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Palmer may face fresh grilling from MPs' committee

Paul Durman
Tuesday 10 May 1994 18:02 EDT
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THE HOUSE of Commons' Treasury Select Committee will today consider recalling Joe Palmer, chairman of the Personal Investment Authority, to clarify misleading answers that he gave the MPs' inquiry into financial regulation.

Brian Sedgemore, the Labour member of the committee who last week made a ferocious attack on Mr Palmer's suitability and competence to head the new regulator, also wants to hear further evidence from Andrew Large, chairman of the Securities and Investments Board. The SIB is the senior financial regulator and must soon decide whether to give the PIA responsibility for the personal savings market.

When Mr Palmer appeared before the committee two weeks ago, he denied any knowledge of a Legal & General memorandum from 1990 that set out widespread breaches of investor protection rules at the life insurer. Mr Palmer was chief executive of Legal & General until September 1991.

The day after the hearing he wrote to the committee to apologise for 'inadvertently misleading' MPs. He had seen the memo before and had discussed it with L&G.

Mr Sedgemore is particularly concerned that Mr Palmer has said he saw the memo only a few weeks before the committee hearing. Mr Palmer last week told the Independent that he had discussed the memo with David Prosser, chief executive of Legal & General, around the time it was the subject of a Commons early day motion in March.

Nicholas Budgen, a Conservative member of the committee, last week drew the sting from some of Mr Sedgemore's criticisms by highlighting the age of the memo. In exchanges with Mr Large, he suggested that it was unsurprising that Mr Palmer might have forgotten it.

Mr Sedgemore said yesterday: 'There's going to be a big storm over this. It's not going to go away. It's more serious than it's made out.'

He added: 'Parliament does not want witnesses coming and giving misleading evidence, and then the next day writing letters that cause even more confusion.'

The Treasury plans to produce an interim report on the PIA within the next few weeks.

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