§ Mr. Eric Forth (Bromley and Chislehurst)
I beg to move amendment No. 1, in page 1, line 21, leave out`at least one relevant representative body'and insert`all bodies and persons who appear to him to have an interest'.
§ Madam Speaker
With this, it will be convenient to discuss the following amendments: No. 4, in clause 3, page 2, line 6, leave out`at least one relevant representative body'and insert`all bodies and persons who appear to him to have an interest'.
No. 9, in clause 4, page 2, line 10, leave out Clause 4.
§ Mr. Forth
It falls to me to congratulate, and I happily do so, my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) on having so skilfully steered his Bill to this stage in its passage. It remains for us to give it proper consideration.
Although my current task is to explain the reasoning behind amendment No. 1, I hope that, on Third Reading, at the very least, we shall be able to explore—I was about to say again, but I do not think that we have done it yet—some of the unresolved issues that have arisen during our consideration of the Bill. I should give my hon. Friend the Member for South Cambridgeshire clear warning that that is my thinking—as I know that, with his eloquence and skill, he will be able easily to persuade me, but I shall require such persuading on one or two matters.
§ Mr. Andrew Lansley (South Cambridgeshire)
Although it is a happy instance that the Bill, which I am privileged to promote, is securing support on both sides of the House, if we are not careful, a possible consequence is that each of the Bill's aspects may not be properly 1194 considered before the Bill becomes law. I therefore hope that, in the course of today's proceedings, we shall be able to allay my right hon. Friend's concerns.
§ Mr. Forth
Let us not prejudge anything. Consideration is what we are here for, and those matters will undoubtedly be dealt with properly.
I tabled this group of amendments because, I confess, I have from the outset had a sense of unease about the Bill—its self-evidently regulatory nature immediately put my mind on the alert. Although it is always possible to argue that regulatory measures are not only justifiable but required, surely the burden of proof and of argument always rests on those wishing to introduce a regulatory measure, rather than the opposite.
I am delighted to see that the Secretary of State for Trade and Industry is with us today. I am sure that what I have just said about regulation would meet with nothing but support from him, as those on both sides of the House are now at one—certainly in our rhetoric—in disapproving of regulation. The irony is that we are expected today to approve a regulatory measure.
Given the principle that the burden of proof is on those who would regulate—which I do not quite accept, yet—I should like to determine whether the provisions in this group of amendments might make the regulation mechanism as open, even-handed and acceptable as possible.
The Bill states:It is the duty of the Secretary of State to secure that the expression 'chamber of commerce' …as an expressionrequires registration and the approval of the Secretary of State.
Clause 2 goes on to say:Before determining …whether to approve the registration of a company name … the Secretary of State must consult at least one relevant representative body.I grew alarmed at that point.
I was quite surprised, knowing him as I do, that my hon. Friend the Member for South Cambridgeshire had included such a phrase in his Bill. I should have thought that he would want to encourage the most open approach possible to the matter, and to ensure that his Bill, in dealing with the process of registration, should be able to demonstrate the widest possible basis of consultation, and therefore of support, for the operation of its provisions. The House will therefore appreciate my surprise when I saw the phrasemust consult at least one relevant representative body.
My suspicions grew. I thought, "If that one relevant representative body was the chamber of commerce itself, or the umbrella organisation"—which, today, has kindly provided us with some excellent briefing material, to which I suspect many us may refer on Third Reading, if not before, and for which we are very grateful—"what sort of openness would there be?"
I begin, already, to get the impression of an inward-looking and incestuous approach to the whole business, which makes me feel—I must confess—rather unhappy.
§ Mr. Tony Colman (Putney)
At the beginning of his speech, the right hon. Gentleman eloquently expressed his concerns about the Bill's regulatory nature. However, 1195 clause 4 clearly states that it is a self-regulatory measure that will be operated within the British Chambers of Commerce and the Scottish Chambers of Commerce. Does he accept that it is a self-regulatory measure, which the chambers of commerce are themselves able to operate?
§ Mr. Forth
Would that that were so, I should be much happier about it. Today, however, we are regulating and creating statute; and, by doing so, we are involving the Secretary of State. I am sure that we are all very confident with the current incumbent in that post, and that we have every confidence that he will use the most excellent judgment in these matters. However, the trouble with legislation is that it is not only binding on this Secretary of State, but Secretaries of State for ever and ever. I do not know whether we would have been so happy with an immediate predecessor of his or whether we will be so happy with whoever comes after his no doubt long and distinguished period in office. The Bill is not self-regulation, but regulation by statute, with a duty being placed on the Secretary of State to approve registration.
§ Mr. Colman
I understand that the Bill has been urged on the House by the chambers of commerce. They see it as necessary to enable self-regulation.
§ Mr. Forth
The hon. Gentleman and I may have to disagree. Giving the Secretary of State a duty and various powers, including the power of registration, is not self-regulation. Self-regulation would involve the chambers policing the use of the title, giving their approval—which I understand that they already try to do—and telling the world at large that if something calling itself a chamber of commerce has their stamp of approval, it could be reckoned to be okay, but if not people should be suspicious of it.
I have no problem with that approach. Indeed, I rather favour it and have tried to encourage it for various businesses. However, that is not what the Bill is about. The chambers of commerce want the Secretary of State to be involved by statute with specific powers to ensure that those whom the existing cosy collective disapprove of are not allowed in. We shall have to return to that on Third Reading. I do not want to digress unduly, but it is already clear that the cosy cartel wants to remain as it is and to provide a mechanism to avoid any thrusting, new, exciting, dynamic bodies being allowed in. That is a paraphrase of the process, but it makes me suspicious.
The amendments would make an important difference. The Bill says thatthe Secretary of State must consult at least one relevant representative body.It would be for the Secretary of State to judge who that relevant representative body was, but we all know who the most likely candidate would be, given the genesis of the Bill. I would be more comfortable with opening the process up in the way that my amendment describes. Indeed, I insist on it. The Secretary of State should consultall bodies and persons who appear to him to have an interest".
I started to jot a list more or less off the top of my head to give a flavour of what bodies I have in mind. It did not take me very long and I do not think that it would take 1196 the Secretary of State very long. I shall run quickly through the list of bodies that should be consulted. My wording is not prescriptive. I did not want to fall into the trap of putting an exclusive, prescriptive list in the Bill. My wording would leave the choice to the Secretary of State. Let us open the process up and make it inclusive, to use the current jargon. I shall be talking about joined-up things in a moment if I am not careful. Let us stick with an inclusive process for the moment in an attempt to attract the support of the Secretary of State and Labour Members.
Surely the Secretary of State should consult existing adjoining chambers of commerce. Any debate about the registration of one chamber immediately involves a proper discussion about the catchment area of the adjoining chambers. That emerges clearly from the helpful notes that the BCC has sent us in the past day or two. The suggested definition of the essential characteristics of a chamber of commerce, set out on page six of the briefing notes, includes the following requirements:owned by the business communitynot owned or controlled by a faction or a commercial interestcompany limited by guarantee or set up by Royal Charterrepresenting specific territorynot a subsidiary of another companyhaving, in part, a public service role9.45 am
Revealingly, the briefing goes on to say:This definition will not form part of the Bill but the Bill will provide the backdrop for such a statement to be agreed between BCC and Companies House.That may or may not be the case, because the Bill says that the Secretary of State will have the final word.
I should like to home in on the BCC's definition that a chamber should represent a specific territory. Surely there must be an obligation to consult adjoining chambers. If we are talking about representation or ownership of a territory, the possibility of disputes emerges. The Bill is all about disputes and their resolution. It is immediately clear that adjoining chambers with a specific interest should be consulted, not an umbrella body.
§ Mr. David Maclean (Penrith and The Border)
My right hon. Friend will be aware that one of the purposes of the Bill is to deal with chambers that take a grandiose geographical title such as the worldwide chamber of commerce of Penrith. If a geographical title could be in dispute, surely consulting a neighbouring chamber is essential.
§ Mr. Forth
I am glad that my right hon. Friend agrees with me. He has given a good example. He will be familiar with the idea that Penrith bestrides the world, but we might not all agree. That is the point.
The training and enterprise councils should commend themselves to the Secretary of State as bodies that can lay claim to having a representative role for the business community. They are not perfect—I am in correspondence with the Department of Trade and Industry about a brouhaha that has developed with my local TEC—but they have developed a key participatory role in the local business community. At best they perform a vital role in bringing together all the elements 1197 of training and enterprise in their area. They should also commend themselves strongly to my hon. Friend the Member for South Cambridgeshire.
I pass rather more quickly over the Confederation of British Industry. I would not want anyone to consult the national CBI, but some of the excellent regional CBI offices, which are real bodies rather than something floating half way between here and the stratosphere, should be consulted.
§ Mr. Lansley
I shall seek not to interrupt my right hon. Friend on every point. It might be helpful to remind him that I referred on Second Reading to training and enterprise councils and to the TEC National Council. Clause 4 allows the Secretary of State to add a relevant representative body and might be used to add the TEC National Council to the list of relevant representative bodies, because it plays an important role when chambers of commerce and TECs come together.
§ Mr. Forth
Of course I accept what my hon. Friend says, but even in that typically helpful intervention he has given the game away. He is being restrictive. The Bill says one body and he says helpfully that clause 4 might allow us to add another. That is not the spirit of what I am talking about. We must open the process up and ensure that when the Secretary of State makes his important decisions he can demonstrate to the world that he has been inclusive and has asked a proper range of people so that his decision is firmly based and is less vulnerable to challenge and judicial review. My worry about the process is that if it rests solely on the existing words of the Bill, it might be vulnerable to judicial review.
§ Mr. Heald
I was not going to ask a legal question. Does my right hon. Friend think that the Bill restricts the Secretary of State in his consultations? Surely he may consult with local bodies if there are complaints. The point is that he must consult the British Chambers of Commerce. Does my right hon. Friend not feel that that is the right balance?
§ Mr. Forth
No. In some senses, they are the last people who should be consulted because they have an interest. They are an inward-looking, inclusive group who want to defend the status quo, as does the Bill. Once again, we have an interesting dilemma in that the Conservatives—or some of us—are the new thrusting, dynamic radicals, whereas the old fuddy—duddies who want to defend the status quo are the British Chambers of Commerce and, I regret to say, my hon. Friend the Member for South Cambridgeshire.
§ Mr. Maclean
I do not want to follow my right hon. Friend down that route. Clause 4 defines the relevant representative bodies, limiting them to the British Chambers of Commerce and the Scottish Chambers of Commerce. Therefore, when clause 2 says:The Secretary of State must consult at least one relevant representative body",1198 he is still limited to chambers of commerce. He cannot consult anyone else if he so wishes.
§ Mr. Forth
That is one reading of the clause, however it does say "at least". Having been a little cruel to my hon. Friend the Member for South Cambridgeshire a moment ago, I shall defend him now. The Bill says:The Secretary of State must consult at least one relevant body",as I suspect my hon. Friend will say when he replies to this debate.
I am hardly a third of the way through my list. If I do not get on, the House will lose patience with me, and I cannot have that.
§ Mr. David Heath (Somerton and Frome)
I am most grateful to the right hon. Gentleman and I shall not delay him long. Does he agree that widening the sphere of consultation might establish that any ambiguity in the title was only in the mind of the single respondent to consultation in the first instance and that nobody else was confused by the geographical spread of a title?
§ Mr. Forth
That is a helpful but typically convoluted Liberal Democrat view. The hon. Gentleman has a good point, but let me press on with my list, Mr. Deputy Speaker, before I try your patience too far.
I deliberately skipped over CBI regional offices pretty quickly. Trade associations, which are an important part of modern business life, can often play a key role in a local community. I would also add significant employers. A catchment area of a chamber of commerce may well be dominated by a very small number of significant companies that should be involved in the process.
§ Mr. Keith Darvill (Upminster)
Surely chambers of commerce are representative in the sense that in most areas companies can apply to join them quite openly. If large employers were to be consulted, the provision would impose an additional burden on them. Surely that is not the way to reduce the burden on business.
