HC Deb 17 August 1991 vol 195 cc422-35

Question proposed, That the clause stand part of the Bill.

8.10 pm
Mr. Harry Barnes (Derbyshire, North-East)

Clause 1(1)(a) deals with states that are not recognised. In our discussions of the Bill the Government should provide a clear explanation of the scope of the clause. How many states are unrecognised by the British Government and how many states would be affected by this legislation? That could be important in determining our attitude to the clause.

My main concern is with clause 1(3) which makes the legislation retrospective. Why is retrospective legislation appropriate? I am not producing an argument against it, but we should take the greatest care when it is suggested. We should consider its implications carefully. We should not propose retrospective legislation in a cavalier fashion.

On Second Reading we heard of a case of some significance when retrospective legislation was introduced to try to cover the problems faced by councillors in Clay Cross. I know those councillors and former councillors well because I represent the constituency in which Clay Cross is situated. Why is the argument for retrospective legislation stronger in this instance than it was in their case?

The Clay Cross councillors found the operation of the Housing Finance Act 1972 objectionable and against the interests of the people whom they represented. They stood out courageously against it, believing that their actions were entirely legal. The Act provided for a housing commissioner to be sent in to take over the council's affairs if it was not increasing its rents as it was required to do under the Act. That was the initial position, although it may have changed later. At least initially they believed that their actions were entirely consistent with the law.

To that extent, the corporations covered by this legislation may be in a similar position. Presumably the corporations thought that their activities were legal, but now have discovered that they were not. Their ignorance of the law will be covered by this legislation. Likewise, in the case of Clay Cross, the councillors' misunderstanding of what became the interpretation of the law by the courts was at the front of their minds.

8.15 pm

The Clay Cross councillors were dealt with under the 1936 legislation on local government finance. The district auditor brought evidence against them, showing their failure to balance the accounts. They were surcharged by the district auditor for the shortfall under the Housing Finance Act. The legislation was reinterpreted, admittedly, because of the existence of the Housing Finance Act. Legally that is legitimate. It was argued in court that they believed that they were not doing anything that was constitutionally odd, therefore action should not have been taken against them. There is a similarity between that case and the corporations covered by this Bill.

Will the Solicitor-General explain why the principles behind this measure are held to be more important and significant than those in the case of the Clay Cross councillors? My constituents in particular and, certainly, the Clay Cross councillors and former councillors will be interested to know why one case is dealt with in one way and why arguments were used in this House to stop full and serious consideration of their particular concerns and interests. In 1975 effective legislation could have covered them and their problems. Many other councillors in the British Isles were covered by the measure, but the particular problem of the Clay Cross councillors was that they were caught earlier by that measure, so a retrospective element was needed to put them in line with others. Likewise, it seems that a retrospective measure is now required to put certain corporations in line with others.

Mr. Andrew F. Bennett (Denton and Reddish)

I do not want to detain the House long. When the Solicitor-General replies, can he give me some information about the principles on which the Government are proposing retrospective legislation in this case?

I see no objection to retrospective legislation provided that everyone gains as a result. It is particularly worrying if some people lose and if an action is regarded as a crime retrospectively. It is an important principle that people should know the law when they carry out actions. When we introduce the idea of retrospective legislation and make an action a crime when it was not a crime when the person performed it, we are on dangerous ground.

So long as the Minister can assure me that there are only winners, no losers, I can see few problems with the Bill. It would be helpful if the Solicitor-General, on behalf of the Government and the Conservative party, spelt out the principles on which the Government operate. It appears that they consider that it is reasonable to have retrospective legislation in some areas, but totally unreasonable in others. Many of us heard that argument on Clay Cross.

I hope that the Minister can set down the clear principles behind the Bill. I hope that he can tell us when retrospective legislation is reasonable and when it is not. I hope that he will not tell us that it is a question of temporary expedience; that is not a good principle to work on. If retrospective legislation is introduced to produce winners when people have been deemed to have done something wrong, which they and everyone else did not believe to be a crime, but which is found to be a crime technically, that is all to the good. I cannot possibly contemplate the circumstances in which we introduce retrospective legislation and someone who does something in good faith is penalised because that act has become a crime as a result of that legislation.

Mr. Fraser

I do not know whether my hon. Friend the Member for Denton and Reddish (Mr. Bennett) was here on Second Reading.

Mr. Bennett

Yes, I was.

Mr. Fraser

Perhaps I can make our position on retrospection clear.

