Insolvency Bill [H.L.] (Hansard, 23 October 1985)

HL Deb 23 October 1985 vol 467 cc1093-169 1093

§ 3.14 p.m.

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)
My Lords, I beg to move that the Commons amendments be now considered.

§ Moved, That the Commons amendments be now considered.—(Lord Lucas of Chilworth.)

Lord Bruce of Donington
My Lords, I rise in somewhat unprecedented circumstances. The House is required to consider the amendments that have been passed by another place to this Bill, together with a number of amendments to those amendments which 1094 have been put down by the Government, and a small but modest number which have been put down by myself on behalf of those who sit behind me. I said that the circumstances were unprecedented. We are required this afternoon to consider some 569 amendments, among which are 46 new clauses and quite substantial additions to and subtractions from the Bill as it left your Lordships' House. The sheer volume of what we have to consider may be gathered by those noble Lords who have a copy of the Marshalled List. It runs to some 114 pages. Even before the subsequent Government amendments to the Commons amendments were put down, it amounted to some 95 pages.
The original Bill as presented to your Lordships' House was 95 pages, so what we are considering in volume—and I am well aware of the number of consequential amendments—is roughly one half of the size of the original Bill presented to your Lordships' House. I cannot believe that this House can consider adequately amendments of this scale of importance, size and detail within the time restrictions that we have been given.
When I first saw the amendments that came from the Commons—some 95 of them—I gave a rough estimate of the time that I thought would be required to give them the consideration and study which Parliament has increasingly grown to expect from this House. I remain of the opinion that some four days should have been allowed.
Had four days been allowed, I am bound to say that such a course would have been politically attractive. With our knowledge of the Government's timetable, it was clear to us that within the constraints of the existing parliamentary Session four days could not be given, and it might have run the risk of disrupting the Government's legislative programme. I repeat that that course was politically attractive.
But at the same time—and I am bound to take account of this—we might have lost this Bill altogether. There are two views about that. Many of the bodies interested in this vital, if non-controversial, Bill would be most reluctant to lose the improvements already incorporated in it, notwithstanding its many shortcomings to which I may later have to refer. The Confederation of British Industry and most of the professions would be reluctant to lose the Bill on that account. Then, of course, there is the non-party nature of the Bill. I speak within the political perceptions of many noble Lords who know how difficult it is to arouse interest in their respective parties on Bills which are quite non-political and arouse no party passions. Indeed, this is one of the characteristics of this Bill.
At a later stage, through the kindness of the Government Chief Whip, we were offered as an alternative an extra Friday on which to discuss this Bill. I came to the conclusion, and so advised my colleagues, that that would give us the worst of both worlds. It would be too short to give adequate consideration to the Bill and it would be too long otherwise. The Government have some courses open to them.
The first purpose of my intervention is to ask the Government a question in view of all the circumstances and on the assumption that the 1095 amendments that are put forward go through and are incorporated in the Bill—and in this connection we are most grateful to the Government for having published as Bill No. 240 a Bill that does show the result on the assumption that all the amendments are put into operation. I ask the Government whether they would withdraw the Bill and whether they would introduce it again in the new Session so that during the interval a comprehensive study could be made as to how the Bill could be better understood, its provisions better operated and better enforced.
I do not think there would be very much difficulty if that course were adopted, because the main principle and thrust, the balance of interest that the Government have contrived to comprise within the Bill, are already settled and there are no matters of controversy between us. But it would give an opportunity for the Bill to be further studied in its final form. The Bill has had over 1,000 amendments made to it since it first came to this House and further suggestions could be made to the Government to (as we loosely say) lick it into shape.
The House itself has a reputation as a revising Chamber. One is quite sure that after a comparatively short time in this House revision of this Bill would not be difficult to do. In particular, the operational nature of the Bill is important. The present position under Clause 236 of the new Bill is that the Bill can be brought in by stages. I speak after consultation with members of the legal profession and members of other professions. I am advised that this will be most difficult to do because of the interlocking nature of the phraseology used in various parts of the Bill. In fact, in the view of those best qualified to say (I am not a lawyer) it is going to be very difficult to activate separate parts of the Bill without introducing special amending legislation.
The other thing which has to be borne in mind in this connection is that so much of the Bill is spattered with references to rules. These have still to be formulated on the basis of a Bill which, if we pass it today, is going to be most difficult to understand. Moreover, there is the third possibility that affects its operation. Your Lordships will be aware of the steps taken by the Minister for Employment to ease the burdens on business, small businesses in particular. He will be aware that some of these affect the accounting provisions.
On my reading of the position, it is quite likely that there will be a conflict between the very strict accounting regulations reflected in this Bill and some of the actions that may be taken, or may be contemplated, by the Minister for Employment. As a consequence, at present there is uncertainty as to the future of the Bill, an uncertainty which your Lordships will have noticed is reflected in the columns of the Financial Times today.
In order to clarify some of the uncertainties, I want to ask the noble Lord three questions. First of all, by what date do the Government expect the Bill to be in full operation, bearing in mind that it is nine years since the Cork Committee was first appointed? Secondly, is an amending Bill to be introduced? If so, when? Thirdly, is it intended to bring into operation those parts of the Bill dealing with the appointment, 1096 role and powers of administrators? There are rumours—they may be entirely baseless but I am bound to give them articulation—that the Government do not intend to proceed with the administrator part of the Bill. In this, I may be entirely wrong.
My second point in raising this matter is the precedent for the future. Can we have an undertaking—and I am now looking more especially to the noble Viscount the Leader of the House, for whom I have a profound respect—that this compression of our deliberations today will not act as a precedent in any way, and will not be cited as such in the future? I know that perhaps the Government may reply that the reason why they have felt constrained to compress our proceedings today is precisely because the Bill is non-controversial. In my respectful submission, Bills, whether they are controversial or not, should be considered by your Lordships' House on the basis of their merits, and on their merits alone, whatever party passions may be roused. I think the House is entitled to an assurance from the noble Viscount the Leader of the House that what happens today in the compression of our deliberations will not be taken as a precedent for the future.

