First Standing Committee on
Monday 12 February 2001
[Mr. Jonathan Sayeed in the Chair]
Company and Business Names (Amendment) Regulations 2001
The Minister for Competition and Consumer Affairs (Dr. Kim Howells): I beg to move,
That the Committee has considered the Company and Business Names (Amendment) Regulations 2001 (S.I. 2001, No. 259).
I have not had the pleasure of serving under your chairmanship before, Mr. Sayeed, but I hope that our proceedings on this occasion will be brief.
The regulations give full effect to the Company and Business Names (Chamber of Commerce, Etc.) Act 1999. They amend the Company and Business Names Regulations 1981 and specify a number of expressions and their Welsh equivalents that include the term ``chamber'' and that cannot be used in a company or business name without the Secretary of State's permission. Those expressions cover the range of activities that would be expected of a chamber and include ``chamber of business'', ``chamber of commerce'', ``chamber of training and enterprise'' and their Welsh equivalents. The regulations provide that companies and businesses whose names include those expressions before they come into force on 10 May will not be affected.
To put the regulations in context and explain their purpose, I shall set out the statutory regime that governs the use of certain sensitive expressions in a business or company name, and talk briefly about the 1999 Act. Under the 1981 regulations, provided for in the Companies Act 1985 and the Business Names Act 1985, companies or businesses must seek permission from the Secretary of State or another relevant body before they can register or use in their name any of a number of prescribed words or expressions. They include words that imply business pre-eminence or representative status such as ``association'' or ``authority'', or words that imply specific functions such as ``charity'', ``insurance'' or ``co-operative''. Those safeguards are there to ensure that companies and businesses cannot use names that might give a misleading impression of the nature of their business or stature.
The British Chambers of Commerce expressed concern that business could be misled by rogue companies or businesses that used the name ``chamber of commerce'' but did not perform the functions commonly understood by that term. In response to those concerns, the hon. Member for South Cambridgeshire (Mr. Lansley)who, I am glad to see, has joined us todayintroduced a private Member's Bill, the Company and Business Names (Chamber of Commerce, Etc.) Bill, to strengthen the safeguards. In acknowledgement of the role of the BCC and the Scottish Chambers of Commerce in promoting public recognition of the title ``chambers'' as synonymous with quality and integrity, the Government fully supported that Bill, which received Royal Assent in 1999.
The 1999 Act ensures that the Secretary of State will consult at least one representative body in determining whether ``chamber of commerce'', ``chamber of trade'' and similar expressions may be used as part of a registered company or business name. The Act names the BCC and SCC as such bodies for the purposes of the Act and provides that the Secretary of State may issue guidance on the factors to be taken into account in considering applications for the use of such expressions. The regulations have the support of both the BCC and SCC, which have been fully consulted on them and on their impact on business. They believe that both the 1999 Act and these implementing regulations will serve to protect businesses from organisations that might seek to pass themselves off as bona fide chambers but that do not represent their interests.
As provided for in the 1999 Act, and to assist those companies or businesses that wish to use any of the expressions listed in the regulations, guidance has been prepared on the factors that the Secretary of State will take into account in considering applications for use in a name. Those include the body's purpose and constitution and its independence, representative nature and geographical location. The Government undertook that the BCC and SCC would be fully consulted on the guidance, and both have confirmed that they agree with the proposals. A copy of the guidance has been placed in the Library.In summary, the regulations will contribute to the wider efforts of the BCC and SCC to build confidence in and maintain the integrity of the chamber movement. I commend them to the Committee.
Mr. Nick Gibb (Bognor Regis and Littlehampton): I, too, welcome you to the Chair, Mr. Sayeed. The seating arrangement of the Committee is interesting, given that when the Bill was in Committee, everyone seemed to be seated on the Government side. Now we are back in our traditional adversarial positions. I also find that a member of the shadow Cabinet is sitting behind me, which is where the shadow Cabinet should be. I pay tribute to my hon. Friend the Member for South Cambridgeshire not only for getting his private Member's Bill on the statute book but for introducing a piece of legislation that does not increase public spending, taxation or regulatory burdens and does not reduce personal freedoms. I can only hope that colleagues on both sides of the House will adhere to those four maxims when proposing their own private Member's Bills.
My hon. Friend now has the added pleasure of spawning two pieces of secondary legislation, which again neither add to spending, tax or regulation nor restrict personal freedom. S.I. 2001, No. 258, which we are not debating today, brings into force the Company and Business Names (Chamber of Commerce, Etc.) Act 1999. The Act effectively enables the British Chambers of Commerce and its Scottish equivalent to prevent bodies and individuals from using the term ``chambers of commerce'' and other similar terms without their approval, unless overridden by the Secretary of State. It is a useful protection for a term that people have come to trust. The commencement date for that Act, 10 May 2001, is set out in that order. It fulfils the promise given in Committee by the then Minister for Small Firms, Trade and Industry, the hon. Member for North Swindon (Mr. Wills), that the Act would be brought into effect at the same time as the relevant regulations.
