HC Deb 14 April 1980 vol 982 cc954-75

11.6 pm

The Under-Secretary of State for Northern Ireland (Mr. Giles Shaw)

I beg to move, That the draft Bankruptcy Amendment (Northern Ireland) Order 1980, which was laid before this House on 11 th March, be approved.

Mr. Deputy Speaker (Mr. Richard Crawshaw)

It may be for the convenience of the House to discuss at the same time the motion on the draft Bankruptcy (Northern Ireland Consequential Amendments) Order 1980.

Mr. Shaw

The main body of law on bankruptcy in Northern Ireland dates back to enactments of 1857 and 1872, and the last major amendment of those enactments took place over 50 years ago. I feel sure that the House will accept that this legislation is in need of some alteration and updating after such a period of time.

In general, it is the intention of the Government that the insolvency law of Northern Ireland should accord as closely as possible with the law of England and Wales, which is at present being examined in depth by the Insolvency Law Review Committee under the chairmanship of Sir Kenneth Cork. In view of this review it would not be prudent to embark on a comprehensive modernisation of the law in Northern Ireland until the report of that committee has been received and considered by the Government. In addition, bankruptcy legislation affecting the whole of the United Kingdom will be required when the EEC draft bankruptcy convention, at present at an advanced stage of negotiation, has been adopted.

Notwithstanding those reasons for not undertaking a major measure of bankruptcy law reform in Northern Ireland at this time, the transfer of responsibility for the office of the Official Assignee in Bankruptcy from the Northern Ireland Supreme Court to the Secretary of State, effected by the Judicature (Northern Ireland) Act 1978—which came into operation in April 1979—makes it desirable to put into effect now the recommendation of the Committee on the Supreme Court of Judicature of Northern Ireland under the chairmanship of the late Lord MacDermott regarding the transfer of that office to the Department of Commerce. It is also recommended that the transfer to that Department of the non-judicial functions of the High Court of Justice in Northern Ireland in relation to bankruptcy should take place at the same time.

It has been decided, therefore, to combine with the legislation necessary to effect this transfer provisions which will deal with certain aspects of the existing law which are urgently in need of being brought into harmony with the law of England and Wales. The opportunity is also being taken to include amendments and repeals of the Irish Bankruptcy Acts which will enable these cumbersome statutes to be abbreviated and ultimately consolidated.

The main interest in the order for the general public is probably in relation to the changes in the law regarding the discharge of bankrupts. Most debtors adjudged bankrupt in Northern Ireland, unless they are able to make an offer of composition acceptable to their creditors and have their adjudications annulled, remain undischarged from their bankruptcy for the rest of their lives, because the discharge provisions are much more stringent than in England and Wales. To obtain his discharge or, to use the language of the Irish Bankruptcy Acts, to obtain from the court a "certificate of conformity", a bankrupt in Northern Ireland must apply to the court and establish that a dividend of at least 50p in the pound has been paid to his creditors, or that his bankruptcy or the failure to pay such a dividend has arisen from circumstances for which he cannot justly be held responsible.

The order introduces the law of discharge as it now stands in England and Wales, following the Insolvency Act 1976.

An undischarged bankrupt adjudged bankrupt more than 10 years before the order comes into force will be automatically discharged on that date. If a person became bankrupt more than five years but less than 10 years before that date, he will be automatically discharged on the tenth aniversary of his adjudication. A debtor adjudged bankrupt after the order is in force will be automatically discharged on the fifth aniversary of his adjudication if, when his public examina- tion is concluded or dispensed with, the court so orders.

Every debtor adjudged bankrupt after the operative date, or who has been made bankrupt within the preceding five years, will have his case considered by the court, with a view to his discharge either immediately or after a period or conditionally agreeing to make payments to his creditors. Such a review will take place during the year after the fifth aniversary of his adjudication, on the application of the Official Assignee, without the bankrupt having to take any initiative.

In addition to these new provisions for granting a discharge without the bankrupt having to apply for a discharge, the order permits a bankrupt who is anxious to be discharged at an earlier date than he would be under those provisions to apply to the court for an order of discharge. On such an application, the court will have a wide discretion to grant a discharge either immediately or after a period of suspension or conditionally on the bankrupt agreeing to make payments to his creditors. An immediate, unconditional discharge may not be granted where certain kinds of misconduct by the bankrupt have been proved.