§ Lord Diamond
My Lords, I do not want to say anything about the content of the Bill or about the date on which it may be brought into effect. But I do want to draw the attention of your Lordships to the fact that once more we are back in the familiar position, which we have so often traversed in previous Sessions, of having much too much to do at this point in the Session to do it properly and up to the standard of your Lordships' work. I am bound to draw this point to the attention of your Lordships again because, fortunately, the proposal we are considering, that we should now consider amendments, comes immediately after two proposals, which your Lordships have accepted without any dissent whatsoever from the noble Lord the Chairman of Committees, to enable Private Business to be dealt with, quite adequately and according to precedent (and without too much trouble, according to precedent), partly in the Session in which it started and partly in a subsequent Session.
Therefore, I am bound to draw the attention of the House to the question whether we ought not to give further consideration to the possibility of adapting that procedure for Private Bills to Public Bills, so that when we are in this difficulty again we can give full and proper consideration to the final stages of a Bill, without having to go through all the previous stages once more, by considering the final stages properly and fully in a subsequent Session.
May I remind your Lordships that one of the predecessors of the present noble Lord the Chairman of Committees was himself, after his experience in that office, in favour of this very procedure. I am suggesting nothing new or revolutionary, but a method of alleviating the difficulty in which we find ourselves time and time again.

§ 3.30 p.m.