§ Mr. Forth
It is interesting to hear the hon. Gentleman saying from the inclusive Government Benches that he wants to reduce the process of consultation. I would be very interested to hear the Secretary of State's view on the balance between the onerous bureaucratic process of consultation and saving companies, especially large ones, from that burden. The hon. Gentleman has raised an interesting point and I should like to hear the Secretary of State's view on it.
§ Mr. Darvill
I am not trying to avoid consultation because the companies will be consulted through the various organisations that the right hon. Gentleman has described. The consultation will be open and on-going, but if the Secretary of State were obliged to consult large employers, for example, the detail of that consultation would be an administrative burden that I suspect large numbers of employers would oppose.
§ Mr. Forth
My amendment would not place them under an obligation as its wording is more flexible than that. It simply proposes that the consultation process could include the bodies to which I have referred. Of course the hon. Gentleman is right. If, as would probably be the case, large 1199 employers were already involved in the TEC, the regional CBI or a trade association, they probably would not want to go through the process again. I concede that. I do not want to press the point and irritate the hon. Gentleman as I am asking for his support for my amendment.
In the same spirit—and it is not often that I say it, but I shall whisper it—we might even consult the trade unions. I do not want to lose the support of my hon. Friends, but as we are all friends here together this morning I thought that I might mention the unions. In many cases, they will be a relevant factor in the process and therefore should not be ignored.
I now come to the last two organisations on my list. Local authorities must have a role to play in the process given that so many of them now have economic development departments and seek to involve themselves in economic regeneration and the like.
Last but not least—and I saved this in order to make my appeal to the Secretary of State—DTI regional offices should also be involved. Having some passing but now rather historical knowledge of such matters, I remember the key role that they sometimes play, often very effectively. I cannot imagine the Secretary of State neglecting to consult the regional offices, but one never knows. Again, it seems somewhat at odds with the wording of the Bill.
Without labouring it unduly, I hope that I have made the point as forcefully as I can. I believe that the present wording of the Bill is unduly restrictive and inspires little confidence that it is sufficiently open and consultative to reassure us that it has not been designed to shore up and reinforce a rather cosy monopoly that no doubt does splendid work but is now asking us by statute to protect its existing membership and, by implication, therefore, deny the process of challenge and renewal.
I shall return to the issue on Third Reading as my hon. Friend the Member for South Cambridgeshire knows that I am worried about the non-reversibility of the process in the Bill and I should like to explore it just one more time to allow him to persuade me of its merits—as no doubt he will, given the power of his eloquence. The amendments are designed to open up the consultation process and make it more credible and more soundly based. Therefore, in my view they would make it a better Bill.
§ Mr. Colman
Let me first declare an interest in that I was a private-sector director of my local training and enterprise council between 1989 and last year and leader of a local authority—the London borough of Merton. In that capacity I encouraged and enabled the setting up of the Merton chamber of commerce, an excellent body that has done a great deal to enhance and advance the cause of commercial enterprises in the London borough of Merton.
As this is my first involvement in the Bill, I congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on introducing it, building on the previous work of the hon. Member for Windsor (Mr. Trend). I oppose the amendments—which I hope that the right hon. Member for Bromley and Chislehurst (Mr. Forth) will withdraw—as they fundamentally undermine the nature of the Bill.
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I was concerned by the description by the right hon. Member for Bromley and Chislehurst of the British Chambers of Commerce and the Scottish Chambers of Commerce as a cosy collective. He may wish to take a different view on that, as I believe that important organisations supporting business should have that soubriquet. The Bill is not attempting to retain the status quo; the status quo is confusion, where the title of chamber of commerce seems to be up for grabs by all and sundry. There must be a statutory basis for the title, and the umbrella organisations—the British Chambers of Commerce and Scottish Chambers of Commerce—should be able to regulate themselves. The Bill will strengthen the confused situation that is outlined in the briefing from the BCC.
The right hon. Gentleman mentioned a number of organisations that should be consulted. I hope to convince him that the correct body for consultation is the BCC, as the Bill attempts to ensure the high standards that are insisted upon by that body.
I have mentioned the Merton chamber of commerce, and the London chamber of commerce provides a good range of services, as does the Croydon chamber of commerce. In my constituency, there is the Wandsworth chamber of commerce and—through contacts with the training and enterprise council for Wandsworth, Kingston and Merton—I know of the chambers in Kingston.
§ Mr. Forth
I have no doubt that nearly all of the chambers are excellent. However, if an inadequate, tired, old chamber was well connected by the old boy network to the British Chambers of Commerce, and a new thrusting chamber in embryo wanted to establish itself, would not the hon. Gentleman be worried that the provisions of the Bill would protect the tired and old and prevent the new and dynamic from establishing?
§ Mr. Colman
The right hon. Gentleman makes my point, although he does so the wrong way round. If there is such a thing as a tired chamber of commerce—a strange adjective—the British Chambers of Commerce can step in and threaten, initially, that if the chamber did not return to the mark, the title could be removed. There are few controls at present.
§ Mr. Lansley
Under the Bill, the circumstances in which a title can be removed are those set out in section 32 of the Companies Act 1985, where there is, rightly, a tough test for removal. That test should be whether harm would result from the continuance of an organisation using the title. I hope that the hon. Gentleman will not proceed on the basis that that would happen at all lightly.
§ Mr. Colman
I am grateful to the hon. Gentleman. The representative bodies to be consulted are those named in clause 4—the British Chambers of Commerce and the Scottish Chambers of Commerce. I note that others might be added, but the Bill—which has been urged upon us by the British Chambers of Commerce and others—should not be lost by producing a laundry list or organisations, as the right hon. Member for Bromley and Chislehurst did.
Chambers of commerce in my area are happy for the British Chambers of Commerce to act on their behalf, and I urge the right hon. Member for Bromley and Chislehurst to get the views of his local chambers. 1201 As a member of my local training and enterprise council—and following consultations at national conferences of TECs—I know that TECs have urged the British Chambers of Commerce to sort the matter out; although they may not have understood the complexity of the situation. The BCC has said that it cannot, and has asked Parliament for help in sorting it out.
The London region of the CBI supports the Bill. When I represented retail interests on the CBI, there was concern about the variability of the title of chamber of commerce, and the national council of the CBI will welcome this attempt to sort that out.
§ Mr. Forth
Is not the hon. Gentleman giving us a list of the fat cats and the establishment? Where does the small man get his say? When will he look out from that inclusive list, with which he is complacently satisfied, and allow others to be consulted? The Secretary of State always says that he regards small firms as important. I may be pre-empting what the hon. Gentleman is about to say, but his list so far seems to be a depressing list of the good, the great and the well-connected.
§ Mr. Colman
The right hon. Gentleman may not realise that he makes my point again, as I was going through his list. I was going to add that, as a life member of the Institute of Directors, I am aware that many smaller companies are urging support for the Bill. I urge the right hon. Gentleman to recognise that support; I urge him also to join that body. As someone who has worked for a larger company, I recognise the determination of directors in competitive sectors of the market to achieve their results.
The right hon. Gentleman mentioned the trade unions. I declare an interest, in that I am a member of the GMB; which, I am pleased to say, is centred in the London borough of Merton. That excellent organisation supports the Bill. The views of the general secretary of the GMB will be shared across the trade union movement.
Local authorities were on the laundry list of the right hon. Gentleman. As a former local authority leader, I was in favour of a similar proposal in 1996 by the hon. Member for Windsor.
§ Mr. Colman
I am happy to provide any advice to my right hon. Friend the Secretary of State for Trade and Industry at any time, but I am sure that he will speak from a considerably more eminent range of interests. I mention my connections only because it is important that we should speak from some point of knowledge or authority. I am gainfully employed in the House and hope that the electors of Putney will return me again and again.
The laundry list of the right hon. Member for Bromley and Chislehurst is far too long, and I would slice it down to what is in clause 4: the British Chambers of Commerce and the Scottish Chambers of Commerce. As the hon. Member for South Cambridgeshire said, if the Secretary of State, in consultation with those bodies, feels that any other body should be added, that option remains. It would 1202 be wrong to have the all-inclusive formula in the amendment, which is far too wide and would defeat the point of the Bill.
I hope that the right hon. Member for Bromley and Chislehurst will withdraw the amendment.
§ Mr. Heald
It is clearly important to consider the issue of consultation, but we do so against the background of considerable success by the British Chambers of Commerce over recent years. I congratulate my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) on promoting the Bill and so effectively piloting it through the House, and I wonder whether that recent success is due to the fact that he was the deputy director of the organisation about 10 years ago.
The British Chambers of Commerce has enhanced the reputation and widened the network of chambers of commerce to the point at which about 95 per cent. of companies and businesses in Britain have reasonable access to their services, which include national and international trade, export supply and support services and information. That widened network and improved quality need to be protected.
The increased integrity and comprehensive character of the chamber of commerce network needs to be supported by the House—I think that all hon. Members would accept that—but it is also important that there should be adequate consultation before a company is barred from using the name "chamber of commerce". It would be wrong, as my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) said, if we ended up with a cosy set-up; but although the Bill contains the minimum requirement for the Secretary of State to consult one of the two representative bodies, it does not prevent him from going wider than that if there is cause for concern.
There is a danger with a wider list that one could end up with an excessively bureaucratic consultation process, with the usual suspects always being consulted on every application, even if that application is in no way controversial.
I know that my right hon. Friend would recoil in honor at the thought that whenever a chamber of commerce wanted to register its name at Companies House, the CBI regional office, the trades unions, the DTI regional office, and all the rest, would have to be consulted. I question whether consulting those people would answer my right hon. Friend's real concern, which is about the little guy: the thrusting new entrepreneur who wants to offer something new in the sector.
§ Mr. Forth
Perhaps I should have suggested a provision for an electoral or referendum process, which might answer my hon. Friend's point. I accept the thrust of what he is saying, but how often does he think the process will happen? The point about the burden, which he and the hon. Member for Upminster (Mr. Darvill) both made, has to be put in the context of the number of times the process is likely to be repeated. From all that I have read, I doubt that it would happen all that often. I see the sense of what my hon. Friend is saying, but we should not over-emphasise the burden that would be imposed.
§ Mr. Heald
I accept my right hon. Friend's point, but we often regulate with the best intentions, thinking that 1203 the burden will not be significant, only to discover to our horror that a process has been set up that requires a very wide-ranging consultation when it is not really necessary, and we end up imposing burdens that we had not foreseen. I know that my right hon. Friend is one of the strongest advocates for not doing that.
I accept that we should consider the issue of consultation very carefully and not cut out the little guy—the entrepreneur—but it is possible to be too cautious about the abilities of the British Chambers of Commerce, which has established a high reputation and is seeking to improve its regulation. It would be horrified at the idea that it would want to promote a chamber of commerce that was seriously failing. In fact, I believe that it would take active steps, as the hon. Member for Putney (Mr. Colman) said, to rectify the situation.
I will be interested to hear what the Secretary of State has to say about the concerns that have been expressed, but the Opposition have welcomed the Bill and supported it throughout. We do not consider the concerns to be so serious that they need to be dealt with by means of the amendment, although we would enjoin the Secretary of State to take careful note of the points that have been made and hold the widest possible consultations when concerns have been expressed by bodies other than the British Chambers of Commerce.
§ Mr. Darvill
The Bill is a balanced and good measure and we should support it. I support the general thrust of the hon. Member for North-East Hertfordshire (Mr. Heald). It is important to get the right balance and I think that the Bill does that.
The amendment would tip the balance the wrong way, because there would be excessive bureaucracy and the administrative costs would be heavy on the public purse. Some of the points made by the right hon. Member for Bromley and Chislehurst (Mr. Forth) about fat cats and consultation need to be addressed—we are doing that now—but the amendment goes too far.
In my experience as a solicitor, the chambers of commerce serve the business community well. They are always looking for new members and encouraging the broader business community to get involved. I believe that the representative bodies should have their input exactly as the Bill sets out. The amendment would make the Bill too restrictive, so I hope that the right hon. Gentleman will withdraw it.
§ Mr. Lansley
I am grateful to my right hon. Friend for the manner in which he moved the amendment and spoke to his other amendments. His vigilance in scrutinising legislation is acquiring a certain status in the House—
§ Mr. Lansley
If I may presume to offer flattery to my right hon. Friend—not something that he ever seeks—I can tell him that I am grateful for the way in which he spoke to his amendments so as to help us to examine the Bill further. As the hon. Member for Putney (Mr. Colman) noted, a very similar Bill was introduced in the previous Session. Even when a Bill clearly pursues objectives which I trust all hon. Members will think desirable, it is 1204 important that we should ensure that we legislate in a proper fashion; I take my right hon. Friend's point in that regard.