I support the retrospective provisions of the Bill because they put the parties to a commercial relationship in exactly the same position that they thought they were in when they entered into their arrangements. In that way they are not deceived. My hon. Friend the Member for Denton and Reddish should appreciate that there can be winners and losers. A case may proceed where parties think they have entered into a contract. However, if the foreign corporation realises that it is being sued and pleads that it has no legal personality and so cannot be sued, that foreign corporation would be the winner. It would have avoided its liabilities, but the person who had contracted with it in good faith would be the loser. I do not believe that is right and that is why I support the retrospective provisions.

Mr. Bennett

Does my hon. Friend accept that foreign companies would not originally assume that they could use that loophole to get out of a contract? That loophole was discovered for them by the courts. It was not something that those companies originally took into account when they entered into agreements.

Mr. Fraser

That is exactly what I am saying. There have always been cases where the law was believed to be in a particular state and where Parliament corrected a misapprehension that was discovered only later on. Such cases may be rare, but they are a proper reason for retrospection.

Retrospection is never justified under any circumstances when one passes a law that makes criminal something done in the past which was not criminal at the time the act was committed. Such retrospective legislation would be a breach of international conventions on human rights. Such retrospective legislation is insupportable and I would not support it under any circumstances—I do not believe any party would do such a thing.

My hon. Friends will be aware that I represented, without any charge, the Clay Cross councillors in the surcharge case. The Bill does not stand on all fours with that case. In that case it was argued that we should not have retrospective legislation that forgave those Clay Cross councillors. People argued that they knew what they were doing at the time.

One can always justify that type of retrospective legislation because the state has the power to forgive. In the Clay Cross case individual rights had not been interfered with, rather it was the rights of the state versus the rights of individuals. If the state wants to be generous and to forgive, as it does with reprieves and pardons, the state is free to do so. That is the proper action. That has often been done for Members of Parliament because many retrospective acts of indemnity have been passed in the House. Dr. Winstanley was the beneficiary of retrospective legislation. He was elected as a Member of Parliament, but was disqualified in the same way as the Clay Cross councillors. However, the state, the House of Commons, forgave him for his minor infraction and he was able to take up his Crown appointment.

It is always proper for the state to be forgiving and that is how I justify the Clay Cross case. I hope that I have drawn the distinction between the different types of retrospective legislation. I hope that I have made my view clear as to why the Bill should be supported.

I want to ask the Solicitor-General about the operation of another part of clause 1, which relates to the recognition of companies incorporated under the laws of a state that is not recognised as a separate state by the United Kingdom. Will that apply to the Soviet Republics? There is no problem with a corporation incorporated under Californian or New York law because all the incorporations in the American federal system are recognised by the Federal Government. What happens if, during a course of radicalism or privatisation, Soviet republics pass laws for which they do not have the vires to pass under the Soviet federal law? What happens if those laws establish private enterprise companies in the Baltic states or in Georgia? Will the United Kingdom courts recognise those Soviet incorporated entities if those republics have a settled legal system and a proper court system? Will the United Kingdom recognise those entities notwithstanding that the Government of the Soviet Union do not?

Mr. Dennis Skinner (Bolsover)

I am a bit worried about this Bill being rushed through. I know that Parliament wants to get finished for the hols on 25 July and when I looked at the agenda for today I spotted about 10 different items. That is unusual because normally we might discuss one or two items, sometimes three. Here we are with five different Bills. I thought that this one was not that contentious until I heard my hon. Friends the Members for Denton and Reddish (Mr. Bennett) and for Derbyshire, North-East (Mr. Barnes). I now realise that the Bill involves the words—dreaded by some—retrospec-tive legislation.

I have heard many arguments about such legislation, especially when a Labour Government were in power. In those days the Tories sat on the Opposition Benches and they used to play merry hell about a Labour Government even daring to introduce retrospective legislation. Now we have the Solicitor-General creeping in here in the middle of the evening when all of his friends have gone to dinner. He is trying to slide the Bill through in the hope that Opposition Members have gone to dinner as well. Some of us have not because some of us have to keep an eye on things so that this parliamentary democracy is sustained, or brought down, as the case may be.

They call this place the mother of Parliaments, but I do not know why, because, frankly, there are only 42 women in it. It should be called the father of Parliaments. We have been told that we should spread this wonderful system of democracy all around the world, to eastern Europe and all over the place. Yet this Bill has come from the other place, the House of Lords, where no one is elected. So we are going to spread this around eastern Europe saying, "Follow us down this wonderful road to democratic nirvana. You can have 1,100 peers for life." Christ almighty! So here we are with a Bill being rushed through when Mr. Speaker is having his dinner. I do not mean any disrespect, Miss Boothroyd, as you have—

The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd)

Order. I am sure that the hon. Gentleman realises that Mr. Speaker is never in the Chair when we are in Committee. I am sure that the hon. Gentleman is warming up to what he has to say on clause 1 as his comments are totally irrelevant at the moment.

