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Company Directors
3. Mr. Michael Jack (Fylde): What measures can be taken against company directors who persistently default in their financial and legal responsibilities. [58218]
The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): A number of measures can be taken, including investigating the company and disqualifying and/or prosecuting the company's directors.
Mr. Jack: I am grateful to the Minister for her answer. A constituent of mine has been the victim of a serial liquidator, as has Customs and Excise. During the past few years, the individual concerned has put five companies into liquidation, leaving my constituent out of pocket by some £20,000 and Customs by £38,000, yet nothing seems to have been done so far to stop that individual continually walking away from his obligations.
Michael Fabricant (Lichfield): Name him.
Mr. Jack: I am advised that, if I do as my hon. Friend suggests, the individual could well go to ground, thus making it more difficult for the authorities to get hold of him. May I ask the Minister, first, what powers can be deployed to deal with such people and, secondly, whether, if I furnish her with a file of the cases that I have in mind, she will give me an undertaking to investigate them with all speed?
Miss Johnson: I take the right hon. Gentleman's comments very seriously. Such cases need to be looked at, and I will, of course, ask the appropriate authorities to look into any details that he can furnish me with so that the matter can be dealt with appropriately.
In relation to the further issue that the right hon. Gentleman raises about the forms of redress and penalty that can be used, there are a number of different ways to tackle such issues. Obviously, directors can be disqualified as being unfit—indeed, 12,000 have been since the Insolvency Act 1986 was put in place, and in the year to March 2002, 1,750 directors have been disqualified. Companies can also be wound up and other measures can be taken, as I said earlier.
Mr. Martin O'Neill (Ochil): I hear what my hon. Friend says, but will she also bear it in mind that one of the problems that small businesses have faced in recent years has been the culture of blame attached to insolvency? The Government have been trying to change that culture so that businesses and those who finance them are prepared to take a chance on people, so that we get a better balance. Always focusing on the defaulters when businesses go wrong is to get the balance wrong. The focus should be on trying to help people back into business. Those who deserve punishment should get it, but the emphasis must be on supporting those businesses that get into difficulty.
Miss Johnson: I completely agree with my hon. Friend on this issue; it is a matter of striking the right balance. Indeed, that is what we shall do through the current Enterprise Bill, which will be considered on Report later today. In fact, we are considering making a distinction between bankruptcy for those who are not reckless and those subject to bankruptcy restriction orders, which can last for between two and 15 years and will recognise the reckless nature of bankruptcy where that occurs. In that way, a distinction can be made between those who have unwittingly become bankrupt and should be given a fair chance to start again without stigmatisation and those who rightly should be stigmatised and kept from running companies because of their previous track records.
Mr. Nigel Waterson (Eastbourne): Does not the Minister agree that the Government's proposals in the
Enterprise Bill to make bankruptcy easier, to remove the stigma from it and dramatically to reduce the scope for investigating bankruptcies will make it easier for rogues or well-intentioned incompetents to leave a trail of financial wreckage in their wake?
Miss Johnson: That is absolute nonsense, for the reasons that I have given in answering my hon. Friend the Member for Ochil (Mr. O'Neill). The hon. Gentleman misses the point: there are penalties of between two and 15 years under bankruptcy restriction orders. Indeed, in relation to the remarks made by the right hon. Member for Fylde (Mr. Jack), the previous record of bankrupts will be taken into consideration by the courts in looking at bankruptcy restriction orders, so serial bankrupts will be very much an issue for those in the courts who consider imposing bankruptcy restriction orders and the very serious penalties that they involve.
Social Enterprises
4. Mr. Colin Challen (Morley and Rothwell): What plans she has to support social enterprises in the UK. [58219]
The Minister for E-Commerce and Competitiveness (Mr. Stephen Timms): We are preparing a Government strategy for social enterprise at the moment. We want an environment in which social enterprises flourish, because of their benefits in boosting productivity and competitiveness, in contributing to the regeneration of communities and in developing new ways of delivering public services.
Mr. Challen: I thank my hon. Friend for that reply. I congratulate the Government on setting up the national social enterprise unit, which is a great initiative. I want to tackle the issue at a local level and have us focus on what happens on, say, council estates, many of which were designed in the 1960s and 1970s with no provision for the possibility of enterprise. They consist of just housing and perhaps one pub, one chippy and one shop.
We need to consider how we can build the capacity of local populations. I want the Government to consider how joined-up thinking might help local people create accredited community safety schemes in the social enterprise arena. In considering capacity-building structures, we ought to look at places such as west Yorkshire where, for example, there is no co-operative development agency for local people to consult.
