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3.15 pm
Perhaps I would be less sympathetic towards the new clause if I knew that there was to be a consumers Bill in the Queen's Speech. However, the word on the street is that there is to be no such Bill. The Minister can look me in the eye and tell me if I am wrong and, if so, I will withdraw these remarks. A specific promise was given that, in the lifetime of the Parliament, there would be a consumers Bill. One of the areas that such a Bill would tackle is the problem of rogue traders.
Mr. Forth: My hon. Friend is being far too charitable. Even if the Minister felt able today to anticipate the Queen's Speech and assure my hon. Friend that there would be a consumers Bill in the Government's programme, the Minister could not guarantee that that Bill would reach the statute book because the Prime Minister might intervene and call the election ahead of the time at which he needed to. My hon. Friend would be left in a position where an undertaking would have been given--perhaps in good faith by the Minister--which could not be fulfilled. I hope that my hon. Friend will not feel obliged to back off even if the Minister gives an undertaking about the Bill today.
Mr. Page: I am frequently accused of being too charitable but that's the way it is: I am one of those creatures who go through life being charitable.
Mr. Page: I well know that my right hon. Friend is not charitable. He is a very hard man. I realise that any
political party needs a balance of the soft and the hard. The soft version is at the Dispatch Box; the hard version is one or two rows behind.The matter raised by my hon. Friend the Member for Christchurch is serious. If the Minister can assure us that there will be a consumer Bill, we will look at it and give it whatever support we can to ensure that the public are protected from rogue directors. We will see what we can do to get the Bill on the statute book as quickly as possible--subject to a reading of the small print. I would hate to give a carte blanche undertaking here without seeing the specifics of the Bill. I am given to understand that a section in a consumers Bill could deal with these matters.
I draw my remarks to a close by thanking the Minister for sending to every member of the Committee the injunction directive and the directives that will be covered by the measure. According to his letter, there are 11, although I have not counted them to see whether that is so. The notice sent with the letter states:
- Further directives, including the proposed directive on distance selling of financial services will be added in due course.
The Minister for Competition and Consumer Affairs (Dr. Kim Howells): By my standards, we have had a lengthy debate on this group of amendments. May I congratulate the hon. Member for South-West Hertfordshire (Mr. Page) on the superb intelligence that he gets from my Department or wherever the Queen's Speech is being drafted? He knows what is in the Queen's Speech, although I do not. I am sure that my hon. Friend the Member for Coventry, North-West (Mr. Robinson) will be delighted to know that the hon. Member for South-West Hertfordshire has helped to boost the circulation of the New Statesman by purchasing a copy of that estimable organ. I have seen my portrait in the magazine and, if the hon. Gentleman was using a Library copy, I shall report him.
At the beginning of his speech, the hon. Member for Christchurch (Mr. Chope) said that I am in danger of missing the bus in relation to implementing enforcement measures against rogue traders. However, I fear that the hon. Gentleman has missed the point of the legislation. For the benefit of those who were not present in Committee when amendments similar to the hon. Gentleman's were debated, I shall reiterate that the main purpose of the Company Directors Disqualification Act 1986 is to provide the public with protection against those who abuse the privilege of limited liability. Sections 6 and 7 of the Act allow the Secretary of State to apply to court for a disqualification order against a director of an
insolvent company whose conduct in relation to the company is such as to make him unfit to be involved in the management of a limited company.In response to the hon. Member for Bournemouth, West (Mr. Butterfill), I was glad to press ahead with the provisions in the Bill--limited though they are, according to him--and am pleased that he gave us the benefit of his experience of a company that found itself slipping into insolvency and receivership. The hon. Gentleman illustrated clearly why the relevant laws should be tough in relation to the honesty and probity of company directors. Section 8 of the Company Directors Disqualification Act enables the Secretary of State to apply for a disqualification order against a person who has been the subject of a statutory investigation, as provided for in that section, and in the case of whom it appears to be expedient in the public interest that the person should be disqualified. Similarly, clause 6 of the Bill will allow the Secretary of State to accept a disqualification undertaking in such circumstances under sections 7 and 8 of the 1986 Act.
