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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 22 June 2006(Morning)[Mr. Eric Illsley in the Chair]Company Law Reform Bill [Lords]Clause 57Duty
to seek comments of government department or other specified
body Amendment
proposed [20 June]: No. 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'.—[James
Brokenshire.] 9
am Question
again proposed, That the amendment be
made.
The
Chairman: I remind the Committee that with this we
are taking 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)'.
The
Parliamentary Under-Secretary of State for Constitutional Affairs (Vera
Baird): This is my first opportunity to welcome you to the
Chair, Mr. Illsley, and to tell you how pleased I am that such an
experienced Chairman will be presiding over my first attempt at helping
a Bill through Committee.
The. Member for Hornchurch
(James Brokenshire) had put forward his argument on the amendments.
Under the clause, anyone who wishes to use a sensitive name in their
company’s name must apply to the Secretary of State, but to
support that application he must ask any public body or Department
whose sensitive words he wishes to use in his name to comment on his
application. The hon. Gentleman feels that if a public body does not
reply to such a request within 30 days, the presumption should be that
it does not object to its words being used.
I have already said how
sympathetic I am to people who get held back by bureaucracy, but the
point of the clause is to prevent people from being misled by a company
having a name that wrongly suggests a connection with a public body.
The amendment would change the balance of the clause. Where a person is
looking for exceptional permission to be allowed to use these sensitive
words, public protection remains the most important thing. The
immediate mischief is that
it would be possible to send in the application for a response in a way
that made it unlikely to get one back, perhaps by sending it to the
wrong part of the relevant organisation or by couching it in a long
letter about something else.
Let me set out what I think is
a greater mischief. The process in the clause is in two stages. First,
the person who wants the name writes to the body that holds the words
he wants to use. Then he sends any response that comes back to the
Secretary of State. The words “any response” specifically
envisage that there may be no response. That is clear. It is the
Secretary of State who is ultimately responsible for approving the
name, and although he would be assisted if there were a response from
the public body, the lack of response under the terms of the clause is
not fatal to the
application. We are
talking about words like “charity”,
“nurse”, “police”, “Her
Majesty”, which it would be extremely advantageous for someone
to use in their company title to try to show some connection with
totally virtuous organisations. What goes a little further than the
mischief I have described is if the application has been with the
public body for 30 days, and there is automatically a deeming of no
objection and therefore approval, it would be extremely difficult for
the Secretary of State to refuse because the public body that the
provision was trying to protect would have raised no objection and
would have been deemed to approve. How could he differ from that and
not be subject to judicial review for being unreasonable?
The consequence, I fear, is
that as we are talking about a public body that has had the application
for 30 days and not responded, it probably has not considered it and
the Secretary of State will not be able to do so. Consequently, public
protection from the mischief would be seriously challenged by such a
deeming provision.
The other specific difficulty
that could be envisaged is that although at the end of the 30 days no
response had been received and the body was deemed to have approved, a
long and detailed objection might be received the day afterwards from a
public body to the proposed use of its name and the Secretary of State
would not be entitled to take it into account. That would be most
undesirable, bearing in mind that the purpose is to protect the
public. Those
are good reasons to invite the hon. Gentleman to think again. We hope
that he will feel able to withdraw the amendment. I repeat that the
Government will not tolerate bureaucratic inefficiency. Public bodies
will be expected to respond as quickly as they realistically can. None
the less, the emphasis has to be on protecting the public and not on
facilitating people skilfully to get around the
provision.
Keith
Vaz (Leicester, East) (Lab): Does the Minister know how
long it takes for public bodies to respond? What gave rise to the
concern that made the provision
necessary?
