James
Brokenshire: I offer my warm welcome to you, Mr. Bercow.
This is the second Committee on which I have had the pleasure of
serving under your chairmanship, although I know that this is your
first Bill Committee. The first occasion was when we considered a
statutory instrument relating to double taxation treaties for Japan,
Gibraltar and Botswana, so it is clear that you have been earmarked for
Bills and legislation of a technical nature. We are therefore grateful
for your stewardship this afternoon and on future occasions; I am sure
that we will get into some quite technical issues during our
considerations. I also offer a warm welcome to the Ministers—the
Minister for Industry and the Regions, who is new to her role, and who
will take this Bill forward, and the Under-Secretary of State for
Constitutional Affairs, the hon. and learned Member for Redcar (Vera
Baird). I imagine that this is her first Bill as a Minister.
I am making what may be
described as a guest appearance on the Opposition Front Bench. I might
flatter myself to think that it is on the basis of the strong
oratorical skills that I have demonstrated since entering the House,
but I fear that it is more due to my experiences as a corporate
solicitor before I entered this place than anything that has taken
place while I have been here. I remain a non-practising solicitor, and
I declare that interest
formally. We come on
to part 5 of the Bill, which deals with company names, restrictions on
the names that a company may use, the manner in which a company may
change its name and the procedures for challenging the use of a company
name. Clause 56 makes provision to require the approval of the
Secretary of State for a company’s use of a particular name that
is specified in regulations.
Amendments Nos. 116 and 117 are
technical in nature; the clause refers to a company being
“registered under the Companies
Acts”, but that drafting
could be construed as limiting the ambit of the clause to a situation
in which a company is about to be registered or established. The intent
of the additions proposed under the two amendments is to ensure that
the clause catches both the incorporation of a new company and an
existing company that is seeking to change its name to one that is on
the prescribed list. That is the intention of the clause, and the
amendments seek to make that
clear. Amendments Nos.
121 to 123 relate to clause 58, which deals with restrictions placed on
the use of certain symbols, characters or marks in a company name. The
amendments make it clear that clause 58 covers a new incorporation and
the change of name of an existing company.
Amendment No. 57 also relates
to clause 58. Clause 58(1) uses the general term
“registered” and clause 58(2) states that the regulations
under the clause “may
prohibit the use of specified
characters”, so it seems
possible for the regulations to cover the names of existing
incorporated companies, forcing them to change their names with
potentially significant cost implications and the loss of good will
attached to the business. The issue was raised by my noble Friend Lord
Hodgson in the other place during the Grand Committee on the Bill, and
I note that the Minister, Lord McKenzie, stated:
“I assure the Committee
that if a word is added to the list that is part of an existing
company’s name, that existing company would not be required to
change its name: there is no power to require a change in such
circumstances.”—[Official Report, House of Lords,
30 January 2006; Vol. 678, c.
GC48.] I am aware of
the issue about whether debates in this place or another place can be
used to interpret a particular statute should it ever become subject to
challenge, which was also raised by my hon. Friend the Member for
Grantham and Stamford (Mr. Davies). However, the drafting of the clause
could give grounds to suggest the contrary, and in the interests of
certainty and clarity I hope that the Minister will feel generous
enough to give ground on that point.
Amendment No. 128 makes
substantially the same point as amendment No. 57 but in relation to
clause 66, by seeking to make it clear that prohibiting theuse
of certain specified words, expressions or other indications in the
name of a company should not affect a company that has been
incorporated or is registered with such a name. I should stress that
that is without prejudice to the additional powers of the Secretary of
State contained in clauses 75 and 76, which protect against misleading
or harmful names used by existing companies, which we shall obviously
discuss later.
The
Parliamentary Under-Secretary of State for Constitutional Affairs (Vera
Baird): I, too, welcome you to the Chair, Mr. Bercow. We
were until recently joint-chairs of the all-party Burma group, and I
know what an amiable person you are to work with and what an active
Chairman you are. I
thank the hon. Member for Hornchurch (James Brokenshire) for his kind
welcome. I shall be speaking on the whole of part 5, as I assume he
will be, so we will do it together and I imagine that we will make
progress on it. I am
grateful to the hon. Gentleman for his explanation of the thinking
behind the amendments. As I understand it, it crystallises around
seeking certainty that the provisions of clauses 56 and 58 are limited
to new incorporations and changes of name by existing companies and
that that is their point. I agree entirely that it would be wrong if it
were possible for regulations to require a company to change its
existing name, but we are confident that it is not possible for that to
occur. The
regulations will apply only to names registered after the regulations
come into force, namely those taken on incorporation and those of
existing companies that change their names. Let us consider the phrase
“to be registered”, which is probably part, or perhaps
all, of the trouble. It is intended to mean “to become
registered” and not “to continue to be
registered”. I hope that that is a sufficient clarification for
the hon. Gentleman to be assured that the amendments are not
necessary. It is
clear that if the intention of the new section were to enforce changes
of name on existing companies, the clause would set out the
consequences were a company name not to be changed if it did not comply
with the regulations, much as such provisions
are set out in clauses 65, 68, 75 and 76, and I hope that that reassures
the hon. Gentleman. The phrasing “to be registered” in
clause 56 and the other clauses that he mentions is exactly the same as
that in clause 55, to which he did not propose any amendment. I can
understand why clauses 55 and 58 might crystallise his concern more
than clause 55 did, but I hope I have satisfied him that it is not our
intention that it will be possible under these provisions to compel an
existing company to change its name—nor should it be construed
in that way—but that the measure will be confined as he wishes
it to be. James
Brokenshire: I am grateful to the Minister. The query
about the drafting was not necessarily mine; the Law Society questioned
whether there was certainty as to the meaning or scope of the
particular form of words. While my preference would have been to gain
clarity by amending the wording, I hear what she says, and I beg to ask
leave to withdraw the amendment.