Mr. Skinner

I am trying to raise my voice sufficiently loud enough for Mr. Speaker to hear me. You are absolutely right, Miss Boothroyd, that we are in Committee, which means that it is a different kind of debate. For the people out there it is difficult to understand this mumbo-jumbo world, this quaint little gentleman's club. The people might think that this debate represents the House of Commons in action, but this is a Committee rushing through a Bill to introduce retrospective legislation. The Government have introduced retrospective legislation before. The former Secretary of State for the Environment, the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), introduced retrospective legislation four times because he had got the original Bill wrong.

My hon. Friend the Member for Norwood (Mr. Fraser) said, quite properly, that retrospective legislation was all right provided that the guilty parties knew what they were doing at the time. Let us face it, we know that the right hon. Member for Cirencester and Tewkesbury did not quite understand what he was doing when he introduced those four Bills that had to be changed by retrospective legislation. Some Tory Members wish that that legislation had gone down then.

8.30 pm

My hon. Friend the Member for Norwood also referred to Lord Winstanley, who used to be a Member of Parliament. He came here in 1974 having been elected as the hon. Member for Hazel Grove. One day, I noticed that the annunciator was showing that a further little item of business was being taken. The Government had added it at the last minute, just like today, because they were trying to rush it through. I asked some of my hon. Friends what was going on and they told me that it was to rescue the hon. Member who is now called Lord Winstanley. A Labour Government were in office at the time and they wanted to ensure that that Liberal Member of Parliament, who had broken the rules, was saved. If someone stands for Parliament he should have an idea about whether he is fit for office. Lord Winstanley had an office of profit under the Crown and served on medical tribunals, so he must have known that he was breaking the rules. Another example is the Prime Minister, who was elected as a councillor in Lambeth and put down the wrong address. He would have been done for that in an election court. Just fancy, he is running an economic summit down the road and he does not even know where he lives. He has several different hyphenated names, which he keeps changing.

Lord Winstanley was told to keep out of the road so that he would not be noticed. In this great democracy of ours he was told not to come here because he might spur someone on to talk about the issue, so I decided to talk about it. Here was a Member of Parliament who should not have been elected, and the Labour Government wanted to give him a chance to stay. I wondered what they were fighting for. The net result was that my former right hon. Friend, now Lord Glenamara in another place, moved the appropriate resolution and up jumped a Tory Opposition Member—oh yes, wonderful, let us get it through sharp before anyone notices—straight after Question Time. The Government could not get away with that now. I then moved in and said that I wanted to know a little more about it. Just imagine the hue and cry if Lord Winstanley had been a left-wing Labour Member. That would have been a different ball game altogether. However, the then Government slipped the matter through and I made my protest.

I do not know where my hon. Friend the Member for Bradford, South (Mr. Cryer) was at that time. I am intrigued to know, because I have only just thought about it.

The Second Deputy Chairman

Order. May I remind the hon. Gentleman where he is at the moment. He should be dealing with clause 1, which is very narrow and technical. I am sure that the hon. Gentleman is ingenious enough to come back to order.

Mr. Cryer

Will my hon. Friend give way?

The Second Deputy Chairman

Order. The point may be amusing, but we should be discussing clause 1.

Mr. Cryer

Will my hon. Friend give way on the question of retrospection contained in clause 1?

Mr. Skinner

Yes, this is a retrospective argument about something that happened in 1974.

Mr. Cryer

My hon. Friend will recall that I was one of the Labour Members who turned up to ensure that we voted the civic rights of the Clay Cross 11 back into operation, against the wishes of the Tories who said that retrospective legislation was a slippery slope that we should not go down. They are willing to go down it in clause 1. My hon. Friend will recall that we did not manage to get that legislation through in spite of my clear adherence to being here and voting for it because some of our hon. Friends, most of whom joined the Social Democratic party later, abstained in that vote to protect decent working class councillors at Clay Cross.

Mr. Skinner

We have already dealt with that matter in which my hon. Friend played a significant role. We are now discussing the Liberal Member of Parliament who was here for a short period and is now called Lord Winstanley.

The important question is, as my hon. Friend the Member for Norwood said, whether Lord Winstanley knew that he was breaking the rules. He was a medical doctor serving on a tribunal and picking up money from a Government quango. He was then elected and he broke the electoral law. That must have been a dodgy affair but it slipped through.

