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Lord Mackay of Ardbrecknish: My Lords, before the Minister sits down, perhaps he can answer a question. If, let us say, a court decides that an agency inspector has infringed the convention rights of an individual and throws out a case against that individual, would not that be in danger of being a breach of the convention and therefore put us in the difficult position which he and I certainly would not want to see?

Lord McIntosh of Haringey: My Lords, I do not believe so. We must do our best within our own and international law to follow the protocol to the letter and, if necessary, follow the spirit. If we fail to do so because of international obligations under the European Convention on Human Rights, that will be widely understood. However, we must make the effort.

Lord Mackay of Ardbrecknish: My Lords, I thank the noble Lord for his response. I may resist the temptation to ignore his tease at the beginning. I believed that I was being reasonable. By tabling my amendment, I was trying to be sure that the Government were absolutely right in their assertion in Committee that the Bill squared with the convention. The amendment states that one cannot plead the convention if one is charged.

I believe that the noble Lord knows, and I hope that the House realises, that I shall do nothing to hinder the passage of the Bill. That does not mean that we should not scrutinise these matters carefully and make sure that we are proceeding in the proper manner. I accept the answers which the noble Lord gives. I hope that he takes my point that if this Government or any future government look for a fourth time at another international agency--an agency which may be set up of which as yet we know nothing--we should be a little more careful. We should try to find a way to ensure that inspectors in this country, who are forced to act within our traditions of respect for civil liberties and the rule of law, do not find themselves in a more difficult position than inspectors of an agency which can come into this country and not have to go through the same "hoops" as our own inspectors.

Frankly, it is not a great problem for the authorities to go to a justice of the peace and persuade him of a case. No one knows that they are going to a justice of the peace to do so. The police do so quite happily all the time, asking constantly for warrants to search premises and homes. It does not impede their investigations in any way, shape or form, and it would not impede the investigations of those international agencies.

It is a pity that we have decided to go down this route and I hope that we shall not go down it too often in the future. I certainly hope that the noble Lord is right in his assertions about the relationship between the Bill and the convention and that no one finds that the convention provides a screen behind which to hide. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Limited Liability Partnerships Bill [H.L.]

4.43 p.m.

Lord McIntosh of Haringey: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.--(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Brougham and Vaux) in the Chair.]

Clause 1 [Limited liability partnerships]:

Lord McIntosh of Haringey moved Amendment No. 1:

    Page 1, line 8, after ("is") insert ("a body corporate (with legal personality separate from that of its members) which is").

The noble Lord said: In moving Amendment No. 1, I should like to speak also to Amendments Nos. 2, 3 and 4. I know that the amendments appear complicated. However, strictly speaking, they are drafting amendments in the sense that, with them, the drafting of Clause 1 is, we hope, very much clearer than it would have been without them. I hasten to say that these amendments were not proposed by the department but by parliamentary counsel in the interests of clarity.

For the benefit of those noble Lords who took part at Second Reading, this morning I have sent to them--I hope that they will find it helpful--a copy of the Bill marked with the government amendments in their place. I do not recall this having been done before but it seemed sensible. If the noble Baroness, Lady Buscombe, does not have one, I am sorry. A copy will be whisked across the Chamber to her from the Box via the Doorkeepers so that she has it in front of her. I believe that noble Lords on the Liberal Democrat Benches have had copies, as has my noble friend Lord Goldsmith, who is not in his place.

If we look at the marked copy, we find that the wording is simply moved around so that the clause starts with reference to the,

    "body corporate (with legal personality separate from that of its members)",

which is the key to the understanding of Clause 1. In all other respects, the meaning of Clause 1 is not affected by the amendments. I beg to move.

4.45 p.m.

Baroness Buscombe: First, I thank the Minister for giving me and Mr Nicolas Gibb MP the opportunity to discuss a number of key issues which we and other Members of this House raised at Second Reading.

I thank the noble Lord for a most helpful meeting, for the accompanying notes, and for giving them to me now. However, on behalf of so many people with whom we and, I understand, the Government have consulted, I feel that it is my responsibility to make a plea with regard to Clause 1. Our concerns relate to a general application of partnership law. We are

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interested in retaining the partnership ethos. With that wish, we begin to question the value of a limited liability partnership. Without a partnership ethos which is clear on the face of the Bill, it becomes in a sense something of a hybrid without the culture of a partnership; that is, neither a partnership nor a company. I question whether that is what the Government intend.

Yes, an LLP can enter into contracts and it can hold property. It is a body corporate, separate from its members. I am grateful to the Minister that the amendments help to clarify that point. However, without express application to partnership law on the face of the Bill, I am still unsure of its worth. That is why I have tabled an amendment to Clause 5 relating to the members of an LLP. That amendment tries to re-establish the relationship of members to differentiate them, if not the body corporate itself, for example, from employers, subject to company and employment law. In a sense, that is intended to demonstrate the existence of the partnership ethos.

Lord McIntosh of Haringey: I am most grateful to the noble Baroness for what she says. I repeat my apologies that the marked Bill did not reach her in time for her to consider it at greater leisure. I am grateful for what she says in the particular sense that it enables me to set out what became clear to me in the course of the discussions which we had last week with a number of noble Lords. It became clear that the principle on which we must insist all through the Bill is that we are changing as little other law as possible. We are responding to pressure, particularly from professionals, that there should be some way for them to achieve the goal of limited liability. We are considering the price at which that achievement should be made. Everybody except the noble Lord, Lord Phillips of Sudbury, agreed with the validity of that goal. However, I may not have expressed as clearly as I would want the way in which we seek to achieve that.

We seek to achieve that by creating a new entity--the limited liability partnership--which falls under company law as far as possible and changes company law as little as possible except in respect of taxation. It falls under partnership law as little as possible and changes partnership law as little as possible except in respect of those matters which are the concern of company law.

The taxation of limited liability partnerships will be on the partnership analogy; every other aspect of the limited liability partnership will be on the companies analogy. The bulk of the text of the Bill consists of amendments to company law which are absolutely necessary in order for limited liability partnerships to be established and no further than that.

Similarly, we do not seek in any way to change the law or practice in respect of professional liability. That is a matter for the law and for the professions themselves. We do not want to diminish or increase it in any way. We do not seek to change the law except in so far as it is absolutely necessary in relation to insolvency. We are doing as little as possible in order to achieve this new entity. If we look at all the

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amendments in the light of those pillars of the temple, perhaps, which are built around that small change in the law, I believe that we shall understand it, as I have come to understand it, rather better than we did at the beginning.

I am grateful for what the noble Baroness said about the amendments to Clause 1. I commend Amendment No. 1 to the Committee.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendments Nos. 2 to 4:

    Page 1, line 10, after first ("in") insert ("the following provisions of").

    Page 1, line 14, leave out ("a limited liability partnership so incorporated") and insert ("such a body corporate").

    Page 1, line 16, leave out from ("partnership") to first ("to") in line 18 and insert ("has unlimited capacity.

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