The order also brings Northern Ireland legislation on the public examination of bankrupts into line with that in England and Wales and gives the court the power to dispense with the public examination of a bankrupt.

Under the Judicature (Northern Ireland) Act 1978, which established the new Northern Ireland court service, responsibility for the office of the Official Assignee in Bankruptcy was transferred from the Northern Ireland Supreme Court to the Secretary of State, who delegated the administrative responsibility for the office to the Department of Commerce. As mentioned earlier, the order now formally transfers that responsibility to the Department of Commerce and places it in a similar position to the Department of Trade in relation to the Official Receiver service. As a follow-through to the transfer, the order makes provision for the payment of funds arising from bankrupts' estates into the insolvency account of the Department of Commerce, which was established under the Companies (Northern Ireland) Order 1978 for the funds of insolvent companies. The audit of the accounts of the Official Assignee, hitherto carried out by the court, will become the responsibility of the Department of Commerce. Provision is also made for the declaration and payment of dividends to creditors by the Official Assignee.

I should explain that in Northern Ireland creditors have never exercised the right given to them in the 1872 Act to transfer the administration of a bankrupt's estate from the Official Assignee to a trustee appointed by them, and in practice, therefore, all estates are administered by the Official Assignee. The right to appoint a trustee is, however, being preserved, and the order contains an article adapting the order to an administration by a trustee.

The order provides for the abolition of the post of bankruptcy messenger, who was formerly appointed by the Bankruptcy Judge. The name of the post is misleading. His functions mainly relate to the taking and securing possession of the bankrupt's property and executing warrants of the court. He acts on the directions of the Official Assignee and in practice he is effectively a member of his staff. The need, therefore, for the separate appointment no longer exists. His functions will continue to be discharged by the present holder of the office as an officer of the Official Assignee's office.

The law relating to the proof of debts in bankruptcy in Northern Ireland is at present contained in many lengthy sections of the Bankruptcy Acts, which have caused difficulties for creditors, particularly in relation to contingent claims. It is important that that branch of the law, which is applied also to the liquidation of insolvent companies, should be uniform throughout the United Kingdom. Accordingly, the order sweeps away the old sections and replaces them with provisions following those which have operated in England and Wales for over a century.

The machinery for dealing with creditors' claims is also assimilated to that operating in England and Wales. Henceforth the Official Assignee will admit or reject claims, subject to the right of an aggrieved creditor to apply to the court. The numerous statutory provisions relating to preferential payments in bank- ruptcy at present scattered through a number of miscellaneous enactments have also been consolidated in article 19.

Another of the more important provisions of the order is the increase of certain monetary limits to bring them into line with those contained in the Insolvency Act 1976. For example, the minimum debt required to support a creditor's petition in bankruptcy is raised from £40 to £200. The order also contains power to alter those limits by order.

The opportunity has also been taken to tidy up the statute book by making numerous minor amendments and repeals of obsolete provisions, which will make the law more easily comprehended and more in accord with modern practice. It will at the same time facilitate a consolidation of the law on this subject.

Generally, the principles of bankruptcy law in Northern Ireland are similar to those in Great Britain, and the overall purpose of the order is to carry out some of the more pressing changes required to bring the law into line with England and Wales.

I commend this first draft order to the House.

I turn now to the draft Bankruptcy (Northern Ireland Consequential Amendments) Order 1980, a copy of which was laid before the House on 11 March.

The order comes within the provisions of section 38 (2) of the Northern Ireland Constitution Act 1973, which enables the law of any part of the United Kingdom to be amended in consequence of any provisions of Northern Ireland legislative measures. By virtue of the Northern Ireland Act 1974, a measure also includes an Order in Council, and the Bankruptcy Amendment (Northern Ireland) Order, which I hope the House will approve, is such an order. The order contains only provisions consequential to the Bankruptcy Amendment (Northern Ireland) Order.

11.20 pm
Mr. J. Enoch Powell (Down, South)

I will, if I may, Mr. Deputy Speaker, take the two orders, which the House is considering together, in the reverse order to that in which the Under-Secretary of State took them.

I think that we owe a few moments' attention to the consequential order, since it was the subject of a report from the Joint Committee on Statutory Instruments, to which attention is very properly drawn on the Order Paper. The reason why the Joint Committee reported upon this order was that it believed that its explanatory note ought to explain when the principal order, if I may so describe it, was expected to be made, as the two clearly hung together.