§ Lord Denning
My Lords, may I say a word on this Bill? First, as to its importance, the last Act dealing 1097 with insolvency was the Bankruptcy Act 1914, although there were some subsequent Companies Acts. Since then, the subject has become far more complicated in business and in other ways. Our world is different. We need a new, comprehensive Act dealing with insolvency. The attempt has very rightly been made. In 1977 Sir Kenneth Cork and his committee entered upon a review of the insolvency law. They sat for five years and heard the most expert evidence. It is the most technical subject you can imagine. Both lawyers and accountants hate it. Most of them know nothing about it. On the other hand, it is most important. Sir Kenneth Cork and his committee, after five years, produced an excellent report with many recommendations. The Government took it away. They issued a consultative paper. That was not nearly so good, if I may say so. On the other hand, after three years—that is the time between 1982 and 1985—this Bill was produced.
I cannot say that I know much about it, but when the Bill was considered on Second Reading and during its subsequent stages in this House, your Lordships were helped by the most expert opinion from lawyers, accountants and directors of companies, all of them closely involved. We went through the Bill on Second Reading and on the various amendments, and there it was. We passed it here so that it could go to another place.
There were some promises on the Government side. They would do this, that and the other. I am glad to say that they have done so, as in the case of the matrimonial home, in which I was so interested. They put in a very good new clause for that; I am entirely in favour of it. They may have done the same in respect of other matters. I feel that a great number of these amendments made by the Commons are first class. So far as I can see, I would agree with most of them. However, I should not like to say that they should go through this House without proper consideration and debate. There are many details which could have been and should have been before this House as a revising Chamber in the first place on Second Reading. But your Lordships are to get, goodness knows, 30 or 40 new clauses and a whole new chapter on voluntary arrangements—all this coming to us from the Commons. In addition, there are all sorts of other amendments.
We should consider these matters with the same care as if they had been introduced into this House in the first place. We should be able to consider whether such and such goes a little too far, whether this does not take care of something else or whether we ought to be able to amend that. This necessarily takes time. Here we have 113 pages, whatever it is, on a most complicated subject. I have tried to go through it but I am no good at it. On the other hand, the accountants may go through it and we shall want advice upon it. This House can do a most important and valuable task if it takes this Bill, reprinted as the Commons have amended it, goes through it again and makes it into a real Bill.
I stress again that this Bill, when it is an Act, will govern our bankruptcy law perhaps for another 70 years—the same as the 1914 Act. So do let us get it right this time after proper consideration in this House. It cannot be done today, I suggest, after my 1098 scant reading of the amendments, to and fro. I suggest that it cannot be done today even with an extra Friday. I do not myself think it can be done.
What, then, is the solution? I would endorse what the noble Lord, Lord Bruce of Donington, said. Is there not some way in which we can get it through quickly, yet have it properly considered? Could it be left, as the noble Lord said, so that we take it at the beginning of the next Session? I should like to see an alteration in our procedure to enable us to do that. If that is not possible, cannot the Bill be withdrawn now and brought in again as a quick, new Bill? It would be in a pretty good shape once we got these Commons amendments in. But let them come in after full consideration and discussion. I support what the noble Lord, Lord Bruce of Donington, suggests.

§ The Earl of Onslow
My Lords, this is really not my subject. My noble friend the Chief Whip can say "no" if he wishes, and I will agree with him. I have had a major discussion with my honourable friend the Member for Tynemouth, Neville Trotter, who, it appears, is a practitioner on behalf of the bankruptcy and insolvency people. His view—I speak with his knowledge and consent, and from notes provided by him—is that part of the problem is that the Government have been very sensible and have listened a great deal to what people have said. This explains why there are so many amendments. If, therefore, we can take this concession just a little further and introduce the Bill again in the next Session, when it will go through extremely quickly, we shall obviate the necessity for an amending Bill that is bound to come up if we do not get it right and rush through 100 amendments of our own and 500 Commons amendments today.
It would seem to me sensible to adopt the course I suggest. Your Lordships' House will have further laurels attributed to it for being sensible. Above all, so will the Government. I am interested in the Government appearing very sensible. I know that at heart they are, but on this occasion they can appear so as well.

§ Viscount Mountgarret
My Lords, may I lend my support to my noble friend Lord Onslow and subscribe to what he has said? We have had today a situation in which a number of Bills can be held over for another Session. Cannot we do the same with this Bill'.' This would enable us to consider it thoroughly and get it right first time instead of compressing three days' worth of amendments, as I understand it, into one day, which cannot be giving them enough consideration.