What connection does clause 1 have with the Bank of Credit and Commerce International?

The Second Deputy Chairman

Order. I can enlighten the hon. Gentleman there. It has nothing whatsoever to do with BCCI and I hope that the hon. Gentleman will now come back to order and deal with the technicalities of the clause.

Mr. Skinner

Let us face it, you, Mrs. Boothroyd—I think that that is the correct title for the position that you presently hold—

The Second Deputy Chairman

I have never been married.

Mr. Skinner

Right. You are called Madam Deputy Speaker, but when you are chairing a Committee you are called Miss Boothroyd. People should know that you have changed your name in the past 10 minutes.

We are discussing foreign countries that deal with trade and money. We know that BCCI was involved in laundering drug money—Noriega and all the rest. We also live in a world in which, by the push of a computer button, money can be transferred from one country to another. I am concerned about whether, if the Bill is enacted, there has been any laundering, because the Solicitor-General is involved in this drug laundering business. I think that he was here last year—it may have been the Secretary of State for Trade and Industry—when the Government passed a law to ensure that drug money was under control and that those involved were brought to heel. I remember that the debate took place late at night and that my hon. Friend the Member for Bradford, South and I took part in it. We asked whether that was possible and I want to know whether, when money is transferred to different countries, we are completely in control of the drug money that is sloshing about. It should be used to write off the debts of third world countries—I just throw that in, en passant.

Will the Bill affect immigrants? If so, my hon. Friend the Member for Norwood would probably have spotted it because he is very knowledgeable on that matter. My hon. Friend mentioned the Soviet republics—the 15 states within the Soviet Union—and asked whether there will be a problem. Six of those states are already saying to Gorbachev, "You can do business with the ex-Prime Minister of Britain if you like but we want to opt out". We could argue about whether it is a good idea for those six states to separate from the other nine in the Soviet Union. My hon. Friend made a good point when he asked whether, when we speak of the Soviet Union, it includes the six who want to break away. Does it include the Ukraine, Latvia, Lithuania and Estonia? Do those foreign countries include Yugoslavia? My guess is that they do. If so, should Croatia be considered separately? Will they be regarded separately under the terms of the Bill?

Mr. Fraser


Mr. Skinner

My hon. Friend says that they will be catered for separately. The Government must have foreseen that. What about India? Kashmir is trying to break away. Is that catered for?

Mr. Fraser


Mr. Skinner

It is quite remarkable. Are Iraq and Kurdistan catered for?

Mr. Fraser


Mr. Skinner

That was mentioned earlier, and I wondered whether it was properly catered for under the Bill—on and on it goes.

There was a discussion earlier about Clay Cross and retrospective legislation. I do not think that any of my hon. Friends were pulled up over that. I shall put the record straight. When Clay Cross councillors made their decision, they did so in the knowledge that, under the Tory legislation brought in by the then hard-nosed Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath)—he is now a wet—a housing commissioner was shifting power away from local authorities to central Government. One of the ways to do so was to tell local authorities, "You put up rents because we tell you." Clay Cross councillors said that they would not do so because they were fighting for an element of local authority control which central Government were trying to seize. The legislation contained the provision that, in the event of a local authority not collecting that extra 50p a week on the rents, a commissioner would be sent in.

I well remember the case then argued, whereby a local authority could say, "If the Government have powers to collect their own money, let them get on with it." The commissioner got to Clay Cross and nobody paid him. That was not because the commissioner did not collect the money—he tried—as my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) knows. The commissioner had an office in Clay Cross, but nobody went to see him. I suppose that it was like the poll tax in Liverpool, but on a grander scale because nobody went to see the commissioner and he had to come back empty handed.

The question arose that if the commissioner could not do the job that central Government had told him to do under the terms of the 1972 legislation, why should the councillors be penalised? In retrospect, it would not be a bad idea if they were all given a pardon for the effort they made then to prevent central Government control. Lord Hailsham was outraged and the House of Lords threw out a section of the legislation, which returned to the House on 14 August 1975. My hon. Friend the Member for Bradford, South and other hon. Members voted to allow Clay Cross councillors to be reprieved so that they would avoid bankruptcy and the rest. But some of our colleagues did not vote that night. The Hansard report of those votes make interesting reading.

Retrospective legislation has had a chequered career in the House. If someone is close to the establishment, he is in with a chance. If he is very close and part of the establishment—in its higher echelons—the chances are that he will be rescued by retrospective legislation and get away with it. But if he happens to be a local Labour councillor, the chances are that he will not be given the chance of retrospective legislation. The nearer people are to the top, the more chances they get because laws are passed on their behalf. If they make a mistake and do not realise, they can be saved by retrospective legislation. If they are part of the establishment, and do something that they know is wrong, the establishment will introduce retrospective legislation to rescue them. Those are roughly the double standards that operate in this place.