With the greatest possible respect to the Joint Select Committee, I feel that that was a rather captious objection, since it is difficult to see how the precise date could have been designated in advance, whereas it is clearly convenient that the House should have the two orders before it simultaneously and that they should be approved by the House on the same occasion, as I think they will be later this evening.

I do, however, feel that there was an objection, unnoted by the Joint Select Committee, which could be brought against the explanatory note of that order. Indeed, it may be that in his last remarks, if I caught them aright, the Under-Secretary of State fell into some error. The explanatory note states that the consequential order is being made in consequence of a bankruptcy amendment order"— that is, the main order which has just been moved— and in some cases, earlier legislation". I do not think it is proper practice that vague expressions of that kind— in some cases, earlier legislation"— should find a place in an explanatory note upon a draft statutory instrument. Before the House agrees to amendments of United Kingdom law for the purpose of conformity with changes which are being made—or which in some cases, apparently, have already been made in the past—in the law applying to Northern Ireland, we ought to be told exactly what those past changes are which require that amendment. So I hope that the reference of the Joint Select Committee to this order may not have been entirely unfruitful for future notice.

The Minister was, of course, quite right in saying that we have this rather curious procedure by double order because some of the consequential amendments are to the law of the United Kingdom as a whole and, therefore, have to be made—even during this interim period—under different powers, and consequently by a separate statutory instrument.

That said, I come to the main order, the Bankruptcy Amendment (Northern Ireland) Order, which, I believe, has an importance for the reform of the law of Northern Ireland greater than would have been guessed from the somewhat unexciting, if not uninspired, description with which the Minister commended it to the House. Its general effect cannot be better described than by words that I take from the useful explanatory memorandum which the Department provided for hon. Members and others studying the proposals. It said that the order is part of the process of harmonising the law in the two jurisdictions". That is a process which my hon. Friends and I believe is of great importance and benefit to Northern Ireland and which in every way we wish to promote and to support.

In this instance, it has to happen in two if not three stages. There has been a precedent for that in the case of company law. The House will remember that a Northern Ireland Companies Order came before it a year or two ago, which effected an approximation of Northern Ireland company law to the company law of Great Britain and was in a sense a preparation for a reform of the company law of the United Kingdom in the Companies Bill which is before Parliament in this Session. That Bill contains what my hon. Friends and I have come to describe as the "theft clause"—I think the clause first made its appearance in a measure called the Theft Bill 1978. It is a clause that enables the precise effect of a Great Britain Bill to be applied by negative procedure in Northern Ireland. Thus, in the context of companies legislation we shall have achieved uniformity of the law throughout the kingdom in three stages: first, there was the approximation stage by a Northern Ireland order; secondly, there was the consolidation of Northern Ireland law, which the first stage made possible; then, thirdly, there is still to come the enactment for Northern Ireland of the new code of company law which Parliament is engaged in creating for Great Britain in this Session.

To that process we have, I think and hope, a parallel developing here. In this order we have the first stage, producing the rough approximation, as it were, between Northern Ireland bankruptcy law, which is well over a century old, and the still rather obsolete bankruptcy law in England and Wales. I was glad to hear the Minister say that this stage and this order will be followed by a consolidation stage. The hon. Gentleman also forecast that there is a third stage to follow. Sir Kenneth Cork is presiding over a committee which is considering on a broad basis the law of insolvency and bankruptcy. The legislation which will follow in due course upon the report of that committee is legislation which ought to be uniform—the principles which it enshrines ought to be applied uniformly—throughout the United Kingdom.

It may be that when that legislation is eventually enacted we shall have outgrown the "theft clause". It may be that we shall then be legislating for Northern Ireland in the proper manner as we have been legislating earlier today for another part of the kingdom—namely, Scotland—by way of Act of Parliament. However, whichever way it comes, the result will be a uniform code of bankruptcy and insolvency law for the whole of the kingdom.

In the order that the House has just passed, there were differences—appreciable, if not substantial—between the code of law in Northern Ireland on matrimonial and domestic matters and the codes in Scotland and in England and Wales. Those differences are fully justifiable by the social habits, points of view and histories of the respective parts of the kingdom. However, when we are dealing with the law covering insolvency and bankruptcy, there can, in the long run, be no justification for local variations. There is every reason why those who enter into relationships as debtors and creditors in any one part of the kingdom or between different parts of it should be covered by the same legal provisions. My right hon. and hon. Friends and I welcome the tripartite process of which the order represents the first stage.