Amendment, by leave,
withdrawn.
Clause 56 ordered to stand
part of the Bill.
Clause
57Duty
to seek comments of government department or other specified
body
James
Brokenshire: I beg to move amendmentNo. 118, in
clause 57, page 22, line 38, after ‘name',
insert ‘and in the absence of the
applicant receiving any response by the specified department or other
body within 30 days of its receipt of such a request, the specified
department or other body shall be deemed to have confirmed that it has
no objection to the proposed
name'.
The
Chairman: With this it will be convenient to discuss the
following amendments:
No. 119, in clause 57, page 22,
line 43, after ‘received',
insert ‘or include a statement that
no such response was received within the time period referred to in
subsection
(2)'. No.
120, in clause 57, page 23, line 6, after ‘received',
insert ‘or must include a statement
that no such response was received within the time period referred to
in subsection
(2)'.
James
Brokenshire: The clause makes additional provisions in
connection with clauses 55 and 56. We discussed clause 56 under our
previous batch of amendments. Clause 55 provides an approval mechanism,
through the Secretary of State, in the event that the proposed name for
a company suggests a connection with Government or with a public
authority. Clause 57, to which the amendments relate, gives power to
the Secretary of State by regulation to require an applicant wishing to
change its name to a name falling within the ambit of clauses 55 and 56
to seek the view of a specified Government Department or other body. In
such circumstances, the applicant must write to the relevant Department
or body to ask it to indicate whether and, if so why, that body or
Department has any objection to the proposed name.
It is interesting to note that
while in many other fields within the Bill, there is a concept of
e-government and filing by electronic means, in this circumstance
communication has to be in writing, rather than by other means. Perhaps
that can be addressed in due course.
To my mind, the weakness of the
provision is that there is no compulsion on the relevant Department or
body to do anything or to respond. There does not appear to be anything
in the clause that says what happens if there is no reply, or if there
is undue delay. It does not seem acceptable that an applicant wishing
to trade under a corporate name in that way could be left to wait for
months without an answer. It does not seem to be a particularly onerous
requirement on the Department to respond. As Lord McKenzie of Luton
said in another place, we are considering some 90 words such
as “charity”, “European”,
“dental”, “nurse”, “royal”
and “trade
union”. The
fact that a relevant body is not prepared to respond in a timely manner
would suggest that the issue is unlikely to be of concern, and that the
applicant seeking to change its name should be able to proceed without
further delay. Amendment No. 118 therefore seeks to impose a time scale
on the process by adding a provision to the effect that, in the absence
of a response within 30 days of receipt of a relevant request, the
Department or body will be deemed to have raised no objection.
Amendments Nos. 119 and 120 seek to make consequential amendments to
the remaining parts of the clause.
Given that the Bill is aimed at
making things easier for business and at being deregulatory, I hope
that the Minister will use this opportunity to demonstrate that
intention, and that the amendments will therefore find favour. I note
in closing that the clause largely reflects the language in section 29
of the 1985 Act, but the matter deserves further reflection and some
updating of the wording. It would be helpful for all parties to gain
some clarity and certainty in this
context. 6.45
pm
Vera
Baird: Again, I thank the hon. Gentleman for his clear
explanation of his proposal. Could I say straight away that I am
advised that “writing” does not necessarily mean
copperplate, quill pens or the things that we lawyers usually write in?
The word is appropriate unless the context otherwise requires us to
cover electronic communication, so there is no anachronism in the
current wording. I am
sympathetic to anyone who suffers from official bodies not responding
to their reasonable requests—not that it happens very much, of
course—but I cannot agree to the amendment, as it would
seriously weaken the protection to the public provided by the clause.
The point of clauses 55 and 56, which are supplemented by clause 57, is
to prevent people from being misled by a company having a name that
wrongly suggests that it has some connection with an official body,
expertise of a particular kind or a degree of
pre-eminence. Debate
adjourned.—[Steve
McCabe.] Adjourned
accordingly at thirteen minutes to Seven o’clock till Thursday
22 June at Nine
o’clock.
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