MOTION MOVED ON CONSIDERATION OF COMMONS AMENDMENT (Hansard, 13 November 1989)

§ Lord Williams of Elvel
My Lords, we continue the debate on Amendment No. 272A, which I move yet again. Last Thursday evening there was some debate of an inconclusive nature. I note that a number of noble Lords opposite display varying degrees of interest in the legislation. On the first day 223 noble Lords went through the Division Lobby to vote against my amendment. On Thursday evening there were only 18. I hope that the important arguments which I shall deploy today will ensure that noble Lords opposite turn up in sufficient numbers to make sure that the House can continue its business on Commons amendments to the Companies Bill.
1089 The essence of the Commons amendment with which I seek to disagree is that the Secretary of State, may by regulations make such further provision as appears to him necessary or expedient for the purposes of this Part". This Part of the Bill —Part VII —deals with insolvency and amendments to the Insolvency Act 1986. The purpose of this Part is to ensure that the insolvency provisions do not impede the operations of financial markets. It is exceptional in almost all respects, in that it cuts across the central feature of the Insolvency Act 1986, which is pari passu treatment for bankruptcy creditors. It opens up that principle yet again.
We thought that we had dealt with the matter in the 1986 Act. But we find here, in a Commons amendment, provision for the Secretary of State to make regulations amending the primary legislation if he decides that there is a better way to do it. As I said on Thursday evening, we are opposed to the general principle that the Secretary of State can amend primary legislation by secondary legislation. We wish it to be amended by primary legislation. It is worse in this case because, if the Secretary of State, or any future Secretary of State, decides that there is a better way of doing it, he can amend the whole of Part VII. We oppose this clause. I very much hope that the House will agree with my Motion. I beg to move.
Moved, That the House do disagree with the Commons in their Amendment No. 272. —(Lord Williams of Elvel.)

§ Lord Trefgarne
My Lords, I explained at some length, when speaking to this matter earlier, the reasons why we have found it necessary to take powers of this kind for the purposes of this Part of the Bill. I hope it will not be necessary to take up the time of the House by repeating that explanation now.
I would make three brief points. First, I do not believe that there is any fundamental difference of view, in this House or elsewhere, on the importance of safeguarding the effective operation of the financial markets. Part VII provides the means for doing that. While we have quite rightly debated several points of detail, nobody has been able to propose a better way of dealing with the uncertainties which have been identified.
Secondly, if it is accepted that something must be done, then it is vital that the solution is, and remains, fully effective. The problems are complex and so, inevitably, is Part VII. We have consulted extensively and have proposed a number of changes since the Part was introduced. It is consultation as much as anything that has persuaded us that we need to be more flexible than we earlier thought, to be sure that the Part is capable of working effectively for all the different markets to which it may apply, not just now, but in the light of future changes in the markets and the way they operate.
Finally, I should like to respond to one specific point made earlier by the noble Lord, Lord Williams, in relation to the provision to make regulations, for integrating the provisions of this Part with the general law of insolvency". 1090 This is not a matter of "junking" the existing provisions and "deciding on something rather different", as the noble Lord put it. On the contrary, it is a matter of being able to make any further detailed technical provision which may prove necessary to ensure that the special procedures provided for in the Part will mesh smoothly with the procedures for conducting insolvencies generally. This can only be in the interests of practitioners and creditors generally, and I would have hoped that the noble Lord would welcome that.
These provisions are the result of widespread consultation with the practitioners, consultation in which the noble Lord himself has been involved in a distinguished way. I hope therefore that, on reflection, he will think it right not to press his Motion.

§ Lord Williams of Elvel
My Lords, I am grateful to the noble Lord, as always, for his response. It is certainly true that there has been extensive consultation. There has been extensive consultation subsequent to the original introduction of Part VII at First Reading in this House. There was no consultation on Part VII other than on the generalities. This was for the obvious reason, which I fully understand and insolvency practitioners understand, that it is difficult to consult until one has something specific on which one wants to consult. Since then there has been extensive consultation.
This Bill has been with Parliament for a year. It is just about one year since the Second Reading debate in this House. If in the course of one year the Government cannot get their ideas together, co-ordinated and properly thought through in full consultation with all the bodies which are properly involved, it is a sad state of affairs. The noble Lord says that the provisions are technical. That is not what the Commons amendment indicates. It refers to, integrating the provisions of this Part with the general law of insolvency". The general law of insolvency is set out in the Insolvency Act 1986. If there has been widespread consultation, that should have been done by now. I am afraid that I cannot accept the noble Lord's arguments. We are all agreed that the financial markets have to be protected. But if the Government have not been able in the past year to come forward with the right solution, I am sorry but they have not been doing their duty properly. That is my object in pressing the amendment.