Mr. Timms: My hon. Friend makes some important points. Our aim is for enterprise to be centre stage in community regeneration in every part of the country, particularly in some of the areas with the characteristics that he describes. We want in every area a sustainable base for business and jobs in order to provide income and services for people locally. We see social enterprises alongside conventional enterprises as key to bringing communities out of decline. That will be at the heart of our social enterprise strategy, which will be published in the summer. A wide cross-section of the social enterprise sector has been involved in working on that.
I agree with my hon. Friend about increasing capacity through community development finance intermediaries, and of course the community investment tax credit in the Budget will be helpful in achieving that.
Judy Mallaber (Amber Valley): Does my hon. Friend agree that post offices are a very good example of social enterprises benefiting the local community? Will he assure me that the announcement this morning by Allan Leighton—now, I am pleased to say, of Royal Mail—will not lead to further closures of post offices in rural areas and market towns?
Mr. Timms: I agree with my hon. Friend about the importance of post offices in rural areas. We have made it clear that we are absolutely committed to the postal network. Post offices provide a lifeline in many of the communities to which she refers. That is why we placed a formal requirement on the Post Office to maintain the rural network and to prevent avoidable closures. That is not affected in any way by the announcement this morning. Of course, my right hon. Friend the Secretary of State will have more to say about the Post Office in a few minutes.
Miss Anne Begg (Aberdeen, South): I recently visited three businesses in Aberdeen—Printability, Turning Point and Square One—which have adopted the social enterprise model to deliver work placements for people with mental health problems. I was very impressed by what I saw. It should be a model for the future as it not only provides a supportive work environment but keeps people out of hospital, gives them an important role in society and eases them back into work. What help can the Government give to such enterprises to ensure the provision of that valuable work and that the schemes fit the model of welfare to work for disabled people put forward by the Department for Work and Pensions?
Mr. Timms: My hon. Friend describes an excellent example of exactly what we want to encourage with the social enterprise strategy, which will be published in the summer. We are taking a range of measures to encourage such enterprise. As she says, the benefits are in providing employment opportunities and in delivering services to local communities, often where those services are not available otherwise. That will be the aim at the heart of the strategy. I draw her attention to the community investment tax credit, which will be a big help in that regard, although there will be a number of other measures in the strategy. I would be interested to know more about the example in her area.
Cefn Croes Wind Farm
5. Mr. Roger Williams (Brecon and Radnorshire): If she will make a statement on the Cefn Croes wind farm application. [58220]
The Minister for Energy and Construction (Mr. Brian Wilson): Consent was granted on 23 May. Copies of the decision letter are available in the Library of the House.
Mr. Williams: I thank the Minister for that reply, but I am sure he will accept that there is considerable disquiet
in Wales about the way in which the application was handled. Groups of people still wish to contest the decision. However, I wish to move on.There is cross-party support in the National Assembly for Wales for decisions on all power stations to be devolved to the National Assembly. I believe that there is considerable cross-party support for that in this House as well. Is the Minister willing to enter into discussions with the Secretary of State for Wales and appropriate Ministers in the National Assembly to see how devolution of decision making could be achieved? Will he report back on the outcome of those discussions?
Mr. Wilson: The short answer to the main part of the hon. Gentleman's question is yes. The discussions are going on.
This issue remained a reserved matter at the time of devolution because the transmission system for England and Wales operates as one. Therefore, it was more appropriate to deal with it on an England and Wales-wide basis. Scotland has a separate grid system, so responsibility for it was devolved to Scotland.
Discussions are going on to get the balance right, and I have no strong feelings about the issue. The current system depends on the way in which devolution was arranged. If it is suitable to change it at some future time, let us look at that. However, at the moment, we operate within the rules as they are laid down.
Mr. Simon Thomas (Ceredigion): The Minister will know that I supported this application which is in my constituency. However, the way the application was decided left a sour taste in the mouths of many people in my area and it left many people in Wales feeling that they had been treated as infant children who were not able to take planning decisions for themselves.
I welcome what the Minister has just said about looking at the issue again. He can do that at the stroke of a pen. In the previous Session, I introduced a Bill to change the electricity legislation and to allow changes to happen, so I hope he will consider that to see how he might easily change the system. Notwithstanding the applications that will come to him from my constituency and elsewhere in south Wales, will he give an undertaking that this is the last time he will take such a decision and that in future he will leave it to the people of Wales to decide?
Mr. Wilson: The hon. Gentleman is having his wind farm and eating it. He agrees with the decision, but he is moaning about the way in which it was taken. I am a strong believer in local democracy and an important point is the fact that the local authority voted 18:3 in favour of the wind farm. That fact is totally ignored in most of the coverage of the issue—all that is talked about is the vociferous minority who have better access to the media and, indeed, to the House of Lords. I make no apology for the decision or the democratic input into it.
I am not suggesting that the present system is wrong. I have given the rational basis for it, but other, wider factors are coming into play to create a UK-wide transmission system and they might make it appropriate to consider the issue in a different context.
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