§ 3. Mr. Michael Jack (Fylde)
What measures can be taken against company directors who persistently default in their financial and legal responsibilities. 
§ The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson)
A number of measures can be taken, including investigating the company and disqualifying and/or prosecuting the company's directors.
§ Mr. Jack
I am grateful to the Minister for her answer. A constituent of mine has been the victim of a serial liquidator, as has Customs and Excise. During the past few years, the individual concerned has put five companies into liquidation, leaving my constituent out of pocket by some £20,000 and Customs by £38,000, yet nothing seems to have been done so far to stop that individual continually walking away from his obligations.
§ Mr. Jack
I am advised that, if I do as my hon. Friend suggests, the individual could well go to ground, thus making it more difficult for the authorities to get hold of him. May I ask the Minister, first, what powers can be deployed to deal with such people and, secondly, whether, if I furnish her with a file of the cases that I have in mind, she will give me an undertaking to investigate them with all speed?
§ Miss Johnson
I take the right hon. Gentleman's comments very seriously. Such cases need to be looked at, and I will, of course, ask the appropriate authorities to look into any details that he can furnish me with so that the matter can be dealt with appropriately.
In relation to the further issue that the right hon. Gentleman raises about the forms of redress and penalty that can be used, there are a number of different ways to tackle such issues. Obviously, directors can be disqualified as being unfit—indeed, 12,000 have been since the Insolvency Act 1986 was put in place, and in the year to March 2002, 1,750 directors have been disqualified. Companies can also be wound up and other measures can be taken, as I said earlier.
§ Mr. Martin O'Neill (Ochil)
I hear what my hon. Friend says, but will she also bear it in mind that one of the problems that small businesses have faced in recent years has been the culture of blame attached to insolvency? The Government have been trying to change that culture so that businesses and those who finance them are prepared to take a chance on people, so that we get a better balance. Always focusing on the defaulters when businesses go wrong is to get the balance wrong. The focus should be on trying to help people back into business. Those who deserve punishment should get it, but the emphasis must be on supporting those businesses that get into difficulty.
§ Miss Johnson
I completely agree with my hon. Friend on this issue; it is a matter of striking the right balance. Indeed, that is what we shall do through the current Enterprise Bill, which will be considered on Report later today. In fact, we are considering making a distinction between bankruptcy for those who are not reckless and those subject to bankruptcy restriction orders, which can last for between two and 15 years and will recognise the reckless nature of bankruptcy where that occurs. In that way, a distinction can be made between those who have unwittingly become bankrupt and should be given a fair chance to start again without stigmatisation and those who rightly should be stigmatised and kept from running companies because of their previous track records.
§ Mr. Nigel Waterson (Eastbourne)
Does not the Minister agree that the Government's proposals in the 986 Enterprise Bill to make bankruptcy easier, to remove the stigma from it and dramatically to reduce the scope for investigating bankruptcies will make it easier for rogues or well-intentioned incompetents to leave a trail of financial wreckage in their wake?
§ Miss Johnson
That is absolute nonsense, for the reasons that I have given in answering my hon. Friend the Member for Ochil (Mr. O'Neill). The hon. Gentleman misses the point: there are penalties of between two and 15 years under bankruptcy restriction orders. Indeed, in relation to the remarks made by the right hon. Member for Fylde (Mr. Jack), the previous record of bankrupts will be taken into consideration by the courts in looking at bankruptcy restriction orders, so serial bankrupts will be very much an issue for those in the courts who consider imposing bankruptcy restriction orders and the very serious penalties that they involve.