First, I shall explain to the House the impact that the amendments would have on the Bill, because that will help to set in context the reasons why I do not think the amendments would be of advantage, and therefore why I hope that my right hon. Friend will not, on reflection, press them.
Amendments Nos. 1 and 4 both relate to the Secretary of State's obligation to consult before approving the title "chamber of commerce" or related titles. One amendment relates to companies legislation and the other to business names legislation. There are two clauses that relate to those separate processes of approving names. That is why there are two amendments.
In each case the effect of the amendment would be the same—to take out the requirement to consultat least one relevant representative bodyand insert the requirement that the Secretary of State "must"—I emphasise the word "must"—consultall bodies and persons who appear to him to have an interest".
Amendment No. 9 would leave out clause 4, which specifies the relevant representative bodies that the Secretary of State should consult, and gives him power to go further and add other relevant representative bodies for that purpose.
I shall tell the House why the Bill is intended to secure consultation through British Chambers of Commerce as a relevant representative body. It may be helpful for those who read the report of our deliberations to be able to see how the Bill is designed, so I must explain that section 29 of the Companies Act 1985 provides that where the Secretary of State is approving a title that is a controlled title for the purposes of the Companies Act, he can specify by order a Government Department or other body as the relevant body for consultation purposes.
There is a parallel feature in section 3 of the Business Names Act 1985. Under existing legislation, therefore, the Secretary of State is in a position to specify that "chamber of commerce" is a controlled title and further by regulation to say that his exercise of his power in relation to such a title should be by way of consultation with a relevant body.
The purpose of the legislation is primarily to entrench the position of British Chambers of Commerce and Scottish Chambers of Commerce so that the Secretary of State is required to consult them as relevant representative bodies. An important factor that has not yet come out in the debate is that the purpose of the Bill is not to prevent the Secretary of State from consulting bodies or persons whom he might regard as persons or bodies whom he should consult, before deciding whether to approve such titles. The purpose is to constrain him to consult British Chambers of Commerce or Scottish Chambers of Commerce as the relevant representative body.
§ Mr. Forth
Of course I follow what my hon. Friend is saying, but is it inconceivable that at some time in the future a group of chambers might decide that the representative body was no longer representative and that they needed to set up a rival organisation that claimed to be more representative? When one names organisations in 1205 primary legislation, one sets the requirement in legislative concrete and makes it difficult for a process of rejuvenation and renewal to take place.
§ Mr. Lansley
I am grateful to my right hon. Friend. I can declare a past interest in that 10 years ago I was deputy director general of the Association of British Chambers of Commerce. If we had been undertaking such legislation then, we would not have specified the association alone. We would also have specified the National Chamber of Trade, as it then was. There was more than one organisation representing bodies that operated under titles relating to chambers of commerce or chambers of trade.
That thought helpfully brings me to an important point. It is not only desirable but necessary to entrench the position of British Chambers of Commerce because, in the intervening 10 years, considerable changes have occurred in the chambers of commerce movement. For example, the National Chamber of Trade and the Association of British Chambers of Commerce have merged, and there is now no body other than British Chambers of Commerce that can lay claim to representing chambers of commerce.
It would be possible, for example, for the Secretary of State to choose to specify as a relevant representative body the International Chamber of Commerce (UK), but that is not a body with the representative characteristics of British Chambers of Commerce. It would be reasonable for the Secretary of State to consult that organisation in relation to bilateral chambers of commerce, such as the British-Australian chamber of commerce or the British-Belarus chamber of commerce, or whatever, but it would not be right for him to specify that body as a relevant representative body.
Over the past 10 years, although British Chambers of Commerce has effectively brought together a high proportion of chambers of commerce and related organisations with such titles into membership of the association, it does not seek to create an exclusive monopolistic organisation. The intention throughout has been to bring members into chambers of commerce, and chambers of commerce into membership of British Chambers of Commerce, in ways that extend the network and improve the overall standard of chambers of commerce.
We should not lose sight of the fact that one of the purposes of the Bill, and of entrenching the position of British Chambers of Commerce, is further to recognise the simple fact that chambers of commerce seek not to defend the status quo but to guarantee high standards of service to business, which they are doing through the network of 60 approved chambers of commerce throughout the country.
Once upon a time, in some regions, chambers of commerce did not provide the level of service that many businesses were looking for, but now they are, because of the British Chambers of Commerce approval system. Once, the criticism of chambers of commerce was that the service was patchy, and depended where one was.
§ Mr. Lansley
Patchiness of quality is to be deprecated. It is acceptable for local organisations to decide for themselves which services to offer, but it is less acceptable if when people go to chambers of commerce either in their own area or in order to trade from overseas, or from other parts of the country, they find poor service. That is why, alongside the approval system to create a network of chambers of commerce to give national coverage, every organisation should be able to say in time that it has a chamber of commerce that provides that valuable service in the private sector, and is not dependent on a grant from Government—I am sure that my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) will applaud that. Through the accreditation system and the procedures of ISO 9000, when a business goes to a chamber of commerce it can be sure of the standard that will be applied.
It is not the intention of the Bill to provide that only those bodies that are approved by the British Chambers of Commerce can be called a chamber of commerce. Neither is it the intention that only those bodies that meet that quality standard of accreditation should be able to call themselves chambers of commerce. However, it is important that—in parallel with the effort that is being made by the British Chambers of Commerce and its members to raise the standard and extend the coverage of the system—they should have the protection that those who are completely outwith the system and making no effort to comply with the essential characteristics of a chamber of commerce cannot use the title. If such organisations were allowed to use the title, it might lead members of the business community to believe that they were dealing with a chamber of commerce. The essential characteristics of a chamber of commerce are that it is owned by its members; that it does not operate in the commercial interest of a member but in the wider business interest of the area it serves; that it relates specifically to a geographical area described in its title; and that it is genuinely representative of the businesses in that area.
The system is intended to be self-regulatory, because the chambers of commerce have pulled themselves up by their bootstraps in past years to ensure that they are bodies in which the business community and Government can have confidence. However, the process should not be monopolistic. In France and Italy, the continental system of chambers of commerce is exclusive and monopolistic. The chambers of commerce have public law status. They are creatures of statute and exercise quasi-public sector functions by virtue of statutory controls. That does not permit the competitive aspects of our system, or the ability of businesses to join a chamber of commerce and cause it to change.
British Chambers of Commerce does not want the continental system. It wants protection of title, rather than public law status—and there is a big difference between the two. The protection of title is the British way of doing things, because it will not create a monopoly or dependency on the Government. However, it will recognise that the Government have a role in preventing abuse. 1207 I do not suggest that my right hon. Friend the Member for Bromley and Chislehurst should withdraw his amendments because they would be difficult to administer, but they would be burdensome. The Secretary of State would have to consult all those bodies that appear to him to have an interest. The list that my right hon. Friend gave consisted of all those bodies that the British Chambers of Commerce would customarily consult. There is no difficulty with individual businesses expressing an objection to or approval of an application for title, because they are likely to be members of the local chamber of commerce or know about it.
In one case, the East London chamber of commerce existed, but the East of London chamber of commerce sought the title and the Secretary of State approved it. It is a matter for debate whether, if the Bill had been in force, the outcome might have been different, but that is not my point. In those circumstances, British Chambers of Commerce made effective representations, but the then Secretary of State felt that he could not refuse title. Under the amendments, the Secretary of State would have had to consult directly every business in the geographical area of east of London, which would have been a major enterprise.
§ Mr. Forth
I acknowledge the force of my hon. Friend's argument, but I hope that he can put it in context. How often would consultation have to be carried out? If it were once a day or once a week, my hon. Friend's argument would have more force. However, if it were relatively infrequent, the argument against the requirement to consult would have that much less force.
§ Mr. Lansley
The applications for changes in title fall into three categories. The first is applications for titles for new organisations, which are relatively infrequent. British Chambers of Commerce records suggest that they occur about half a dozen times a year. In each case, major consultation is necessary. Secondly, chambers of commerce often seek to change their titles. For example, on 20 or so occasions, chambers of commerce and industry have sought to combine with training and enterprise councils and to change their names. A further 20 or 30 of those could come forward in a short time.
The third set of applications is one that we have not mentioned in the debate, because we think of chambers of commerce as bodies that represent specific geographical areas within the United Kingdom. However, many bodies using the title "chamber of commerce" operate in the trading sphere, as bilateral chambers of commerce between the United Kingdom and other countries. Sometimes there is a rush of such applications. For example, after the dismemberment of the former Soviet Union, many bodies sought to become the bilateral chambers of commerce between Britain and the former Soviet republics. That would mean dozens of applications a year reaching the desk of the Secretary of State, who would face significant difficulty if he were required to consult all those bodies that appeared to have an interest in the trade between the two countries, which would include many of the exporters in this country.
I hope that my right hon. Friend the Member for Bromley and Chislehurst recognises the excessive burdens that would be imposed by his amendments. Although the 1208 purpose of the amendments does not transgress against the principles that he expressed in moving them, I hope that he will withdraw them.
§ The Secretary of State for Trade and Industry (Mr. Stephen Byers)
Not for the first time, the right hon. Member for Bromley and Chislehurst (Mr. Forth) has done the House a service. He has allowed us not only to debate the narrow implications of amendments Nos. 1, 4 and 9, but to address some far bigger issues surrounding the danger of over-regulation and the tendency to which all Governments are prey to endorse the status quo and the big players already in the field which have good links with Government and can lobby effectively.
There is always an inclination to listen to the views expressed by those organisations, and we can as a consequence deny opportunity to young and dynamic organisations that are just starting out and do not have the access that established organisations enjoy. I hope to reassure the right hon. Gentleman on how the Government will operate the provisions in the Bill. I hope that he will then feel able to withdraw his amendment.
There can be no doubt that it would be a terrible mistake to introduce legislation that would prop up old and tired organisations, ensuring that they maintained a privileged position that denied opportunities to other organisations. I do not feel that the Bill will do that. The consultation provisions clearly place a specific requirement on the Secretary of State to consult British Chambers of Commerce and the Scottish Chambers of Commerce. There is nothing to stop the Secretary of State using discretionary powers to discuss matters with, or take views from, other organisations.
There is certainly nothing to stop dynamic local companies or groups of employers from making representations to the Secretary of State about any proposal. They would need to be proactive, because the Secretary of State would not seek out their views as there would be no legal requirement for consultation. However, the Secretary of State would listen to any representations that those organisations might make.
My hon. Friend the Member for Upminster (Mr. Darvill) spoke of getting the balance right. We can do so by placing a clear requirement on the Secretary of State to consult British Chambers of Commerce and Scottish Chambers of Commerce, but adding that the Secretary of State will listen to other representations that might be received. People must feel that their voices may be heard.
We must not make the mistake of putting a great burden on the Secretary of State, the Department or local bodies that would have to be consulted whether they liked it or not. The right hon. Gentleman's amendment would require the Secretary of State to consult relevant bodies, and that would have to be done whether the Secretary of State wanted it or not, and whether or not those organisations wanted to be consulted. I receive many complaints from businesses that think that we contact them a bit too much. The last thing that they want is another brown envelope from the Secretary of State or a Department.
§ Mr. Byers
I had better not go down that road, although an interesting debate would ensue if I did. The type of 1209 brown envelopes to which I was referring would be less welcome, either through the letter box or in one's back pocket.
The right hon. Member for Bromley and Chislehurst listed the kind of organisations which he felt it would be appropriate to consult. He mentioned the TEC National Council and relevant trade organisations. He was not too keen on the Confederation of British Industry nationally, but felt that regional CBIs might be worth consulting. If he would pass on their names, I would be grateful to him, as that information would be useful. He mentioned significant employers.
