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Session 2005 - 06 Publications on the internet Standing Committee Debates Company Law Reform Bill [Lords] |
Company Law Reform Bill [Lords] |
The Committee consisted of the following Members:Mark Egan, Mark Oxborough,
Committee Clerks † attended
the Committee Standing Committee DThursday 15 June 2006[Mr. Eric Illsley in the Chair]Company Law Reform Bill [Lords]9
am
The
Chairman: I remind the Committee that there is a money
resolution and a ways and means resolution connected with the Bill.
Copies of both resolutions are available in the Room. I also remind
hon. Members that adequate notice should be given of amendments. As a
general rule, my co-Chairman and I do not intend to call starred
amendments, including any that may be reached during an afternoon
sitting. The usual
rules and conventions of Committees will apply. While I am in the
Chair, hon. Members may remove their jackets as and when they wish. My
co-Chairman will make an announcement on this when he takes the
Chair.
That— (1)
during proceedings on the Company Law Reform Bill [Lords] the
Standing Committee shall (in addition to its first meeting at 9.00 a.m.
on Thursday 15th June)
meet— (a) at
1.00 p.m. on Thursday 15th
June; (b) at 10.30
a.m. and 4.30 p.m. on Tuesday 20th
June; (c) at 9.00 a.m.
and 1.00 p.m. on Thursday 22nd
June; (d) at 10.30
a.m. and 4.30 p.m. on Tuesday 27th
June; (e) at 9.00 a.m.
and 1.00 p.m. on Thursday 29th June;
(f) at 10.30 a.m. and 4.30 p.m.
on Tuesday 4th
July; (g) at 9.00 a.m.
and 1.00 p.m. on Thursday 6th
July; (h) at 10.30
a.m. and 4.30 p.m. on Tuesday 11th
July; (i) at 9.00 a.m.
and 1.00 p.m. on Thursday 13th
July; (2) the
proceedings shall be taken in the following order: Clauses 1 to 137;
Clauses 253 to 361; Clauses 604 to 641; Clauses 676 to 680; Clauses 694
to 777; Schedule 4; Clauses 778 to 795; Schedules 5 to 7; Clauses 796
to 806; Schedule 8; Clauses 807 to 812; Clauses 821 to 846; Schedule
10; Clauses 847 to 849; Schedule 11; Clauses 850 to 871; Schedule 12;
Clauses 872 to 881; Schedule 13; Clauses 882 to 893; Schedule 14;
Clauses 894 to 901; Schedule 15; Clauses 902 to 919; Clauses 921 to
925; Clauses 139 to 238; Schedule 1; Clauses 239 to 252; Clauses 362 to
529; Clauses 642 to 648; Schedule 2; Clauses 649 to 675; Schedule 3;
Clauses 530 to 603; Clauses 681 to 693; Clause 138; new Clauses; new
Schedules; Clauses 813 and 814; Schedule 9; Clauses 815 to 820; Clause
920; Schedule 16; remaining proceedings on the
Bill; (3) the
proceedings shall (so far as not previously concluded) be brought to a
conclusion at 4.00 p.m. on Thursday 13th
July. I
welcome you to the Chair, Mr. Illsley. Having just looked you up, I
find that you are now in your 20th year as a Member of Parliament. I am
grateful to you for taking on this onerous task. I am told this is the
longest Bill that has ever appeared before the House. We are hoping
that your interest in football will inform our
sittings—[Hon. Members: “Hear,
hear.”]—and that we shall finish in time to watch the
Sweden match. [Hon. Members: “It is next
week.”] I am ahead of my time.
Mr.
Illsley, you once called on the royal family to attend more football
matches. I do not know what success you had with that. You are one of
the few MPs who opposed televising the Commons, but I am sure that you
do not oppose the facility of television in the Commons for those who
want to watch things going on outside.
We had a good debate on Second
Reading. The Bill is enormous and will grow during the course of our
considerations as we try to consolidate more into it to put all the
legislation has an impact on companies in one place. It will make an
enormous difference to UK business and I hope that it ensures that
people who wish to incorporate companies see the UK as the best place
in which to do business. If we are to succeed in that, it is vital that
we get the provisions right.