DIVISION NO. 1
CONTENTS
Amherst, E.	Blackstone, B.
Ardwick, E.	Blease, L.
Aylestone, L.	Bonham-Carter, L.

Broadbridge, L.	Llewelyn-Davies of Hastoe, B.
Bruce of Donington, L.
Buckmaster, V.	Longford, E.
Callaghan of Cardiff, L.	Mason of Barnsley, L.
Carmichael of Kelvingrove, L.	Mishcon, L.
	Mulley, L.
Cledwyn of Penrhos, L.	Nicol, B.
Cocks of Hartcliffe, L.	Ogmore, L.
Dean of Beswick, L.	Oram, L.
Donaldson of Kingsbridge, L.	Peston, L.
Dormand of Easington, L.	Ponsonby of Shulbrede, L. [Teller.]
Ennals, L.
Ewart-Biggs, B.	Reilly, L.
Ezra, L.	Ritchie of Dundee, L.
Fisher of Rednal, B.	Rugby, L.
Fitt, L.	Sainsbury, L.
Gallacher, L. [Teller.]	Serota, B.
Gladwyn, L.	Soper, L.
Grantchester, L.	Stallard, L.
Grey, E.	Stedman, B.
Hanworth, V.	Stoddart of Swindon, L.
Harris of Greenwich, L.	Taylor of Blackburn, L.
Hooson, L.	Taylor of Gryfe, L.
Houghton of Sowerby, L.	Tordoff, L.
Irvine of Lairg, L.	Turner of Camden, B.
Jenkins of Putney, L.	Underhill, L.
John-Mackie, L.	Wallace of Coslany, L.
Kennet, L.	White, B.
Leatherland, L.	Williams of Elvel, L.
Listowel, E.

NOT-CONTENTS
Ailesbury, M.	Ironside, L.
Alexander of Tunis, E.	Jenkin of Roding, L.
Allerton, L.	Johnston of Rockport, L.
Alport, L.	Killearn, L.
Ampthill, L.	Kinloss, Ly.
Annaly, L.	Lawrence, L.
Auckland, L.	Layton, L.
Belhaven and Stenton, L.	Long, V.
Belstead, L.	Lovat, L.
Bessborough, E.	Lucas of Chilworth, L.
Blanch, L.	Mackay of Clashfern, L.
Blatch, B.	Macleod of Borve, B.
Boyd-Carpenter, L.	Marley, L.
Brabazon of Tara, L.	Merrivale, L.
Brightman, L.	Mersey, V.
Butterworth, L.	Monk Bretton, L.
Clanwilliam, E.	Montgomery of Alamein, V.
Cockfield, L.	Morris, L.
Constantine of Stanmore, L.	Mountgarret, V.
Craigavon, V.	Mowbray and Stourton, L.
Dacre of Glanton, L.	Murton of Lindisfarne, L.
Davidson, V. [Teller.]	Nelson, E.
De Freyne, L.	Newall, L.
Denham, L. [Teller.]	Nugent of Guildford, L.
Eden of Winton, L.	Orkney, E.
Effingham, E.	Orr-Ewing, L.
Elibank, L.	Oxfuird, V.
Ellenborough, L.	Penrhyn, L.
Elles, B.	Peyton of Yeovil, L.
Elliot of Harwood, B.	Porritt, L.
Elton, L.	Pym, L.
Erroll of Hale, L.	Rankeillour, L.
Faithfull, B.	Reay, L.
Ferrers, E.	Rodney, L.
Foley, L.	St. Davids, V.
Fraser of Kilmorack, L.	Saltoun of Abernethy, Ly.
Gainford, L.	Shannon, E.
Gridley, L.	Sharples, B.
Hailsham of Saint Marylebone, L.	Slim, V.
	Strathcarron, L.
Halsbury, E.	Strathclyde, L.
Harvington, L.	Strathspey, L.
Havers, L.	Sudeley, L.
Henley, L.	Terrington, L.
Hesketh, L.	Teviot, L.
Hives, L.	Thomas of Gwydir, L.
Holderness, L.	Thorneycroft, L.
Hood, V.	Tranmire, L.
Hylton-Foster, B.	Trefgarne, L.

Trumpington, B.	Wedgwood, L.
Ullswater, V.	Wise, L.
Vaux of Harrowden, L.	Wynford, L.
Walton of Detchant, L.