The most intriguing part of the right hon. Gentleman's speech was his suggestion that we should consult trade unions. That must be a first. The fact that he also mentioned local authorities makes me think he must be undergoing a conversion. I know that he was angered by the comments made a couple of weeks ago by the deputy leader of the Conservative party about the role of the private sector and public services. The right hon. Gentleman's views have been coherently argued as a point of principle, and it is a shame that the same cannot be said of the deputy leader of his party.
§ Mr. Maclean
Has the Secretary of State considered that my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) may be happier today for local authorities to be consulted because more local authorities are under Conservative control and might give a more sensible point of view than, say, Sheffield would have done in the past?
§ Mr. Byers
The number of local authorities under Conservative control is very small, but the right hon. Member for Bromley and Chislehurst argued for a spirit of inclusivity, and it was interesting to hear from him that local authorities of whatever political persuasion should be consulted. That is certainly a first for the right hon. Gentleman. He also suggested that Government offices for the regions could be consulted, although they would be able to express a view about the merits or otherwise of a particular application in any event.
The Bill places a requirement on the Secretary of State to consult British Chambers of Commerce and Scottish Chambers of Commerce. That does not stop the Secretary of State receiving representations from other interested bodies that wish to make them. That strikes the right balance. Representations would be taken into account in any decision ultimately taken by the Secretary of State.
We do not want to support a cosy monopoly. We want to support challenge and renewal in this and many other areas of our political, social and economic life. As Secretary of State, I do not want to be seen to prop up what is old and failing while denying opportunities to those who wish to progress and succeed.
The Bill would not deny such opportunity to anyone who wanted to come forward, to challenge the status quo or to make life difficult for local chambers of commerce. Local employers and businesses can keep chambers of commerce on their toes by acting and by talking to local business representatives. We hope that that is the right way forward. The Bill strikes the right balance, and amendments Nos. 1, 4 and 9 would create a great burden 1210 and cause confusion about the requirement on the Secretary of State to consult all relevant bodies, which would not be helpful.
I assure the right hon. Gentleman that we shall, in the light of experience, reflect on whether there is a need to add more organisations by order, as the Bill allows. Given that power and my clear commitment that representations will be considered, I hope that the right hon. Gentleman will feel able to withdraw his amendment.
§ Mr. Edward Leigh
As usual, the Secretary of State has dealt with the amendment with great skill and courtesy. He has given the House important reassurance, but I want to encourage my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), lest he feels rather lonely.
§ Mr. Leigh
Indeed not, but those who are remembered by history are often in a minority, perhaps even a minority of one. That should not stop my right hon. Friend from speaking up for his beliefs.
The amendment is no mere technical adjustment to a minor Bill as it encompasses an important philosophical point from my right hon. Friend. I support my right hon. Friend's arguments, albeit that he may feel that he should withdraw the amendment for the reasons given by the Secretary of State.
My interest in these matters dates from when I served in the Department of Trade and Industry under my right hon. Friend the Member for Henley (Mr. Heseltine), who had a particular view of the role of that Department and its relationship with chambers of commerce. He felt that, under previous incumbents, the Department had not been sufficiently interventionist in many areas and that it should have taken more of a proactive role to encourage local chambers of commerce to join together to become more efficient and effective.
As my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) said, there is nothing wrong in that. Indeed, it is true that the network has been patchy over the years. However, a warning bell sounded in my mind when I used to sit at the feet of my right hon. Friend the Member for Henley and it sounds in my mind now. There is a danger that we take a corporatist view of these matters.
As we have been told, chambers of commerce have a long history. The first dates from 1599, from the chambre de commerce in Marseilles. Therefore, we are talking about a movement that is not only 400 years old but that was mercantilist in its inception. We do not hear much talk about mercantilist politics nowadays. Perhaps I can explain what they are. Chambers of commerce were initially designed not to open up trade to all newcomers or encourage free trade, but to ensure that those who were already engaged in trade in a locality increasingly enjoyed a monopoly. I am not accusing modern chambers of commerce of being in any way involved in that sort of practice, but that was their original function.
I think that my right hon. Friend the Member for Bromley and Chislehurst is trying to feel his way towards the argument that, while he recognises the excellent work that is being done by chambers of commerce, he does not want us to develop a system that would lock them 1211 in concrete, as it were, and which would give British Chambers of Commerce too much power to prevent new entrants coming in from the system. No one is accusing British Chambers of Commerce of wanting to do that—everyone has great respect for it and knows that it wants to create a system of chambers of commerce to provide good and adequate support to local businesses.
My right hon. Friend the Member for Bromley and Chislehurst has done the House a service in reminding us that, occasionally, organisations become a little stuffy or inward looking in their middle age and are perhaps not prepared to consider the merits of newcomers. If this debate achieves anything, I hope that the House will at least have been made aware of that point.
§ Mr. Lansley
I remind my hon. Friend that just over 10 years ago, at the point at which British Chambers of Commerce entered into the process of establishing an approved network of chambers with accreditation standards, it was not being given the encouragement of my right hon. Friend the Member for Henley (Mr. Heseltine) as our former and lamented colleague Nicholas Ridley was then the Secretary of State. He saw chambers of commerce as part of a body that was not corporatist in its design—he saw them as springing from the activities of local businesses rather than operating on a national basis.
§ Mr. Leigh
My hon. Friend has a point. At the end of the 1980s, which was before my right hon. Friend the Member for Henley became Secretary of State, Professor Bob Bennett of the London school of economics was asked to prepare a report to set out proposals for building a stronger and more credible chamber of commerce movement. Our right hon. Friend the late Nicholas Ridley was not going to stand in the way of that movement when he was Secretary of State. As much as he was fully committed to the concepts of free enterprise and new entrants to industry, he recognised that a strong and vibrant chamber of commerce movement was needed.
That is why I do not oppose the Bill—I do not think that any hon. Member opposes the point of view that my hon. Friend the Member for South Cambridgeshire is putting forward. No one is suggesting that we should allow a situation to develop in which people could set up some sort of criminal organisation, as has happened in Italy, or use the title of chamber of commerce to cover some narrow business purpose. Everyone knows that we want chambers of commerce to be strong and independent and to provide comprehensive coverage. There is no argument about that and that is why the late Nicholas Ridley was happy with the purport of the Bennett report. I doubt whether he would have wanted the proposals in the report to be taken as far as they were taken under our right hon. Friend the Member for Henley. As neither of our right hon. Friends are in the Chamber—sadly, one cannot be and the other is absent no doubt for good reasons—we do not know the nature of that debate. My right hon. Friend the Member for Bromley and Chislehurst and my hon. Friend the Member for South Cambridgeshire are both doing the House a service in trying to encapsulate the problem.
We heard a reassuring speech from the Secretary of State. Listening to him, one felt that there could be no possible concern about the Bill as drafted. After all, the
1212 Bill requires him to consult the British Chambers of Commerce on applications. He said that he will not be held back in any way from consulting other bodies, of course, but that he does not wish to over-regulate industry or to send out lots of brown envelopes. He has said that the amendment is not satisfactory because it would place undue burdens on business and the Secretary of State. All that is fine and, having listened to the way in which the right hon. Gentleman described these matters, I am sure that my right hon. Friend the Member for Bromley and Chislehurst may be tempted to withdraw the amendment. Before he does so, he should consider this point: although we have received the reassurance today that the Secretary of State has an open mind and wants to create new and vibrant chambers of commerce if they are necessary in particular areas, what will be the reality? Who will he consult?
Once the Bill leaves this place, given all the burdens that are placed on officials in the Department of Trade and Industry, will they make an effort to consult the sort of people about whom my right hon. Friend the Member for Bromley and Chislehurst was talking? Or, will it become a cosy arrangement where, in every case, the Secretary of State lays down the guidelines as to what is a chamber of commerce as the Bill sets out, someone makes an application and, as a matter of course the right hon. Gentleman consults British Chambers of Commerce? We all know how these things operate. As everyone who has had anything to do with government knows, officials at assistant secretary level are the motor force in Departments. No doubt such an official will know the official at the appropriate level in British Chambers of Commerce. The two will have a good and cosy working relationship. They will know each other well and be on first-name terms. It will be a question of the official at the DTI ringing the BCC official and saying, "John, we've had this application. What do you think?" That is the reality of what will happen.
When it is described in that way, perhaps people can understand some of my concerns and those of my right hon. Friend the Member for Bromley and Chislehurst. What will happen if there is a dispute in a local area when an existing chamber of commerce has become tired, as inevitably happens, or even corrupt in some way? I know that that does not happen at the moment.
I intend no innuendo against the present movement, but life being what it is, that will happen. A new group of perhaps younger business men, as has happened so often, might want to set up a rival chamber of commerce. We should not be too concerned because Companies House does not grant applications willy-nilly but consults the British Chambers of Commerce. My hon. Friend the Member for South Cambridgeshire says that that is not good enough and that everything must be in the Bill. I am not sure that that is always necessary, but that is the way we operate now. We can see the problems that could arise.
My right hon. Friend the Member for Henley would say that the way in which the movement developed in the early part of the century was chaotic. He likes things to be neat. He would not approve of the fact that there were nearly 900 chambers of commerce early in the century or that, perhaps typically, in the south of England, there were chambers of commerce while the north had chambers of trade. 1213 I also fear that we could be inching our way towards a continental system of doing things, where the chambers of commerce are embedded in the structure of the state and chamber membership is mandatory. Membership is mandatory in Germany, Austria, France, the Netherlands, Italy, Spain, Hungary and Luxembourg. Those are not minor countries.
§ Mr. Leigh
They are our partners. My right hon. Friend may not approve of the word, but for better or for worse, they are our European Union partners. I fear that the next step may be to try to move towards harmonisation where every business is required to join a chamber of commerce and the chamber of commerce movement is set in stone. It would become increasingly difficult, or impossible, for people to set up rival chambers of commerce.
There are countries where chamber membership is voluntary. That is the pattern in many dynamic economies. While south-east Asia has some problems at present—
§ Mr. Deputy Speaker (Mr. Michael Lord)
Order. The hon. Gentleman is gently straying into a Second Reading speech. He should return to the amendment.
§ Mr. Maclean
Without straying off the point, does my hon. Friend think that it would be sensible for another place to amend the Bill to make Commissioner Prodi one of the relevant people to consult? He could give his opinion on whether the chambers of commerce were dodgy or corruption was involved. That would deal with my hon. Friend's European point.
§ Mr. Deputy Speaker
Order. I would be grateful if the hon. Gentleman would remember my earlier stricture.
§ Mr. Leigh
I will not follow my right hon. Friend down that path.
When my right hon. Friend the Member for Bromley and Chislehurst replies, he should accept that the Secretary of State made a fair point about the burdens that would be imposed on his officials if he were to consult all the bodies to which my right hon. Friend referred. I am not sure that that is what amendment No. 1 seeks to achieve. Were the amendment passed, subsection (2)(a) would provide for the Secretary of State toconsult with such persons and individuals who appear to him to have an interest".I would have thought that he and his officials could deal with that sensibly if the amendment were accepted; I suspect that it will not be. My right hon. Friend is not suggesting that in every case the Secretary of State should have to consult all the individuals and organisations that may have an interest but that he should consult organisations that appear to have an interest. My hon. Friend the Member for South Cambridgeshire adduced an example about chambers of commerce being formed in the east of London. No one is suggesting that the amendment would force the Secretary of State to consult all organisations, businesses, trade unions and local 1214 government organisations in the east of London but simply those that appear to have a proper interest. Some may think that that is playing with words, but it is not. It goes to the fundamental point of the Bill. It is important that my right hon. Friend the Member for Bromley and Chislehurst receives assurance on that.
We all wish the Bill well but once it is passed, there must be no question of creating a cosy, narrow network with new entrants discouraged from entering. If the debate has achieved anything, it has prised out from the Secretary of State an admission that that could be a danger. He made an interesting point that needs to be emphasised. He is prepared to return to the House and, if necessary, through an order amend the Bill to make it clear that he is determined to consult widely. I congratulate my right hon. Friend the Member for Bromley and Chislehurst on his amendment.
