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Mr. Greg Knight: I am less satisfied with ministerial control in that area than with judicial control. Would it not be much better to allow the courts to say that the use of the powers must be reasonable instead of allowing a decision to be made on the whim of a transient Minister?
Mr. Mitchell: My right hon. Friend has put his finger on an important point. Parliament must add the necessary safeguards to the Bill so the courts can exercise them. The safeguards on which the Minister relies sadly offer little reassurance. In Committee, she referred to the obligation on inspectors when seeking entry to produce proof of identity and provide a statement of their powers and the company occupier's obligations under proposed new section 453B. Those responsibilities will be prescribed by regulations, but we have not been given any comfort about their content.
Will the Minister give us an undertaking that the regulations will require that the statement will make it unequivocally clear to people on whom it is served that
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they may, without penalty, refuse to admit the inspector or may request that he and anyone accompanying them should leave? The occupier may believe that the investigation is to take place at an unreasonable time, but will the statement provide examples of such circumstances? Will the statement make it clear that officials have no power to search for or seize documents, and will it refer occupiers to the code of conduct and the published complaints procedure for Department of Trade and Industry officials?
The Minister reminded us that a thorough vetting procedure would be completed before the visit took place and that the Secretary of State must give sound reasons for authorising an investigation. In fact, I cannot find any obligation on the Secretary of State to give any reasons to anybody. In Committee, the Minister resisted an amendment that provided expressly for the Secretary of State to have good reason for authorising an investigation, as I explained earlier. I agree with her about the liabilities that directors of limited liability companies enjoy and the responsibilities, such as the exposure to investigations, that are a natural consequence of those privileges. However, those responsibilities may not be assumed willingly by spouses and family members, who may be reluctant to accept that business activities should be carried out in their home. The Bill, however, exposes them to the full force of untrammelled officialdom in their home and the prospect of being hauled before the courts on the inspector's written certification.
The Minister reminded us that the Bill does not entitle inspectors to enter premises by force. However, it entitles them to visit people at home and seek entry with the threat, which will no doubt be set out in the statement issued pursuant to new section 453B, of contempt of court proceedings for non-co-operation. It entitles inspectors to enter premises and remain there, even though no one connected with the company is present. We are assured that, during that time, they will not conduct searches of any kind. The availability of redress, which the Minister accepted was important, turns out to be an action for trespass. Given the way in which the Bill is drafted, any such action would require knowledge of administrative law, practice and quite possibly procedure.
The Minister objected that the amendment requiring a warrant to enter domestic premises would mean the inspector turning up accompanied by a policeman. For reasons that escape me, she appeared to conclude that that automatically would create the impression that criminal activity was being investigated and would make the investigation public. I do not follow her logic, as there may be any number of reasons why a police officer should visit a house; such a visit does not imply the conduct of a criminal investigation. The presence of a neutral third party such as a police officer may be a comfort for people affected by the potentially oppressive exercise of the powers.
I am sure that the Minister accepts that my words have added weight, given the fact that since we began our deliberations on the Bill I have become the Conservative spokesman on policing. The powers are highly intrusive and affect the private lives of children and people without any direct connection to the company's business. Where such intrusion is necessary, it should be proportionate, and there must be effective
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safeguards against abuse, tested not by the high standards and integrity of the Minister and her officials but by measures to deal with unforeseeable pressures that may operate in a very different political climate.
The Bill has got the balance wrong. The requirement for inspectors and investigators to obtain a warrant, which may be subject to conditions, before entering and remaining on residential premises provides an effective safeguard against over-zealous officialdom or abuse, and ensures that any necessary intrusion is carefully and independently weighed for proportionality before it takes place.
The third of the four subjects that we are raising under this set of amendments is characterised by amendment No. 11. The purpose of this and its sister amendments is to include in section 453A, which is to be introduced into the 1985 Act by clause 23, a clear and express limit on the times during which the power to enter and remain on premisesas I have already underlined to the House, these may include domestic as well as business premisescan be exercised by inspectors. In the present form of the Bill, the right to exercise the powers is triggered by what the inspector or investigator thinks would assist him materially in the exercise of his functions and what, in the case of remaining on premises, is necessary for that purpose. The only limitation in the Bill on the exercise of this power is that it may be exercised "at all reasonable times".
