HC Deb 16 November 2000 vol 356 cc1124-45

'. The duty imposed on directors by Section 309(1) of the Companies Act 1985 to have regard to the interests of the company's employees shall apply to the nominee during his administration of the company.'.—[Mr. Mitchell.]

Brought up, and read the First time.

Mr. Austin Mitchell (Great Grimsby)

I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Mrs. Sylvia Heal)

With this it will be convenient to discuss the following amendments: No. 46, in schedule 1, page 15, line 6, at end insert— 'and notify the registrar of companies, the company and any petitioning creditor of the company of the actual fees charged, the basis of the charges, the outcome of the moratorium and whether during the term of the moratorium he has been the subject of any adverse court judgment or disciplinary findings by any of the Recognised Supervisory Bodies.'.

No. 33, in page 20, line 20, at end insert— '(5) The nominee shall have the power to apply to the court for directions to enable him to perform his duties under this paragraph.'.

No. 47, in page 21, line 45, at end insert— '(c) on an application by any creditor, any member of the company or any other person affected by the moratorium.'.

No. 3, in schedule 2, page 35, line 47, at end insert— '(ba) After subsection (4), there is inserted— (4A) The supervisor shall owe a duty of care to the employees of the company and consult regularly with their representatives.".'.

Mr. Mitchell

The purpose of the new clause and associated amendments is to swing the balance in favour of workers and trade unions. The new clause would involve them more in the process of a company's 28-day moratorium, and outline their role in that process.

So far the debate has been like a class reunion of Standing Committee B. It is a shame that more Labour Members are not present, as by amending in little ways little measures such as this Bill we can swing the balance in favour of the workers, the less well-off and the people who form the section of society that we represent. The vested interests always have people such as the Conservative Members present this afternoon who will speak for them and push their views and interests. It is important that we Labour Members use our influence to push the balance the other way when the opportunity arises.

It is as important for us to do that as it is for the Government to introduce major legislation. The Government tackle the big picture, and we Back Benchers tackle the small picture. That is what I want to try and do with these amendments. New clause 3 would impose on the nominee duties at present incumbent on the directors, to ensure that he attends to the same interest.

The Bill is right and worth pursuing. It is a minor measure, but it will be useful and will help to save companies. If we can get this measure in the interstices of the Government's legislative programme—as we can now, because the House is effectively ticking over, waiting for more messages to come from the Lords so we can get our teeth into the bigger issues—we should do so, and that is what we are doing. The Conservative party's critique that this is an unnecessary measure has no standing. However, if it is necessary, it is necessary to use it for the purposes of the people.

4 pm

The measure gives a new role to a vested interest—it creates a new role for insolvency practitioners. They have already been consulted on it extensively and they say that they want to be consulted more and to exert more influence on the processes and regulations when they are introduced. This is a Labour Government, however—it is not a Conservative Government, pandering to the vested interests. So when we have the legislative opportunity, we should use our role as a Labour Government to tilt the balance in the right direction. After all, for 18 years, it has been substantially tilted the other way. It is time to swing the balance back a little.

New clause 3 would impose responsibilities that are in the Companies Act 1985. Indeed, I was surprised to find them there. They were introduced to the Companies Act 1967. The surprising thing is that after the long years of Conservative Government, in which numerous Companies Acts were passed, almost year after year, as the previous Government changed their mind on these issues, these provisions were never removed. This is an important and potentially influential measure. The 1985 Act says: The matters to which the directors of a company are to have regard in the performance of their functions include the interests of the company's employees in general… That is a point of leverage which has been too little noticed and used. If the responsibility is incumbent on directors under the 1985 Act, it should also be incumbent on the nominee in the period when the nominee's decisions will effectively change the shape of the company. For example, decisions will be taken about shedding staff. Attempts to save a company, given present priorities, always seem to involve firing people and reducing the number of employees to save money. Decisions made by the nominee will thus affect the employees. In that case, why should they not have the same responsibilities as the directors who continue to run the company and who should continue to exercise those responsibilities, but who are temporarily less powerful than the nominee?

A company is a team—it depends on its employees. It is a collective effort. We have to take a collective, communal view of a company. It does not consist simply of the directors and those in charge—everyone has an interest. The interests of the workers clearly lie in the company's survival. However, those interests get neglected in the vulture culture of insolvency and administration.

The whole process is a grab for money—the banks are the most powerful grabbers and play the most powerful role. They make so many loans, mortgages and floating charges, they have the necessary personnel and experience, so they will be the dominant influence. The workers are in a very weak position. They have a role as creditors; my hon. Friend the Minister will doubtless emphasise that as he did in Committee, because the workers may be owed wages.

I want to give the workers a role beyond that, as an integral part of the company, with an interest in its survival. They are stakeholders. I know that we do not talk so much about stakeholders now. Having discovered stakeholderism in the mid-1990s, we moved rapidly on to the third way. I am not sure what happened to the third way, but it has gone the way of all bright ideas. However, I think that the stakeholder philosophy is correct. Employees are stakeholders in the company; they have an interest in the company, and that should be taken into account.

The new clause is a comparatively diluted expression of that view, which amendment No. 3 develops more fully. It was well supported in Committee by both Labour and Liberal Democrat Members. I am not gifted with the killer instinct—something I have in common with the Prime Minister. I am too nice a guy and tend to think that one simply has to put the argument and the truth will prevail, a failing that spreads right across to Downing street. But had I the killer instinct, the Minister could have been beaten on this issue. I did not want to do that. The Minister undertook to look at the issue and see what he could do to incline the balance my way. I am sure that he has done that, and I am grateful to him.

I see from the posters going up around the country that it is now party policy to say "Thank you, thank you, thank you." As one of my constituents said, "What the hell for?" So I thank the Minister, but I was disappointed by the reply that he sent me when he exercised that function. He more or less advised me to go away in a fashion advised by French Connection UK. He said that it could not be done in the way that I wanted. I know what is happening here. The vested interests say, "We can't do that". The officials say, "Play it safe, Minister, there's no point in extending the role of the Bill. It will be a nuisance, it's another imponderable, it's not within the scope of the Bill which is simply concerned with matters of company administration and insolvency, so let us keep the focus on the main issue. Don't buy into emotive concepts like the workers or the stakeholders. Best say no—that's the easiest course."

I hope that, now I have approached the issue in a moderate form by proposing new clause 3, the Minister might look again at what he said in his letter. The nominee is effectively making a life or death decision on the company and should have the same responsibilities as directors.

