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Limited Liability Partnerships
Mr. Mitchell: To ask the Secretary of State for Trade and Industry what consultations he has had with the Insolvency Service about the potential for disqualified and failed directors creating limited liability partnerships for new operations. [124451]
Dr. Howells: The Insolvency Service have been closely involved at every stage in the development of limited liability partnerships. The Government's proposals include the application, by secondary legislation, of existing safeguards and sanctions relating to disqualified directors. This will ensure that those who have been disqualified on the basis of unfit conduct under any of the provisions of the Company Directors Disqualification Act 1986 will also be prohibited from being a member of, or being in any way, whether directly or indirectly, concerned with taking part in the formation or management of a limited liability partnership, unless they obtain leave of the court to so act.
Mr. Mitchell: To ask the Secretary of State for Trade and Industry what consultations he has had with the (a) FSA, (b) Competition Commission and (c) Office of Fair Trading about their role in regulating limited liability partnerships. [124450]
Dr. Howells: There have been discussions at official level with other Departments and the FSA. To date we have not discussed the detail either with the Office of Fair Trading or the Competition Commission.
The Limited Liability Partnerships Bill creates a new legal entity, the limited liability partnership. Other Departments will consider the limited liability partnership in the context of their policy areas and decide what, if any, amendments to existing legislation are required. Clause 15 of the Bill contains regulation-making powers which may be used to apply to LLPs any law relating to companies, other corporations and partnerships. Clause 16 contains a power to make consequential amendments. Other Departments will give consideration to whether it is appropriate to make amendments to their primary legislation under these powers or under any other legislation which the relevant Department is itself bringing forward.
Mr. Mitchell: To ask the Secretary of State for Trade and Industry what proposals he has for stopping (a) convicted fraudsters, (b) directors censured by his Department and (c) directors of failed companies setting themselves up as limited liability partnerships; what regulatory framework such partnerships will operate under; and what sanctions can be operated against such partnerships. [124368]
Dr. Howells: We will be applying to limited liability partnerships, under powers contained in clauses 14 and 15 of the LLP Bill, large portions of the Companies Act 1985 and the Insolvency Act 1986, with appropriate modifications. This will provide the general regulatory framework.
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In addition, the Company Directors Disqualification Act 1986, which provides for the disqualification of a person from being a director of a company in certain circumstances, will also be applied to the members of an LLP.
The Company Directors Disqualification Act gives the court a power to disqualify persons on a variety of grounds, including on conviction of an indictable offence, persistent breaches of companies legislation, fraud in a winding up and participation in wrongful trading. In addition, the court will be under a duty to disqualify a person where it is satisfied that his conduct as a member of an insolvent LLP renders him unfit to so act. Simply being a director of a failed company (or, in future a member of a failed LLP) will not, though, necessarily result in disqualification--the intention is to punish abuse of limited liability, not the mere fact of failure.
The application of the Company Directors Disqualification Act to LLPs will ensure that any director who is disqualified under the provisions of the CDDA would not be eligible to be a member of an LLP or take part in the promotion, formation or management of an LLP. In a similar way a member of an LLP may be disqualified from acting as a director of a company.
Mr. Mitchell: To ask the Secretary of State for Trade and Industry what consultations he has had with (a) the Consumers Association and (b) trading standards authorities about the possibilities of fraud arising from (i) fraudsters and (ii) disqualified and failed directors setting up limited liability partnerships. [124449]
Dr. Howells: No such consultations have taken place. Secondary legislation will apply to LLPs appropriately modified parts of the Insolvency Act 1986 and the Companies Act 1985. This will include the wrongful and fraudulent trading provisions, and powers of investigation. The Company Directors Disqualification Act 1986 will also apply, such that disqualified directors will not be eligible to be members of an LLP and vice versa. In these cases the regulation of an LLP will be the same as that of a company.
Mr. Mitchell: To ask the Secretary of State for Trade and Industry what proposals he has for ensuring that limited liability partnerships set money aside for legal claims against the partnership. [124366]
Dr. Howells: After considerable consultation, and taking account of the views of the Trade and Industry Committee, the Government concluded that LLPs would not be required to maintain any kind of fund or insurance to protect against claims. The main reasons for reaching this conclusion were:
- the lack of justification for requiring a higher level of funding than is required of private companies;
the difficulty of setting an appropriate level which is high enough to safeguard the interests of third parties, but does not discourage firms from either setting up in business or trading through difficulties;
the general availability of LLPs makes it difficult to design a regime which could adequately distinguish between the many types of business which might become LLPs and the different liabilities they might face;
it is more appropriate to regulate an activity, rather than an entity, so as to tailor the regulation effectively. For example, where professions require professional indemnity insurance, the level of
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- insurance required will vary depending on the profession. A general requirement made of LLPs would conflict with any existing requirements.
Premium Rate Telephone Services
Mr. Pollard: To ask the Secretary of State for Trade and Industry what plans he has to review the regulatory framework governing the promotion by businesses of premium rate telephone services so as to improve consumer protection. [124677]
Ms Hewitt: The Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS) has responsibility for regulating premium rate services. ICSTIS enforces an effective Code of Practice which has provisions to ensure that consumers are given adequate information to enable them to take informed decisions about the use of premium rate services. ICSTIS and Oftel are reviewing the regulatory framework for Premium Rate Services to ensure that consumers continue to benefit from the right level of protection.
EDUCATION AND EMPLOYMENT
Fair Funding
Mr. Allan: To ask the Secretary of State for Education and Employment what estimate he has made of the net effect on school budgets of the new Fair Funding arrangements for schools during the financial year 1999-2000 for (a) England and (b) each local education authority; and if he will make a statement. [124689]
Ms Estelle Morris: In 1999-2000, 82.4 per cent. of the Local Schools Budget was delegated to schools, compared with 79.2 per cent. of a broadly comparable figure in the previous year. This increase of 3.2 per cent. in the delegation rate represents an extra £634 million delegated to schools. Fair Funding will result in a further increase in delegation in 2000-01, since it is being implemented in two stages. Comparisons between individual local education authorities for change from 1999-2000 to 2000-01 will appear in expenditure tables to be available shortly.
Women 2000
Mr. Reed: To ask the Secretary of State for Education and Employment what contribution the Government are making to the United Nations Conference, Women 2000: Gender, Equality, Development and Peace for the Twenty-first Century. [125249]
Ms Jowell: We published yesterday and have placed in the Library two documents: "Equality in practice" and "Women and Men in the UK: facts and figures 2000".
"Equality in practice" is a short, practical and lively document which shows how the UK Government are improving women's lives at home and overseas by focusing on five vital areas: women and the economy, making equality happen, education, health and the resolving of crime and violence. It also describes some
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of the work being carried out with partner countries and organisations in Asia, Africa, Latin America and the Caribbean and Eastern Europe.
"Women and Men in the UK: facts and figures 2000" tells the story of women and men's changing position in society. It highlights both change and continuity with facts and figures. It is a celebration of women's achievements and a reminder of what more still needs to be done. The UK Government are working to create a more just society, one in which women and men are equal. To achieve this, we have to understand what has and has not changed. These facts and figures are vital to inform our thinking and policy making.
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