Company Law Reform Bill [HL]

My Lords, currently the Financial Reporting Review Panel may disclose information obtained under its compulsory powers only in a limited range of circumstances. It may make disclosures to the bodies listed in subsection (3) and for the purposes listed in subsection (4), as well as, in circumstances specified in subsections (5) and (6), to public bodies outside the UK. The new subsection introduced by Amendment No. 273 would impose additional requirements on the panel that would involve it expending considerably more resources in order to meet the higher thresholds that the amendment proposes. First, it would have to authorise each and every onward disclosure of information by the body to which it had previously disclosed that information; and, secondly, it would have to be satisfied that it would be in the public interest to make the onward disclosure. But what is the logical reason for asking the panel to judge whether or not, say, the Financial Services Authority should be making an onward disclosure to the Secretary of State for Trade and Industry in the public interest? Moreover, the regulators exercising these functions may not have a reciprocal gateway with the panel, which would then be precluded from considering the very information that it would need to have in order to determine whether or not disclosure could be in the public interest in the particular circumstances. Such decisions should properly be for the bodies concerned, which are in the best position to have regard to all relevant factors in determining whether onward disclosure would be appropriate. Similar considerations of resources and regulatory authority and practice apply to Amendment No. 451, which would apply where the Takeover Panel disclosed information to another person or body under the relevant gateways provided for by Clause 630. It would require the panel to authorise any onward disclosure of such information by that person or body. For the authorisation process to be meaningful, the panel would need to consider the merits of any such onward disclosure. The amendment would therefore impose additional burdens on the panel. Moreover, the panel might not be best placed to make a decision as to whether, for instance, the Treasury should make a disclosure to the Director of Public Prosecutions. As in the case of the Financial Reporting Review Panel, the Takeover Panel might not even be in possession of all the necessary information on which to base such a decision. This might depend, for instance, on the contents of documents which were not available to the panel and, unless reciprocal gateways were in place, could not be supplied to the panel. It does not seem to us that there is an overriding public interest justification in requiring either the FRRP or the Takeover Panel to authorise further disclosures that would outweigh these obstacles. I emphasise that in the case of both the FRRP and the Takeover Panel there are already restrictions on the onward disclosure of information by the bodies to which they have previously disclosed that information. In the case of the FRRP, those bodies may only disclose this information further, except to each other, for the purposes set out in subsection (4). As for the Takeover Panel, with the exception of information supplied to other EEA regulators in accordance with the requirements of the takeovers directive, the disclosure restrictions that apply to the panel will continue to apply to the recipient of information from the panel. So the information could be further disclosed only in accordance with the provisions of Clause 630. The criminal sanction at Clause 631 will also apply to unlawful disclosure of such information by any person to whom it is passed by the panel. I think that the noble Baroness will see that we are not able to support the amendments she has tabled. The noble Baroness asked about the commissioners of the Inland Revenue. There has always been a higher control of Revenue information. Individuals dealing with the Revenue have to be completely open about their private affairs. In contrast, in dealing with the FRRP or the Takeover Panel when they are under investigation—or at least potentially under investigation—the range of information is much less. We are not saying that their rights have to be disregarded, but the circumstances are different. The specific circumstances in which information would come before the FRRP and the Takeover Panel are different from those in which information would come to the Revenue. I have perhaps not put it very succinctly, but that is the thrust of why there is a difference. I hope that the noble Baroness will understand why the amendments she has tabled—unless, perhaps, they are probing in nature—would create great difficulties and would be impractical.