The regulations also come into effect on 10 May 2001. As a fulfilment of the requirement in section 1 of the 1999 Act, it introduces a whole new set of ``chamber of commerce'' terms. The four that are already on the statute book are ``chamber of commerce, ``chamber of commerce, training and enterprise'', ``chamber of industry'' and ``chamber of trade''. The new terms include ``chamber of business'', ``chamber of commerce and industry'', ``chamber of enterprise'', ``chamber of trade and industry'', ``chamber of training'' and ``chamber of training and enterprise'', together with the Welsh equivalents. I was disappointed that the Minister did not spell out all the Welsh equivalents and their plurals.
Mr. Greg Pope (Hyndburn): You can do it.
Mr. Gibb: I have no intention of doing that myself.
The BCC sought those additions initially, so the BCC and SCC support the regulations. The Minister and my hon. Friend will be pleased to know that the Opposition also support them. I am delighted to hear that the Minister has placed a copy of the guidance in the Library, but could he say something about its contents?
When the Bill was on Report, my hon. Friend set out some of the things that he felt the guidance should contain. For example, he said that in almost all circumstances chambers of commerce should be incorporated as companies limited by guarantee to ensure that they cannot be used for profit-distributing purposes. I hope that the Minister will comment on that when he responds to the debate.
My hon. Friend also said that a chamber of commerce should not be a subsidiary or division of any other body except another chamber of commerce, because its independence is important. He said that the constitutional arrangements of chambers of commerce should
``provide for it to be controlled by the whole of its membershipnot by a faction or a cabal, still less by an individual. There should be an expectation that a very high proportion of the members of a chamber of commerce should be engaged in manufacture, commerce, business, trade, shipping, distribution, agriculture, fishing or professional practice.''
Is that what the Minister understands will be placed in the Library? Journalism is not mentioned, as the chamber of commerce will be independent.
Will the guidance take into account whether a chamber of commerce whose name is a geographical descriptor is genuinely representative of businesses in that area? On that matter my hon. Friend said that
``a chamber of commerce should exist to serve and promote the interests of the whole business community in any place or area to which its name is applied...a chamber of commerce should provide a service to the local business community.''
The last of my hon. Friend's criteria was that
``a chamber should undertake, or encourage its members to undertake, joint activities and arrangements for mutual support'':[Official Report, 7 May 1999; Vol. 330, c. 1219-20.]
That is what we hope will be included in the guidance.
Mr. Brian Cotter (Weston-super-Mare): I supported the Bill and I am pleased to support the regulations.
Mr. Andrew Lansley (South Cambridgeshire): As an interloper in the Committee, I am pleased to be able to thank the Minister for acting on the opportunity presented by the 1999 Act. As the hon. Member for Weston-super-Mare (Mr. Cotter) said, the Bill was supported by all parties in its passage through the House and is appreciated by chambers of commerce.
I recently met members of the North Staffordshire chamber of commerce; they and members of other chambers of commerce attach great importance to the continuing work to try to secure accreditation of and quality in chambers of commerce. The further protection provided by the companies and business names legislation will buttress that work.
My hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) was right to say that the form of guidance to be published with the regulations will be important in assisting the business community to understand more fully the nature of a chamber of commerce. We hope that our chambers of commerce will match the quality and stature of chambers of commerce in other countries, which have public law status, but that they will provide for business communities and protect those businesses that use their services on a voluntary basis, without requiring them to be members.
I have some questions for the Minister, as I want to be confident that the regulations will achieve the intended purpose. He and the Department helpfully consulted the British Chambers of Commerce and took note of the comments made. Several chambers of commerce have the title ``chamber of commerce, trade and industry'', which is not specified in the list, although ``chamber of commerce, training and enterprise'' is specified. I was slightly perplexed at that, as I thought that any title in which ``chamber of commerce'' is included would be protected. I should be grateful if he would make it clear that, even though ``trade and industry'' might be added to such a title, a title that has the words ``chamber of commerce'' at the beginning is covered in the list.
Although the regulations do not address the question of geographical descriptors, will the Minister confirm that those descriptors will have no qualifying effect, whether they appear at the front or the end of a title? Will the simple fact of their use within any proposed title be enough to bring it within the scope of those that require the Secretary of State's formal approval against the guidance?