The amendment would introduce a subsection into section 453A to make clearer what will in the normal case be regarded as a reasonable time. The exercise of the powers would be limited effectively to the normal working hours of a company unless exercise of the powers only during that time period would seriously impair the work of officials. The limitation applies both to the power of entry and to the period during which an investigator or inspector may remain on the premises.
Mr. Greg Knight: My hon. Friend has taken me with him thus far, but I am a little concerned about the provisions. If the inspectors were in effect allowed to work only during normal office hours, would that not enable a dishonest and unscrupulous director to dispose of damning evidence outside office hours, knowing that the inspector could not possibly appear on his doorstep?
"A visit to business premises outside the company's trading hours would not ordinarily be regarded as taking place at a reasonable time."
No guidance is given in the Bill as to what reasonable times might be. The Government suggested in another place a number of alternative situations as a reason for not rising to the drafting challenge: the possibility that a company trades only at night; that it might not have its own normal business hours; or that it might change them in order to frustrate investigation, the very point made a moment ago by my right hon. Friend.
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In Committee, the Minister refused to adopt amendments that sought to limit the exercise of the entry and remainder powers to normal office hours or to define "reasonable times" as 9 am to 5.30 pm. The grounds for refusing to accept the amendments were, respectively, that a company may not have normal office hours, and that if the hours between 9 and 5.30 were set out as normal office hours, companies would trade outside those hours to avoid or frustrate investigation.
The amendment provides answers to both concerns. First, it refers to "normal working hours", a phrase that encompasses a wider range of activity than the phrase "office hours". Secondly, in the case of companies whose activities extend to evenings and weekends, the inspector would not be precluded from pursuing investigations at those times if necessary, because they would be the company's normal working hours. In any event, the amendment preserves the inspector's power to enter premises at any other times, provided that he reasonably believes that to be necessary because his investigative functions otherwise would be seriously impaired.
Our amendment provides desirable certainty for companies and the public, as well for Department of Trade and Industry officials, about what, in the vast majority of cases, will be reasonable times for the exercise of powers of entry, while preserving the power of inspectors to operate at other times when their investigations otherwise would be seriously impaired. At other times and during other periods, investigators will be required to act at reasonable times.
The final change is characterised by amendment No. 24, which limits officials' wide powers in proposed new section 453A of the Companies Act 1985 to enter and remain on premises. First, the amendment imposes a one-month time limit within which inspectors may initially seek entry into premises, which may be mixed business-domestic premises as well as commercial premises. Secondly, it limits the period in which investigators may continuously remain at a company's premises without express authorisation by the Secretary of State. A limit on the period in which the power of entry may be exercised should encourage inspectors to get on with their investigations and not hang about squatting in somebody's home. It provides an effective safeguard against possible abuse in the form of excessively long, drawn-out investigations that cease to be fruitful and begin to border on the oppressive.
In the case of genuinely lengthy and complex investigations, the amendment provides the Secretary of State with the power to extend the one-month period. The requirement for reauthorisation should focus the minds of the Secretary of State and officials on the reasonableness of continuing to use those powers and requires circumstances and considerations to be reviewed and formally recorded regularly.
The intention is that, unlike investigations conducted under section 431 of the 1995 Act, which are intended to be public, investigations under proposed new section 447 should be conducted confidentially and without publicity. That addresses the concern that the continued
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presence of inspectors at a company's trading premises could result effectively in the investigation being publicised.
In Committee, I raised the example of a business that was largely a front-of-house operation to which customers or the public had access. The presence of an investigation would be effectively and publicly advertised by the persistent presence over a period of time of DTI inspectors on the premises asking questions of employees in front of customers, or even asking questions of customers themselves. Such practices are envisaged in proposed new section 447(3) of the 1985 Act, and nothing could be calculated to cause greater damage to the reputation of a company, which might prove to be entirely innocent of any wrongdoing.
It is possible to envisage a different political climate in which inspectors might or might not be encouraged or induced by political pressures to remain on the premises of a particular companyperhaps a company that conducts a politically controversial, but lawful and legitimate activityin order to close down its trading operations by stealth. That might involve driving away customers by persistent questioning and making employees uncomfortable or insecure by a continuous and oppressive presence in the workplace. The possibility of such abuse is effectively balanced by the requirement to seek, explain and justify the need to attend a business premises continuously for an extended period.
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