Vera
Baird: I am grateful to my hon. Friend for raising that
point. I understand that it is a completely new provision, and I invite
the Opposition to comment on it. However, it was not supported or
buttressed by any pressure group—not by the Law Society or the
Institute of Directors, the company secretaries of major companies or
any list of people who might have been expected to respond if it was
likely to be a problem. It is not clear to me where the thrust of the
provision is coming from, and we have not received any
submissions. I shall
probably serve the Committee better by setting out other words that
could be sensitive—words that could imply national or
international pre-eminence. For instance, the word
“British” will need a significant amount of protection,
and I see that Opposition members agree. Approval of that word in a
company name would depend on how it was to be used. The Secretary of
State would normally expect the company to be British owned—a
realistic thing to think—and it would probably be necessary to
show that the company was pre-eminent in its field in order to merit
that epithet and description. The company would need to show that it
was pre-eminent by providing supporting evidence from an independent
source, such as a Department or trade association.
The same goes for the words
“English” and “England”, and
“Scotland” and “Scottish”.
“Wales” and “Welsh” would probably fall
into the same category. It would be hard it distinguish them in any
realistic way from “British.” The same applies to
“Ireland” and “Irish”. If a company wanted
to use one of those words as a prefix to its name, similar conditions
would have to apply as apply to the word “British”, and
approval would have to be given for such use. The same would apply if
the word were used as a suffix.
It will usually be possible to
get approval only if the person can show that the company has its main
business in the country concerned. It would be rather odd for a company
to call itself “Welsh” if its factory was in my
constituency of Redcar. I cannot think of a company in Redcar with
“Welsh” or “Wales” in its name; that was
just an example of how curious it would
be. One cannot rule
out, however, the chance that somebody might want to use the word
“Welsh,” perhaps to describe Welsh cakes or something of
that kind, even if they are not made in Wales, but I imagine that one
would have to go a long way before being able to register
“Welsh” in the name of a company, if the business was in
Redcar, or in the constituency of the hon. Member for Reigate (Mr.
Blunt). For instance, in Reigate, it would be odd to call a company
“Welsh”. Mr.
Crispin Blunt (Reigate) (Con): I am extremely grateful to
the hon. and learned Lady for replying comprehensively to the
amendments. However, I am slightly concerned that if Ministers are
going to go into such exquisite detail, the Committee will struggle to
get through the thousand or so amendments that we are likely to
consider, as well as the 925
clauses.
Vera
Baird: I know that the hon. Gentleman rightly, and
compatibly with his job, has his hands on the accelerator and brakes in
the Committee. I can assure him that I am quite succinct
sometimes.
The
Minister for Industry and the Regions (Margaret Hodge):
Does my hon. and learned Friend agree that
we would make better progress if so many amendments were not identical
to those discussed in another place? They were given considerable
airing there, and little value is added by reconsidering
them.
Paul
Farrelly (Newcastle-under-Lyme) (Lab): I want to welcome
the new approach outlined by the Opposition. Will my hon. and learned
Friend join me in hoping that, throughout the course of the Committee,
Opposition filibustering, nay hair-splitting, will be kept to a
minimum?
Keith
Vaz: To take us back to the substance of the
Under-Secretary’s comments, she made an important point about
names because it causes a great deal of concern. Have Ministers seen
any evidence of abuse by a company registering as British, with the
word “British” in its name, but which subsequently was
discovered not to be British, and to have no such connections, such as
the fictional Welsh company in
Redcar?
Vera
Baird: I hesitate usually to express personal opinions,
but it might be an abuse of the term “Welsh” if the
company were in Redcar. As I have already mentioned, however, I do not
think that there is such a company in Redcar. None of my constituents,
or anyone linked with them, bear any responsibility for the misuse of
the fine name of Wales. I shall tell you about my Welsh antecedents in
a
moment. Mr.
David Jones (Clwyd, West) (Con): I am grateful to the
Under-Secretary for allowing us to discuss the manufacture of Welsh
cakes in Redcar. Will she comment on the possibility of a company
obtaining registration to manufacture Eccles cakes in my constituency?
Would they run into
difficulty?
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