Mr. Butterfill

I have the disadvantage of not having served on the Standing Committee although, together with my hon. Friends on the Select Committee, I considered a number of these issues. The effect of the amendment is not entirely clear, and perhaps when the Minister replies it will become a little clearer. At present, the directors and, indeed, the officers of the company have personal liability under certain circumstances for malfeasance and can be sued individually. Is the hon. Gentleman intending to pass on to the nominee a similar liability vis-à-vis his duties in the particular connection that he proposes? If so, does he think that it will be easy to find a nominee under those circumstances?

Mr. Mitchell

It is good to hear the voice of the vested interests again expressed here, even if it did not get on to the Committee. The answer is that the directors have that responsibility, but they are also responsible for having regard to the interests of the company's employees in general. They have both responsibilities. They continue to be in charge of the company during this period. I want the nominee to be impressed with the same responsibility. It is fairly simple. It does not detract from the directors—they have the responsibility too. The new clause would spread the responsibility to the nominee.

Mr. Butterfill

rose—

Mr. Mitchell

No, I do not want to give way again, because the tear-jerking picture of directors at risk will be paraded before us. I simply want the responsibility that directors have to employees to be shared. I am not going to get bogged down in that argument.

Mr. Butterfill

Will the hon. Gentleman give way?

Mr. Mitchell

No. I am sorry, but I am moving on.

Mr. Butterfill

rose—

Madam Deputy Speaker

Order. The hon. Member for Great Grimsby (Mr. Mitchell) has said that he will not give way.

Mr. Butterfill

On a point of order, Madam Deputy Speaker. The hon. Gentleman has publicly accused me of representing a vested interest in the Bill. I want him to tell the House what vested interest he thinks I represent.

Mr. Mitchell

The hon. Gentleman may be somewhat sympathetic to the interests of directors. He paints that picture of directors at risk, giving the impression that the risk would be increased if the nominee shared the same responsibilities and had to pay attention to the workers' interests. That is why I accused him of pushing a vested or a sectional interest—that of the directors. I am speaking for the interests of the employees. I do not want to go further down that road—I did not want to give way in the first place, but I did so out of courtesy. The point was largely irrelevant, but it has been answered.

Amendment No. 46 is designed to ensure that the nominee is accountable to directors and the public. At present, the Bill only requires the nominee to inform the court when the moratorium has been brought to an end. It does not require the public filing of information on matters that have to be disclosed.

The Bill would extend what amounts to a state-guaranteed market for insolvency and business restructuring, to the benefit of insolvency practitioners. They have that privilege and it should be accompanied by an accountability requirement. That is what I am trying to impose in amendment No. 46.

Amendment No. 47 would bring paragraphs 26 and 28 of schedule 1 into alignment with each other. The Bill does not recognise that creditors, members of companies and other stakeholders have the right to ask the courts to seek a replacement of the nominee. Under paragraph 26, they can apply to the court if they are dissatisfied with what is going on, but they do not have the power that is given to the directors in paragraph 28 to have the nominee replaced. Those powers should be equal. The amendment would bring paragraphs 28 and 26 into line by extending the power to any creditor, member of the company or other person affected by the moratorium. That seems to be a balanced requirement.

Amendment No. 3 is the nub of my argument on Report, as it was in Committee. We should impose on the nominee a duty of care to the employees of the company. Why does the Bill not impose that duty—to have regard to the interests of employees when making decisions? As the Bill stands, only the interests of creditors are promoted and protected. We are a Parliament that is elected by the people for all the people. We should enact legislation that benefits as many people as possible—not merely the minority covered by these procedures.

I proposed a similar amendment in Committee. The Minister's response was that he was not keen to change the legislation and to recognise the rights of employees, which I regret. Where we have the power to do so, we should. My hon. Friend also stated that an employee's position is no different from that of any other creditor. Most employees will be creditors and, in that capacity, they can make representations to the nominee and even go to court. The response that they are merely creditors is flawed. Creditors' committee meetings are dominated by the major creditors, which usually means the bank and the insolvency practitioner. Working together, they dominate the proceedings and other people do not get a look-in. A nominee needs to be expressly instructed in legislation to ensure that employee interests are not overlooked. That is the duty of care imposed in the amendment.

4.15 pm

I recall in Committee the touching picture painted of workers at Sturmey Archer by my hon. Friend the Member for Nottingham, South (Mr. Simpson) who has put his name to amendment No. 3. He talked of their difficulties in understanding what was going on and getting representation. Let us give the nominee a duty of care.

The Minister has replied that employees are creditors and, as such, have rights. I am seeking recognition of their rights as employees, not as creditors. After all, it is the blood, sweat, muscles and brawn of workers that keep the company going. Without that human capital, no business will survive. At the restructuring of the company, matters that are crucial to all have to be decided—pension rights, jobs, wage levels, security and all the things that go with a job. Those matters cannot be discussed without the employees or their representatives being involved—if they have a trade union to do it, I am happy with that because a trade union will always represent the interests of the employees.

Directors have a responsibility to attend to the interests of employees and that should be the nominee's responsibility too. All those rights should be respected in business. In this legislation, we have the opportunity to ensure that those rights are protected and to incline the balance to the workers. It is not an onerous imposition or a radical restructuring of the Bill. It is merely saying that in the vulture culture, when all the creditors move in and everyone is grabbing, either to keep the company going or to close it down—grabbing for the assets and getting the best deal for themselves—someone should pay attention to the interests of the workers and have a duty of care to them. Someone should involve their representatives in the discussions.

We are in power and we are a Labour party. This is the party of the workers and the trade unions. We should incline the balance to them by the simple procedure of a duty of care. In the new clause, I have modified the provision and toned it down so as not to frighten the Minister or his advisers. The full-blooded statement is in amendment No. 3, and either would be suitable—obviously, I prefer the amendment. I cannot see why the Minister cannot leap to his feet and say, "Yes. I've seen the light. This is the responsibility of a Labour Minister. Let us have new clause 3."

Mr. Page

I will speak to amendment No. 33, but before I do so, I will deal briefly with some of the comments of the hon. Member for Great Grimsby (Mr. Mitchell). His new clause has merit and I hope that the Minister will not be as hard-hearted and dismissive as he was in Committee. I hope that he will try to understand that the workers in a company have rights and responsibilities, and that a Labour Government should be looking after them, not casting them to one side.

The hon. Member for Great Grimsby accused Conservative Members of blowing hot and cold. If we agree with the hon. Gentleman, we are right, but if we introduce the slightest balance, we are wrong and we are promoting vested interests. The attack on my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) was unjustified, unwarranted and without any evidence. That is typical of the way in which the hon. Member for Great Grimsby—with great humour, and most amusingly—shoots from the hip.

