, many thanks for your response.

    Howridiculous.

Comments are closed.