I am sure that the Minister will join me in acknowledging the hard work done by the Incorporated Law Society of Northern Ireland in studying the order; and we have been provided with the outcome of the important discussions which took place between the representatives of the Law Society and the Department of Commerce. It is right that allusion should be made to those discussions, because the Law Society drew attention to some potentially controversial aspects of the proposals, on some of which aspects the Law Society was only partially satisfied by the order before the House.

Since, in some measure, the Law Society and the Department in combination have been doing our preparatory work for us, it is right that the three main points left for further consideration should briefly be put on the record.

The first point raised by the Law Society was the position of the Official Assignee, as an official of the Department of Commerce, in his relationship with his home Department. The society drew attention to the peculiar nature of that relationship, in that the Official Assignee would be acting both in a court or fiduciary capacity and also as a member of the staff, and subject to the instructions and requirements, of the Department of Commerce.

Its objection to that arrangement was withdrawn only on the assurance that, in asking for information from the Official Assignee under the provisions of the order, the Department of Commerce would do so only through an official of the level of assistant secretary or above and that the information would be sought only for the purpose of confirming that the Official Assignee was fully and duly carrying out his statutory duty, and not for any additional or ulterior motive. On those assurances, which I have taken the opportunity to write into the record of the House, the Law Society of Northern Ireland was satisfied, though only—it would be fair to add—barely satisfied.

There is, it must be admitted, an uneasy relationship between the new duties of the new Official Assignee and the Department of Commerce—there is a certain parallel, though not a perfect parallel, with the Department of Trade in England and Wales—and that is something which we shall watch as time goes by.

The second point that I put on record is the Law Society's objection to the fact that the Department of Commerce will be making the regulations for fixing fees for the Official Assignee's services. It felt that there was something a bit endogamous about the Department of Commerce being thus mistress, so to speak, in its own house. It was pointed out, of course, that regulations fixing fees, and from time to time altering and presumably raising fees, at any rate in money terms, would be subject to parliamentary procedure; but I was amused by the scepticism of the Law Society in that context. It opined: One can readily realise just what chance one is going to have to have any matter brought before the Commons. While not elegantly expressed, that is an anxiety which we here recognise. I am not quite sure, even so, whether the Law Society understood that under the interim constitution with which we live in Northern Ireland there is no parliamentary procedure at all: it is not just a negative procedure—the possibility of a prayer; there is not any procedure at all. I have an idea that, if it had understood that, it would have been even less happy.

However, I leave that point where it is, simply because regulations must be made to fix fees. Regulations fixing fees are normally—not invariably—subject to negative procedure, and I look forward to the day when negative procedure in respect of fees fixed for Northern Ireland will mean the same as negative procedure in respect of fees fixed for the rest of the United Kingdom and when, therefore, the appropriate parliamentary safeguards will be available.

I come, Mr. Deputy Speaker—and I hope that I am not unduly charging your patience—to the third point over which the Law Society was anxious. This concerned the new act of bankruptcy, which the order creates. Under article 8 (b), if the Enforcement of Judgments Office grants a stay of enforcement of a money judgment, that is equivalent to the debtor committing an act of bankruptcy. There are certain opportunities still open to the creditors, one understands, if they act quickly enough in such a case, to avert or postpone the bankruptcy. Neverthe- less, this is a new way in which bankruptcy can be brought about and, therefore, the possibility of an arrangement, which might be more advantageous to some or all of the creditors, aborted.

There was considerable discussion, one gathers, on this point between the Law Society and the Department; and the matter was left at a point which I believe should again be put upon the record—namely, that, as this order is a preliminary step to further legislation which will be required in a few years time once the Cork committee on insolvency has reported", and during that time the workings of this provision could be carefully monitored, and if the fears that the disadvantages of the provision outweigh the advantages are realised, fresh consideration could be given to the provision", and, therefore, it might be allowed pro tern to stand in this order. That is about the correct balance. We should make a note that when we come again to this matter of the acts of bankruptcy in the future corpus of law on the subject we must look carefully to see whether the functioning of article 8(b) has proved on balance advantageous or disadvantageous.

Subject to those qualifications, I believe, as I said at the outset, that this order will be of great advantage to those who advise upon the law, who use the law and who are covered by the law of insolvency and bankruptcy in Northern Ireland. I express the hope that we shall very soon have the consolidating order which this order makes possible brought before the House.