Sir Sydney Chapman (Chipping Barnet)

In fairness to the House, if an hon. Member states that another hon. Member has a vested interest, it is incumbent on the hon. Member making that assertion to say exactly what those vested interests are. It is not necessarily wrong to have a vested interest—it all depends on the import one gives to the word "vested". Does my hon. Friend agree that our principal duty is not to support one sectional or vested interest against another, but to ensure that our legislation is fair?

Mr. Page

My hon. Friend makes the point that I was trying to make: we should introduce balance in whatever we say. I certainly would never accuse a Labour Member of representing the vested interests of a trade union. Why should a Member not represent such interests? That is part of the great spread of diverse interests represented in the House; we hear a variety of views and can form a judgment. From such a balance, we can come to the best decision for the people of this country. That is why we are sent to this place.

I resent being lumped in under the term "vested interest". I remind the hon. Member for Great Grimsby that I introduced a ten-minute Bill that proposed splitting responsibilities: someone involved in the valuation of a company should not be allowed to carry out the liquidation. I think that the hon. Gentleman agreed with me—he praised me for that proposal—but now he lines me up with the vested interests against which he obviously has a vendetta. He would do more for everybody and do it better if he balanced his words more carefully, and thought before shooting from the hip.

When one disagrees with the legislation under discussion, it is a standing temptation to regard it as coming from cloud cuckoo land. That seems odd to me, as according to the Greek play by Aristophanes, the laws of logic applied more rigorously in cloud cuckoo land than they did on earth, but I use the term in its currently accepted sense when I apply it to this aspect of the Bill.

Dr. Howells

I am slightly confused as to whether the hon. Gentleman thinks that the Bill or the amendment comes from cloud cuckoo land.

Mr. Page

The Minister will have the opportunity later to tell me that my amendment comes from cloud cuckoo land; I was saying that the balance in this part of the Bill comes from there.

I should like to be able to say that the Bill's provisions for applying to the courts were entirely logical and straightforward. Creditors can apply, as can directors and anyone affected by the moratorium—including the company; so can liquidators, administrators, shareholders and the supervisors of voluntary agreements, but not the nominee.

Nominees will have responsibility for assessing whether voluntary arrangements proposed by a company's directors are likely to be approved and implemented—the kernel of the Bill. Such nominees will also have to come to a view on whether the voluntary arrangements are likely to be improved without modification, or whether they might fail. Those are huge and important responsibilities.

With great respect to the Minister, it is for this House and the other place to decide whether a nominee should have the right to apply to the courts when he or she may need guidance on the performance of his or her duties. If his or her decisions can be challenged in the courts by the parties I mentioned, surely it is fair and equitable to afford the nominee an equal opportunity to exercise that right.

The purpose of the amendment is not to give nominees an escape clause so that they can evade their responsibilities and under which courts would take over those administrative and commercial decisions. I suspect that the Minister's opposition to the amendment is based on Mr. Justice Neuberger's decision—as though he and not Parliament ran the country. Although I have enormous respect for Mr. Justice Neuberger, it is not for him to decide whether nominees, or any insolvency holder, should have the right to apply to the court when in doubt about the decision that should be made; it is for Parliament to decide whether nominees should have that right. If we decide that they should have such a right, judges should respect that—unless, of course, the matter involves human rights issues.

At present, everyone involved in the whole chain of events—except the nominee—can apply to the court. Yet the nominee has to make that crucial decision that will bring the moratorium into effect, or will continue it. At times such a decision can be extremely difficult, especially if the nominee forms the view that the original voluntary arrangement will not be approved, but is likely to be approved with modifications proposed by a creditor.

The proposed procedure is novel—it does not take a tried and trusted path; the company could obtain a moratorium by applying to an authorised person rather than to a judge. The difficult decisions that were made by judges will be made by authorised persons. In Committee, we were all fully aware of how many times the Minister was asked to explain by which route the nominees might appear. In a rare show of comradeship with the hon. Member for Great Grimsby, I acknowledge his excellent and valid point about the number of organisations that could license practitioners. The measure would add yet another one, but in a rather vague and nebulous form—appearing from the ether or through some osmotic process, an organisation would be approved by the Secretary of State and could then approve a nominee.

We should proceed along that route with caution. I must not say that the Minister has been sloppy, but he has only made vague and conciliatory noises about what a future nominee might be like—hard facts and detail are lacking.

Those authorised persons do not have to hold the same qualifications as a licensed insolvency practitioner. We are well aware of the views of the hon. Member for Great Grimsby on those gentlemen. It is important that the Secretary of State should ensure that if he creates even more bodies that can grant approval to carry out such work, they should be of a standard and quality that will be a help rather than a hindrance.

During proceedings on the measure, we frequently made the critical comment that it is half a Bill, or even less than half a Bill. It would have been an ideal measure under which to introduce monitoring or quality control of the operations of insolvency practitioners. But no such provisions were included. The issue certainly occupied the time of one member of the Committee. He made his argument forcibly and we were all made aware of what he was trying to achieve. The House will have gathered that I refer to the hon. Member for Great Grimsby.

4.30 pm

Just as there are rogue directors—although the vast majority of directors are decent people who work hard to the best of their ability—so too there are licensed practitioners who do not behave appropriately, but the majority do a good job.

I was pleased to hear from the new named body of licensed practitioners—the Association of British Recovery Professionals—that its title includes the word "recovery". I recently received, as did every member of the Committee, a letter from that body, saying that the word "recovery" is now very much in the forefront of its thinking. That is a change of emphasis and direction, which I am sure we all welcomed.

If the Bill does nothing more than to introduce the culture of rescue and recovery earlier in the process, it will have achieved something. Too many businesses run right to the wire, when they could have been saved if they had taken decisions earlier. In the United States an eminent gentleman—so eminent that his name escapes me—conducted research and discovered that if a company had taken slightly earlier the measures that it took in the last six months of its existence, it would have been rescued. Too many directors do nothing until the cliff edge is crumbling beneath their feet, and by then it is far too late—too late for moratoriums or any form of rescue. If any message is to be conveyed from this place to company directors, I hope that it will be my strong encouragement to seek advice and help earlier, instead of bottling things up and thinking that they can work their way out of their difficulties. In so many cases, neither success nor rescue comes, and the inevitable pain of bankruptcy follows.

I return to my comments about the fear that the authorised person will not be of sufficient quality. I do worry that a number of authorised persons will be out of their depth, so to my mind it would be bizarre and pointless to deny them the right to appeal to the court. What conceivable advantage can there be in denying the nominee such an opportunity? If he applies to the court unnecessarily, wasting the court's time, the court's displeasure will no doubt be exhibited and reflected in an appropriate order for costs, but it cannot be right to deny the nominee the right to apply to a court when he has a real need for guidance.

I urge the Government to reconsider the amendment.

Mr. Burnett

I shall speak to new clause 3 and amendment No. 46.

