§ 7.54 p.m.
§ Lord Lyell rose to move. That the regulations laid before the House on 24th November 1982 be approved.
§ The noble Lord said: My Lords. I beg to move the Motion in my name on the Order Paper. The purpose of the regulations is to make minor amendments to the Company and Business Names Regulations 1981. to give effect to a point that was raised by the noble Viscount, Lord Hanworth, and the noble Earl, Lord Halsbury, almost exactly a year ago. I am pleased to report that the Joint Committee on Statutory Instruments has no comments to make on the regulations before us tonight.
§ Before the 1981 Companies Act was considered, the Secretary of State had wide discretion to reject any company name that was considered to be undesirable. The 1981 Act abolished that discretion, but included powers to prescribe, by regulations, a list of sensitive words and expressions which may not be used as part of a company or business name without the prior approval of the Secretary of State. The first list of such words was introduced by the 1981 regulations.
§ Your Lordships may recall that the noble Viscount, Lord Hanworth, and the noble Earl. Lord Halsbury, questioned the omission from the regulations of certain words, including "chemist", "chemistry", and related words. I am very grateful to the noble Lords for drawing attention to those omissions, and, after further consideration and consultation with the Royal Society of Chemistry and the Pharmaceutical Society of Great Britain, the Government have agreed to the addition of the words "chemist" and "chemistry" to the list of words requiring approval by the Secretary of State.
§ I should at this stage answer the further query raised by the noble Viscount, Lord Hanworth, about why such words as "pharmacy" and "pharmaceutical" were also omitted from the regulations. Use of those words in company and business names is covered by the Medicines Act 1968, and it is not appropriate to duplicate this control in legislation relating to companies. However, so far as the words "chemist" and "chemistry" are concerned, it has now been agreed that they are not fully covered by the Medicines Act, and the present regulations correct the omission.
§ The second amendment covered by the regulations 789 before us provides for inclusion of the words "university" and "polytechnic". That is at the request of the Secretary of State for Education and Science, and it will enable control to be exercised where use of the words might imply association with a recognised university or a designated polytechnic. But there may be cases in which the use of the words in company or business names may be unobjectionable, as, for example, if a hotel were to be called the "University Arms".
§ A further minor amendment is included to correct an error in the wording of the original regulations. The relevant body whose opinion is to be sought by persons intending to use the word "apothecary" was given as the "Worshipful Company of Apothecaries", but that should read the "Worshipful Society of Apothecaries of London".
§ My Lords, that said, I beg to move.
§ Moved. That the regulations laid before the House on 24th November 1982 be approved.—(Lord Lyell.)
Lord Bruce of Donington
My Lords, we on this side of the House do not propose to dissent in any way from the content of the regulations that have been very adequately explained by the noble Lord. They add to the schedule of the regulations of last year certain words for the use of which companies or firms must obtain the consent of either the Minister of the appropriate department (the name of which appears in the second column of the schedule) or the designated body. I do not think that the addition to the list of the words "chemist", "chemistry", "polytechnic" and "university" will cause any particular tremors of anxiety on this side, or indeed anywhere else in the House.
However, since we are discussing business names, I must ask, what is the purpose and what is the end that is in mind in this connection? What would happen if instructions were disobeyed? Let us say that, notwithstanding the regulations, a firm or company decides to use certain words. What means are there of enforcement of the regulations? What inspections are there? What penalties are attached to a breach?
Your Lordships will recall that during the passage of the Companies Act 1981 some of us on all sides of the House ventured to look somewhat askance at all the provisions of the business names section of the Act. It will be recalled that there were objections from all parts of the House, in particular from those noble Lords on the Benches opposite who had any connection with, or responsibility in, business. Noble Lords simply did not see the sense of abolishing the old business names registry. If the noble Lord peruses once again the columns of the debates that took place in your Lordships' House on this particular section, he will immediately become aware of the miserable inadequacy of the replies that were received from the Government Benches on this subject. There really was no reason given ultimately at all.