I repeat that I have some sympathy with the concerns of the hon. Member for Christchurch, but the 1986 Act is not the appropriate measure with which to try and address the issue of rogue traders. Those concerns need to be dealt with in other ways, and we are doing that through, for example, the useful directive that the hon. Gentleman told us about; better enforcement of consumer legislation, including measures on e-commerce; pursuing issues that cause particular concern, such as the servicing and repairs of cars; as well as the scheme that the hon. Gentleman mentioned, in which someone purporting to sell windows in his constituency is just operating a scam. We shall also deal with rogue traders through an important series of measures to modernise consumer advice networks. As I indicated in Committee, the impending EC injunctions directive should be of some help in that area too.
Whatever the hon. Member for Christchurch thinks about disqualified directors being able to trade as sole traders, it would be inappropriate for the 1986 Act to go any further by restricting a person's right to do so. Such restrictions need to be dealt with in other ways. New clause 2 deals with issues relating to that and, as the hon. Gentleman said, is similar to the amendment that he tabled in Committee, although he revised the amendment's drafting in the light of our debate there. New clause 2 would introduce a new clause into the 1986 Act and would allow the court to make a disqualification order against someone when the court considers that he or she has been a director of a company which was struck off the register of companies because it failed to deliver company accounts, and it considers that the person's conduct as a director of that company makes him or her unfit to be involved in the management of a company.
As I explained in Committee, directors can be disqualified for failure to file their company's accounts under sections 3 and 5 of the 1986 Act for defaults in relation to various provisions of company legislation, including failure to file accounts at Companies House.
Mr. Burnett: Will the Minister give way?
Dr. Howells: In a moment. I accept that neither provision would allow for disqualification following only one default, as the hon. Member for Christchurch said.
Mr. Burnett: Will the Minister give way?
Dr. Howells: If the hon. Gentleman can contain himself, I will give way in a second.
It is not clear how the amendment would allow for a disqualification after one default, either. Nevertheless, disqualification on default would be going too far in any event.
Mr. Burnett: Does the Minister agree that, in some cases, the failure to deliver just one set of accounts can be of the greatest importance? Surely, a person who fails to do so on being given notice or who is judged guilty of conduct that makes him unfit should be disqualified.
Dr. Howells: I shall try to deal with that in a moment. The two matters are not directly related and I shall try to make it clear why that is so in relation to the legislation.
It is not our intention to revisit in the Bill what constitutes unfit conduct for the purposes of achieving a disqualification. Where there are concerns about the failure of a company to file accounts, another remedy exists. A complaint made to the Registrar of Companies, who has enforcement responsibility in this area, will result in him taking appropriate action against the company. If the company is carrying on business or is in operation, the registrar will take enforcement action to secure delivery of the documents, up to and including prosecuting the directors in the magistrates court or, in Scotland, referring the matter to the prosecuting authorities.
In addition, the late filing of accounts attracts an automatic civil penalty. If, in the registrar's opinion, the company is not carrying on business or is not in operation and is defunct, he can initiate statutory action to dissolve it and strike it off the register.
In Committee, the hon. Gentleman raised the fascinating case of the People's Trust, and he may wish to know that it is currently up to date with all its filing requirements at Companies House. Indeed, I started to dig around a bit on the hon. Gentleman's behalf, given his fascination with that company. The trust was incorporated on 22 November 1996, but failed to file accounts or annual returns as required by the Companies Act 1985. It failed to respond to statutory letters inquiring whether it was still in operation or carrying on business under section 652 of the 1985 Act. It was struck off and dissolved on 8 September 1998 and was restored to the register after a relatively short period, on 5 November 1998. All outstanding documents filed at the time of restoration are up to date with all current filing requirements. I would be the last person in the world to defend Mr. Fayed, but that should be on record as it is perhaps an additional piece of information that I am sure would interest the hon. Member for Christchurch.
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