Hon. Members who have read
proceedings in the upper House will see that the Government are very
open-minded in our approach to the Bill. The provisions are in good
shape, but we are always anxious to improve them. Certainly, during the
discussions that I had in the past month with my officials, we found
that there is always room for improvement in a Bill of such an enormous
size. If we are persuaded that amendments will improve it, we will be
happy to support
them. We tried to
approach the development of the Bill in a truly collaborative and
inclusive way, which is why it has attracted such broad consensus and
support in the business community. Indeed, I am meeting various hon.
Members to determine whether we can reach a consensus on one of the
issues of contention, which is the clause on indirect shareholder
interest. Those who read the debate in the other place will know that
the Bill attracted a good deal of cross-party support. I hope that in
this Committee all Opposition Members act in that collaborative and
constructive way. I
hope that hon. Members will bear with us on the substance of the
programme motion. We are proposing not to deal with the provisions in
the precise order that they are laid out in the Bill. There are several
reasons why that approach is sensible. I will be kindly supported by
two ministerial colleagues who have better legal qualifications than I
do. One of them is the Solicitor-General, who is unable to be with us
today because of his involvement with the Fraud Bill. We want to defer
parts 10, 11, 15, 16 and 24. He will lead on those in the most part
lead, although I shall work through some of the clauses with him. As
the Attorney-General took those through the House of Lords, it seemed
sensible for the Solicitor-General to lead on them in the Commons
Committee. Parts 17 to
21, 26 to 33, and schedules 9 and 16 have been moved because they are
where we want to introduce new consolidating clauses from previous
legislation. Those will restate many of the provisions of the Companies
Act 1985. As we speak, parliamentary counsel are drafting those parts.
We want to defer them and discuss them later in our
proceedings. Finally,
I alluded to consideration of part 9, which is the clause on indirect
shareholders. We want to leave it to the end because I am trying to
build consensus with all parties concerned on the proper way forward.
After the first consultation meeting yesterday, I am optimistic that we
will bring the parties together. That would be a much more satisfactory
way of resolving the problem.
Mr.
Crispin Blunt (Reigate) (Con): I join the Minister in
welcoming you to the Chair, Mr. Illsley. She was correct when she said
that we might finish in time for the Sweden match, as it kicks off at 7
o’clock. I suspect that if we are still here shortly before 5
o’clock, even I would command a majority if I were to move that
the Committee be
adjourned. This is one
of those occasions when our primary duty as legislators is to work
together to produce the best framework for our companies. There is
broad agreement that company law needs to be recast. There is no
disagreement on that in principle—indeed, there is significant
agreement. The subject may be politically dull, but it is important. We
are all charged with a precious responsibility to get the legislation
right, because the prospects and living standards of all our citizens
will be hampered if we do not get right the legal environment that
affects our wealth creation. The Bill is immensely
important. The Bill
had a lengthy gestation period. There has obviously been substantial
consultation since the Department first started serious preparation of
it as far back as 1998. However, it is only in Parliament that the
arguments of the people who are being consulted about the Bill, the
people whose interests are affected by it and the experts who have made
contributions to all sides of the debate will be exposed to public
discussion. It is only by examining the detail of the legislation that,
in Committee here and in another place, we can expose the arguments put
to the Department of Trade and Industry over a long period to determine
how strong they are, particularly when the Government have rejected
submissions that have been made to them. The Government are asking for
trouble by introducing legislation that will become the largest Act to
reach the statute book, as everyone anticipates it will, and by getting
into detailed Committee consideration more than one year into the
parliamentary Session—it is a year since this Parliament was
formed—when there has been such substantial preparation time. It
will be difficult for us to do the job that, as legislators, we are
sent here primarily to do.
This is a 925-clause Bill. Some
181 amendments and 22 new clauses are tabled for consideration. I
suspect that 22 new clauses will be multiplied by a factor of at least
22 to give us perhaps 400 new clauses to deal with the consolidation.
At this stage, we do not know for sure, however, because the Government
will table the consolidation measures in due course. They cannot
produce them yet because they are drafting them and consulting on them.
However, this programme motion provides for a finish date in Committee
of 13 July. That is the principal problem.
With this Bill, programming as
a way of doing our business as legislators reaches its nadir. With a
Bill of this length, the 13 July finish date will not enable us to do
our job properly, and we will have to examine the legislation with that
handicap. We must make it clear to the people whose interests are
affected by all 925 clauses that Her Majesty’s Opposition will
not be able to examine significant aspects of the Bill in the detail
that we would wish. We are being forced into a position whereby we will
have to focus our attention on those aspects of the Bill which have
attracted the most public
controversy. Important elements deserving of proper consideration will
not receive it because of the time constraints on us.