§ Mr. Forth
I am most grateful to all the right hon. and hon. Members who have spoken in this short debate. It has been helpful in clearing my mind about the Bill's purpose and effect. I am grateful to my hon. Friend the Member for Gainsborough (Mr. Leigh) for his support. I never feel all that lonely in these cases because I am spurred on by the thought that there have been many lonely crusaders for justice and truth. He shares my lifelong suspicion of cosy consensus. I know that it is trendy these days to be consensual but I have never felt comfortable with that. When everyone says that they agree, I am suspicious because it is usually wrong. We all agreed with the Child Support Agency, and where did that get us? The same was true of the Dangerous Dogs Act 1989, which is hardly one of the great successes of recent legislative history.
The object of our proceedings is to give proper consideration to legislation, which is what we have been doing. It has been useful. I am grateful to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) for the knowledgeable way, which we have come to expect of him, in which he answered the points made. I am particularly grateful to the Secretary of State, who, typically, listened to the debate and was careful and courteous in answering fully our points. I do not know whether Pepper v. Hart is still part of our lives.
§ Mr. Forth
My right hon. Friend, who is a lawyer, and Opposition legal experts confirm that it is. We can therefore be doubly reassured because what the Secretary of State said will be recorded faithfully, as ever, in Hansard. That allays most of the fears expressed by me and my hon. Friend the Member for Gainsborough. Pepper v. Hart means that the Secretary of State's words, along with those of the Bill's promoter, will become part of the reassurance. When the Bill, as it undoubtedly will, becomes statute, we can be reassured of their intentions in respect of its implementation. I am, therefore, reassured to that extent.
I was impressed by the point that was made by the hon. Member for Upminster (Mr. Darvill) and echoed by other hon. Members. It touches a raw nerve end for me, which was probably why the hon. Gentleman made it; he referred to the burdens and bureaucracy that might arise from the amendments. I am sensitive to that point and, indeed, rather persuaded by it. Although I believe that 1215 that process would not be undertaken frequently, my hon. Friend the Member for South Cambridgeshire pointed out that there might be spurts or splurges of activity that could create difficulty for firms, companies and so on—even for the Department of Trade and Industry itself. I am sensitive to that point and want to take it into account.
I hope that the debate has been valuable. I have certainly emerged from it better informed, and reassured. Given the reassurances that we have received from the Secretary of State and from my hon. Friend the Member for South Cambridgeshire, I hope that my hon. Friend the Member for Gainsborough joins me in agreeing to withdraw the amendments. I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Mr. Deputy Speaker
With this, it will be convenient to discuss amendment No. 6, in clause 3, page 2, line 8, leave out 'may' and insert 'shall'.
§ Mr. Forth
Clause 2(2) is another important part of the Bill; it deals with the publication of guidance by the Secretary of Statewith respect to factors which may be taken into account in determining whether to approve the registration of a name to which this section applies.That follows on properly and logically from the debate that we have just held. It revolves around territory that is familiar—but important—to all Members of the House: our friends "may" and "shall". As drafted, the Bill states only that:The Secretary of State may publish guidancewith respect to those factors. I want to persuade the House that that should be "shall".
§ Mr. Lansley
I understood that, in the amendments that have been selected for debate, my right hon. Friend does not want a requirement that the Secretary of State should publish guidance, but that there should be a requirement that the Secretary of State should take that guidance into account when determining whether to approve the registration of a name, under both the companies and business names legislation.
§ Mr. Forth
Indeed—we are talking about the relevance of the guidance and the role that the guidance will play. That follows on from what was said earlier. In order to give the matter some context and substance, I want to pick up from the excellent guidance notes that have been provided for us by the British Chambers of Commerce. Those notes give a flavour of the factors that members of that organisation suggest are relevant to these considerations, and they will enable the House to judge whether such matters should be discretionary or mandatory—if I may use that shorthand.
I have highlighted some of the comments in that helpful Bill briefing document and will cite them briefly, as they set the matter in context. The document refers to the consideration ofa proposal to adopt a new geographic descriptor"—1216 that has already been referred to during the debate; and toan application from promoters to set up a new Chamber".That point is crucial to the case that my hon. Friend the Member for Gainsborough (Mr. Leigh) and I wanted to make; we see that as a most desirable process. In that case, according to the documentBCC will examine the draft Memorandum and Articles of Association and check whether they are appropriate to a Chamber of Commerce.The document notes a number of questions that arise from that—questions that 1 envisage should be very much part of the guidance. Such questions are:Do the members control the Chamber? Are there proper processes for members to elect the Board?Such questions naturally arise. The document continues:Are the rules on membership appropriate so that membership is not unreasonably restricted?One can begin to see the sort of questions that should properly be part of the guidance.
The document continues:Next, inquiries are made about the proposed directors. Do they have private, possibly commercial motives? Do they have any experience of Chambers?We all know now that the hon. Member for Putney (Mr. Colman), who has left the Chamber, would qualify on all those grounds and probably on several others. We know that that is the sort of territory that we should be in.
The document points out thatA Chamber is a membership body, so what evidence is there of wide support from the business community?Again, that ties up to the points that we debated earlier. The document continues:Are we being asked to sanction a Chamber which is always going to struggle to represent the business community?I imagine that such points would properly be reflected in the guidance that we are debating.
The document notes, interestingly, thatParticular care is taken with applications from people wishing to set bilateral Chambers i.e. a Chamber purporting to relate to issues of bilateral trade between the UK and another country.That relates to a point made by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley).
What we see in the document is surely the view of the members of the BCC on the kind of factors that the Bill originally statedmay be taken into account in determining whether to approve the registration of a name"—and that what my amendment proposes must be taken into account.
I suspect that people outside the House often find it difficult to understand our preoccupation with "may" and "shall" when we consider legislation. However, it is a most important matter. At present, the Bill states only that "it may be", but I am proposing that "it shall be". I hope that my brief rehearsal of some of the points made in the BCC guidance will give some idea of the vital necessity for us to have a guarantee that those factors will be taken into account whenever the deliberations, which the Bill insists that the Secretary of State will carry out, are undertaken. We need that level of reassurance. 1217 In the end, we may again have to rely on reassurances given by the Secretary of State and perhaps by my hon. Friend the Member for South Cambridgeshire in this Chamber—so be it. However, at the very least, the tabling of such amendments as these and the holding of such brief debates enable those reassurances to be given. Obviously, I should prefer it if the Bill were amended in the way that my amendments suggest. However, what emerges during these sort of proceedings is that such reassurances—if, indeed, they are given—can be almost as effective in their own way, by providing guidance as to what will happen in future. They give an indication of the thinking of the promoter of the Bill and of the Secretary of State—the holder of that position will be responsible for carrying out the provisions of the Bill, as the Bill points out.
We want some clear indications—or even commitments—as to the way in which the provisions will be implemented. At present, the Bill states only that the guidancemay be taken into account".That leaves a degree of unacceptable uncertainty; we need to know much more. If we are to have guidance, why should it not be taken into account? Are there circumstances in which the kind of factors that I have briefly outlined as to membership, directors and so on—especially in respect of bilateral chambers—would not be taken into account? That is difficult to imagine. It may be that I am wrong and that some hidden flexibility was built into the Bill that required it to be drafted in the way that it was, but I need a great deal of reassurance on this matter.
I look to the Secretary of the State and to the promoter of the Bill for a clear idea of how they see the role of the guidance—for example, what it would contain, if my comments about that are off beam, and especially, the circumstances in which the guidance might be discretionary rather than mandatory. I want that to be fixed firmly; I want to ensure that the guidance plays a central and key role, and that we can rely on it to give direction to what is done—rather than for it to be discretionary. That is the purpose of my amendment.
§ Mr. Darvill
I always listen with care to the right hon. Member for Bromley and Chislehurst (Mr. Forth). He holds principled views, for which he argues very strongly. In the Committee on the Greater London Authority Bill, on which we both had the pleasure to serve, I twice spoke up in agreement with points that he had raised. However, this time I believe that he is mistaken.
In my view, there should not be a burden on the Secretary of State to issue guidance. It seems to me that the current law for the setting up of companies, as it will be amended by the Bill, will be flexible enough to cope with the requirements that are envisaged in any such application. At some stage, if there were particular difficulties surrounding such applications, it might be necessary for the Secretary of State to issue guidance. If contentious applications were made, which were being contested in the courts—perhaps even by judicial review—such guidance might help.
However, I understand that the Bill was designed to give flexibility to organisations, companies, chambers and so on, and if the Secretary of State was forced to make the guidance notes—as he or she would be if amendment 1218 No. 3 were accepted—that flexibility would be limited. I believe that that would be too prescriptive, so I urge the right hon. Member for Bromley and Chislehurst to reconsider and withdraw the amendment.
§ Mr. Lansley
I am grateful to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) for moving amendment No. 3 and giving us an opportunity to consider another important aspect of the Bill. I am also grateful to the hon. Member for Upminster (Mr. Darvill). Perhaps I should explain why I do not agree with my right hon. Friend or the hon. Gentleman, and why I hope that my right hon. Friend will withdraw amendment No. 3 and will not press amendment No. 6 to a vote.
The effect of amendments Nos. 3 and 6 would be that the Secretary of State, having issued guidance, would have no discretion whether to take into account the factors set out in the guidance when deciding whether a title should be used. The amendments do not directly bear upon whether the Secretary of State issues guidance. The Secretary of State would continue to have discretion whether to issue guidance. However, I emphasise that it is my opinion, as the Bill's promoter, that it is a key aspect of the Bill that there should be guidance, and that if the Secretary of State were unreasonably not to issue guidance, that should be challenged.
Under existing companies legislation, the Secretary of State, when considering an application to use the title "chamber of commerce", can reasonably say no only when the application is by a person or body that is plainly not a chamber of commerce, but not when the proposed title, or the circumstances of the organisation proposing it, does not meet the positive test of complying with the characteristics of a chamber of commerce. Therefore we are moving—it may be regarded as a subtle distinction, but it is an important one—from a test that has proved to be very difficult for the Secretary of State to use to a more purposive test.
The question of what is in the guidance brings us back to the question of what happens once guidance has been issued. I do hope that the Secretary of State issues such guidance, and in the way that the Bill posits, having discussed and negotiated with the British Chambers of Commerce and other interested parties.
As my hon. Friend the Member for Gainsborough (Mr. Leigh) said, there is a tendency to set things down in the Bill. When I first drafted the Bill, I tended to want to put everything in it. The legislation, as introduced in the previous Session, in the form of the Chamber of Commerce (Protection of Title) Bill, included a schedule, the purpose of which was to set out the essential characteristics of a chamber of commerce. During discussions on the legislation in the previous Session, I was persuaded that that would be inflexible, that some flexibility was necessary and that everything should not be set down in the Bill. The Secretary of State will therefore have that discretion.
§ Mr. Heald
Is my hon. Friend saying that, if the amendment were passed, the wordsfactors which shall be taken into accountwould be very restrictive, because no other factor could be taken into account except those factors, and that that would restrict the discretion of the Secretary of State unreasonably?
§ Mr. Lansley
I am very grateful to my hon. Friend, who, having a legal background, has come to the point 1219 which is often the crux of the not pedantic issue of whether one says "may" or "shall". That is indeed an objection to the amendment. However, in the spirit in which my right hon. Friend the Member for Bromley and Chislehurst has moved the amendment, I hope that the House will bear with me while I explain what I hope that the guidance will cover, and why it would not necessarily in all circumstances be appropriate for each aspect of that guidance to be taken into account when considering every application—although my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) is absolutely right to say that we do not want the Secretary of State to be constrained not to take other factors into account if they are not expressly provided for in his guidance.
My right hon. Friend the Member for Bromley and Chislehurst has mentioned some of the things that the British Chambers of Commerce has said in its briefing to Members of Parliament, but it may help if I list some of the things that I foresee as being among the characteristics of a chamber of commerce. I shall divide them into three categories.
The first category relates to the constitution of a chamber of commerce. Although some chambers of commerce enjoy a royal charter, they are the lesser number. A chamber of commerce should be constituted as a body corporate, but not a company limited by shares. In almost all circumstances, chambers of commerce are incorporated as companies limited by guarantee. The straightforward purpose of that is to ensure that they cannot be used as a profit-distributing vehicle—that any moneys generated by the commercial activities of a chamber of commerce should continue to be re-invested for the improvement of service to the whole membership.