Tonight, in this mini debate, which might continue—there will have to be votes on the important issues—we have been able to show that the Tory Government bring in retrospective legislation. They send Conservative Members to dinner and bring them back when the Division bells ring. There are shop stewards on the door saying, "We know that you have not listened to the debate, but go in here." They kick the Conservative Members into the Lobby to vote through the retrospective legislation. [Interruption.] Does my hon. Friend the Member for Derbyshire, North-East want to join in? He looks earnest.

Mr. Harry Barnes

I want to talk about councillors and the debarments that affected the Clay Cross case. The debarment provision, which was elaborated in the 1936 legislation, dealt with a measure that has never been discussed in the House in the 20th century. It stated that councillors can be debarred if they are surcharged and go bankrupt. That 19th century provision has been drawn on for further good measure.

Mr. Skinner

Surcharging is wide open to abuse. Some people, especially in local authorities, are surcharged if they spend too much money. A Tory, right-wing authority such as Wandsworth, which wants to cut and carve, and get rid of all the services, is not penalised for that. When Lady Porter at Westminster sold off cemeteries, she should have been surcharged but nobody got their collar felt there.

The Second Deputy Chairman

Order. I am sure that the hon. Gentleman will return to the proposition before us.

8.45 pm
Mr. Skinner

I am not suggesting for a minute that we should have retrospective legislation to rescue the Tories on Westminster council. It is high time that somebody in the Government said that selling cemeteries for 15p and buying them back for £2 million and £3 million is a matter of public concern, and those involved should pay the penalty for it.

I was talking about retrospective legislation in all its forms being used by Governments—mainly this Tory one —to rescue Ministers and people close to them in the City of London. When it comes to the ordinary man or woman in the street, and Labour councillors, there is a different set of rules. That is why we have to ask the Solicitor-General all those questions. I expect him to respond to the points raised tonight. I also want to know a bit about drug money.

Mr. Cryer

The Solicitor-General should clarify some of the sloppy wording in the clause. It states that if any question arises whether a body which purports to have or, as the case may be, which appears to have lost corporate status it will be granted a legal personality.

Corporate status is one of the prime means of crookery, fraud and milking money out of various organisations. Corporate status is granted as a convenience to allow capitalism to develop. It allows a fictional person to exist separate from the members of the organisation itself. That person has limited liability, does not become bankrupt and is not affected when the body corporate, with its separate and distinct legal personality, goes into liquidation. In that way, companies go into liquidation with their directors owing huge sums of money to them. Companies, with their separate, legal personality, lend money to the directors who form the company on extremely advantageous terms, sometimes without any repayment provisions.

Mr. Fraser

That is illegal.

Mr. Cryer

Yes, it is now, but I am talking about the history of corporate endeavour.

We are dealing with a group of people who will be given corporate status, and who are from states which may not even be recognised, with legislation that will not be as comprehensive as United Kingdom legislation. These issues may apply to other states, and even United Kingdom legislation is not foolproof, is it?

Will the legislation bring under the Banking Act 1987 all the bodies which purport to have lost corporate status or which have had that status under the laws of the territory concerned? If it does, that will ensure that the Bank of England will be able to scrutinise them. We know that under the Bank of England's powers there is no possibility of any bank in this country engaging in fraudulent practices—unless, of course, we turn to immediate history and look at the Bank of Credit and Commerce International. Despite all the legislation, the Bank of England has not been able to find out what happened in that case.

Will the granting of corporate status to a bank which is based, let us say, in northern Cyprus and which wishes to trade in this country mean that it will be assumed to come within the terms of our legislation? Would we be establishing corporate status simply for its own convenience, or for ours—it is not clear which it is—and will the bodies corporate be operating under the legislation of their parent state? The position is confused, but the matter is important because if the directors decide to put the company into liquidation, traders in this country who sued the company over a contract would find that the directors had decamped and gone to another state to which we are giving recognition.

If we are not careful, this legislation could be a bonanza for the dubious company operator. Such people operate in northern Cyprus and move to Kashmir and then to some other state, leaving behind them a trail of companies with which they have traded and built up huge debts and then put into voluntary liquidation before decamping elsewhere. That is a possibility under the legislation. I caution the House against accepting the notion that a body corporate with its separate legal identity and personality is of necessity an advantage for traders in this country.