§ Lord Boyd-Carpenter
My Lords, I would only add one word to express my own unhappiness at the idea of the role of this House as a revising Chamber being dealt with in the way proposed. As the noble and learned Lord, Lord Denning, has said, this is a Bill of great importance. It is one to which this House has already given a great deal of care and attention. To deal with this mass of amendments, some of which appear to me to be of considerable importance, in the course of a day, seems to me to undermine the role of this House—the very important role of this House—as the revising Chamber. I hope that even at this stage, my noble friend the Leader of the House can give us a 1099 little hope that it is not proposed to deal with it in this way.

§ Lord Mishcon
My Lords, I follow, if I may, upon a great judge, a parliamentarian of great repute sitting, as he does, as a former Minister on the Government side, and a somewhat courageous Back-Bencher in the form of the noble Earl, Lord Onslow. I do so because in my view there is no party consideration in what we are now discussing. It is a question of the dignity, the pride and the tradition of this House. As rightly stated by the noble Lord, Lord Boyd-Carpenter, we have our great tradition in the role of the revising Chamber. I go this far, speaking completely non-politically. The procedure that we are asked to adopt today is an insult to this Chamber. It is an insult, too, to people who are meant to practise in insolvency law whether they be lawyers or whether they be accountants. Both professions welcome many of the principles of the Bill. But they are being asked to deal with a Bill that will not have had a proper amount of attention in your Lordships' House in relation to a number of amendments. There are 70 Government amendments to Commons amendments filling up many pages.
I wish to take up one other point before I sit down. I believe that is a very important point. There are occasions in your Lordships' House when the question of good faith is of great importance in deciding about Government business. The noble Earl, Lord Onslow, talked in terms of a speedy dealing with this Bill if it were re-presented in the form in which it now is so that we could go through it in a proper way and deal with many ambiguities and many controversial points that are still in this Bill arising out of the Commons amendments. I am authorised by my noble friend Lord Bruce of Donington—and if I may say so humbly I certainly speak for myself—that if this course were adopted we would regard it as a matter of good faith to deal with the new Bill as speedily as it is practicable to do so. We would even give undertakings about limitations of time, and so on, as long as those times were reasonably given.
Whatever any Government department may say, I hope that the Leader of the House, with his usual courage and his love of this Chamber, will see to it that today is not a miserable day in our history because we have, for Government programme reasons which cannot be so urgent, dealt with this Chamber in an improper way, and dealt with this Bill in a very negligent way.

§ Lord Mottistone
Perhaps I may intervene very briefly, with one further point. I am much taken with the recommendation of my noble friend Lord Onslow. The CBI—who advise me, as your Lordships know—are of the opinion that this Bill should go through now regardless. I am therefore not speaking for them. But I should like to remind the House that one of the most successful Bills of a non-political nature which originated in this Chamber in recent years was the Data Protection Bill which fortuitously was stopped because of the Election in 1983. That Bill had gone a long way—right through this House, and halfway through the other place—and many of the views that had been expressed had not been properly encompasssed by the Government department 1100 concerned. The Bill then had to be reintroduced shortly afterwards, quite quickly, and furthermore had a lot of points incorporated within it that almost certainly would not otherwise have been incorporated, which improved the Bill greatly and was itself a classic example of how things should be handled.
I implore my noble friends on the Front Bench to give great thought to what has been suggested by my noble friend Lord Onslow, and the special points that were made by the noble Lord, Lord Mishcon, and to consider whether this Bill could not be put on one side and reintroduced hastily in the next Session.

