Insolvency

HC Deb 19 July 1982 vol 28 cc3-4

2. Mr. John Fraser

asked the Minister for Trade when he expects to be in a position to publish his proposals for legislation on the law of insolvency.

The Minister for Consumer Affairs (Dr. Gerard Vaughan)

Consultations have only just started following publication of the Cork report on 9 June 1982. I cannot say at this stage when proposals for legislation may be introduced.

Mr. Fraser

Does the Minister agree that for five years consumers and creditors have been getting a raw deal under our insolvency laws, and that all questions have been put off on the basis that the Cork committee has been considering the matter? Is it not time that the Government at least showed their tentative decisions by publishing their proposals as, after five years of investigation, there must be a limit to the consultations?

Dr. Vaughan

I agree. I am anxious about the position of consumers. A number of abuses are taking place, some serious, and we are considering what action we can take and how quickly.

Mr. Anthony Grant

If the Cork committee report were implemented, as well as helping the consumer, would it not enable a number of small businesses to continue? Although I appreciate the difficulty of securing time for legislation, will my hon. Friend at least consider whether the more important aspects, particularly those relating to dishonest directors, can be brought forward in the interim?

Dr. Vaughan

I am pleased to accept the suggestion. It is what we wish to do. I am anxious to make progress. I am worried about the position of a number of small businesses. The situation with dishonest directors has been improved under the Companies Acts, and regulations were brought in in June. It is possible for a director to be disqualified by a magistrates' court for up to 15 years.

Mr. Clinton Davis

Will early legislation be introduced to deal with the most flagrant abuses affecting the rights of consumers? Would it not be wrong to wait for the entirety of the Cork proposals to be considered before some legislative action is taken? What is the time scale for the Government's proposed action?

Dr. Vaughan

It would be wrong to give a firm assurance today. We are anxious to make progress. We are considering whether some of the recommendations can be pulled out for early action.

Mr. Douglas Hogg

Would it not be most desirable urgently to impose on directors of insolvent companies a considerable degree of personal liability for the debts?

Dr. Vaughan

That is one aspect that we are considering.