The matter becomes of some importance because the business name, whether or not it is approved and whether or not it obtains the consent of the Minister or of the various other bodies listed in the second column of the original schedule, becomes the name that is used by the company—and the noble Lord sets great store 790 by this. But the noble Lord will recall that under Section 29 of the Companies Act firms or companies are required to disclose certain particulars to any-interested party who wants to obtain them. Your Lordships will recall that, under the old business names registry, it was always possible (although the Government said at the time that this was only 50 per cent. to 60 per cent. effective) to find out the particulars which one sought. On this side of the House we warned him at the time that, if the registry was abolished, things would become very difficult.
Now, what has happened since the passage of the Act? The fact of the matter is that the provisions of section 29, which require any firm or company to give a written response to inquiries from any interested party—in the case of a partnership, the names of the partners and so on, and the various other particulars with which the noble Lord is quite familiar—have been virtually disregarded; and I propose to offer the noble Lord proof of this. I should inform the House that I gave his noble friend the Minister of State notice, albeit unofficially, but again confirmed to his private secretary on Monday and Tuesday, that I was going to raise this particular question. I had no response from the noble Lord, possibly due to inadvertence, as to whether he was prepared to deal with if, and so I propose to read to the House, with your Lordships' indulgence, because it is a specific case—and the House loves specific cases as against generalities—exactly what has happened.
I read from a note that was sent to me by a firm called TS Association and Company Limited, who are very prominent management consultants from Oxford. They act on behalf of the following firms: Burmah-Castrol, Total Oil. Conoco, Avis Rent-a-Car and Securicor. among others. Acting on behalf of these clients, they sent inquiries in accordance with Section 29 of the Act, asking to be advised of the particulars that are required by the Act. This is what occurred. I quote from their letter.Since last February we advised our clients that they were empowered under the Act to ask for the full name(s) and addresses of the owners of firms seeking credit. Several clients authorised us to act for them in this matter. To date we have written 128 letters on the subject none of which have been answered. A broad poll amongst our clients shows that certainly several hundred similar letters have been sent out but the answer rate appears to have been less than 10 per cent.My Lords, I quote the next part with diffidence and accept no particular responsibility for it; but it is an expression of view of this firm. They continue:The new man at the Department of Trade who replaced Reginald Eyre has not been able to comment and the Registrar of Companies is not interested. The question is where does industry and commerce go from here? Does the new Companies Act have teeth? If so. what remedies are there available against firms which do not comply with Section 29".I am well apprised, having read the previous debates, of the Government's attitude on this matter. They will say immediately, "Of course, the old Register of Business Names was not more effective, anyway, so nothing has been lost".
That appears to be a little odd because, from further inquiries, it appears that the London Chamber of Commerce and Industry has set up a special business registry and search department in conjunction with 791 other chambers in Birmingham, Cardiff and Merseyside and that,this new body has taken possession of the files of the old Registry of Business Names covering all registrations from 1st January 1970 to 26th February 1982.The letter continues:It would be interesting to know what fee was paid for these records but the main point is that the London Chamber of Commerce are offering a search service based on these old files at a charge of £10 or £5 for a no trace.If it is the case that the old registry was no good and the thing did not work, it is a little surprising that firms are now prepared to pay £10 for the use of the records that were formerly in the charge of this department. So that that particular answer—"Well, the position is now no worse than it was before"—simply does not ride.
I have a straight question to ask the noble Lord and it will be asked increasingly by all business firms and industrialists that seek to obtain the particulars that they require for the purposes of their own businesses in accordance with Section 29 of the Companies Act 1981. The question I have to ask is this. Are the Government going to enforce it or not? If they are going to enforce it, by what means do they propose to enforce it? It is no answer for a responsible Government that is charged with the enforcement of the law—and law and order, I seem to remember, was a very loud cry from the party opposite—to say, "Well, it is no worse than it was before". Otherwise, that brings the law into disrepute. So I do have to ask—and I know the noble Lord has no personal responsibility for it—just what the Government are going to do about it. Industry and commerce will await with interest the answer that is given.
§ 8.8 p.m.
