Vehicles (Crime) Bill

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Mr. Fabricant: The Minister said in a helpful answer during an earlier debate that local authorities would liase with the police on the matter. The police might say to a local authority, ``Okay, the directors are fine, but that is how the company is structured. The employees are crooked, and the firm is going to operate in an unlawful manner. We advise you not to register the firm.'' If the amendments are not added to the Bill, will not the authority be powerless in those circumstances? It will be forced to put the company on the register because the applicant, himself or herself, does not contravene the Bill?

Mr. Clarke: The hon. Gentleman referred to the structure of the company. The directors of the company are responsible for the structure of the company. The hon. Gentleman grimaces, but I do not mean that nastily. Directors are responsible for the companies of which they are directors, and partners responsible for the partnerships that they run. Were the police to tell directors of a company that they had structured their company in such a way that there was an element of criminality in a part of it, or that certain individuals were working in a particular way, and the directors took no action in the light of that, one would have to ask whether such people were fit and proper. To try to evade the responsibility of directors for their company—I am not suggesting that that is the intention of the hon. Member for Lichfield—is a mistake. The structure of the corporate framework in this country rightly makes directors key in terms of responsibility for companies. That is why the Bill focuses on the role and responsibility of directors in such circumstances.

I acknowledge that the circumstances to which the hon. Member for Lichfield refers may arise. The police may draw attention to an individual, a way of operating or a partnership that is dodgy in some respect. If directors were not to take account of what they were advised by the police in those circumstances, the local authority would have the right and the duty to consider whether the directors were behaving in a fit and proper manner. We shall see how that evolves in law, but that is why we are focusing on those who have responsibility for the company. I understand the spirit in which the hon. Member for Colchester raised the issue, but extending the test to every employee and business associate of the 3,000 companies involved would be excessive.

Amendment No. 38 specifies what the local authority would have to take into account before registering a motor salvage operator. We want to avoid that. It is important that local authorities are able to take into account relevant convictions when considering the fit and proper test, and the offences mentioned in the amendment would come under that heading. However, there is no reason to specify in law at this stage. If, however, in the light of experience, we find that local authorities are not taking into account offences that we consider relevant, we will have the power, under subsection (4)(b), to specify those offences by regulation. If we were to discover offences that were serious and were not taken into account, we could regulate that under the powers of the Bill. We will discuss with the Local Government Association the criteria that it might use when making a decision, and will publish joint guidance before introducing the regulations.

I hope that I have clarified why we would ask the hon. Gentleman to withdraw the amendment. We understand the points that he has made, but we do not think that it would be effective in reaching the end that we share.

12.30 pm

Mr. Russell: The Committee has been told that the point raised in amendment No. 38 can be covered when the Bill is enacted, in the light of experience, and I am content with that. However, I urge the Minister to give serious thought to amendments Nos. 36 and 37. The numbers involved are not significant when compared with the numbers that were brought into off-licence legislation when a loophole needed to be closed. This Bill has a built-in loophole, as the debate on the amendment has illustrated. The hon. Member for Lichfield referred to another aspect of the loophole. The matter should be considered—although not today.

Mr. Clarke: Before the hon. Gentleman concludes, I give him the commitment that we will consider carefully the loophole that he mentions in relation to similar case of off-licence legislation.

Mr. Russell: I am most grateful for that further reassurance. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

The Chairman: With this it is convenient to take new clause 8—False application—

    `( ) Any person who knowingly makes a false application under section 1 shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.'.

Mr. Bercow rose—

The Chairman: Mr. Bercow, you must rise more quickly.

Mr. Bercow: I am sorry, Mr. O'Brien. I thought that you would invite the Minister to speak. I apologise for being slow to get to my feet.

I would like to focus my remarks, briefly, less on the issue of whether the clause should stand part than on new clause 8. Members of the Committee will recall that, in relation to the provisions for registration of registration plate suppliers, I argued that there should be an offence, punishable by a fine not exceeding level 5 on the standard scale, of making a false application to register. I received an encouraging response at the time from the Under-Secretary. Without wishing to compromise private exchanges, I must say that I have been given reasonable grounds for optimism in relation to the purpose and broad content of the new clause to which I am speaking.

The same principle applies as before: the line of redress for the provision of inaccurate information must be clear. The seriousness that the Committee attaches to the registration process and the importance of its fairness and accuracy would be underlined if we made it an offence for anyone knowingly to make

    a false application under section 3.

That person

    should be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

I do not think that I need to support my point at greater length, although other hon. Members may wish to contribute. I am especially interested in the Minister's response.

Mr. Fabricant: I rise to speak briefly in support of the new clause. It seems an extraordinary omission that an application can be made by someone who will not be prosecuted and fined if they deliberately provide false information. I may not have read the Bill thoroughly enough; there may be provisions elsewhere, under which that person can be fined. After all, the Bill, which has the support of Members on both sides, has been introduced because of the continual treatment by salvage operators that is contrary to the law. Those unlawful operators are the ones that we want to control.

I raised earlier the spectre of people putting in place applicants who may be lawful but act on behalf of those who are unlawful. Those people may well put in an application that is knowingly false. I do not know whether level 5 provides the appropriate fine—I look forward to the Minister's remarks on the matter—but it is extraordinary that there is no provision to punish someone for putting in a false application.

The point legislation is to control the sector of the industry that operates unlawfully, because those who operate unlawfully are crooks. Are they not the very people who might put in a false application to confuse local authorities, which may put them on the register when, clearly, they should not be included? My hon. Friend the Member for Buckingham clearly agrees with me.

Miss Anne McIntosh (Vale of York): I join my hon. Friends the Members for Buckingham and for Lichfield in supporting the amendment.

Perhaps the Minister could put my mind at rest. I am a non-practising Scottish advocate—it is several years since I practised—so I have some knowledge of these matters. Is the Minister saying that the matter is dealt with somewhere else in common law? Should there not be a statutory responsibility under the Bill? Does he not agree with my hon. Friends and me that only by adopting new clause 8 and creating this offence will the Government make a success of the Bill? It would make a mockery of the Bill if registered owners of the company or those employed by such people made false applications. Is there a common law duty elsewhere to that effect?

Mr. Clarke: The amendment has a real point and substance. It would make it an offence punishable by a fine of up to £5,000 knowingly to make a false application for entry into the register of motor salvage dealers. The Bill requires a motor salvage dealer to make an application for registration; it does not, however, address the possibility of someone making a false declaration as part of that application. To answer the point made by the hon. Member for Vale of York, that situation is not addressed elsewhere.

We accept that if a person whose registration had been cancelled subsequently reapplied under a false identity, there would be no sanction against him under the Bill. Of course, we hope that an application containing false information would be detected, which would give grounds for rejecting the applications in its own terms. We will consult the industry and local authorities about the form in which applications should be made; there is power to prescribe that in regulations. The application process should be as resistant as possible to falsification.

I am prepared, however, to consider further the possibility of creating an additional criminal offence. I agree to do so and to bring the matter back before Third Reading, in response to the points set out in the new clause. However, I cannot accept the new clause as drafted, as what constitutes making ``a false application'' is far from absolutely clear, and I want to look at that very carefully to ensure that we draft the legislation in the right way. With that assurance, I hope that the Opposition will not press the new clause, and that the clause can stand part of the Bill.

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