Secondly, a chamber should not be a subsidiary or division of any other body except another chamber. The independence of chambers of commerce is an important characteristic and should be reinforced, in my view, by the stipulation that a chamber of commerce should be independent and not under the direct control of Government or a local authority. It would be contrary to what I would regard as the essential characteristics of a chamber of commerce if, for example, local authority X were to set up chamber of commerce X. That body would not be representative of the business community and independent of Government.
Finally, the constitutional arrangements of a chamber of commerce should provide for it to be controlled by the whole of its membership—not by a faction or a cabal, still less by an individual. There should be an expectation that a very high proportion of the members of a chamber of commerce should be engaged in manufacture, commerce, business, trade, shipping, distribution, agriculture, fishing or professional practice. The hon. Member for Upminster reminds us that those who are in the professions often play a significant part. Although, as my hon. Friend the Member for Gainsborough said, chambers of commerce were often established as manufacturing, commerce and trade oriented bodies, they now represent the whole business community, including the professions.
However, there is a British chamber of shipping. Therefore it is possible to contemplate circumstances where bodies that enjoy a title related to "chamber of commerce" do not necessarily comply with that criterion, because they are not representative of a geographical area, 1220 but represent a particular trade relationship—perhaps between the United Kingdom and another country—or a particular form of trade or business. That has a bearing on the question whether that factor should be taken into account in all cases.
The guidance should cover the issue of whether a chamber of commerce whose name is a geographical descriptor is genuinely representative of all businesses in that area. That point was alluded to in previous discussions, but I think it should be made explicit now. When a name refers to an area, the Secretary of State must also consider whether the chamber of commerce seeks to promote business and trade between that area and others. That is an important point, and we must draw a distinction between chambers of commerce that represent a specific geographical area and those that seek to promote trade between areas. The guidance should take account of certain factors when assessing a title application by a chamber of commerce that represents a specific geographical area and different factors when considering an application by a chamber of commerce that seeks to represent trade between areas. Not every factor should be taken into account in every application.
I think that it is important that the essential characteristics of chambers of commerce should include some central purposes. First, a chamber of commerce should exist to serve and promote the interests of the whole business community in any place or area to which its name is applied. The body should foster the interests not simply of its members but of the whole business community in the area that it represents. Secondly, a chamber of commerce should provide a service to the local business community—it would not necessarily be exclusive to its members—in respect of information, advice and assistance. Thirdly, a chamber should undertake, or encourage its members to undertake, joint activities and arrangements for mutual support and promotion of the interests of the business community. That is one of the central original purposes of chambers of commerce: they must promote the relationship between the local business community and its legislatures—
§ Mr. Deputy Speaker
Order. This is a fairly general point. Will the hon. Member for South Cambridgeshire (Mr. Lansley) relate his comments to "may" and "shall"?
§ Mr. Lansley
Yes, Mr. Deputy Speaker. This is my final point about guidance.
It is clear that it will not always be relevant to take into account whether a chamber of commerce has the purpose of representing a business community to a legislature or to other bodies. For example, if the body seeks to promote trade between two areas, it might have no representational role in relation to local authorities or central Government. It might operate in the international sphere, even though it is incorporated in this country. Some chambers of commerce and related titles are incorporated in this country but are not representative of a particular national geographical area. Therefore, it would not be relevant to assess them according to whether their activities include joint promotion or representation to Government in their area.
I hope that I have covered reasonably fully what I think the guidance should include. In the process, I hope that I have illustrated that, because of the scope of the guidance 1221 and the diverse bodies that use the title "chamber of commerce", we should not assume that every one of the factors set out in the guidance will apply to each of the bodies that seeks to use the "chamber of commerce" title. Therefore, the legislation should give the Secretary of State discretion to decide not only the issuing and timing of guidance, but which factors to apply to a particular application in each instance.
I apologise if I have trespassed upon the patience of the House. I hope that I have assisted hon. Members in understanding why this small but important point is phrased in the way it appears in the Bill. I hope that my right hon. Friend will feel able to withdraw his amendment.
§ Mr. Leigh
I support amendment No. 2, but, for the reasons given by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), I oppose amendment No. 3. I am not sure why, in framing the Bill, we are talking about the Secretary of State "perhaps" publishing guidance. Of course he will publish guidance, so I am not sure what is wrong with amendment No. 2 proposed by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), which says that the Secretary of State "shall" publish guidance.
§ Mr. Leigh
I apologise, Mr. Deputy Speaker. I may have got the numbers wrong, but I hope that my point will stand as to whether we should talk in terms of "may" or "shall". My right hon. Friend said that the Secretary of State shall publish guidance, which is a very important point.
My hon. Friend the Member for South Cambridgeshire listed the factors that will influence the Secretary of State in determining whether he should allow the creation of a new body. My hon. Friend referred to some very unremarkable facts. Of course the Secretary of State would not want to allow the establishment of a new body if it were not constituted as a body corporate or run constitutionally and democratically. Those points are well made. However, the "may" or "shall" point is important in how it relates to the geographical descriptor. I think that is the key to the whole argument, and it relates to the fears that we expressed when considering the previous group of amendments.
I am worried that, when the Secretary of State considers these matters, he will have regard to not only whether the proposed body is run by reputable people, is run democratically and seeks to represent people in the area but whether a similar body already exists in that area. How much weight will he give to that latter point? That is an important point that relates to my experience in the last Parliament. As a lawyer, I was retained by the newspaper distribution industry. It is a very restrictive business, being a vertical monopoly. Until recently, one was not allowed to open a news agency when one already existed in that area. You can see my point, Mr. Deputy Speaker. I want to try to frame the legislation—I hope that the Secretary of State will reassure me about this in his winding-up speech—so that no one will be denied the ability to create a new chamber of commerce simply because one already exists in that area.
1222 There may be perfectly valid reasons—although it may not happen very often—why the existing chamber of commerce is not doing its job adequately. It may have been taken over by a clique or, as often occurs with democratic bodies, it may have remained in the same hands for many years and atrophied. I want to ensure that the Secretary of State is able to look at the issue in the round. The guidance should be quite clear. Someone may wish to establish a chamber of commerce that is perfectly well constituted and genuinely representative but which covers an area served by a similar body. For the sake of argument, let us suppose that someone wishes to establish the new Blankshire chamber of commerce, but there is already a Blankshire chamber of commerce in that area. I do not understand how the procedures will work. Will the Secretary of State say, "I'm sorry, but there is already the Blankshire chamber of commerce, so your geographical descriptor is not accurate."? I am sure that that is not what my hon. Friend intends to do. Indeed, I am sure that he wants an open and democratic system that permits new entrants. We are talking about something that may happen only rarely but there may be good reasons why it might be necessary in some instances. I hope that when the Secretary of State replies, he will be able to give us the reassurance that we seek.
§ Mr. Byers
I shall try to reassure right hon. and hon. Members, either in relation to the two amendments, which are narrowly drawn, or on Third Reading, when some wider issues may need to be addressed.
Amendments Nos. 3 and 6 relate specifically to the factors that may be taken into account. The right hon. Member for Bromley and Chislehurst (Mr. Forth) is trying to remove "may" and replace it with "shall". Many Members will have debated for hours, if not days, the merits or otherwise of "may" as opposed to "shall". Indeed, I remember—it was probably four or five years ago-when the right hon. Member for Bromley and Chislehurst was a Minister in the Department of Education and taking a Bill through Committee. I was then a Labour Back-Bench Member. We debated "may" and "shall" for many hours in the context of the various powers that the Secretary of State should have.
Right hon. and hon. Members will know that there are significant reasons why "may" is to be preferred. If "shall" is inserted in a Bill, it is often seen to be prescriptive. There may be other issues that should be taken into account, or it would be appropriate to take into account, in particular circumstances. If "shall" is used, there is a limit on the issues that may be reflected upon by the Secretary of State. By having "may", the Secretary of State has the discretion to consider other factors if it is appropriate to do so in the particular circumstances of an individual case.
There have been references to the publication of guidance. You were right to point out, Mr. Deputy Speaker, that the two amendments do not touch on that issue. The amendments do not relate to whether the Bill should state "may publish" or "shall publish". The amendments that do relate to that issue have not been selected for debate. That being so, we must restrict ourselves to the factors that may or, if the amendments are carried, shall be taken into account.
The right hon. Member for Bromley and Chislehurst used shorthand when he said, "Is it discretionary or mandatory?" That is probably quite an accurate way of 1223 putting the question. There will be difficulties if the amendments are carried. It would be restrictive and prescriptive for the Secretary of State. The issues to be taken into account would be set in stone and would be required to be taken into account. More worryingly, the Secretary of State would not be able to take into account some wider issues that it might be appropriate to consider in individual cases but not in all cases.
For these reasons, I ask the right hon. Member for Bromley and Chislehurst to withdraw the amendments. He has raised an interesting debate about "may" and "shall" and I am sure that it is one to which we shall return on other occasions, perhaps in different capacities, in the months and years ahead. However, I hope that he will accept today that inserting "shall" would create some real difficulties. I hope also that he might feel able to withdraw the amendments.
§ Amendment, by leave, withdrawn.
§ Order for Third Reading read.11.44 am
§ Mr. Lansley
I beg to move, That the Bill be now read the Third time.
I am grateful for the opportunity to move to Third Reading. I am grateful to right hon. and hon. Members on both sides of the House who on Second Reading gave the House a short but useful opportunity to understand the purposes of the Bill. Consideration of the Bill in Committee was an interesting occasion when we were able to raise a number of issues, none of which was controversial. It is always interesting when a Bill is being considered in Committee and there are no amendments. Sometimes, as my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) said in a previous debate, that is not encouraging. In this instance, I hope that my right hon. Friend and other hon. Members will be comforted by the thought that there were no amendments in Committee because the Bill follows a pattern that was agreed after substantial amendment to another measure in the previous Session.
§ Mr. Lansley
I am grateful to my right hon. Friend. I would not subscribe to that view in this instance. When my right hon. Friend examines the Bill at a later stage, I hope that he will find that, although he has properly raised various issues, it is competent for its purpose and in that sense is a quality product. It is our objective to achieve that.
I thank Ministers at the Department of Trade and Industry, as well as the Financial Secretary, who was a DTI Minister in the previous Session. The hon. Lady was 1224 supportive of the Bill at that time. The Secretary of State and the Minister for Small Firms, Trade and Industry have been helpful during this Session, as have Liberal Democrat Members and my right hon. and hon. Friends. I hope that we have arrived at a Bill that will substantially improve the environment for chambers of commerce. It is certainly legislation that they seek, and for good reasons.
It is important to stress that the Bill is not sought on the basis that existing legislation has been applied in anything other than a good fashion. I think that it has been applied as well as could possibly have been expected. However, there are deficiencies in its present structure. That is why we introduce legislation. If existing legislation is good enough but has been misapplied, that is a different matter and does not justify the introduction of new legislation. However, in this instance there are deficiencies in current legislation. It is the purpose of the Bill to correct potential problems and abuses.
For example, the role of British Chambers of Commerce as a consultee on applications has not been entrenched in statute. It should be so entrenched for a series of reasons to which I referred in the first of our two debates on Report. Secondly—this touches on the issue that we dealt with in the second of our debates on Report—there is no benchmark in legislation against which the Secretary of State can judge what is a chamber of commerce. The hon. Member for Upminster (Mr. Darvill) talked about whether the Secretary of State should issue guidance. I think that he should. In the absence of it, the Secretary of State is trying, with difficulty, to answer the question, "Is this plainly not a chamber of commerce?" It is important that there should be a benchmark, and it is important also that legislation should provide the power to issue guidance. Under existing legislation, the Secretary of State could not issue such guidance nor use it as he will be able to use it once the Bill is enacted.
With your indulgence, Mr. Deputy Speaker, I was able to explain the factors that I believe should be included in guidance. There is no need for me to rehearse those factors on Third Reading. I hope that, when the time comes, the Secretary of State and British Chambers of Commerce will be able to agree something along the lines of those factors to form the basis for guidance.
As has been said in previous debates, there is a risk of abuse. Fortunately, it is not a risk that has materialised to any great extent in this country—although it has happened in other countries, as my hon. Friend the Member for Gainsborough (Mr. Leigh) said. There is a problem about the scope to challenge the geographical descriptors that are applied to chambers of commerce. There is a difficulty every time such an issue arises. My hon. Friend raised the hypothetical example of a chamber of commerce that seeks, as it were, to be the new Blankshire chamber of commerce. The Secretary of State may well not be able to entertain such an application. It will have to be justified in relation to the factors to which I referred.