I was delighted to hear the speech by the hon. Member for South-West Hertfordshire (Mr. Page) because I believe that there is very significant support in all parts of the House for new clause 3. It is not draconian. We are talking about duties that are already imposed on directors. They are not onerous.

Let us read what the new clause says. It imposes the burden of section 309(1) of the Companies Act 1985 on nominees—and why should nominees not have regard to the interests of the company's employees? The new clause is pretty tame, and not onerous. It merely provides that the nominee should at least consider the interests of the company's employees.

Dr. Howells

rose—

Mr. Burnett

I am happy to give way to the Minister.

Dr. Howells

Will the hon. Gentleman concede that the intent of the Bill is to offer some companies the opportunity to survive and to continue trading, and therefore to help employment? The whole point of the Bill is to offer support for employees, because without it, they will not have jobs.

Mr. Burnett

I entirely agree that the object of the exercise is to promote the rescue culture. We have in this country a particularly creditor-friendly business culture. I believe that all hon. Members who served on the Committee, from whatever party they came, recognised that. If the moratorium has the effect of keeping a company in existence, that is marvellous, but in taking his or her decisions, the nominee should at least have regard to the interests of the company's employees. That is not an onerous provision. Nominees must consider such matters. They may disregard them, but they must at least consider the number of employees in the company, whether the company should contract and whether people should be sacked. They should at least give those matters some weight. That is all that the new clause would provide. In my view, it is entirely correct. The employees have invested their time and efforts in the company and been loyal to it, and their interests should at least be considered.

Amendment No. 46 is not draconian or onerous in the slightest. At present, insolvency practitioners have almost carte blanche to charge what they like. There is little scope for those fees to be taxed or challenged, and that is deeply unfair to directors, employees and creditors—particularly unsecured creditors.

The hon. Member for Great Grimsby (Mr. Mitchell) is not the only hon. Member who has highlighted that unfairness. Two or three years ago, no less a Member than the right hon. Member for Maidstone and The Weald (Miss Widdecombe) initiated an Adjournment debate on the subject. The amendment is a small step in the right direction. Fees and other matters should be reported to the Registrar of Companies. I hope that when the Minister replies to the debate, he will tell us what he hopes to do and what provision his Department proposes to make to remedy this and other defects in the legislation, which were highlighted from both sides of the Committee.

Mr. Brian White (Milton Keynes, North-East)

I have a great deal of sympathy for the amendments tabled by my hon. Friend the Member for Great Grimsby (Mr. Mitchell). I suspect that I could have a long discussion with him about the things for which his constituents should be thankful to the Government—not least the national minimum wage—but I shall leave that for now.

In Committee an awful lot of examples were cited of the type of problems that the amendments would address and the Minister expressed some sympathy for the points that were raised. We should remember that the Bill deals with small companies, and that the period when discussions are held about whether to impose a moratorium is often traumatic for employees—it is probably the most stressful time of their lives. As the hon. Member for South-West Hertfordshire (Mr. Page) put it, a decision taken early can save jobs.

I shall be interested to hear the Minister's reply, because one thing that concerns me about the Government's unwillingness to accept the amendments is that, as I understand it, the Minister's argument in Committee was that employees are creditors and so are protected because they are part of the creditors' meeting. He argued that if they are not creditors, they are just normal employees and are protected by the directors. My worry is that the influence of the nominee in overriding the directors' wishes or suggesting to directors that they should go in a slightly different direction will be at variance with the interests of employees and key personnel. It is not unknown for key personnel, especially of small IT companies, to be poached and to move to other companies. There are several such key issues that the creditors' meeting would not address which would be crucial to the nominee's administration and the way in which the directors operate the company during the moratorium.

If the nominee does not have a duty of care to employees, I fear that the directors will say, "Of course, we would like to look after you, but this nasty nominee is telling us to do something different." Because of the relationship between the nominee and the directors, the terms and conditions of employees could be directly affected by decisions that they cannot influence.

My hon. Friend the Minister seems to rely greatly on the fact that employees will receive protection as creditors, but there are other concerns that he did not address in Committee.

Mr. Burnett

We considered two particular points in Committee. The first was the duty of nominees to creditors and the second was whether an employee was likely to be a creditor. In fact, he or she will almost certainly be a creditor. Therefore, does the hon. Gentleman agree that new clause 3 at least provides for the interests of a company's employees to be regarded by the nominee during the moratorium?

Mr. White

That is why I have some sympathy for the new clause and shall be interested to hear my hon. Friend's comments. The emphasis in the Committee was on the employees' role as creditors, but the issue goes beyond that. If we do not consider the problem fully, the Bill may not achieve its aims of saving people's jobs and giving them hope by providing a breathing space. If there is a simple duty of care on the nominee, different decisions may be taken and that may secure the employment of the people in the company concerned.

Mr. Butterfill

The House owes a debt of gratitude to the hon. Member for Great Grimsby (Mr. Mitchell) for bringing this matter to its attention. New clause 3 and amendment No. 46 deserve serious consideration. Like the hon. Member for Milton Keynes, North-East (Mr. White), I am minded to support amendment No. 46, but I am not entirely clear about how the new clause will function. I shall listen to the Minister's considered reply before I make up my mind. In principle, the idea that there should be a duty to look after the interests of employees should be accepted by all reasonable people.

Mr. Burnett

I hope that the hon. Gentleman will accept that the provision in new clause 3 is not as strong as that—it is a pretty tame proposal. It would be a requirement not to look after the interests of employees but to have regard to them.

Mr. Butterfill

The hon. Gentleman has an advantage over me on this, because he is a qualified lawyer with experience of the legal niceties. However, I shall listen to the Minister before I finally make up my mind.

Mr. Page

My hon. Friend, who was savaged earlier by the hon. Member for Great Grimsby (Mr. Mitchell), is showing his true colours by considering the matter dispassionately. Does he not agree that employees would be best served by amendment No. 46? If the Registrar of Companies is notified of the fees charged, the basis of the charge and the terms and outcome of the moratorium, there is more chance—if things go wrong—of money being recovered to pay creditors and employees. Will that not give those in the company a better chance of receiving something if, sadly, the moratorium does not work?

Mr. Butterfill

I have already said that I support amendment No. 46. It is admirable and will go a long way to dealing with some of the rare but considerable abuses that take place from time to time when companies go into liquidation.

4.45 pm

I have been nice about the hon. Member for Great Grimsby, but I was a little disappointed when he did not follow the best traditions of the House and did not allow me to intervene when he was rather rude and accused me of defending vested interests. My interests are fully declared in the Register of Members' Interests. I have two small directorships of family companies that do not have any employees other than the directors themselves. Therefore, I have no interest to defend in that respect. I have already talked about my experience as a non-executive director of Maples.

