Previous SectionIndexHome Page

Mr. Waterson: I am not wholly convinced, but in the interests of making progress, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Miss Johnson: I beg to move amendment No. 99, in page 243, line 34, after "96", insert "and 99 to 101A".

Madam Deputy Speaker (Sylvia Heal): With this it will be convenient to take Government amendments Nos. 100 and 101, 324 to 326, 102 to 104, 327 and 105, 106 to 124, 328, 125, 329, 126, 330, 331 and 127, 332 to 345, 128, 346, 129 and 347, 130 to 133, 348 and 134, 349 to 353, 140, 354 and 355.

Miss Johnson: It will be a relief to everyone in the Chamber, not least yourself, Madam Deputy Speaker, that these amendments are mostly technical and consequential. They do not deal with fundamental policy, so I do not propose to deal with them one by one. They will, however, ensure that the revised administration procedure works effectively. They are consequential amendments to the existing provisions of the Insolvency Act 1986 and other measures, and are necessary as a result of the proposed changes to the administration procedure. I do not propose to speak about them in detail, but if hon. Members would like me to address a particular amendment, I am happy to do so.

A number of Government amendments have been tabled in response to points raised by hon. Members in Committee. Having listened to what they said, we agreed to go away and consider certain matters further. I am pleased to say that a number of the amendments were tabled as a result of that discussion, and I hope that hon. Members will agree that they make useful improvements and support them accordingly.

I should like briefly to address Government amendment No. 101, which will ensure that the special insolvency provisions that apply to financial services businesses, including banks and insurance companies, under part XXIV of the Financial Services and Markets Act 2000, continue to have affect. I think that that is probably the only amendment that is worth mentioning at this early stage.

I hope that hon. Members will support the amendments.

6.30 pm

Mr. Waterson: You will be relieved to hear, Madam Deputy Speaker, that I certainly do not want the Minister to deal with the amendments in any detail. I am grateful to her for acknowledging that a number of them arose from points made by the official Opposition in Committee. It would be positively churlish of us to speak at any length to the amendments, let alone press them to a Division.

17 Jun 2002 : Column 66

Mr. Mark Field: I, too, should like to express my support for many of the amendments that have been tabled as a result of the various Committee discussions. In particular, given the importance of the insurance sector in my constituency, I welcome Government amendment No. 101, to which the Minister specifically referred.

I want to make a few brief comments, partly in relation to a briefing that may bring to light one or two slight concerns about administration. I apologise to the Minister for not mentioning the matter to her already, but as I received the briefing earlier today, I have not had an opportunity to do so. She may wish to return to the subject at a later stage. Indeed, I would be happy to deal with it in that spirit.

More generally, before we consign the concept of administrative receivership to the annals of insolvency and company law history, I point out that it has been improved as a very quick, cheap and often effective means of allowing a business to be sold without interference from either companies or creditors. Many of us have recognised that the potentially unfettered power of secured creditors to appoint receivers has sometimes made them insufficiently accountable to other creditors. Such concern was expressed in Committee and is addressed by one or two of the amendments. It seemed to us that such appointments could put paid to other potential rescue plans. Clearly, the Bill seeks to water down some of those powers in an insolvency situation. One of the anxieties in Committee was to ensure for all creditors and classes of creditors as great a degree of certainty as possible as to replacement.

As I said, I should like to address a specific concern to which I have been alerted by a constituent, an international bank, in relation to the commercial property market. The briefing that I received states that there has been some anxiety about the

which is at a tentative stage in the economic cycle as it is,

I hope that the Minister and other hon. Members will forgive me if I now quote a little more extensively from the briefing, which obviously deals with a somewhat technical matter. It goes on to state:

That runs slightly counter to the concerns expressed in the debate about the previous clause, when we wanted to stress that it is all too often forgotten that it is not a company, but a business, that is being maintained. In this case, however, it is a special purpose vehicle company that may run the risk of insolvency procedure and it will wish to ensure proper safeguards. The special purpose vehicles typically have no employees.

The briefing goes on to state:

which must be done rapidly where there are potential difficulties. It also states:

17 Jun 2002 : Column 67

under the doubtless fairly stringent terms of their own agreement—

The concern is that the abolition of administrative receivership runs the risk of increasing the level of commercial uncertainty. In a slightly more uncertain property market—I suspect that the entire property sector will face such a market during the next few years—the abolition will

Even more catastrophically, in relation to some of the projects that are being put into place, the abolition will also lead to a withdrawal of funding by the banking system. Of course, that would especially affect more marginal projects. That is a concern for me in central London, but I am sure that my concern is shared in all corners of the United Kingdom. It is feared that the consequences will be a reduction of refurbishment and regeneration, as well as in development funding, in the commercial property sector. That is especially important in relation to various central Government proposals to ensure substantial development on brownfield sites. Clearly, all of us who represent urban or suburban seats are keen to encourage such development.

The briefing also states:

I understand that the Department has been lobbied for

Again, that was discussed at some length when we considered some of the schedules in Committee. As the Minister will know, an exception has been created for projects where the debt is in excess of £50 million. As I have indicated, however, the difficulty with that provision in relation to specific property finance is that the threshold is way too high for the small special purpose vehicles that are being created. In relation to certain property finance transactions, might it be possible to introduce a lower threshold of, say, £5 million to £10 million? I know that that proposal was discussed tangentially in Committee, but it strikes me that a major area of Government policy is involved, especially in relation to regeneration and refurbishment projects. We run the risk of causing such projects to fall outside the protection that would otherwise be provided in the proposed administration procedure.

I appreciate that the Minister may not have had full notice of those issues, although I suspect that the Department has been subject to various lobbying in recent weeks and months. I would be happy for her to deal with the matter in a written response, if that is necessary, but I wanted to put it on record and felt that now was the most appropriate stage in today's discussions at which to raise it.

Miss Melanie Johnson: Indeed, those subjects have been much discussed and there has been considerable liaison between Departments and with interested parties about appropriate provisions in respect of property

17 Jun 2002 : Column 68

development. I do not believe that a bespoke exception is necessary. As the hon. Member for Cities of London and Westminster (Mr. Field) remarked, the definition in the Bill is wide enough to include any project company that incurs a debt of at least £50 million and over which there are step-in rights. That is the case regardless of the reason why the project in question has been set up.

I heard what the hon. Member for Cities of London and Westminster said about special purpose vehicles of £10 million in value, but it seems a little unusual, especially in the context of our earlier remarks about property values in central London. I am listening to what the hon. Gentleman has to say and I should be grateful if he would furnish me with some further details about the background. I shall certainly consider the matter further, but I do not currently believe that it necessary to introduce any further provision. I shall undertake to look further at any evidence that he submits to me.

Amendment agreed to.

Amendments made: No. 100, in page 243, line 34, leave out "the replacement of" and insert "replacement and additional".

No. 101, in page 243, line 41, at end insert—

Next Section

IndexHome Page