§ The Lord President of the Council (Viscount Whitelaw)
My Lords, I appreciate that the noble Lords who have spoken have raised some very important points. I should like to deal with them in the same spirit.
First of all, I have to say to the noble Lord, Lord Diamond, and to my noble friends Lord Mottistone, Lord Mountgarret, and Lord Onslow—being the reasonable, understanding people that they are—that to ask at this moment suddenly to change all the conventions concerning various Bills and indeed to postpone the Bill which is being considered at this time—and Lord Mishcon put his point very fairly too—is asking something to which one could not expect the Leader of your Lordships' House to concede just like that. That would be totally inconceivable for someone in my position to do.
The noble Lord, Lord Diamond, asks," Could we not move to the procedure for public Bills that is adopted for private Bills?" The noble Lord knows very well that that would have to change a major position of our whole parliamentary procedure and it could not be something that in my position I could consider at this stage. I am sure that your Lordships will appreciate that. That I could not do.
3.45 p.m.
However, I want to help in every way that I can on an important Bill. That is certainly true. Perhaps I may make some comments on the various points which have been made. First of all, no one has worked harder over this Bill than the noble Lord, Lord Bruce of Donington. No one has tried harder to get this Bill into what the noble Lord would like to see as a non-controversial Bill; the best for the country in the long run. I accept absolutely what he has done. My noble friend Lord Lucas has done an enormous amount so far as concerns the Government, too. However, I hope your Lordships will appreciate something else. I fought extremely hard to get this Bill to come to your Lordships' House so that it could be considered first here and then in another place. I think that that was very important. I should like to say that to my noble friend Lord Boyd-Carpenter. I hope that your Lordships will understand that, having fought as hard as that to get the Bill here in the first place, I cannot say to another place, "We had this Bill, we did a great deal of work on it, changes have been made in accordance with what we wanted in another place, and, having come back here, we cannot get it through". I understand some of the feelings that have been raised but I hope that those who put them forward will look at my position for a moment. If I were to concede that, 1101 where would I be then? How would I get Bills to come to your Lordships' House first to enable us to consider them in very great detail and to make very great changes to them? I would be in a very difficult position. I understand that there are a great many noble Lords who would love to see me in a very difficult position—and I do not blame them for that—but if they see me in a very difficult position I beg them to believe that they might be seeing your Lordships' House in a difficult position, too. I ask for that understanding.
This Bill arrived and has been substantially changed in your Lordships' House. Some of the changes that were made were made against the advice of the Government. I have learned, as Leader of your Lordships' House, that these are matters which I have stoically to accept. When the Bill is changed against the wishes of the Government, sometimes I reflect afterwards—when I have overcome my initial irritation—that in fact your Lordships' House was probably right and the Government wrong. But that has been done on several occasions as far as this Bill is concerned. The Bill went to another place. Many of the matters which the noble Lord, Lord Bruce of Donington, raised in this House were changed in another place; and I think for the better. It now comes back here and many of the changes that have been made—and I appreciate totally what the noble and learned Lord, Lord Denning, has said in this matter—have been made at the instigation of this House. I am told—when one uses that famous phrase, one is always very well aware that what one is told someone may dispute; that is why I say "I have been told"—that the amendments have been combined to a total of some 40 groups. Nearly all of these deal with issues that came up previously in your Lordships' House rather than with new issues. Many of them are simply meeting points that were made in your Lordships' House. One new addition is a group of amendments intended to produce an equitable balance between a bunkrupt's family and his creditors in relation to the family home. But this group results from undertakings given by my noble friend Lord Lucas in your Lordships' House.
I understand that there are a great many amendments. I believe that many of them will go through quickly because I know that the noble Lord, Lord Bruce of Donington, agrees with them. The noble Lord will want them to go through quickly because he thinks that they are right for the Bill and will therefore be very speedy in his consideration of these matters. I know that that is what he would wish. There are others which will require some further consideration, and I also understand that.
When all this was considered it was agreed through the usual channels that this would be the time available to deal with the Bill. I am bound to say that because that is the way in which our business is conducted. I hope that your Lordships' House will seek to regard this Bill as a Bill which your Lordships have done a great deal to improve and that many of these improvements are being, as one might say, completed in the discussions today. I hope that that can be done speedily; I hope that we shall get on well.
1102 However, if at the end of the day there is not enough time, I have to say that the Government could give time on Friday, if that is really necessary. I wonder whether it will be; I very much hope that it will not be necessary. I absolutely understand the feelings that have been put forward, but I must return to my point that, having once managed to start the Bill in your Lordships' House, and having, I consider, improved the Bill out of all recognition, when it comes back to us at the end of the day from the other place I believe that there is some duty on us to accept the changes that we have made ourselves as quickly as possible and to look at the other matters concerned in a reasonable time. I hope that it will be possible to do this in the time allotted.
But I have made the maximum concession which I think is reasonable in the circumstances. Throughout I have tried to be reasonable in relation to what after all, is a very important principle for this House: 1 must fight to start important Bills in this House at the beginning of the Session. That is extremely difficult to do. Every objection is put to me as to why these Bills should not come here. My senior colleagues say that they wish to start them in another place because they are their Bills and they wish to make the major speeches on them at the beginning. I understand their views, but I have to fight them. Then there are the arguments that they are too much a matter of finance and cannot come to your Lordships' House.
I do not accept many of those arguments. I believe that it is in the interests of your Lordships' House to start major Bills here, and I argue the matter time and time again. I am doing my best for your Lordships' House, but I beg your Lordships to realise that it I have to go back on something like this, after having won the battle, I shall be in a very weak position in the future, and that will be bad for your Lordships' House.