11.36 pm
Dr. Brian Mawhinney (Peterborough)

I rise to make a short intervention which is really in the form of a question to my hon. Friend the Minister. I listened carefully to what he said. It raised in my mind the beginning of a question which was accentuated by the first part of the speech of the right hon. Member for Down, South (Mr. Powell). My hon. Friend talked about the usefulness of the position in Northern Ireland being harmonised with that in Great Britain. The assumption underlying that is that there is no difference between the situation in Northern Ireland and that in Great Britain.

However, there is a difference. There is a difference in respect of the general level and the general perception of what is commonly called law and order at present. Some people mistakenly believe that the problems of law and order in Northern Ireland relate only to security, but I believe that it will be generally accepted that this is not necessarily true. If I understood my hon. Friend correctly, he indicated, first, that the law in Northern Ireland had been on the statute book for a considerable time and that the measures before us this evening would liberalise that law and would in effect make it possible for someone to be discharged from a bankruptcy at five years or shortly thereafter, which is a very much shorter period than is the present case.

The question I want to put to my hon. Friend is this. Given the difficulties that the law enforcement agencies have in Northern Ireland at present, given the fact that the prospect of long-term bankruptcy may act as a restraint on certain people who would otherwise prefer not to pay their debts, given also that someone who is made bankrupt has only five years or so to wait before he is discharged, and given the fact that law enforcement creditors may have considerable difficulty in obtaining redress within that time, what thought has my hon. Friend given to the timing of the introduction of the order?

I have no objection to the order itself, but I wonder if it is sensible to introduce it at this time, because in attempting to harmonise the position in the Province with that in the rest of the United Kingdom the assumption is being made that the two parts of the Kingdom are in all other respects identical. This is at best a questionable assumption. If it is a questionable assumption, are we right to proceed with the order at this time, or should not the order be reintroduced at a time when its operation and its chances of operation will more nearly parallel the operation of the same type of order and law on the mainland?

11.39 pm
Rev. Ian Paisley (Antrim, North)

The Minister in introducing the order said that its purpose was to enable us more easily to comprehend the law in relation to bankruptcy. I think that that is the exaggeration of the twentieth century, because anyone trying to read the order certainly will not find it easy to comprehend. Perhaps the hon. Gentleman, with his brain power, can comprehend it, but there are some parts of the order which are incomprehensible to me.

I am very glad that the right hon. Member for Down, South (Mr. Powell) underlined some of the matters which cause concern to the Law Society of Northern Ireland. I would like to take that a step further and to ask the Minister if he is prepared to put on record the two assurances requested by the Incorporated Law Society of Northern Ireland as regards article 4. In respect of confidentiality, it is recognised that the Official Assignee is also an officer of the court. The Department has pointed out that if he considers that the provision is being abused to the detriment of debtors, he can appeal to the master in bankruptcy.

Is the Minister prepared to give us an assurance that the assignee will be intructed to take that course if there is any abuse of the confidentiality or breach of article 4? Will he also assure us that only an assistant secretary of the Department, or someone above that rank, can act for the Department in asking for information under the provision? Is the Minister prepared to come to the Dispatch Box now and to give those two assurances? Evidently the points were put to the officials when they held conversations with the Department of Commerce before the memo to Members of Parliament representing Northern Ireland constituencies had been issued. It would be helpful to have those two assurances, as they would have some authority.

Article 7 states: Whenever the cash balance standing to the credit of the account of any estate is in excess of £2,000 or such other sum as may be fixed by regulations, the Department shall credit to the account of the estate interest on the excess at such a rate as the Department and the Department of Finance may determine. It seems that if the estate does not total £2,000, the Department of Commerce will get the interest. I am sure that the Minister is praying that all such estates will turn out to be less than £2,000 so that he does not have to pay any interest into the estate. Perhaps he could explain this subject. Does this provide a way for the Department to get its money back on the services rendered? The Minister should tell us what he has in mind.

Northern Ireland is part of the United Kingdom. Rights that are guaranteed to other subjects in the United Kingdom should be guaranteed to the people of Northern Ireland. However, perhaps the Government cannot enforce laws that have been enacted by Parliament. We know that the Government cannot enforce the law in many areas of Northern Ireland. For example, it is well known that the law against squatting is rigorously enforced in Protestant districts, and that squatters are removed. However, in areas that are republican ghettos, squatters can squat to their hearts' content. That is a fact of life. The Minister should consider what my hon. Friend the Member for Peterborough (Dr. Mawhinney) said about the ability to carry out laws that have been enacted by the House.