The hon. Gentleman seeks to include in the Bill provisions from the Companies Act 1985, which was passed by a Conservative Administration. If this Bill is passed, in the event of a liquidation, the nominee will have a duty to consider the interests of all those concerned. That is important. The hon. Gentleman referred to vultures, but they may be defending the interests of customers. For example in the case of Maples, our constituents—many of them pensioners—might have put down a £1,000 deposit on a three-piece suite, which would represent a huge purchase for them. Suddenly, the company went bust and they wanted their money back. Customers are also entitled to consideration, and it is always extremely difficult to balance the different interests and to treat everyone even-handedly and fairly, particularly if one knows that not everyone will be paid in full. On reflection, I am sure that the hon. Gentleman would agree with that.

I have just voted for a new clause that would have helped to prevent the abuses that have occurred in some companies. I am disappointed that the hon. Gentleman did not support it, and he may recall that the Insolvency Act 1993 started as a private Member's Bill that I promoted. It protected the innocent purchasers of property that could be seized by a receiver or a liquidator. I changed the law to defend innocent purchasers from those that the hon. Gentleman describes as vultures. I do not apologise for my record on this issue.

The general theme of this group of amendments is the nominee's supervisory activity in relation to the moratorium. Unfortunately, I am the only contributor to the debate who did not serve on the Standing Committee, but I served on the Select Committee that considered the draft Bill. Therefore, I wish to point out the respects in which the Government have failed to meet the concerns that the Select Committee expressed.

One of the dangers is that nominees could face a conflict of interest. They will be invited by the directors to take up a paid position and a few in the profession—I hope not many—might think that it is worth taking such a rewarded post even if they think that a company does not have much chance of surviving. That would be regrettable, but the Government have failed to include in the Bill one of the defences that the Select Committee drew to its attention. If the directors of a company fail to attract the person that they want as nominee because he does not think that the company will survive, they may go to as many as 20 people to trawl for a nominee. Eventually, they may find a person who is sufficiently self-motivated to do the job.

The Select Committee suggested that the Government should include a defence against trawling, but they signally failed to do so. Perhaps the Minister will tell us why. Equally, the Government are changing the requirement for qualifications of nominees. That again exacerbates the danger. Up to now, only qualified insolvency practitioners have been able to fulfil that role, but the Bill will allow anyone with an appropriate qualification or who is a member of a recognised professional body to fulfil the task.

Plenty of people, such as certified accountants and chartered accountants, are members of appropriate professional bodies. Although they might be good accountants and produce good audits, they might have no experience of the specialised subject of insolvency. Again, the Select Committee made it clear that it was concerned that the Government were considering involving such people. A broad spectrum of people made representations to the Committee, and many of them expressed the same concerns. The Select Committee concluded that it might have been better if the Government had left this particular change to the wider review of the whole issue of insolvency.

We are all—I hope—interested in protecting every section of the public, including, as the hon. Member for Great Grimsby said, employees, but that must be even-handed, transparent and above all fair.

Dr. Howells

I shall deal first with amendment No. 3 and new clause 3 in the name of my hon. Friend the Member for Great Grimsby (Mr. Mitchell).

The amendment seeks to place on a nominee and a supervisor a duty of care to employees. However, I am not sure that my hon. Friend appreciates that it would place a duty of care on a supervisor only under the existing voluntary arrangement procedure—that is, without the moratorium. It is also not at all clear whether the proposed duty on a nominee is to apply in both moratorium and non-moratorium cases. Either way, I believe that neither the new clause nor the amendment is necessary.

The first part of the amendment would provide for the supervisor to owe employees a duty of care in the existing voluntary arrangement procedure but, as I have said, that is not necessary. Section 7(3) of the Insolvency Act 1986 provides: If any of the company's creditors or any other person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court. Therefore, if employees have concerns about the way in which the supervisor is acting, the 1986 Act already provides them with the ability to challenge the actions of the supervisor by seeking an appropriate order.

New clause 3 is not necessary either. Paragraph 26 of proposed new schedule Al similarly allows any other person affected by a moratorium to apply to the court if he is dissatisfied by any act, omission or decision of the nominee.

Mr. Burnett

Why should employees have to bother to apply to the court? Will the Minister concede that we are not proposing an onerous duty?

Dr. Howells

A proper procedure must be followed. I shall expand on this matter when I address the important issues raised by the hon. Member for Bournemouth, West (Mr. Butterfill), who spoke about redressing the balance in the way in which the case is presented. That is an important issue. I know from the many cases that arrive on my desk from the companies investigation team at the Department of Trade and Industry that we cannot blind ourselves to the truth that there are many sharp directors who are prepared to fleece creditors, some of whom are pensioners who might have used their savings to put down a deposit on a three-piece suite, as the hon. Gentleman said. We must take into account all stakeholders, not just employees.

I think that my hon. Friend the Member for Great Grimsby might have misunderstood the function of the supervisor and the nominees in a moratorium case. Neither will assume control of the company. I have said that a number of times, but hon. Members have not taken it on board. The purpose of the supervisor will be to perform the duties as set out for him in the voluntary arrangement. The nominee's role during the moratorium is set out clearly in proposed new schedule 1A.

The directors will remain in charge of the company both during and after the moratorium. We therefore do not consider it appropriate to include a provision in the Bill that imposes such an undefined duty of care on a supervisor. Nor do we think it right that he should have to consult employees' representatives or that nominees should be subject to the duty imposed in section 309 of the Companies Act 1985. That section, which is headed Directors to have regard to interests of employees, states: Accordingly, the duty imposed by this section on the directors is owed by them to the company (and the company alone) and is enforceable in the same way as any other fiduciary duty owed to a company by its directors. We must remember that the directors are still in charge of a company in a moratorium, and section 309 continues to apply. Therefore, they should have regard to that duty when framing a rescue plan. That is my point which, for whatever reason, my hon. Friends do not want to accept.

Mr. White

Many examples were given in Committee of employees whose directors did not act in the way outlined by the Minister. Will he undertake to ensure that, for the purposes of this Bill, that duty will be publicised clearly so that people who go into voluntary arrangements understand it?

Dr. Howells

I readily concede that successive Governments have done a bad job in making employees aware of their rights in such circumstances, but it is clear from section 309 that those rights are already enshrined in law. Far too often, trade unions do not take sufficient notice of them and employees do not know about them. I am not so worried about employees who are represented by trade unions, but about non-union, low-paid shop workers because those people do not have the confidence or the knowledge to use what is available. That is the problem. My hon. Friend the Member for Milton Keynes, North-East (Mr. White) is right to say that we have a real job to do to educate people.