We will have to focus our
efforts on specific aspects to meet our priorities for examination. We
have had to produce a batting order for the things that we wish to
examine. Sadly, we will reach perhaps only the top 11 in that batting
order. At the moment it runs to 925, but no doubt it will be rather
longer when we reach the end of our proceedings.
Although on Second Reading we
can no longer debate programming because of a change in Standing
Orders, the Secretary of State
said: “As I
understand it—I may be wrong—the timetable was agreed
through the usual channels, though they are not always
foolproof.”—[Official Report, 2 June 2006; Vol.
447, c.
123.] The
usual channels never agree to timetables on any legislation. Her
Majesty’s Opposition have a principled opposition to
programming, and that goes for all legislation. The Government must
expect Divisions on programme motions at any stage. We are in principle
opposed to them imposing programme motions because they deny
legislation the chance for proper
consideration.
9.15
am We agree that
the Government are entitled to get their legislation. If it becomes
clear in the course of proceedings on any legislation that obstruction
or filibustering is likely to prevent that from happening, we accept,
as we did when we were in government, that timetables might need to be
applied. The fact that the Bill has been introduced in June and is
likely to be the largest Bill ever makes our position extremely
difficult. We shall oppose the programme motion. I refute the
suggestion that it was in any sense agreed; it was not. It might be
suggested that we sit for all hours of the night between now and 13
July to consider the Bill. The Government might decide that that is an
appropriate way to proceed. I do not think that it is.
The Bill is technical and
requires a lot of work and preparation. The Government are still doing
a great deal of that and their civil servants are working away trying
to meet their deadline of 13 July. We should have a proper chance to
scrutinise the Bill in sensible time. That has been denied us by the
Government and that is why we oppose the
motion. Lorely
Burt (Solihull) (LD): On behalf of my Liberal Democrat
colleagues, I welcome you to the Chair, Mr. Illsley, for this
marathon. I am sure that under your wise guidance we will manage the
whole event with dignity and good humour.
Our group will also play our
part in ensuring that we co-operate as fully as possible, so that we
meet the strict deadline imposed by the Government. I echo the hon.
Gentleman’s sentiments: we will work hard to ensure that we do
not take unnecessary time over things that are not controversial and
have received a high degree of consensus in consultations elsewhere.
However, we are disturbed at the order of proceedings. Although we take
the Minister’s point about the Solicitor-General’s other
responsibilities, it is unfortunate that legislation of this importance
has to be ordered in a way that reflects his convenience, not the
convenience of the Committee. It does not reflect well that no one on
the
Government side is available to give the level of expertise that taking
the Bill through Committee in a coherent manner demands.
We are particularly concerned
that clause 399, which relates to what was the operating and financial
review and is now the business review, should receive proper time for
debate. It would be appalling if we did not reach that point. We, too,
will vote against the programme motion.
Jeff
Ennis (Barnsley, East and Mexborough) (Lab): It is a great
pleasure to serve under your chairmanship, Mr. Illsley. As you know, we
are a rare breed in Parliament in that we are both Barnsley supporters.
There are few Barnsley supporters in this House apart from you, me and,
of course, Lord Mason in the other place. We recently had the privilege
of seeing Barnsley win against Swansea City in the league one play-offs
for a place in the championship. Later today is the World cup match,
and I am sure that we are all looking forward to England winning their
second World cup—under a Labour Government, like last time. We
are tough on sport, but not soft on
crime. Some of the
comments of the hon. Member for Reigate (Mr. Blunt) do not really
reflect the debate on Second Reading, as far as I can see from
Hansard. The Bill is very complicated, important and long and it
should be subject to detailed scrutiny. I draw his attention to the
remarks of the hon. Member for Rutland and Melton (Mr. Duncan) on
Second Reading, who
said: “We
broadly support the Bill. As it has nearly 1,000 clauses, it is
pleasing that we have to disagree with only a handful of them. We are
glad that the Government have moved towards our position on some of the
issues that remain before us.”—[Official Report, 6
June 2006; Vol. 447, c. 136.] As
the hon. Member for Reigate rightly said, it is a long Bill—925
clauses—but as the hon. Member for Rutland and Melton said,
there is an all-party consensus on many clauses. The Minister referred
to that, and she is willing to go as far as possible to accommodate
Opposition Members.
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