HL Deb 10 November 1983 vol 444 cc953-4
Baroness Burton of Coventry

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they accept the view of the Cork Committee on Insolvency Law and Practice that its proposals on "wrongful trading" are of the greatest importance and should be implemented as a matter of urgent necessity.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)

My Lords, Her Majesty's Government recognise the value of the Insolvency Law Review Committee's wrongful trading proposals. These proposals, however, are only part of the solution to the problem of delinquent and irresponsible directors. It is the Government's view that such an important subject should not be dealt with piecemeal but should wait for the insolvency law reform legislation on which the Department of Trade and Industry expects to issue a White Paper early in the New Year.

Baroness Burton of Coventry

My Lords, if I might pursue the Minister a little more on this question of urgency, does he recall that in another place in July and August the Minister for Consumer Affairs gave two Written Answers stating that he thought that there were certain abuses in this area of wrongful trading which required urgent attention? Does he also recall that the Minister went on to say that he was considering taking up the matter of the Cork recommendation for the introduction of civil liability in these matters? Finally, bearing that background in mind, might I ask the noble Lord whether he has any views on Chapter 44 of the Cork Report which in paragraph 1806 contains a draft clause on this matter, and whether the Government would consider that that might be dealt with separately?

Lord Belstead

My Lords, I recognise that both the Cork Report and the noble Baroness, very rightly, are extremely concerned particularly about the wrongful trading question. I think that we must bear in mind that the recommendations of the report which might appear to be most suited for early treatment—including this one—are inter-related and their effects are often interdependent. We have tried to give urgent attention to the report which, after all, came out only last year. My right honourable friend the former Secretary of State for Trade and Industry gave an undertaking that there will be a White Paper and legislation to follow as soon as possible. We intend to try to stick to that.

Baroness Burton of Coventry

My Lords, I know that the noble Lord wishes to be helpful, but might I ask him if he is aware that the experts in the consumer organisations—and there are some good experts among them—consider that this particular matter could be dealt with separately instead of waiting for the whole of the Cork Report? Might I ask him something arising from last week? If he refers to the Official Report of this House for last Thursday he will note that I asked whether we could be told what aspects of the Cork Report the White Paper which was promised early in the new year would cover. I was not able to be given an answer. Could the noble Lord write to me about that so that the matter can be cleared up?

Lord Belstead

My Lords, we ought to try to be more helpful to the noble Baroness. I must admit that I am not in a position today on the Floor of the House to be more helpful because the report is such an enormous one and I do not think that we yet genuinely know its exact scope. But I should like to write to the noble Baroness and try to help over that matter. On the first point which the noble Baroness raises, all that I can say is that, although there may be those very well versed in these matters who believe that one could pull out certain aspects of the report which, I agree, need to be looked at with as much urgency as possible, I think that I really must rest on my answer to the first supplementary question—which is that one finds that those recommendations which might be most suitable for early treatment are inter-related and their effects are interdependent.

Lord Mishcon

My Lords, I could not hope to equal the persistence of the noble Baroness who has just spoken; but may I press the noble Lord the Minister on one aspect? Will he agree that, because of the complexity of this report, it is unlikely that legislation on insolvency matter will take place at anything like an early date following on the White Paper because of the number of consultations that will have to be involved? Will he not agree therefore that this question of wrongful trading which is so much hurting our little people in commerce might be legislated upon separately and then to carry that through into any other legislation which may be enacted a very long time afterwards?

Lord Belstead

My Lords, I recognise the expertise of the noble Lord and his concern in this matter; but I think that even he, knowing a great deal more than I know, would wish to see what is in the White Paper—which ought to be available in the very near future—before reaching any conclusions on that supplementary question.

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