Mr. Burnett

We are not talking about directors—we know that they must comply with section 309(1). I hope that the Minister will direct his attention to the fact that new clause 3 would impose on a nominee the very small burden of having to have regard to the interests of the company's employees.

Dr. Howells

I have tried already to respond to that point. I have said that it is an unnecessary burden, and I believe just that.

My hon. Friend the Member for Great Grimsby said in Committee that he was looking for a way of ensuring that employees' interests were included in the equation. He will understand that supervisors and nominees will be aware that employees are able to make application under section 7(3) or paragraph 24, and should take that right into account when performing their duties. Additionally, supervisors and nominees will be aware that if they act in such a way as to give rise to a course of action—such as in tort—they will be vulnerable to legal action, and they would have to take that into account too.

On amendment No. 3, given the supervisor's function, it would be inappropriate for him to have regularly to consult employees' representatives. However, if an employee happened also to be a creditor, the supervisor would keep him informed of progress in the same way as he would other creditors.

I think that my hon. Friend the Member for Great Grimsby referred to amendment No. 47 after dealing with new clause 3 and amendment No. 3. It is a similar amendment to one that he tabled in Committee. Like that one, I believe that amendment No. 47 is unnecessary. First, it is not necessary for any creditor or any member of the company to be able to make such an application. If he or she is not happy with the existing nominee, they can vote to change the nominee at the meeting summoned under paragraph 29 of schedule A1. That can be achieved by proposing that it be a condition of any extension of the moratorium that the nominee be replaced. I hope that the House accepts that. Alternatively, it can be proposed that the nominee be changed by amending the voluntary arrangement proposal considered by the meeting. It would be up to the meeting to pass such a proposal. We do not consider it appropriate that anyone should be able to apply to the court to change the nominee. The right contained in paragraph 28 to make application to the court to replace the nominee is designed to deal with specific circumstances.

5 pm

The hon. Member for Bournemouth, West raised an extremely important point. I have said that I see far too many cases of shysters fleecing those whom we refer to as creditors. I know that my hon. Friend the Member for Great Grimsby knows about those cases. I had one recently that received much publicity. It involved the World of Leather, where extremely dubious practices were carried on in the last few weeks of trading.

Constituents were affected throughout the country and there were some sad results. Many people did not get their money back and they did not get their three-piece suites. They are creditors—it is not only the big banks that are creditors, along with the circulating vultures, as my hon. Friend referred to them. I know of elderly and poor people who saved up for three-piece suites and did not get them. We must remember that the process is designed to protect those people, as much as it is designed to ensure fair play in every other respect. We are offering a period of respite for companies when they feel that they are in trouble. Perhaps the Bill will significantly add to that rescue culture.

The hon. Member for Bournemouth, West asked whether directors will be encouraged to shop around for a nominee until they find one who is prepared to sign the necessary statement. His intervention was tantamount to that. The likelihood is that in practice they will not have time to do that. We should bear that in mind. However, there seems no good reason why directors should not be able to test the market.

In the early days of consideration of the Bill in Committee, there was much discussion about the enormous fees that are charged by insolvency practitioners. Many allegations were made by my hon. Friend the Member for Great Grimsby and others about dubious practices concerning fee setting and levels of fees. Perhaps the Bill will go some way towards breaking that monopoly.

Mr. Butterfill

It is not that I have any concern about people shopping around to get the best fee. That is entirely admirable. I am worried that if they shop around and are repeatedly turned down because experienced professionals say that there is no hope of their acting as nominees, they will eventually find someone who for self-interest—that of earning a few quid—will say, "Yes, I'll do it." That point, which the Government have not addressed, was addressed by the Select Committee.

Dr. Howells

I shall try to convince the hon. Gentleman that we have addressed it and that we are concerned.

As the hon. Gentleman says, some nominees might be more rescue-oriented than others for many reasons, good as well as bad. We know that there is a flip side to the coin. There are some professionals who are notoriously not interested in rescues, whereas there are others who generally are. It could work both ways. Any prospective nominee should be up to the standard expected of him. There is no question about that. That goes to the point made by the hon. Member for South-West Hertfordshire (Mr. Page). I believe that they will be up to the proper standard because they will be authorised and regulated by a body recognised by the Secretary of State for that purpose. However, if needed, in the unlikely event of a director being able to pull the wool over a nominee's eyes, various remedies are available in schedule A1 to address the abuse. Not the least of those is the offence contained in paragraph 40, which provides for the punishment of those who make false representations and the like to obtain a moratorium.

Those of us who have previously been involved with the Bill are accustomed to hearing my hon. Friend the Member for Great Grimsby talk about the importance of public accountability of insolvency practitioners, and he is right to highlight that. However, in amendment No. 46, he is again talking about fees. I am glad that he wants to discuss fees, which are an important subject and one that is obviously dear to his heart—but the fact is that the Bill is not about the regulation of practitioners' fees.

At issue is the requirement on the nominee to give notice of the end of a moratorium. That requirement can arise for two reasons, among others: first, because the moratorium has come to an end without a voluntary arrangement being agreed; and, secondly, when an arrangement has taken effect following the meetings of a company and its creditors. In the first instance, the question of payment of the nominee's fees will be a matter for the company and its directors, not anyone else, to deal with. In the second instance, the nominee's fees will be a matter for the meetings to consider when voting on whether or not to accept the voluntary arrangement. What the nominee is to be paid is a matter that must be included in a voluntary arrangement, under rule 1.3 of the existing company voluntary arrangement procedure, and we intend that a similar provision should apply to the new moratorium procedure.

My hon. Friend should also take comfort from paragraph 32 of the new schedule, which sets out that, if a meeting proposes to extend the moratorium, the nominee has to inform the meeting of the costs of his monitoring activity up to that point and what he intends to do in that respect during the proposed extension. Therefore, anticipated costs will have to be approved if the moratorium is not to end. In those circumstances, I consider it to be neither necessary nor appropriate for the nominee to have to give the notice set out in amendment No. 46 regarding his fees.

My hon. Friend also desires the nominee to have to notify various individuals of any adverse court judgment or disciplinary findings by any of the Recognised Supervisory Bodies. I do not consider that to be appropriate to the Bill, which my hon. Friend described in Committee as a very modest measure. Such issues have nothing to do with a moratorium and, as I have said before, practitioner regulation is not a matter for the Bill.

The hon. Member for South-West Hertfordshire spoke to amendment No. 33, which is identical to one that he tabled in Committee. For the benefit of those who have not had a chance to read Hansard, I repeat that we do not consider it necessary to provide the nominee with the power to apply to the court for directions. The nature of the nominee's role is such that he should not be in a position in which such an application would be appropriate. Commercial and administrative decisions are for the nominee, not for the court. We do not consider that the court should be used to provide the nominee with a way in which to avoid taking decisions that are, rightly, for him, or to enable him to obtain the court's endorsement of his intended course of action.