I shall listen to the Minister's speech with great interest. I shall note whether those assurances are given or refused.

11.41 pm
Mr. Harold McCusker (Armagh)

I was surprised, considering his background, that the hon. Member for Peterborough (Dr. Mawhinney) should make such remarks. I suggest that the Incorporated Law Society of Northern Ireland is in a better position to comment on whether the provision is necessary for the Province.

The submissions made during the past few weeks make clear that the consolidation is welcomed. The society regards the consolidation as an advantage for the Province. It advises us not to oppose it and to look forward to the new legislation, which is seen as a preliminary step. I am surprised that the hon. Member for Peterborough should suggest a delay in bringing Northern Ireland into harmony with the rest of the United Kingdom.

Dr. Mawhinney

I was careful to say that I had no objection to the order. I was also careful not to say that it should be delayed. I said that my intervention was in the form of a question to the Minister. I wanted to know what consideration he had given to that aspect before introducing the legislation. I was careful in the way in which I put that question.

Mr. McCusker

I am glad that the hon. Member for Peterborough has qualified what he said. When he reads what he said he may find that it comes across differently. He tended to imply that we should question whether there are differences in Northern Ireland of which account must be taken and whether harmonisation on all matters is important. The average Unionist would welcome such harmonisation.

11.46 pm
Mr. Brynmor John (Pontypridd)

I intend to delay the House only briefly. I support the draft order. The Minister should not draw comfort from that because all hon. Members who have welcomed it have belaboured him with technical questions.

The hon. Member for Peterborough (Dr. Mawhinney) was worried about law and order. One of the problems for a bankrupt is that of obtaining credit. If the problem of law and order for the Province is as great as the hon. Gentleman predicates, obtaining credit as a bankrupt over 10 years must be taken into account. The five-year period is better for both creditor and bankrupt.

The hon. Member for Antrim, North (Rev. Ian Paisley) spoke of the universal relationship of the law in what he said were Unionist and Republican areas. That is a matter not for the Government but for those responsible for civil debts.

Rev. Ian Paisley

In certain areas of Northern Ireland the law cannot be enforced. Those responsible for law enforcement have made representations to hon. Members about the difficulties that they experience. Squatting is an example. That involves law enforcement.

Mr. John

I was dealing with the ascription of the responsibility for law enforcement to the Government. I am prepared to belabour the Government with many things but not with the enforcement of the civil law. That is for the court on application by the creditor.

The bankruptcy and liquidation laws cause the public much anxiety. Even in England and Wales there is room for amendment. When is the Cork committee likely to report? Has it considered the difficult position of the Official Assignee in Northern Ireland cases? In England and Wales the trustee in a bankruptcy, who is not an official of a Government Department, is expected to carry out the administration of a bankruptcy. A conflict of interests is created by an official from a Government Department carrying out that duty. I wonder whether that matter has been referred to the Cork committee for its consideration and whether the Minister has sought the views of the committee on this updating of the law in advance of its report.

Mr. John Biggs-Davison (Epping Forest)

Does the hon. Gentleman agree that it would have been better to leave the duties of the Official Assignee with the Supreme Court and not transfer them to the Department of Commerce, particularly as this would not have been out of keeping with the situation on the mainland?

Mr. John

This is a possibility. There are possible conflicts of interest that emerge whenever a person is an officer holding a position of trusteeship, which is what he does for the creditors in a bankruptcy, and, at the same time, a servant of a Government Department. I believe that the Cork committee should be asked for its view upon the Northern Ireland practice.

I finish by gently chiding the Minister. When the Joint Committee on Statutory Instruments presents a report, commenting however misguidedly, it is worth at least a passing reference in the Minister's introduction of the order and should not be left until the matter is raised from the Back Benches. The Minister should deal with all published criticism so that our debate may be as informed as possible.

11.51 pm
Mr. Giles Shaw

By leave of the House. Mr. Deputy Speaker, I shall seek to reply to the points made in the debate. I should like to take them in the reverse order to that in which they were made. I am grateful to the hon. Member for Pontypridd (Mr. John) for his general welcome to the order and his endorsement of the timing that was questioned by my hon. Friend the Member for Peterborough (Dr. Mawhinney). The hon. Member for Pontypridd was right to say that, in relation to this kind of law and its administration, we should not seek to be deterred by the problems of the Province in the wider aspect of law and order but should seek, where we can, to make changes that we believe to be in the best interests of commercial practice and commercial law. That is the reason for bringing forward the orders now even though I accept the general point of my hon. Friend the Member for Peterborough on the difficulty of enforcing much of the civil law in Northern Ireland, given the circumstances that at present obtain.

