SUBMISSION OF PROPOSALS ETC. (Hansard, 6 April 1981)

§ Mr. Eyre
I beg to move amendment No. 3, in page 3, line 39, after "applicant", insert "in writing".

§ Mr. Deputy Speaker
With this it will be convenient to take Government amendments Nos. 8 and 17.

§ Mr. Eyre
The hon. Member for Hackney, Central (Mr. Davis) moved an amendment similar to amendment No. 3 during the second sitting of the Committee. With his usual style and understanding, the hon. Gentleman kindly asked leave to withdraw that amendment when I agreed to 736 table an amendment of equivalent effect. Our common objective is to ensure that if the Secretary of State refuses an application for authorisation he should be obliged to set out his reasons in writing. That is the simple effect of the amendment.
In Committee I mentioned that there were implications for clauses 11 and 25. I have tabled parallel amendments. Clause 11 deals with the withdrawal of a company's authorisation in respect of new business. Clause 12 already requires the Secretary of State formally to serve on a company a written notice of the particulars of the ground on which he is considering withdrawing a company's authorisation.
However, at present the Secretary of State is not required to tell a company for which reasons he has withdrawn it. They may have been narrower than the grounds that he was considering. The amendment to clause 11 fills that gap and requires him to inform the company in writing of his reasons. That does not, of course, need to apply when the withdrawal is at the company's request.
Clause 25 deals with the transfer of general business policies subject to the approval of the Secretary of State. He is already obliged to give reasons for refusing an application for a transfer. The amendment ensures that these reasons are communicated in writing. I hope that the hon. Gentleman is pleased that my undertakings have been discharged.

§ Mr. Clinton Davis
The Minister never goes far wrong when he follows my prudent advice. I wish that he did it more often.

§ Mr. John Fraser
I beg to move amendment No. 4, in page 3, line 39 at end insert: (3) The Secretary of State shall make provision for a right to apply to the courts should there be any refusal but such right to apply shall not include an appeal save on a point of law.". Article 11 of the directive on which the provision is based states that member States shall make provision for a right to apply to the courts in the event of any refusal. I stress the words "any refusal". In Committee the Minister said that he would like to think about this subject. Therefore, I have tabled an amendment in a similar form so that he can give the House his revised thoughts.
The words in the directive are capable of three interpretations. They could mean that in the event of any refusal a person has a right of appeal to the courts. All of us agree that that is not desirable and that the Secretary of State should make an administrative decision. There should be no right of appeal on the facts. Nevertheless, the words are capable of that interpretation. Many people think that the right to apply to the courts when a refusal has been given means a right of appeal.
The second interpretation is that even if there is no appeal an aggrieved person has the right to apply to the courts in the case of a refusal. In other words, each and every refusal would give a right of application to the courts. That is a fair, literal interpretation of article 11.
The words in the directive are capable of a third interpretation—that placed on them by the Department of Trade to the effect that in the event of a refusal an aggrieved person has the right of judicial review. Judging from what I know of the law, the number of opportunities for a judicial review will be rare compared with the refusals received.
737 I tabled the amendment to clarify the words in the directive. We are no longer sovereign in these matters. The directive can have legal force. In my view, we should eliminate any doubt by translating this important phrase in article 11 in the way that we want it translated in the statute. I hope that I have made it clear that there should be a right of application to the courts which would not encompass a right of appeal. In that way we would make the statute more certain, understandable and reconcilable with the appropriate article in the European directive.

§ Mr. Eyre
I appreciate the care with which the amendment has been drafted by the hon. Member for Norwood (Mr. Fraser) to make it clear that what is proposed is not an appeal on the merits of the case. The hon. Gentleman and I are at one on that issue. It would be wrong for the court's discretion to be substituted for that of the Secretary of State.
The amendment seeks to ensure that someone aggrieved by the Secretary of State's decision not to issue an authorisation should have the right to apply to the courts for a review of that decision, to establish whether the Secretary of State has erred on a point of law.
I do not dispute for a moment that an aggrieved applicant should have that right. The point is that he has it already, given the right to apply for a judicial review. That is a substantial right. It comprises the historic remedies of the prerogative writs of certiorari, mandamus and prohibition and the equally important remedies of declaration and injunction. I suggest that this is an adequate and proper answer to the points raised by the hon. Gentleman.