I look to Mr. Justice Neuberger for neither direction nor support, but the hon. Member for South-West Hertfordshire is correct to say that I take a great deal of comfort from Mr. Justice Neuberger' s ruling in the case of T and D Industries plc and another, relating to a company that was the subject of an administration order.

Having made those points, I hope that my hon. Friend the Member for Great Grimsby will withdraw his amendment and that the others will not be pressed.

Mr. Mitchell

I should make a couple of points before coming to my agonising decision about whether to keep the House on tenterhooks by pressing the matter to a Division.

In answer to my hon. Friend the Member for Milton Keynes, North-East (Mr. White), may I say that I was not neglecting the big things that the Labour Government are doing: they are important and the Government are successful. What I said was that, as Back-Benchers, we have a little influence on legislation affecting the way in which companies are run, insolvencies administered and companies rescued, and we should use that opportunity to tilt the balance towards our section of society and the workers. We have only a little influence but we can do much to improve society through little changes to legislation. That seems to me to be the responsibility of the Back Bencher. We do not get much responsibility, for heaven's sake; we should use what we have.

I did not want to take the question from the hon. Member for Bournemouth, West (Mr. Butterfill) because I did not want to go down that legalistic path. If the hon. Gentleman understood me to say that he represented vested interests or, worse still, that he was one of the vultures I was criticising, I correct that impression and apologise. I was not saying that.

The hon. Gentleman was asserting the primacy of company directors by pointing out their legal responsibilities—to the detriment of the workers, I thought. My sole point was about the need to swing the balance towards the workers.

Mr. Butterfill

rose—

Mr. Mitchell

No, I will not give way.

I make no correction on the vulture culture. In too many cases the interests of the banks is predominant, and in the scrabble over the money, the banks have enormous power. I know that there are tear-jerking pictures of people all over the country who are owed small sums by fraudulent companies, but that is not what we are discussing.

Through the Bill, we are trying to instil the rescue culture, to keep companies going. The power of the vultures to close companies down and to call in debt, in the unpredictable, lurching way in which banks do that, needs to be checked. All that I am trying to do is to tilt the balance towards the workers. After all, we are the Labour party still, I think. We are a party of stakeholders, and voice the interests of stakeholders. We work in a European context, and workers' rights are properly advanced by all the proposals coming out of Europe—something that I strongly support. We have an opportunity, so why are we not doing what we can and should do?

The trade unionists to whom I have spoken and with whom I formulated the amendments think that we will do so, but I am disappointed to find that my hon. Friend the Minister does not consider that necessary. I do not accept the argument that workers can apply to the courts. That is not part of their repertoire or expertise, and it should not be necessary if we write their primacy into legislation. I am not asking for the interests of the employees alone to be taken into consideration. I am asking for them to be taken into consideration, but not as the predominant influence.

Dr. Howells

I thank my hon. Friend for giving way. I am sure that he did not mean that it is not for workers or trade unions to take these matters to court. Many of the great advances that have been made by trade unions and workers have been made in court, as a result of brilliant advocacy. Even I am old enough to remember some of it, and I have witnessed it first-hand. I am sure that my hon. Friend does not mean what he just said.

Mr. Mitchell

I wish that I could speak Welsh, rather than the simple verities of Yorkshire—pure language of the people of the north. I was not saying that at all. I said that applying to the courts was not part of workers' expertise. Certainly, they need backing and support from the trade unions, and the trade unions provide it. We can encourage them to provide more of it. If the rights of workers have been trampled on, it is the responsibility of the trade unions to help them to go to court, but in some cases workers are not members of trade unions. The courts are an uncertain way of making progress, and we could make progress in the matter by simply writing into the Bill the requirement of a duty of care to the workers. That is all I ask.

I do not see why my hon. Friend is so adamant. I know that he has received advice to the effect that that would be a nuisance, would complicate matters and might lead to unforeseen consequences. I believe that it would set the tone for the entire procedure. My hon. Friend has turned down the idea and I am disappointed by his reply. It seems to me that as he is the Minister of social and corporate responsibility and as such issues are raised in that context, appropriate provisions should be included in the Bill.

5.15 pm

I was excited by the tumultuous support that I received from the other side of the House—Conservative Members are clamouring to support my proposal—but it puts me in an embarrassing situation. I would like to lead the Liberals and the Conservatives to the barricades and shout, "What about the workers?"

Mr. Page

After the hon. Gentleman's dramatic words at the start of our debate, is he now saying that he will not press the new clause to a vote and will back off? Surely not!

Mr. Mitchell

When I used the word "tumultuous" I was referring not to the hon. Gentleman's speech, but to the widespread support I received from Opposition Members. I was delighted by their support—that shows that they have learned something after failing the workers for 18 years. I am disappointed by the lack of support among Labour Members, especially from the Minister, and I am now in an embarrassing position. Neither of my two co-authors of the new clause could be present for the debate. In light of that, I give up. I did not push the matter in Committee because of a lack of killer instinct. With a feeling of sad impotence, I beg to ask leave to withdraw the motion.

Hon. Members

No.

Question put, That the clause be read a Second time:—

The House divided: Ayes 42, Noes 280.