For example, Polly Peck blossomed from northern Cyprus and built up a huge pack of cards which suddenly collapsed. As it happened, all the accounts were in northern Cyprus. The business took over some good United Kingdom companies and that was an example of the result of Government policy. Companies came here to invest and develop. Prestige, the cooking utensils firm, produced a range of well-manufactured kettles, electric toasters and so on. It got into the Polly Peck net and its future was placed in jeopardy because of all the financial machinations.

Therefore, the matter can affect the ordinary man and woman in the street, the worker who spends his or her time in the factory working diligently, increasing productivity and turning out high-quality goods. Under capitalism there is investment elsewhere in a shell company in Outer Turkestan which subsequently collapses and draws all the assets of the properly operating companies in the United Kingdom through its northern Cyprus parent company. The assets of the company are sold to rescue the company from debt in some far-flung place of the sort that I have mentioned. That means that jobs in this country can be placed in jeopardy. Granting blanket corporate status may well disguise the information which people in this country deserve and need.

Mr. Andrew F. Bennett

Does my hon. Friend agree that not just jobs but often the pension interests of the people who work for such companies are at risk? It is worrying for someone who has worked for a company for many years and who has accumulated a substantial pension to see a corporate raider coming in and clearing off with the pension funds.

Mr. Cryer

My hon. Friend is absolutely right. That is one of the questions that the Minister should answer. If we grant corporate status to a body, will it be covered by this legislation or will such status be granted simply for our own tidy-mindedness towards these companies? If a firm is taken over by a limited liability company calling itself, say the Kashmir Development Corporation, what happens to the pension funds? The Bill, which is short, does not seem to contain any protection for such funds. The Bill provides only "legal personality" for the purposes of the law in the United Kingdom. I am not sure what that means and clause 1 does not make it very clear. If a trading corporation takes over a United Kingdom company—buys the majority shareholding in it—will the pensions and the general trading position of the company be protected?

Ordinary workers who simply aim to do a good job are placed in jeopardy by this world of high finance in which financiers who build up cardboard companies treat the people who work in them as pawns to be discarded when it is convenient. People can also be lured into jobs. My hon. Friend the Member for Bolsover (Mr. Skinner) knows of a concern which claimed to pay wages of £160 a week. When people who flocked to the company had worked there for four weeks the wages immediately dropped to £120 a week. Shortly after that the company went into liquidation. I think that the proprietor decamped to northern Cyprus.

The matter is worrying and I hope that the Minister will be able to provide some answers before we give clause 1 the approval that the Government seeks.

The Bill demonstrates how valuable Parliament is for debating these issues. It is nearly always true that probing during a debate in Parliament reveals more information and subjects matters to proper scrutiny. Therefore, I hope that the Solicitor-General will be able to provide all the answers to the questions that I and my hon. Friends have asked in this important debate.

Although I have spoken ironically in the past, the fact is that the collapse of BCCI, with the consequent devastation of the personal lives of 200,000 people and small businesses facing the prospect of having to sack hundreds of employees, is extremely worrying. BCCI had corporate status. It is true that it did not come from one of the states mentioned in clause I, but it could be operating from such a state. In Bradford, many of my constituents have been affected by the collapse of BCCI. I have had telephone calls from many people—

9 pm

The Second Deputy Chairman

Order. The hon. Gentleman is as aware as I am that the Bill does not relate to the collapse of BCCI. Until now, he has been in interesting and good order, and I am sure that he will continue to be so.

Mr. Cryer

I was simply suggesting that the collapse of BCCI has heightened our awareness of the need to scrutinise the Bill in great detail.

Mr. Skinner

Would it not be a fair point to make that, a week after the collapse of BCCI, with many of my hon. Friend's constituents in Bradford and elsewhere saying that they want compensation for the money that they have lost—

The Second Deputy Chairman

Order. The hon. Gentleman is completely out of order. His remarks would have been more appropriate on Second Reading.

Mr. Skinner

The point is that those people say, "Look at that lot down there at Westminster passing retrospective legislation when they can't pass it in order to bail us out." That is the point.

Mr. Cryer

My hon. Friend makes an important point. Clause 1(3) contains the extraordinary phrase: Any registration or other thing done at a time before the coming into force of this section shall be regarded as valid if it would have been valid at that time". That is quite a swingeing power of retrospection.

People who are hammering on the door—almost literally in some cases—of BCCI asking where their money is will look askance at this retrospection when the Governor of the Bank of England and Touche Ross apparently cannot release their accounts to people who are pressing hard. However, I shall not pursue that. It is simply an example given in passing. I hope that I and others will have some answers from the Chancellor of the Exchequer when we meet him tomorrow morning to press him to take action on that important matter.

