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12.6 am
Dr. Tonge: I thank the hon. Member for Hertford and Stortford (Mr. Wells) for his contribution to what has been an extraordinarily acrimonious debate on a well-intentioned Bill. It has been interesting to hear the official Opposition defending God, on the one hand, in their new clause on investment policy, and mammon, on the other hand, in their new clause on share pricing. I suspect that it is yet another example of the increasing schizophrenic tendencies within the Tory party.
The Liberal Democrats welcome the Bill. There is the potential for more investment in developing countries. Foreign investment is already the largest source of financial flows to the third world and it is increasing rapidly. However, as hon. Members have pointed out, we need the right kind of investment.
On Second Reading, the Secretary of State said:
During the various stages of consideration of the Bill, I have tried to express my fears and reservations, particularly on the business principles and ethics of the new CDC. They are absolutely crucial because they replace the additionality test of the old CDC structure.
I turn briefly to the Organisation for Economic Co-operation and Development's guidelines for multinationals. They have been in place for 20 years and are now under review. They have not had a substantial impact. Some say that things are getting better, but not by very much. Those guidelines could be valuable, and the CDC business principles could be even more valuable in setting an example to other big companies operating in the world.
As I have said before, many multinationals that subscribe to the OECD guidelines produce wonderfully glossy brochures. However, I have here a dossier of complaints entitled, "Problems caused by Multinationals". It refers to labour rights and standards, communities and their environment, consumer protection, national Governments' development strategies, effects on local employment, threats to infant or indigenous industries and
more. It mentions all the usual multinationals. We have all heard of them, and I shall not go through the list of names because it is late. That is the result of business principles and ethical guidelines to which multinationals subscribe in glossy brochures, but in name only, as all hon. Members know only too well.
The CDC must not let standards slip. It is clear from the countries that I have visited in a limited way in the past two years, and from Government officials that we have consulted, that they want investment and development. Regrettably, they often dismiss environmental and labour standards and sustainability as they are so desperate for growth in their economies. So it will be up to the CDC to make sure that things are done properly.
The Liberal Democrats support the policy if the Government guarantee that it will not result in less money going to the aid budget and that the business principles and investment policies will really work. In three or four years' time, I do not want to be asking parliamentary questions about labour standards or the destruction of the environment in some country where the CDC is operating. That is why I have had reservations about the Bill, but I wish it well.
Question put and agreed to.
Bill read the Third time, and passed, with amendments.
Not amended in the Standing Committee, considered.
Order for Third Reading read.
The Parliamentary Secretary, Lord Chancellor's Department (Mr. Keith Vaz):
I beg to move, That the Bill be now read the Third time.
I am pleased to bring before the House for its final appearance this short Bill, which sets out to clarify the law relating to the delegation by individual trustees of their trust responsibilities and to improve the protection of beneficiaries. It is the consequence of a report by the Law Commission and it met with support on all sides in another place.
The noble Lord Goodhart said:
Mr. Nick Hawkins (Surrey Heath):
At this fairly advanced hour I can be relatively brief. As the Minister has made clear, the Bill is a simplification of the law. I am sure that my right hon. and hon. Friends will be pleased to see a group of lawyers speaking for all the major parties welcoming simplification.
I should mention that after our Second Reading Committee a couple of small points were raised with me by some trusts experts. Although it is too late for any substantive amendment, in fairness to Macfarlanes, a major City firm which has partners specialising in trust law, I should mention a couple of points. Even after the Bill receives Royal Assent and becomes law, the Government may be able to consider those points and perhaps issue some guidance for clarification.
Clause 1 provides for the delegation of trustee functions where the trustee has a beneficial interest in the trust assets in certain circumstances and, as the Minister pointed out in Committee, this replaces the delegation of trustee functions under section 3(3) of the Enduring Powers of Attorney Act 1985, which is repealed by clause 4 of the Bill.