The hon. Member for Pontypridd and other hon. Members also raised the question of the Official Assignee. I willingly give the hon. Member for Antrim, North (Rev. Ian Paisley) an assurance on confidentiality. It is right and proper that such an assurance be given about the manner in which this office will be discharged. We have agreed that the office should be at the level of assistant secretary and above. The hon. Member for Antrim, North will understand that we accept the point about the degree of care and attention to be paid to the difficult role carried out by the Official Assignee. In terms of confidentiality of information, I give the House the assurance that it seeks.

Article 4 of the order is in line with the provisions of the Companies (Northern Ireland) Order 1978 and the comparable Great Britain legislation. It is, in our view, necessary for the Department to have power to obtain accounts, returns, vouchers and information in order to carry out full audit investigation and to ensure the protection of public and of private funds. This is especially necessary as the Official Assignee is now an officer of the Department, which would be liable for any loss of funds or general misconduct. On confidentiality and the manner in which the office will be discharged, I can unequivocally answer "Yes" to the question asked by the hon. Member for Antrim, North. It will be conducted at the high level he seeks and with proper regard to confidentiality.

The hon. Member for Pontypridd and the right hon. Member for Down, South (Mr. Powell) raised points about the Select Committee's report.

Mr. Biggs-Davison

I am sorry to interrupt my hon. Friend. Has he now left the Official Assignee, or will he refer to the suggestion that reference might be made to the Cork committee?

Mr. Shaw

I thank my hon. Friend for reminding me that I had not dealt with that point. It was suggested by the hon. Member for Pontypridd that the question of the Official Assignee's role should be referred to the Cork committee. The Cork committee as at present constituted is restricted in its terms of reference to England and Wales. As I indicated in my opening remarks, while we must look at the general observations made about the law in Great Britain and how it would affect the law in Northern Ireland, I think that the specific terms of reference would preclude the suggestion that the role of the Official Assignee be added at this stage to the committee's terms of reference or, indeed, that they should be widened to include it.

However, I shall take on board the point which has been raised and see whether there are any other ways in which we can obtain a view on the role of the Official Assignee, because hon. Members on both sides of the House have suggested that this is a matter which concerns them. I shall endeavour to write to them when I have given consideration to it.

I want now to refer to other matters which have been raised. The hon. Member for Antrim, North referred to sums of less than £2,000 being, as it were, interest-free in relation to the credit to their account. I must remind the hon. Member that it is part of our duty to try to ensure that the activities of the Department are reimbursed and that the services are paid for. In our view, while the interest accruing to sums should be available to defray some of the costs which are involved in the administration of these cases, the amount of interest earned by sums under £2,000 would be comparatively small and in most cases would not adequately pay for the services which are provided, whereas interest or sums above £2,000 would make some significant contribution.

Rev. Ian Paisley

In this age of inflation, surely the interest on £1,000 would make a contribution. Surely the people who would be paid are entitled to get some benefit. Of course, perhaps the Minister is afraid that, even with all the cuts, the Government might go bankrupt.

Mr. Shaw

I hope that the hon. Gentleman will recognise that in due course in- terest rates may not be as significant as they currently are. However, with regard to his question, that is why there is a cut-off point at £2,000.

The right hon. Member for Down, South and the hon. Member for Pontypridd both asked about the Select Committee's report. I take the slightly acerbic point raised by the hon. Gentlemen about that report. In this case, it was hoped that the arrangements made for the publication of the consequential amendments order would meet with the Joint Committee's approval. I am sure that the right hon. Member for Down, South will recognise that this was first raised in connection with another matter for which my hon. Friend the Minister of State—the hon. Member for Barkston Ash (Mr. Alison)—has responsibility.

We made certain changes to the setting and the words used to describe this particular order. I am grateful for the right hon. Gentleman's comments with regard to dating. I accept his view that we did not consider that it was necessarily correct to publish the date of enactment of the major order. However, we hoped that the clear statement which has been made in the explanatory note—that it is a consequential order—would go some way towards meeting the Committee's view. In addition, we felt that the words Draft Order in Council laid before Parliament would also make it clear that it was a consequential order, and that in so far as the entitling did not appear in the official legal document, it was something which could be of a more explanatory nature. The right hon. Member for Down, South raised another point which had not at this juncture been considered by me in relation to the view of the Joint Committee. The right hon. Gentleman asked that the phrase "earlier legislation" should be amplified.