I hope that the Solicitor-General will give the House some answers tonight to try to ensure the smoother passage of the Bill.

The Solicitor-General

The debate has had an air of nostalgia about it. Light has come into eyes as old battles have been fought again to illustrate, wholly within the bounds of order, points that are relevant to clause 1 of this interesting Bill. They have focused on the question of retrospection and whether the retrospection that is provided for by clause 1(3) falls fairly and squarely within the principles that are well acknowledged and accepted.

A number of hon. Members have joined the debate who, no doubt, had other pressing business earlier when we were discussing the same matters on Second Reading. We welcome the hon. Members for Derbyshire, North-East (Mr. Barnes) and for Denton and Reddish (Mr. Bennett).

Mr. Andrew F. Bennett

I was here.

The Solicitor-General

If the hon. Gentleman was here I have done him a grave injustice. I hope that I will not do him another injustice by wondering whether he failed to notice that we were discussing the same points on Second Reading.

Mr. Harry Barnes

Will the Solicitor-General give way?

The Solicitor-General

I shall give way in a moment.

The question of retrospection was extremely well put by the hon. Member for Norwood (Mr. Fraser) when he accepted that it was appropriate in this case. Whether or not it was the case in Clay Cross—some contentions were put forward by the Clay Cross councillors and some found themselves in dispute—there is no dispute here that I he Bill seeks to put the law back into the state that everyone believed it to have been in until the matter was queried during recent litigation. Consequently, this is the type of retrospection which the House accepts and which Law Officers from parties of all colours which have governed the country have accepted in the past. That answers the questions asked by the hon. Members for Bradford, South (Mr. Cryer), for Bolsover (Mr. Skinner), for Denton and Reddish and for Derbyshire, North-East.

The hon. Member for Norwood referred to the situation that might arise if certain Soviet socialist republics found themselves no longer part of the Soviet Union. The answer to his question is to be found in clause (1), which states: (1) If at any time—

  1. (a) any question arises whether a body which purports to have or, as the case may be, which appears to have lost corporate status under the laws of a territory … should or should not be regarded as having legal personality … and
  2. (b) it appears that the laws of that territory are at that time applied by a settled court system in that territory".
That question of fact will be focused on in relation to the republic in question. Even if it were not recognised by this country, and found itself in a position similar to that of the countries to which the hon. Member for Norwood referred, such as Taiwan and northern Cyprus, the court would decide the question on fact—depending on whether, at that time, the territory had a settled court system.

The question will be asked whether the territory had a court system that was settled and understood, and in good and sensible operation—notwithstanding that it was not recognised by this country at the time. It might be said, for example, that Taiwan or northern Cyprus—

Mr. Skinner

Or Slovenia.

The Solicitor-General

—or Slovenia have settled court systems. One can think of many other examples.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 167, Noes 39.