§ Lord Lloyd of Kilgerran
My Lords, I apologise to the House for not being present when the noble Lord the Minister introduced this regulation. I was occupied some distance away from the House on intellectual property matters, somewhat associated with trade marks, and not very different from business names, and I am very sorry that I was late in arriving. As the noble Lord realises, I spoke at considerable length in the course of the debates on the Companies Act 1981 and I endeavoured to do my best to persuade the Government, with little success, that the business names registry should be kept on. I do not think that at this time of the night it will be proper for me to job backwards into the history of the way in which, as I still feel, the Government introduced something which is somewhat of a disaster for large numbers of business people who want to continue with that registry.
I agree with the noble Lord, Lord Bruce of Donington, but perhaps not quite so strenuously, that some branches of industry and some firms of lawyers have not quite settled down to the new régime which has been introduced by the Government. I should like to ask also, if it is relevant on this occasion, whether the Government are going to try to enforce Section 29, which is supposed to be a substitute for what I thought was to be a far more practical and useful business names registry.
792 I welcome these regulations and I think that they show a certain amount of progress. In particular, I should like to make reference to paragraph 3 of the regulations. That assists certain business firms in that it allows those firms which were in being prior to 1st January 1983 to continue as before. I do not propose to enter into any effort of jobbing backwards in this matter but I welcome these regulations, such as they are.
§ Viscount Hanworth
My Lords, obviously I am very grateful for this instrument. The problem which I can describe quite briefly is that the Royal Society of Chemistry, which is the chartered professional body for chemists, and the Pharmaceutical Society of Great Britain, which is the chartered professional body for pharmacists, both wish to ensure that the confusion about the meaning of the word "chemist" is reduced and eventually eliminated. We are one of the very few countries where colloquially "chemist" means both the person working in chemistry and the person working in pharmacy. Anyone who goes abroad will know that in most countries there is this clear difference.
While welcoming what the Government have done as a step in this direction, I hope that they will consider what other steps may be taken. Not for one moment would one suggest tearing down the name "chemist" on shop fronts, but one might be able to do this gradually over 10 years, by possibly ensuring that on official correspondence the local chemist refers to himself as a pharmacist. Gradually this style may get adopted. I ask the Government to consider what else they can do to help.
§ 8.12 p.m.
§ Lord Lyell
My Lords, we are very grateful for the interest that has been shown in these regulations this evening, and indeed for the robust comments of the noble Lord, Lord Bruce, and the helpful comments from the noble Lord, Lord Lloyd, and the noble Viscount. Lord Hanworth. I am afraid that I am not able to answer the question which I think the noble Lord, Lord Bruce, asked me about four times. I could stress to him that the remedies are as set out in Section 29 of the Companies Act 1981. I stress to him that firms who do not reply to inquiries as detailed by the noble Lord about the names which concern them, or indeed the persons with whom they do business, are guilty of an offence. The fine, I am informed, is £200. I am also informed that anyone can prosecute. That is certainly an effective remedy.
Your Lordships will note from Section 28(7) that the fine is £200 on a summary conviction for using sensitive words without approval; that is, a breach of the regulations that are before us this evening. If there is any further breach, there is a daily fine for continued contravention. We believe in enforcing the regulations which back up Section 28. I am sure that your Lordships will agree—and the noble Lord, Lord Lloyd, put his finger on it—that we simply cannot go backwards to the lengthy and complicated arguments that we had in discussing this problem when we were dealing with the Companies Act in 1981. I was interested in Lord Bruce's comments—I think I quote him accurately—when he said it was always possible to 793 find the particulars sought. Well, the noble Lord gave a percentage of success, and his comments may go some way towards proving whether or not the figures are accurate as to the success of finding out the relevant names that he found under the old system.
I am sure that he and those who were interested in the 1981 Companies Act when it was before your Lordships will agree that we argued this at great length and in great detail then. I believe that your Lordships will agree that tonight, when we are considering these simple amending regulations, is not the occasion to go into these lengthy arguments once again. I shall undertake to bring the comments of your Lordships on this matter—and indeed on the other matters raised by the noble Viscount, Lord Hanworth—to the notice of my noble friend. I think that the noble Lord, Lord Bruce, made one minor error: my noble friend is the Secretary of State and no longer the Minister of State. Nevertheless. I shall bring your Lordships' comments to his notice. I hope that your Lordships will agree that these regulations are useful, and for that reason I hope your Lordships will agree to this Motion.
§ On Question, Motion agreed to.