In terms of the major order under discussion tonight there are 26 enactments but I take it that the right hon. Gentleman did not wish us to go that far in terms of the consequential order. It would be our intention in discussion with the Joint Committee to ensure that we bring orders before the House—as well as consequential orders—which are as fully and as fairly described as possible. It is my intention to see that the wishes of the Joint Committee, if possible, can be met in this matter. I will take on board the point made by the right hon. Gentleman and after considering it further I will write to him upon it.

The right hon. Gentleman was right in saying that in the light of subsequent developments we look forward to a more general review as a result of the Cork committee's report. There could be consequences from the Companies Bill and the measure on company law reform now going through the House.

The general intention of these orders is to move as fast as we reasonably can to ensure that in the area of commercial legislation we have a comparable basis of law in Northern Ireland to that in England and Wales. This is some answer to my hon. Friend the Member for Peterborough. We are concerned that the recommendation of the late Lord MacDermott's committee be put in hand and that the transfer from the judiciary to the Department of Commerce be enacted. That recommendation has been with us for some time. I believe that the House would probably wish to see that we were able to move piece by piece and at least in line with the overall objective set out in the major order.

We seek to find some degree of uniformity between the systems. The systems are different historically and certainly those in Northern Ireland go back a considerable way. It is obviously to the benefit of companies, and indeed of the law operating in Northern Ireland, for the systems in relation to bankruptcy to be brought into line where they can be as soon as possible.

The right hon. Gentleman and other hon. Members raised matters in connection with the Law Society of Northern Ireland. I have already referred to the role of the Official Assignee and I hope that hon. Members will accept that this gives them the assurance they require. The matter of fees was also raised by the right hon. Member for Down, South. The provisions of article 34 of this order are similar to those in article 96 of the Companies (Northern Ireland) Order 1978 and section 133 of the Bankruptcy Act 1914.

Although we have included fee-making powers we think that the prece- dents are sound and it was our understanding that the Law Society, on considering these matters, withdrew its objections when it last met representatives of my Department.

The other matter raised by the right hon. Gentleman concerned the new act of bankruptcy. I understand fully why he should have found this, in particular, a matter worthy of special comment. It is considered that once the judgment enforcement office has determined that a debtor is insolvent his affairs should be subject to an insolvency administration as quickly as possible. For this reason, this new act of bankruptcy was created.

However, I am advised that the fact that a debtor has committed an act of bankruptcy will not prevent the court, as suggested by the Law Society, from making a protection order if the debtor is endeavouring to make an arrangement with his creditors under the control of the court. It is not envisaged that the enforcement of judgments office would make an order which would have the effect of creating an act of bankruptcy in a case where a debtor had demonstrated to that office that he was genuinely seeking to make an arrangement with his creditors.

That is probably the most important assurance that I can give to the right hon. Gentleman.

I do not believe that there are good grounds for the fear expressed by the Law Society. But the order, as I have already indicated, is a preliminary step to further legislation. I cannot give the right hon. Gentleman a date when the Cork committee will report, but I shall seek to find out and write to him on the matter. When that committee reports, clearly we may seek to review the matter again. During that time, the operation of this provision will be carefully monitored. I undertake that its operation, if it proves unsatisfactory, will be the subject of fresh consideration. The right hon. Gentleman may rest assured that we shall look most carefully at the anxieties that have been expressed, but in our view they are not likely to arise.

I am grateful for the general welcome that has been accorded to both orders. I take the point on procedure. We shall endeavour to come to a better arrangement with the Select Committee so that we do not offend either the Committee or Members now present in the House. However, I think that the general welcome that has been given to the order is right in so far as it is necessary to make these changes at this time and in so far as they are changes which forecast a general review of practices to see where we can bring them into general line with the law operating in other parts of the United Kingdom.

I commend both orders for the approval of the House.

Question put and agreed to.

Resolved, That the draft Bankruptcy Amendment (Northern Ireland) Order 1980, which was laid before this House on 11th March, be approved.

Resolved, That the draft Bankruptcy (Northern Ireland Consequential Amendments) Order 1980, which was laid before this House on 11th March, be approved.—[Mr. Giles Shaw.]