Division No. 220] [9.06 pm
Alison, Rt Hon Michael Goodlad, Alastair
Allason, Rupert Gorman, Mrs Teresa
Amess, David Gorst, John
Amos, Alan Greenway, John (Ryedale)
Arbuthnot, James Gregory, Conal
Ashby, David Griffiths, Sir Eldon (Bury St E')
Atkins, Robert Griffiths, Peter (Portsmouth N)
Atkinson, David Hague, William
Banks, Robert (Harrogate) Hamilton, Neil (Tatton)
Beaumont-Dark, Anthony Hanley, Jeremy
Beggs, Roy Hannam, John
Bellingham, Henry Hargreaves, Ken (Hyndburn)
Bennett, Nicholas (Pembroke) Harris, David
Bevan, David Gilroy Haselhurst, Alan
Blackburn, Dr John G. Hayes, Jerry
Blaker, Rt Hon Sir Peter Hayward, Robert
Boscawen, Hon Robert Hicks, Robert (Cornwall SE)
Boswell, Tim Hill, James
Bottomley, Peter Hind, Kenneth
Bottomley, Mrs Virginia Howarth, G. (Cannock & B'wd)
Bowis, John Howell, Ralph (North Norfolk)
Brandon-Bravo, Martin Hughes, Robert G. (Harrow W)
Brazier, Julian Hunt, Sir John (Ravensbourne)
Brooke, Rt Hon Peter Irvine, Michael
Brown, Michael (Brigg & Cl't's) Jack, Michael
Budgen, Nicholas Janman, Tim
Butler, Chris Jones, Gwilym (Cardiff N)
Campbell, Menzies (Fife NE) Jones, Robert B (Herts W)
Carlile, Alex (Mont'g) Kilfedder, James
Carttiss, Michael King, Roger (B'ham N'thfield)
Cash, William King, Rt Hon Tom (Bridgwater)
Chapman, Sydney Kirkhope, Timothy
Chope, Christopher Knapman, Roger
Clarke, Rt Hon K. (Rushcliffe) Knight, Greg (Derby North)
Conway, Derek Knowles, Michael
Coombs, Simon (Swindon) Knox, David
Couchman, James Lang, Rt Hon Ian
Currie, Mrs Edwina Latham, Michael
Davies, Q. (Stamf'd & Spald'g) Lennox-Boyd, Hon Mark
Davis, David (Boothferry) Lester, Jim (Broxtowe)
Douglas-Hamilton, Lord James Lightbown, David
Durant, Sir Anthony Livsey, Richard
Dykes, Hugh Lord, Michael
Emery, Sir Peter Lyell, Rt Hon Sir Nicholas
Fallon, Michael Maclean, David
Favell, Tony McLoughlin, Patrick
Fenner, Dame Peggy McNair-Wilson, Sir Michael
Fishburn, John Dudley Malins, Humfrey
Forman, Nigel Mans, Keith
Forth, Eric Meyer, Sir Anthony
Franks, Cecil Miller, Sir Hal
Freeman, Roger Miscampbell, Norman
French, Douglas Mitchell, Andrew (Gedling)
Fry, Peter Moate, Roger
Gale, Roger Monro, Sir Hector
Morrison, Sir Charles Stern, Michael
Moss, Malcolm Stevens, Lewis
Neubert, Sir Michael Stewart, Allan (Eastwood)
Nicholls, Patrick Stewart, Andy (Sherwood)
Norris, Steve Summerson, Hugo
Oppenheim, Phillip Taylor, Ian (Esher)
Page, Richard Taylor, John M (Solihull)
Paice, James Taylor, Matthew (Truro)
Peacock, Mrs Elizabeth Temple-Morris, Peter
Porter, David (Waveney) Thompson, D. (Calder Valley)
Price, Sir David Thompson, Patrick (Norwich N)
Raffan, Keith Thorne, Neil
Raison, Rt Hon Sir Timothy Thornton, Malcolm
Rhodes James, Sir Robert Trippier, David
Riddick, Graham Twinn, Dr Ian
Ridsdale, Sir Julian Walden, George
Ross, William (Londonderry E) Walker, Bill (T'side North)
Rowe, Andrew Wardle, Charles (Bexhill)
Ryder, Rt Hon Richard Wells, Bowen
Shaw, David (Dover) Wheeler, Sir John
Shepherd, Colin (Hereford) Whitney, Ray
Sims, Roger Widdecombe, Ann
Skeet, Sir Trevor Winterton, Mrs Ann
Smith, Sir Dudley (Warwick) Winterton, Nicholas
Smyth, Rev Martin (Belfast S) Wood, Timothy
Speed, Keith Yeo, Tim
Speller, Tony
Spicer, Sir Jim (Dorset W) Tellers for the Ayes:
Spicer, Michael (S Worcs) Mr. Nicholas Baker and
Steel, Rt Hon Sir David Mr. Tom Sackville.
Steen, Anthony
Adams, Mrs Irene (Paisley, N.) McKay, Allen (Barnsley West)
Armstrong, Hilary Madden, Max
Banks, Tony (Newham NW) Mahon, Mrs Alice
Battle, John Marshall, David (Shettleston)
Bennett, A. F. (D'nt'n & R'dish) Martin, Michael J. (Springburn)
Bermingham, Gerald Meale, Alan
Brown, Gordon (D'mline E) Morley, Elliot
Canavan, Dennis Nellist, Dave
Cryer, Bob Pike, Peter L.
Flannery, Martin Primarolo, Dawn
Flynn, Paul Redmond, Martin
Godman, Dr Norman A. Rogers, Allan
Gordon, Mildred Salmond, Alex
Griffiths, Nigel (Edinburgh S) Strang, Gavin
Haynes, Frank Vaz, Keith
Home Robertson, John Wise, Mrs Audrey
Hughes, John (Coventry NE) Young, David (Bolton SE)
Jones, Barry (Alyn & Deeside)
Leighton, Ron Tellers for the Noes:
Loyden, Eddie Mr. Harry Barnes and
McAllion, John Mr. Dennis Skinner.
McAvoy, Thomas

Question accordingly agreed to.

Clause 1 ordered to stand part of the Bill.

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