The explanatory notes covering the Bill state on page 3 that the provision
Macfarlanes other query related to the power of attorney under section 25 of the Trustee Act 1925, which is an enduring power. It felt that clarification was required. It wonders whether such a power, even if a donor becomes mentally incapable and the power--
Mr. David Maclean (Penrith and The Border):
I am listening carefully to my hon. Friend. It seems that he has found a serious lacuna in the Bill at this late stage. Surely my hon. Friend should be advising us to vote against the Bill to enable the Government to reintroduce it at an early stage when they have dealt with the lacuna.
Mr. Hawkins:
I am grateful to my right hon. Friend for his intervention. I should tell him that although Macfarlanes is raising some points of clarification, it states that it welcomes the Bill. It feels that it is a measure that will help to simplify the law of trusts. From his experience of the law, I am sure that my right hon. Friend will agree that any simplification of such a complex area of the law is greatly to be welcomed.
I shall complete the point that I was making. The query was whether, if a donor becomes mentally incapable and the power of attorney is registered within the year, the power will cease to be exercisable after the year has elapsed. Clause 8 authorises an attorney under a registered power to exercise certain powers of appointment of new trustees. Macfarlanes was concerned that it might not be entirely clear how this would extend beyond the initial one-year term of the power of attorney. It may be that the Minister can deal with these points when he replies--
Mr. Eric Forth (Bromley and Chislehurst):
My hon. Friend is obviously trying to be helpful to the House, but he is in danger of having the opposite effect. He seems to be saying at one and the same time that the Bill will help to clarify the law, while going to great pains to explain how those whom he says are experts are telling us that there are points of difficulty. How can it be that if a firm called Macfarlanes believes that there are points that require clarification, the Bill still simplifies the law? This sounds to me like a lawyers' ramp to ensure that we think that the Bill will simplify matters when in fact it requires clarification, with additional legal advice being provided at great expense.
"We hope . . . that the new CDC will encourage by example much larger flows of foreign investment into the least-developed and poorest economies, by proving that such investment can be safe and profitable."--[Official Report, 24 May 1999; Vol. 332, c. 38.]
She also said that the Government
"expect the CDC to operate as an exemplary social, environmental and ethical business. That approach is reflected in its business principles and policies, which cover social, environmental, health and safety matters and business ethics, as well as a statement of the general principles by which the CDC will conduct its business."--[Official Report, 24 May 1999; Vol. 332, c. 43.]
That is agreed.
12.11 am
"I welcome the Bill wholeheartedly . . . I am sure that it will do considerable good and no harm."
The noble Lord Kingsland said:
"I believe the Opposition have absolutely no quarrel with it whatsoever."
The noble Lord Falconer of Thoroton said:
"It is unusual to encounter such relative complexity in so short a Bill, but I genuinely believe that this is a worthwhile Bill."--[Official Report, House of Lords, 11 January 1999; Vol. 596, c. 17-18.]
In Standing Committee, the hon. Member for Surrey Heath (Mr. Hawkins) said:
"The Bill will provide a helpful simplification of the law of trusts, and will correct one or two anomalies in decided cases. The Bill is uncontroversial and the official Opposition welcome it. I thank the Law Commission for all its work on this measure."
On the same occasion, the hon. Member for Torridge and West Devon (Mr. Burnett) said:
"We welcome the Bill . . . I congratulate the Law commission on its work. We hope that the Bill has a speedy passage through the . . . House."--[Official Report, Standing Committee F, 22 June 1999; c. 3-4.]
I was grateful to the hon. Gentlemen for their constructive and helpful approach to the Bill. It mirrored the approach taken in the Second Reading Committee.
"will enable a co-owner of land to make effective provision for the disposal of the . . . land if he or she becomes mentally incapable."
However, it is not entirely clear how this result might be achieved as the power of attorney provided for in clause 1 is not an enduring one. Macfarlanes was concerned whether, on the face of it, the power would lapse on the donor becoming, in some sad cases, mentally incapable.
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