HC Deb 18 July 1985 vol 83 cc589-92

Amendments made: No. 18, in page 16, line 33, leave out 'or'.

No. 19, in page 16, line 35, at end insert 'or (c) where the company is a recognised bank or licensed institution within the meaning of the Banking Act 1979 or an institution to which sections 16 and 18 of that Act apply as if it were a licensed institution'.—[Mr. Fletcher.]

Mr. Gould

I beg to move amendment No. 271, in page 17, line 6, at end insert— '(e) to secure greater protection for the jobs of those employed by the company than would be effected on a winding up.'.

Mr. Deputy Speaker

With this, we shall take the following:

Amendment 272: in clause 34, page 25, line 41, after 'creditors', insert 'and trade union and other representatives of the company's employees'.

Amendment 273, in page 26, line 2, after 'creditors', insert 'and trade union and other representatives of the company's employees'.

Amendment 274, in clause 35, page 26, line 15, leave out 'of creditors'.

Amendment 275, in clause 36, page 27, line 9, after 'creditors', insert `and trade union and other representatives of the company's employees'.

Amendment 276, in page 27, line 13, after 'creditors', insert 'and trade union and other representatives of the company's employees'.

Amendment 277, in page 27, line 24, leave out 'of creditors'.

Amendment 278, in clause 37, in page 27, line 35, leave out 'of creditors'.

Amendment 279, in clause 38, page 28, line 4, after 'creditors', insert 'or employee'.

Amendment 280, in page 28, line 9, after 'creditors', insert 'or employees'.

Amendment 281, in page 28, line 10, after 'creditors', insert 'or employees'.

Amendment 282, in page 28, line 36, after 'creditors', insert 'or employees'.

Mr. Gould

We considered this group of amendments in Committee, and the Under-Secretary of State expressed some warmth about them. He undertook to consider them in a general sense. Predictably, he has not been able to accept the amendments, which were designed to impose upon the adminstrator the duty to pay some attention to the employment prospects of the work force in the company for which he was acting as liquidator. It imposed on hire the duty to consult the work force at a number of stages during the carrying out of his functions as administrator.

The fact that the Under-Secretary of State has not been able to accept the thrust of the amendments that we are left in the familiar position where the potential failure of a company is seen almost exclusively—in my view, wrongly—as a balance to be struck between the interests of the directors and the creditors. The employees, whose livelihood are most likely to be directly at stake, are regarded as a side issue and not a central matter to be taken into account by those responsible for the company's future. Their jobs are regarded as of very little value compared with the debts owed to creditors and the future of the company. The paradox is that the administration procedure is designed to maximise the chances of survival of the company. In that undertaking there can be no more important body of people than the work force. Its cooperation is essential. It needs to be taken into the confidence of the administrator at the earliest possible moment and to be kept in his confidence throughout.

The Opposition regret that, although he expressed general sympathy, the Under-Secretary of State found it impossible to express it directly in the Bill. I do not intend to press this amendment to a Division, but many people outside the House will take this failure to recognise the importance of the work force as another indication that in the end the Government do not concern themselves to much with the jobs of ordinary people and that they are quite content to leave this area of the law as a battleground between the directors of companies and those who in many cases are trade creditors, sight being lost of the interests of the work force.

10.45 pm
Mr. Fletcher

I sympathise with the spirit of the amendments. I made that clear in Committee,. I cart envisage obvious political attractions in flagging up the requirement that the administrator should consult the work force. However, having considered this matter in the cold light of the Department as distinct from the warmth of the Committee it does not appear to be very helpful. Amendment No. 271 could be harmful. It could introduce a potential conflict between the purposes for which adminstrators are to be appointed.

There are two fundamental issues. First, the new administration procedure is intended to promote the survival of companies as going concerns. Secondly, it is intended to secure the preservation of jobs. The purpose of amendment No. 271 is therefore implicit in all of the existing purposes for which administrators may be appointed. As for the remaining 11 amendments, the hon. Member for Dagenham (Mr. Gould) knows that my view is that no administration will be successful unless the administrator enjoys the support of the employees. To achieve this support he must consult them and keep them informed. There may be cases where the employees of a company will be creditors; they will then have the rights of creditors in terms of formal consultations with the administrator.

The central point that I wish to underline is that the success of the procedure is the best safeguard for employees' jobs and that, attractive though the amendments of the hon. Member for Dagenham are, they would not improve that safeguard. I cannot therefore agree to the inclusion of something which, although it might appear to be attractive politically, would not serve a real purpose or have any real effect.

Mr. Bermingham

Once again the Parliamentary Under-Secretary of State has proved that we were right. He warned us in Committee that we should not be too nice to him because it would harm his political career. Every time that we did our best to educate him he went back to his Department, of which we were highly critical. It poured cold water on this education and destroyed everything. The only thing to do is to move the Under-Secretary of State and to ignore the Department.

We are saying in the amendment that if there is any chance of saving a business the people we need to help us most are the employees; so why not put it on the face of the Bill? In Committee the Under-Secretary of State said that in theory it was a good and attractive idea and that he liked it. But what do we find when he returns to the Floor of the House? We find that the gremlins in the Department have got at him again. There seems to be an overwhelming objection on its part to anything sensible, humane and decent being put on the face of the Bill.

I said earlier that it is over 100 years since we had a Bill on insolvency. Joseph Chamberlain introduced the last one. It will be another 100 years before we have the next one. I fear that the gremlins in the Department in 100 years' time will again wreck the face of the Bill. We should be showing that it is the purpose of the insolvency law to save employment where we can, and that we think that the work force is important. That is not too much to ask.

The Minister says that it would be cosmetic and pretty. I say that it would be positive and attractive to the work force. It would show that this House believes that the people who work in industry are important, that their rights matter, that they will be protected, and that they will be given the courtesy of consultation. To achieve that, the Minister has only to bow gracefully to us—because he is at present some distance from the gremlins—in the warmth of this Chamber and accept the amendment. Then we can all go home thinking that he has done a fine job and finally overcome his own gremlins.

Mr. Gould

In the conviction that the arguments, if not the votes or the gremlins, are on our side, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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