HL Deb 26 February 1998 vol 586 cc796-8

3.31 p.m.

Read a third time.

Clause 1 [Statutory interest]:

The Minister of State, Department of Trade and Industry (Lord Clinton-Davis) moved Amendment No. 1 Page 1, line 8, after ("interest") insert ("subject to and").

The noble Lord said: My Lords, in moving Amendment No.1, I shall speak also to Amendments Nos. 3, 5, 6, 7, 10, 12, 13, 15, 16, 17, 21 and 22.

A query from a business representative organisation has prompted us to reconsider terms such as "qualifying debt" and "the debt" as used in the Bill. As currently drafted, the Bill might not adequately cover the rare instance where a contract debt is owed partly for a sum which carries interest under the Bill and partly for a sum which is excluded from the Bill.

I apologise that, in revising the wording to ensure such contract debts are caught, it has been necessary to lay so many drafting amendments. I wish to assure the House that these do not change the policy intent of the Bill. The substantial amendment is No. 3, which rewrites Clause 3. From that amendment, the others follow. The result of the amendments is that any part of a debt which qualifies for statutory interest will be subject to the Bill, regardless of whether some other part of the debt is excluded from the Bill.

I have written to a number of noble Lords who have been interested and involved in the Bill, explaining the reasons for these and later amendments. I beg to move.

Lord Ezra

My Lords, I am grateful to the Minister for having written to explain the reasons for the amendments. I find them acceptable.

On Question, amendment agreed to.

Clause 2 [Contracts to which Act applies]:

Lord Clinton-Davis moved Amendment No. 2: Page 1, line 22, leave out first ("or") and insert ("of goods. a contract for the").

The noble Lord said: My Lords, in moving Amendment No. 2, I shall speak also to Amendments Nos. 4, 8, 9, 11, 14, 18, 19 and 20. These are drafting amendments which simply tidy up the Bill. None is substantial. The Government have chosen to lay them now so that the Bill is in as good a shape as possible before it enters the other place. I beg to move.

On Question, amendment agreed to.

Clause 3 [Qualifying debts]:

Lord Clinton-Davis moved Amendment No. 3: Leave out Clause 3 and insert the following new clause—

QUALIFYING DEBTS

(" .—(1) A debt created by virtue of an obligation under a contract to which this Act applies to pay the whole or any part of the contract price is a "qualifying debt" for the purposes of this Act, unless (when created) the whole of the debt is prevented from carrying statutory interest by this section.

(2) A debt does not carry statutory interest if or to the extent that it consists of a sum to which a right to interest or to charge interest applies by virtue of any enactment (other than section 1 of this Act).

This subsection does not prevent a sum from carrying statutory interest by reason of the fact that a court, arbitrator or arbiter would, apart from this Act, have power to award interest on it.

(3) A debt does not carry (and shall be treated as never having carried) statutory interest if or to the extent that a right to demand interest on it, which exists by virtue of any rule of law, is exercised.

(4) A debt does not carry statutory interest if or to the extent that it is of a description specified in an order made by the Secretary of State.

(5) Such an order may specify a description of debt by reference to any feature of the debt (including the parties or any other feature of the contract by which it is created).").

On Question, amendment agreed to.

Clause 4 [Period for which statutory interest runs]:

Lord Haskel moved Amendments Nos. 4 to 8: Page 2, line 31, at beginning insert— ("() Statutory interest runs in relation to a qualifying debt in accordance with this section (unless section 6 applies)."). Page 2. line 31, leave out ("on a qualifying debt"). Page 2, line 32, after ("day") insert ("for the debt,"). Page 3. line 10, leave out ("on a debt"). Page 3 line 12, leave out from first ("payment."') to end of line 14 and insert ("has the same meaning as in section 11").

On Question, amendments agreed to.

Clause 5 [Rate of statutory interest]:

Lord Haskel moved Amendment No. 9: Transpose Clause 5 to after Clause 6.

On Question, amendment agreed to.

Clause 6 [Remission of statutory interest]:

Lord Haskel moved Amendment No. 10: Page 3, line 28, leave out ("on") and insert ("in relation to").

On Question, amendment agreed to.

Clause 7 [Purpose of Part II]:

Lord Haskel moved Amendment No. 11: Page 4, line 1, leave out from ("apply") to end of line 2 and insert ("when a qualifying debt created by the contract (in this Part referred to as "the debt") is not paid.").

On Question, amendment agreed to.

Clause 8 [Circumstances where statutory interest may be ousted or varied]:

Lord Haskel moved Amendments Nos. 12 to 18: Page 4, line 8, leave out ("on") and insert ("in relation to"). Page 4, line 9, at end insert ("of the debt"). Page 4, line 11, leave out ("on") and insert ("by"). Page 4, line 13, after ("interest") insert ("in relation to the debt"). Page 4, line 17, at end insert ("for late payment of the debt"). Page 4, line 20, at end insert ("for late payment of the debt"). Page 4, line 21, leave out second ("the").

On Question, amendments agreed to.

Clause 9 [Meaning of "substantial remedy"]:

Lord Haskel moved Amendment No. 19: Page 4, leave out line 31 and insert ("that would otherwise apply in relation to the debt.").

On Question, amendment agreed to.

Clause 10 [Interpretation of Part II]:

Lord Haskel moved Amendments Nos. 20 to 22: Page 5, line 4, leave out ("for late payment"). Page 5, line 14, leave out ("a qualifying") and insert ("the"). Page 5, line 16, at end insert— ("(3) In this Part a reference to late payment of the debt is a reference to late payment of the sum due when the debt is created (excluding any part of that sum which is prevented from carrying statutory interest by section 3).").

On Question, amendments agreed to.

Lord Clinton-Davis

My Lords, I beg to move that the Bill do now pass.

Moved, That the Bill do now pass.—(Lord Clinton-Davis.)

On Question, Bill passed, and sent to the Commons.