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30 Oct 2002 : Column 955—continued

Mr. Deputy Speaker (Sir Michael Lord): With this we may discuss Lords amendments Nos. 167 to 173.

Miss Johnson: Although not all the amendments are related, they are all technical amendments to the provisions on individual insolvency. I thank the Opposition in the other place. With the exception of amendments Nos. 168, 169 and 173, the amendments were inspired by helpful amendments tabled by them, for which we are most grateful.

I could comment in detail on the amendments if hon. Members wish, but I do not propose to do so. Amendment No. 166 ensures that any variation of an income payments agreement must be in writing. Given that an income payments agreement itself must be in writing, it is a sensible clarifying amendment. Amendments Nos. 167, 170 and 171 apply to clause 257 on the bankrupt's home and provide protection to what the noble Lord Freeman referred to as the deserted spouse.

Mr. Greg Knight: I may depart company with my noble Friends in the other place on this matter. Amendment No. 166 is, on the face of it, the most reasonable amendment tabled to the Bill. However, it is a long-established facet of English law that contracts do not have to be written. I await to be corrected by a lawyer, but I recall from the days when I practised law that the only aspect of law for which one had to produce a written contract was for the sale or purchase of property—land. That was introduced in the Law of Property Act 1925 by one of my political heroes, F. E. Smith, the First Earl of Birkenhead.

Since then, lawyers have accepted that it is reasonable that if someone is selling property, there has to be evidence of a written contract because of the risk of gazumping—but that is all that the Act has to say on the matter. It does not say that the contract has to be written, just that it has to be evidenced in writing. Why is it deemed that an agreement between the parties has to go further than the Law of Property Act and be contained in a written agreement?

Mr. Forth: I hesitate to intervene because I am not a lawyer and my right hon. Friend is a distinguished member of that profession.

In the context of the stipulation that a contract is to be determined by agreement between the parties, does there have to be a witness to it if it is simply verbal? One of the dangers is that we might get into the difficulty—I speak as a layman—of one person's word against another. Given the importance of the matters under consideration, it strikes me that there is a fragility or vulnerability in that context. Does my right hon. Friend

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believe that a simple verbal agreement without witnesses is sufficiently robust? Perhaps there should be a provision for a written agreement in such cases.

Mr. Knight: As I understand it, amendment No. 166 requires a written agreement—a document in writing between two or more parties. Ten or more people might witness a verbal agreement. They are honest citizens who are not going to perjure themselves. They would have heard the agreement made, but if this amendment were accepted, the agreement would be outwith the scope of the Bill, and that seems rather odd.

9 pm

The Minister dismissed this amendment as being technical, but we are seeking to make this a unique area of law. [Interruption.] I hear the Minister for Employment Relations, Industry and the Regions, the hon. Member for Hull, West and Hessle (Alan Johnson), muttering incoherently on the Front Bench, but I have to say to him that I am aware of only one case in English law where one needs evidence of a contract, and that is in the sale or purchase of land. We are now taking that a stage further and saying that written evidence is not enough; a written contract is necessary. Why should such a draconian provision be introduced?

My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) touched on what many see as the danger here. If an oral contract is sufficient, someone who is less than honest may be willing to persuade his wife or another person to perjure themselves at a court or tribunal, and we have seen that happen in a number of court cases recently. We do not want to encourage that, but where a court can be satisfied that there is an agreement, even if it is not in writing, surely that should be sufficient.

Mr. Forth: I want to press the Minister to give further clarification on amendment No. 167. It strikes me—I confess that I speak as a layman, but such is the role that we have in these circumstances—that we are making some rather radical alterations to the sense and thrust of the existing provision. The wording that the amendment seeks to change is clear: it says that the provision applies where the property comprising the bankrupt's estate consists of an interest in a dwelling house that, at the date of the bankruptcy, was the bankrupt's sole or principal residence.

The amendment seeks radically to alter that sense. Instead of referring to the

it would refer to the

By any definition, that considerably widens the scope of the provision. We need clarification from the Minister to establish whether the amendment seeks to broaden the definition so as to include more principal or sole residences, or whether it seeks to narrow the definition.

I thought that I heard some reference to divorced spouses a moment ago, and after simply reading the wording I am not entirely clear whether we are trying to

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include or exclude them. On the face of it, the amendment means that the measure will now apply to one of a range of properties in the bankrupt's estate, and that range will extend beyond the property of the bankrupt himself.

That seems radically to alter the meaning of the provision, and it could have a considerable effect on a number of people, who may be innocent parties. I am not saying that any guilt should be attached to someone who is bankrupt. In fact, as the House will know, our cultural attitude to bankruptcy, which tends, wrongly in my view, to regard bankruptcy as a wicked act, is very different from that of our American cousins, who regard it as something benign that one must go through if one is to achieve something in future. I wonder whether we are trying to spread the blame and bring in others beyond the bankrupt himself or whether we are trying to protect those others.

We seek from the Minister clarification about the thrust of the amendment and its likely effect. It would be helpful if she could give us some idea of the numbers involved. I do not know whether we are talking about a few unusual cases or a larger number. If we start to include spouses or exes, the numbers could rise considerably.

Mr. Greg Knight: Lords amendment No. 167 is highly discriminatory or defective because proposed paragraph (b) refers to the bankrupt's spouse in the singular. What about polygamous marriages and the Mormon faith?

Mr. Forth: My right hon. Friend is trying to draw me into territory that I am reluctant to enter. In turn, however, will he clarify something for me as a distinguished lawyer? Is he suggesting that polygamous marriages are sufficiently legal in our culture to be encompassed by the amendment? My lay interpretation is that in our Judaeo-Christian tradition the amendment can apply only to one spouse, not multiple spouses as he suggests. I should be grateful if my right hon. Friend would consider something. It is possible that under proposed paragraph (c) there would be multiple ex-spouses—that possibility does arise in the Judaeo-Christian tradition and our legal framework. My right hon. Friend was therefore half-right, but was looking at the wrong paragraph—he concentrated on proposed paragraph (b) instead of (c). I shall allow him to think about that while giving way to my hon. Friend the Member for Cities of London and Westminster (Mr. Field).

Mr. Mark Field: I may be able to assist. Polygamous marriages are not recognised in English law, but my right hon. Friend is a polygamous politician. Not only has he represented Bromley and Chislehurst but a Worcestershire seat and another seat in the European Parliament. Our right hon. Friend the Member for East Yorkshire (Mr. Knight) is also polygamous, having previously represented Derby, North.

Mr. Deputy Speaker: Order. Before the right hon. Gentleman responds to that intervention, I remind him that he should stay tightly on track.

Mr. Forth: Of course I shall, Mr. Deputy Speaker. Uncharacteristically, however, my hon. Friend

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underestimated me, as he forgot that I was a local councillor in Brentwood in Essex back in the 1960s. My multiplicity is almost unlimited, but it would be immodest of me to dwell on it—the House knows that that would be uncharacteristic.

However, I wish to return to the remarks of my right hon. Friend the Member for East Yorkshire, which applied strictly to the amendment. The Minister, as happens from time to time when we are deliberating on such matters, tried to give the impression that we were considering a technicality—we were talking about a few words that would have little effect, and that we would have a quick glance at the provision and nod it through. I suspect that we are only scratching the surface and have an inkling that the provision could be problematic, as we do not know what its scope is. We need the Minister's guidance as to whether the provision is restrictive or permissive.

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