I envisage circumstances in which a title is allowed although it includes the geographical descriptor of an area that is covered by another chamber of commerce. However, the question should be whether the chamber of commerce seeking to use that title meets the essential characteristics of a chamber of commerce as stated in guidance. If it does, all will be well and good.
§ Mr. Leigh
My hon. Friend is giving us very important reassurance. Is he saying that the Secretary of State will 1225 consider new applications solely on their merits and on how the bodies will operate, and that applications should not be refused solely on the ground that a proposed organisation will cover the same area as an existing one?
§ Mr. Lansley
That is indeed my view—each application should be considered on its merits. The purpose of providing guidance is to enable us much more clearly to understand how the merits are judged.
It is possible to envisage circumstances in which two chambers of commerce are, by reference to their geographic descriptors, working in the same area. Clearly, it would be undesirable for them to have titles that are so similar that people trying to do business with them might be confused about which body is which.
Neither the chambers of commerce movement nor I, in promoting the Bill, are trying to create an approved and exclusive network of chambers of commerce in which only those organisations approved by British Chambers of Commerce can represent a specific geographical area.
Hon. Members have dealt with political boundaries—with which area is within the compass of which local authority or parliamentary constituency. I know that none of us would advise British chambers of commerce to try to agree exclusive boundaries for their responsibilities and areas, which will overlap. Although more than one chamber may cover the same area, that will not be a problem in itself.
The London Members present will appreciate that there is no difficulty with the existence of both a London chamber of commerce and industry and, for example—as the hon. Member for Putney (Mr. Colman) said—a Merton chamber of commerce. They seek to serve different purposes for their area, to provide different but complementary services, and to do so to a high standard; and that is perfectly acceptable. We are not trying to establish a geographically exclusive operation.
We are trying, I hope, to ensure that a geographical descriptor is not applied to a chamber of commerce that is not justified by its ability to represent the business community in that area. That is a central point of the Bill's structure.
On Second Reading, my right hon. Friend the Member for Bromley and Chislehurst addressed the vexed issue of reversibility—the extent to which it is possible for the Secretary of State to conclude that a name should be removed from a chamber of commerce. For the benefit of the House, I should explain how I foresee that situation being dealt with. In some circumstances, a specific chamber of commerce may no longer be operating as a chamber of commerce. In other circumstances, an organisation, although it holds the title of chamber of commerce, may not be operating as a chamber of commerce at all, but in a manner that is potentially misleading and harmful to those in business.
British Chambers of Commerce, for example, owns five chamber of commerce titles. It has acquired those titles to frustrate possible efforts by others to acquire them to abuse the business community wishing to deal with a chamber of commerce. One could say that those registered titles are redundant, as they are not being used for chamber of commerce purposes. However, in those circumstances, I do not think it would be right for the Secretary of State to remove the titles, as they have been registered for a perfectly legitimate purpose.
1226 The test that should be applied—as it is in section 32 of the Companies Act 1985—is whether the Secretary of State believes that the name in which a company is registered givesso misleading an indication of the nature of its activities as to be likely to cause harm to the public".In those circumstances, he may direct it to change its name.
We are dealing with a difficult matter. We are not trying to create a situation in which the Secretary of State is daily to police the activities of chambers of commerce—as that would be wholly contrary to the purpose of the chambers of commerce movement, which is to be business led, membership controlled and very decentralised in operation. I therefore do not want the Secretary of State to tell chambers of commerce, "You don't match up to my standard of a chamber of commerce, so I shall remove your title." The chamber of commerce movement itself would deprecate that.
Current legislation provides that, if the tough test that I have described—of whether harm would result from a body registering and continuing to use the title "chamber of commerce"—is met, the Secretary of State shall have the power to ask for the title to be changed. I think that that is a satisfactory basis on which to proceed.
§ Mr. Forth
My hon. Friend has rightly pointed out that the issue has been on my mind for some time, and I am grateful to him for the point that he has just made. However, surely he is not saying that this Bill is justified by the fact that we can already deal with the matter under current law, principally the Companies Acts.
§ Mr. Lansley
The issue is whether the Bill—which contains provisions additional to current legislation—should include provisions giving the Secretary of State a power to cause a chamber of commerce title to be changed, over and above the generic power already provided in companies legislation and based on the test of harm. I believe that it would be wrong to provide the Secretary of State with a more intrusive power in dealing with bodies calling themselves chamber of commerce, or related titles, than he already has in dealing with any company that has been given a title and continues to use it.
There is already a generic power; the question is whether there should be a specific one, on chambers of commerce. I should be happy to rest on the Secretary of State's generic power provided by companies legislation, and see no need to go beyond it.
I apologise for that digression, but, as the Bill's promoter, I am conscious of the fact that we should not complete our proceedings without specifically addressing the issues raised in earlier debates.
I thank all those who have further contributed to our debates on Report and Third Reading, and especially officials at the Department of Trade and Industry, who have been enormously helpful to me in reconciling and trying to mesh the objectives that I sought to achieve in the Bill—to support the chamber of commerce movement—with the structure of current companies legislation. As hon. Members will appreciate by my responses on some of the issues, the Bill's structure is very much designed to work within the structure of companies legislation, rather than to operate outside it or perhaps come into conflict with it. 1227 I hope that the Bill will reinforce the efforts of the chamber of commerce movement to create a more complete and comprehensive structure that provides better services to the business community and can take more responsibility for their provision—even to the point at which the Government can stop doing things and the business community can more readily do them for itself. Rather than reinforcing the defence of the status quo in the chambers of commerce movement, I hope that the process will promote and enhance the standards and quality of service to the business community. On that basis, I hope that the House gives the Bill a Third Reading.
§ Mr. David Heath
It is a pleasure to be able to contribute to the progress of the Bill, even at this late stage. I commend the hon. Member for South Cambridgeshire (Mr. Lansley) on the content of the Bill and the admirably well-informed way in which he has taken it through its stages in the House. I am also pleased to see that the Secretary of State for Trade and Industry has been present throughout this morning's proceedings.
I do not want to delay this worthwhile Bill. It was worthwhile in its earlier manifestation, when the hon. Member for Windsor (Mr. Trend) introduced it. The proceedings before today have been characterised by their brevity. The Official Report shows that 34 minutes were spent on Second Reading and 27 minutes in Committee, which, by anyone's standards, is fast progress for a Bill. We have rightly been slightly more leisurely today, because it is important to tease out the purposes of a Bill and its consequences on enactment.
I am interested in the debate not least because my local chamber of commerce was keen on the Bill and gave its support. However, there is one blemish in the record of the hon. Member for South Cambridgeshire—one blot on his escutcheon—to which I must draw attention because it illustrates a point that we should consider before giving final approval to the Bill.
Given my interest in the Bill, imagine my surprise on Monday 1 March—St. David's day—when I saw, at column 704 of the report of the Second Reading, a remark that was interpreted in my area as a slighting reference, intentional or not, to the Wessex chamber of commerce. This is an important point about geographical descriptors and the operation of the legislation. The hon. Member for South Cambridgeshire has also referred to the issue in radio interviews, so it is clearly important to him.
The Wessex chamber of commerce serves Frome in my constituency, and several other towns. It may be helpful to describe the genesis of the Wessex chamber, because it illustrates a difficulty that I should like the hon. Gentleman, or perhaps the Secretary of State, to address. The Frome chamber of commerce used to deal exclusively with the affairs of the town. It did so extremely well and celebrated its 50th anniversary recently, when my namesake the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) was the guest of honour. I hope that it will work closely with the newly elected Liberal Democrat town council in Frome over the next four years.
However, the chamber realised that there is a limit to the scope of the services that can be provided to the trade members in a small market town and that there is an 1228 advantage in associating with other areas. It considered the best way forward. It thought about joining the prestigious and active Bristol chamber of commerce, but felt that that was probably not right for a town some distance from Bristol. Instead, it looked towards the West Wiltshire association, where it saw towns of a similar size with similar activities with which it fitted well. Eventually, a joint chamber of commerce was formed serving Bradford-on-Avon, Melksham, Trowbridge, Warminster, Westbury, Frome, Chippenham, Devizes and Shepton Mallet. That immediately created a problem of nomenclature. The chamber of commerce could not be called West Wiltshire any more because it extended outside west Wiltshire. It is difficult to find a geographical descriptor that covers four district council areas, two county council areas, four health authority areas—if that is relevant—and five parliamentary constituencies. How can that area be described adequately?
I experienced a similar problem when I was chairman of Avon and Somerset police authority. When the Government decided to abolish Avon county council, we had a problem knowing what to call the police authority. As chairman of the authority, I said that we should do nothing, partly because I was not prepared to spend money on new cap badges, but also because it was difficult to find a geographical descriptor for the area. The "Somerset, Bristol and Parts of South Gloucestershire constabulary" would have been a bit of a mouthful and would not have been likely to commend itself to the Home Office or the local population, so we stuck with Avon and Somerset.
The same applies to Wessex. The hon. Gentleman has introduced a provision which might have the capacity to mislead, as Wessex is a rather amorphous geographical term. I do not want to get into a discussion about the heptarchy and the realm of the west Saxons, but Wessex is often used to describe an area which we know is in the west country but of whose extent we are not sure. Wessex is also one ward in the West Somerset district council area, so the term does have a specific use. However, in this case it was decided on as a convenient term.
Would the Bill create difficulties if a chamber of commerce were set up but it was difficult to find a precise geographical definition of the area that it covered? Would it have any effect on existing chambers of commerce that had been set up in similar circumstances? No one would suggest that Wessex chamber of commerce is doing anything other than an excellent job for the businesses that it represents. There is certainly no intention to deceive or any sense of self-aggrandisement.
§ Mr. Lansley
I am most grateful to the hon. Gentleman for providing me with an opportunity to set the record straight. If my references to the application by the former West Wiltshire chamber of commerce to call itself the Wessex chamber of commerce were regarded as a criticism, I happily withdraw what I said. I am quite clear from all the evidence received that the Wessex chamber of commerce is one of standing and has every reason to use that title. I know from past experience not to question the definition of Wessex. However, it illustrates the point that we have to apply ourselves carefully to the issue. I understand that British Chambers of Commerce was consulted and raised no objection because the Swindon chamber of commerce had no objection. However, the Dorset chamber of commerce would have had an 1229 objection—probably not one that would have prevailed—and the process did not mesh together properly. We have to be sure that the description is accurate.
§ Mr. Heath
I am most grateful to the hon. Gentleman for an extremely helpful intervention which I will transmit to members of the Wessex chamber of commerce. I know that they will be pleased to hear what he said, which was helpful in explaining how the Bill will operate.
There is still a problem in respect of making sure that nobody has a veto on what may be a convenient term simply because it could be considered misleading. There should be a proper test as to whether there might be a genuine chance of a term misleading the general public and anyone who wished to trade with that chamber of commerce. The test of harm in the Companies Act 1985, to which the hon. Gentleman referred, should underlie the consideration of the Secretary of State in determining whether a particular geographical description is likely to mislead.
Having made that point, which I hope is a useful one, and having been reassured to a considerable extent by the hon. Member for South Cambridgeshire, I hope that I shall be reassured further by the Secretary of State and that the Bill will receive a Third Reading and pass into law. It is a worthwhile measure.
§ 12.8 pm
§ Mr. Heald
I pay tribute to the way in which my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) has presented the Bill, building up a cross-party consensus in the House. I know how hard that can be from my experience of a private Member's Bill on insurance company reserves when I had a great deal of difficulty with the hon. Member for Bolsover (Mr. Skinner). In the end we prevailed, but it is not always easy. Anyone who reaches this stage with a private Member's Bill deserves huge plaudits. I also thank the Secretary of State for his constructive approach to the Bill. All hon. Members appreciate it if the boss, the man at the top of the Department, can be in the House when such a Bill is being debated.
The Bill will not affect the status title of any existing chamber of commerce, but it will deal with a problem that has become increasingly evident. Although the existing procedure has been well administered, there has been concern that added protection is needed, so that the title "chamber of commerce" and related titles can be applied to persons and bodies that are genuinely representative of the business community and the area described in the title.