Division No. 338] [5.16 pm
AYES
Atkinson, Peter (Hexham) Kennedy, Rt Hon Charles (Ross Skye & Inverness W)
Beggs, Roy
Beith, Rt Hon A J Kirkwood, Archy
Boswell, Tim Lewis, Dr Julian (New Forest E)
Bottomley, Peter (Worthing W) Lilley, Rt Hon Peter
Bottomley, Rt Hon Mrs Virginia Loughton, Tim
Burnett, John McIntosh, Miss Anne
Burstow, Paul Maclean, Rt Hon David
Campbell, Rt Hon Menzies (NE Fife) Major, Rt Hon John
Mitchell, Austin
Chapman, Sir Sydney (Chipping Barnet) Morgan, Alasdair (Galloway)
Page, Richard
Pickles, Eric
Chope, Christopher Rendel, David
Clifton-Brown, Geoffrey Russell, Bob (Colchester)
Collins, Tim Shephard, Rt Hon Mrs Gillian
Davey, Edward (Kingston) Spring, Richard
Davis, Rt Hon David (Haltemprice) Syms, Robert
Emery, Rt Hon Sir Peter Taylor, Rt Hon John D (Strangford)
Fearn, Ronnie Welsh, Andrew
Forth, Rt Hon Eric Winterton, Mrs Ann (Congleton)
George, Andrew (St Ives)
Gray, James Tellers for the Ayes:
Harvey, Nick Mr. John Butterfill and
Heath, David (Somerton & Frome) Mr. Brian Cotter.
NOES
Adams, Mrs Irene (Paisley N) Butler, Mrs Christine
Ainger, Nick Byers, Rt Hon Stephen
Ainsworth, Robert (Cov'try NE) Caplin, Ivor
Allen, Graham Casale, Roger
Anderson, Donald (Swansea E) Caton, Martin
Atkins, Charlotte Cawsey, Ian
Austin, John Clapham, Michael
Banks, Tony Clark, Rt Hon Dr David (S Shields)
Barnes, Harry Clarke, Eric (Midlothian)
Battle, John Clelland, David
Bayley, Hugh Coaker, Vernon
Beard, Nigel Coleman, Iain
Beckett, Rt Hon Mrs Margaret Colman, Tony
Begg, Miss Anne Connarty, Michael
Bell, Martin (Tatton) Cook, Frank (Stockton N)
Bell, Stuart (Middlesbrough) Cooper, Yvette
Bennett, Andrew F Corbyn, Jeremy
Bermingham, Gerald Corston, Jean
Berry, Roger Cox, Tom
Blackman, Liz Cryer, John (Hornchurch)
Boateng, Rt Hon Paul Cunningham, Jim (Cov'try S)
Bradley, Keith (Withington) Darling, Rt Hon Alistair
Bradshaw, Ben Davey, Valerie (Bristol W)
Brinton, Mrs Helen Davidson, Ian
Browne, Desmond Davies, Rt Hon Denzil (Llanelli)
Buck, Ms Karen Davis, Rt Hon Terry (B'ham Hodge H)
Burden, Richard
Dawson, Hilton MacShane, Denis
Dismore, Andrew Mactaggart, Fiona
Dobson, Rt Hon Frank McWalter, Tony
Dowd, Jim McWilliam, John
Drown, Ms Julia Mahon, Mrs Alice
Eagle, Angela (Wallasey) Mallaber, Judy
Eagle, Maria (L'pool Garston) Marsden, Gordon (Blackpool S)
Ennis, Jeff Marsden, Paul (Shrewsbury)
Etherington, Bill Marshall, David (Shettleston)
Field, Rt Hon Frank Marshall-Andrews, Robert
Fitzpatrick, Jim Martlew, Eric
Flint, Caroline Maxton, John
Flynn, Paul Meacher, Rt Hon Michael
Foster, Michael Jabez (Hastings) Meale, Alan
Galloway, George Merron, Gillian
Gapes, Mike Michael, Rt Hon Alun
Gardiner, Barry Michie, Bill (Shef'ld Heeley)
Gerrard, Neil Miller, Andrew
Gibson, Dr Ian Moffatt, Laura
Godman, Dr Norman A Moran, Ms Margaret
Golding, Mrs Llin Mountford, Kali
Gordon, Mrs Eileen Murphy, Jim (Eastwood)
Griffiths, Jane (Reading E) Naysmith, Dr Doug
Griffiths, Nigel (Edinburgh S) O'Brien, Bill (Normanton)
Grogan, John O'Hara, Eddie
Hall, Patrick (Bedford) Olner, Bill
Hamilton, Fabian (Leeds NE) O'Neill, Martin
Hanson, David Osborne, Ms Sandra
Healey, John Palmer, Dr Nick
Henderson, Ivan (Harwich) Pearson, Ian
Heppell, John Perham, Ms Linda
Hesford, Stephen Pike, Peter L
Hewitt, Ms Patricia Plaskitt, James
Hill, Keith Pollard, Kerry
Hinchliffe, David Pope, Greg
Hodge, Ms Margaret Pound, Stephen
Hope, Phil Prentice, Ms Bridget (Lewisham E)
Howells, Dr Kim Prentice, Gordon (Pendle)
Hughes, Kevin (Doncaster N) Quinn, Lawrie
Hurst, Alan Radice, Rt Hon Giles
Hutton, John Rammell, Bill
Illsley, Eric Raynsford, Nick
Jackson, Helen (Hillsborough) Reed, Andrew (Loughborough)
Jenkins, Brian Reid, Rt Hon Dr John (Hamilton N)
Jones, Mrs Fiona (Newark) Roche, Mrs Barbara
Jones, Ms Jenny (Wolverh'ton SW) Rogers, Allan
Rooker, Rt Hon Jeff
Jones, Dr Lynne (Selly Oak) Roy, Frank
Jones, Martyn (Clwyd S) Ruane, Chris
Keeble, Ms Sally Ruddock, Joan
Keen, Alan (Feltham & Heston) Salter, Martin
Keen, Ann (Brentford & Isleworth) Sarwar, Mohammad
Kemp, Fraser Sedgemore, Brian
Kennedy, Jane (Wavertree) Sheldon, Rt Hon Robert
Khabra, Piara S Skinner, Dennis
King, Ms Oona (Bethnal Green) Smith, Jacqui (Redditch)
Kumar, Dr Ashok Smith, John (Glamorgan)
Ladyman, Dr Stephen Smith, Llew (Blaenau Gwent)
Lawrence, Mrs Jackie Soley, Clive
Laxton, Bob Southworth, Ms Helen
Leslie, Christopher Spellar, John
Levitt, Tom Squire, Ms Rachel
Lewis, Ivan (Bury S) Starkey, Dr Phyllis
Linton, Martin Stevenson, George
Lloyd, Tony (Manchester C) Stoate, Dr Howard
Lock, David Strang, Rt Hon Dr Gavin
Love, Andrew Taylor, Rt Hon Mrs Ann (Dewsbury)
McAvoy, Thomas
McCabe, Steve Taylor, David (NW Leics)
McCafferty, Ms Chris Temple-Morris, Peter
McDonagh, Siobhain Thomas, Gareth (Clwyd W)
Macdonald, Calum Thomas, Gareth R (Harrow W)
McDonnell, John Timms, Stephen
McIsaac, Shona Touhig, Don
Mackinlay, Andrew Trickett, Jon
McNulty, Tony Twigg, Derek (Halton)
Tynan, Bill Winnick, David
Vis, Dr Rudi Winterton, Ms Rosie (Doncaster C)
Walley, Ms Joan Wood, Mike
Ward, Ms Claire Wright, Anthony D (Gt Yarmouth)
Wareing, Robert N Wright, Tony (Cannock)
White, Brian Wyatt, Derek
Whitehead, Dr Alan
Williams, Rt Hon Alan (Swansea W) Tellers for the Noes:
Mrs. Anne McGuire and
Wills, Michael Mr. Gerry Sutcliffe.

Question accordingly negatived.

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