§ Lord Cledwyn of Penrhos
My Lords, we appreciate what the noble Viscount the Leader of the House has just said, and I am bound to say that I agree with virtually everything that he has said. I am grateful to the noble Viscount for the generous tribute which he paid to my noble friend Lord Bruce of Donington, who has, as he said, worked hard and assiduously over a long time to master the details of one of the most complex Bills that we have seen during the Session. I should also like to add my own tribute to the work which has been done by the noble Lord, Lord Lucas. It is because of their efforts and those of other noble Lords, but their efforts in particular, that, as the noble Viscount has just said, the Bill is a much better Bill today than it was when it started on its course through this House.
I should also like to pay my own personal tribute to the noble Viscount for the effort he made to enable the Bill to start in this House. I know that he was doing this at the beginning and, as Leader of the Opposition, I felt that it was my duty to support him to the full because, the more such Bills start in this House, the greater the contribution that this House makes to the legislative process. Over the last few years this House has, of course, done a great deal. We certainly do not wish to lose the opportunities which may present themselves to us in the future to enable Bills to be launched in this House in the first instance.
1103 Nevertheless, having listened to most of the contributions—and a good deal of common sense has been spoken about the Bill—I regard it as unfortunate that at this stage this House should be presented with over 600 amendments. All I would say—and I am quite sure that the noble Viscount will agree with me—is that this needs very careful thought indeed. If we proceed as he suggests—and I support what he says—I would ask him to take advice from the appropriate quarters to see whether this kind of situation can be avoided in the future. For example, it would be unfortunate if 12 months from now we are confronted with a similar situation, because if we have to deal with over 600 amendments in a very short space of time—obviously not all of them are of the same value but a number of them are of the first importance—and if noble Lords do not think that they have the opportunity to pay the kind of attention which they believe should be paid to the amendments, that would be unfortunate.
I would ask the noble Viscount to ensure that this does not become a precedent; that he will make certain with his colleagues and with the party managers that we do not find ourselves in the position of having major legislation—and it is major legislation, albeit not party political legislation—before us at the fag-end of a Session without adequate opportunity to go into it in detail, which is indeed our primary duty. I am quite sure that the noble Viscount will give those assurances. In those circumstances, I would give general support to the noble Viscount.

§ Viscount Whitelaw
My Lords, I am extremely grateful to the noble Lord the Leader of the Opposition, Lord Cledwyn, for his remarks in what I accept is for this House a very difficult situation. I do not deny that for one moment. The noble Lord asked me if I will give assurances about a precedent for the future. Probably the right thing to say on these occasions is that one never knows what will happen in life owing to human frailty, but I will do my best given the opportunity to do so. That I shall certainly do, and I can give that undertaking, but that is a very human undertaking and it is subject to all the relevant factors of human frailty in this life.

§ On Question, Motion agreed to.

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