It will be helpful if the Secretary of State can publish guidance on the criteria to be used in determining whether a body should be permitted to use the title. My hon. Friend the Member for South Cambridgeshire was right to say that there has not been a benchmark, and that there should be.
The Bill will reduce the scope for abuse by public relations companies and others who may use the title when they have no representative function. It will prevent also the use of grandiose geographical descriptions; although I exempt Wessex, in light of the comments of the hon. Member for Somerton and Frome (Mr. Heath).
It will be far better to have the matter on a solid, statutory footing, while giving the British Chambers of Commerce and the Scottish Chambers of Commerce the opportunity to be involved in strong self-regulation.
1230 The Opposition welcome the Bill and pay tribute to the chambers of commerce, which have made great strides in recent years in accreditation, quality-assured services, sensible mergers, more comprehensive geographical coverage and, in some areas, the close work between chambers and training and enterprise councils.
The Bill will remedy the weaknesses in the current regime and will reinforce the steps that are being taken to give chambers of commerce the role that they merit. Local authorities in my area and across the country will be pleased that an extra element of protection will accompany the improvements that have been made. In North Hertfordshire and East Hertfordshire—where the Conservatives gained both councils yesterday—that will be the case.
§ Mr. Byers
I am delighted to be here to support the Bill. I congratulate the hon. Member for South Cambridgeshire (Mr. Lansley) on the way in which he has dealt with the issue, and on the way in which he has ensured that there has been a cross-party coalition in support of the Bill. As the hon. Member for North-East Hertfordshire (Mr. Heald) said, it is difficult to get agreement in this House on almost any measure; even on one that appears to be non-contentious. The hon. Gentleman has done extremely well to achieve such a level of support for the Bill.
The Government have a positive and constructive working relationship with the British Chambers of Commerce and the Scottish Chambers of Commerce, and we are working together to drive forward the competitiveness agenda. It is vital that chambers of commerce continue to be business-led, and that their membership is controlled.
The hon. Member for Gainsborough (Mr. Leigh) referred to his experience as a DTI Minister and to the view of the then Secretary of State, the right hon. Member for Henley (Mr. Heseltine), that chambers of commerce were almost an arm of the Government, as they were proactive and part of what the Government wanted. Our view is that there should be an arms' length relationship, and that chambers of commerce should be responsible for issues of concern to their members. The priority for the chambers must be what their members want. On occasion, there may be conflict with the Government; so be it. That is one of the strengths of our democracy.
We are working positively with the chambers of commerce and we wish to continue the partnership. We have studied the Bill—which we know the chambers are keen to have on the statute book—and we believe that it is appropriate to legislate in this way. We do so to rule out abuse by organisations which, for their own reasons—perhaps to mislead or deceive—use the description "chamber of commerce" or the variety of other descriptions that can flow from that.
We must not rule out the possibility of other groups coming forward in a proactive way to represent the interests of the business community. We want to rule out abuse but not to deny other bodies the opportunity to be described as chambers of commerce if they so wish. It will be for the Secretary of State, considering the guidance that will have been published, to determine whether such an application should be agreed.
I listened carefully to what the hon. Member for Somerton and Frome (Mr. Heath) said, using the example of the Wessex chamber of commerce. His points are well 1231 made, and when the Department considers these matters, those are exactly the sort of issues that we will want to take into account.
I was pleased that officials from the Department were able to assist the hon. Member for South Cambridgeshire with the Bill. The Bill will apply to Great Britain and it will be for the new Northern Ireland Executive to make proposals for consideration by the Northern Ireland Assembly on any changes in legislation that might be needed for Northern Ireland.
We warmly support the Bill and look forward to working in partnership with the British Chambers of Commerce and the Scottish Chambers of Commerce. We believe that the Bill creates a clear and workable statutory basis for consultation with those bodies on company and business names, and I commend it to the House.
§ Mr. Forth
I think that I welcome the Bill but I am not yet wholly convinced, despite the eloquence of my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), its promoter, whom I, too, congratulate on piloting it so skilfully to this stage.
I join all those who have welcomed the Secretary of State. It is a great pleasure to see a Secretary of State taking the trouble to be here on a Friday for a Bill that is of importance to his Department. We all greatly appreciate his presence.
I am somewhat puzzled. The briefing from the British Chambers of Commerce says:Companies House seeks the opinion of BCC on new applications but there is no legal requirement to do so … There is no definition in British law of a Chamber of Commerce.Then, intriguingly, it says:This Bill would solve these problems by providing an acceptable and meaningful definition of the term 'Chamber of Commerce'.It does no such thing: I can find no definition of the term in the Bill. If that is what the British Chambers of Commerce was looking for, I do not think that the Bill provides it.
That leaves me slightly at a loss, but if the promoter of the Bill, who has worked so closely with the BCC, and the Secretary of State reassure me that the BCC has got what it wants, I suppose that must be the case. I hope that the BCC will not be disappointed when the legislation is implemented.
I was grateful to my hon. Friend the Member for South Cambridgeshire for taking a bit of time to cover the issue of what he and I have come to know as reversibility. I was grateful, too, to my hon. Friend the Member for Gainsborough (Mr. Leigh) for the points that he made on that issue.
Those points were not covered in our rather brief proceedings in Committee and on Second Reading. The value of Report has been demonstrated yet again. It enables those who were not privileged to serve in Committee to have some input and it allows points that may have arisen on Second Reading and may or may not have been dealt with in Committee to be reconsidered by the House as a whole.
This has been a useful example of the value of the Report stage, even when the Bill has, as my hon. Friend the Member for South Cambridgeshire told us, emerged
1232 unscathed from Committee. As for reversibility, I remain uneasy, but obviously I will have to accept what has been said today.
My hon. Friend the Member for Gainsborough, with his usual eloquence and force, has said that he hopes, as I do, that the Bill will not provide a mechanism to reinforce the status quo and protect those who have title to use the term "chamber of commerce" regardless of their performance and value.
We also hope that there will be sufficient flexibility in the mechanism to allow for the removal, where justified, of such a title, and for newcomers to come onto the scene if they are providing either something new or—this is a horrible phrase but I shall use it—added value.
My suspicion all along has been that we are reinforcing the established order, ensuring that there is not much of a threat to it, and then walking away rather satisfied. My hon. Friend the Member for South Cambridgeshire has said repeatedly that that is not the case, and has told us that the Companies Act 1985 makes proper provision for the removal of the title, where necessary, by the Secretary of State.
That is good and I am reassured—although if the provision already exists in companies law, that leaves open the question: how necessary is the Bill? However, the chambers of commerce believe that it is necessary, and my hon. Friend was sufficiently persuaded by the case for the Bill that he used that most precious of opportunities, a high place in the ballot for private Members' Bills, to introduce it. That in itself signifies the importance that he attaches to the subject. The Secretary of State, too, has reaffirmed that his Department is enthusiastic about the Bill, saw it as necessary and gave it help and support.
All in all, therefore, although I remain somewhat uneasy about some elements of the Bill, I sense that having got this far, it has support in all parts of the House. I am therefore content for it to be given a Third Reading and be sent winging its way to the other place, where no doubt it will receive a different kind of scrutiny from a different perspective.
§ Mr. Darvill
I support the Bill, and I can reassure the right hon. Member for Bromley and Chislehurst (Mr. Forth) that the definition of the term "chamber of commerce" is clearly covered in clause 1, which says that it is contained in regulations pursuant to section 29(1)(a) of the Companies Act 1985 and section 3(1)(a) of the Business Names Act 1985.
§ Mr. Darvill
The point that I was making was that the Secretary of State's ability to secure the term "chamber of commerce" is specified in regulations pursuant to those sections. The point of the Bill is to bridge the gap in existing legislation, and the need for it has been clearly demonstrated not only on Second Reading and in Committee but today on Report. I agree with the right hon. 1233 Gentleman about the importance of Third Reading, which has enabled the House to focus on two of the major points, on which debate and reassurance were clearly needed.
I add my congratulations to the hon. Member for South Cambridgeshire (Mr. Lansley), whose expertise on the subject has been demonstrated throughout proceedings on the Bill. I am sure that all hon. Members will endorse those congratulations. The hon. Gentleman has done a service to the House and the business community as a whole. I am sure that my local chamber of commerce in Havering welcomes the Bill. It is a good sign that all parties in the House are working to support the business community, and I hope that the Bill receives a Third Reading.
§ Mr. Leigh
When historians write the history of Friday, 7 May 1999, I fear that they will not dwell at length on the passage of the Bill. That will be unfair. However, they will dwell on the fact that a new Parliament, for better or worse, has been created in Scotland. The Report stage of the Bill showed that this old Parliament can scrutinise legislation effectively and improve it.
We have had an excellent debate this morning. As usual, my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) responded to arguments with skill and sensitivity. It is welcome that, on a Friday morning, we have been joined by an existing member of the Cabinet and by my hon. Friend who—according to today's newspapers—may shortly join the shadow Cabinet. He well deserves that honour for the skill that he brings to our debates. I hope that I have not ruined his chances by saying that, because I was trying to pat him on the back for what will be a good Act of Parliament.
The Secretary of State gave the House various assurances today. He said that he does not see the Bill as an interventionist measure and that he intends to deal with the issues with a light regulatory touch. Reference has been made to Nicholas Ridley and, listening to the Secretary of State, one is left with the impression that he would have enjoyed serving under the late Nicholas Ridley, because their views are similar. The Secretary of State stressed that he sees the chambers of commerce as a business-led organisation with which he does not wish to interfere any more than is necessary.
The Secretary of State also wishes to ensure that there is no abuse of the system. As I understand it, that is the purpose of the Bill, because it will provide a mechanism for the Secretary of State to issue guidance on how chambers of commerce may properly be set out and allow the British Chambers of Commerce to be consulted when a proposal is submitted. That appears to be an unremarkable hope and I am sure that the Bill will achieve it.
I hope that my hon. Friend the Member for South Cambridgeshire is not unhappy with what my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) and myself have tried to achieve this morning. 1 hope that he agrees that our arguments have been sensible, because we do not wish to adopt the rigid structure that appertains in many continental countries. I do not criticise those countries for the way in which their chambers of commerce operate, because they are effective. However, they are an arm of government, albeit a quasi-independent arm of government. We have a different tradition, and I know that my hon. Friend does not wish to adopt the continental approach. He is convinced that the Bill will not make that more likely.
1234 My right hon. Friend the Member for Bromley and Chislehurst and I have made the point that if someone wishes to set up a new chamber of commerce, the Secretary of State will consult widely, if necessary, and will not just take the view of the existing establishment in the British Chambers of Commerce. That point must be emphasised. I hope that the Secretary of State has also accepted the important point about the geographical descriptor. It is important that a thousand flowers should bloom in the chambers of commerce movement and small market towns, such as Gainsborough, should have their own chamber of commerce, albeit under the umbrella of county or even regional chambers of commerce. My right hon. Friend shares that view and has made it clear that if the existing structure in any county, town or city is not working satisfactorily, a new organisation can come forward and should not be turned down because there is a pre-existing organisation.
We have received reassurances, on the basis of which the Bill will be effective. I wish it well.
§ Mr. Lansley
With the leave of the House, I thank right hon. and hon. Members on both sides for their contributions. I must say to my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) that, as the British Chambers of Commerce have said, the Bill should give statutory backing to the issuance by order of the Secretary of State of guidance that will set benchmarks for what is defined as a chamber of commerce. That would not be possible without legislation.
A balance needs to be struck, raising the point of whether that should be done in the Bill or through secondary legislation. The latter is both more flexible and more manageable as chambers of commerce may change their remits, particularly when training and enterprise councils and chambers of commerce merge. They have done so in the past and may do so again in future.
I am grateful to all hon. Members who have spoken, and I hope that the House will feel it right to speed the Bill on its way. Finally, I thank the Secretary of State for the time and attention that he has given to the Bill. The chambers of commerce will appreciate that, and I hope that they will also appreciate the spirit and detail in which we have scrutinised the Bill.
§ Question put and agreed to.
§ Bill accordingly read the Third time, and passed.