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Companies Bill [ Lords] (Programme) (No. 3)
4.4 pm
The Minister for Industry and the Regions (Margaret Hodge): I beg to move,
That the Order of 6th June 2006 (Company Law Reform Bill [Lords] (Programme)) be varied as follows:
1. Paragraphs 4 and 5 of the Order shall be omitted.
2. Proceedings on consideration and Third Reading shall be completed in three days.
3. Proceedings on consideration shall be taken on each of those days as shown in the first column of the Table and in the order so shown.
4. Each part of those proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in relation to it in the second column of the Table.
5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at 6.00 p.m. on the third day.
The motion increases the time allowed on Report and Third Reading from one day to three days. It also sets out an order of consideration and a time for conclusion of proceedings on various parts, which has been discussed through the usual channels to assist us in making the best use of the time. This protects time for Members to debate the areas regarded as most important, and allows time for scrutiny of other areas of the Bill.
We recognise that the Bill is long and complex, but there has been a high degree of collaboration with interested parties. The Bill has had the benefit of detailed scrutiny in another place and of 11 days in Committee. There is a strong consensus on a great deal of it.
Mr. Edward Garnier (Harborough) (Con): Before the Minister concludes her remarks, will she confirm that the Government are introducing 1,000 new amendments to the Bill at this late stage?
Margaret Hodge: No, we are not introducing 1,000 new amendments. [Hon. Members: “How many?”] We are introducing six hundred and—[Hon. Members: “The Minister does not know.”] It is not a matter of not knowing. It is a matter of looking at what those amendments seek to do.
If Opposition Members wish to spend the valuable time that we have to scrutinise the Bill on a programme motion, so be it. I draw their attention to the fact that the longer we spend on the programme motion, the less time we have to discuss the meat of the Bill, which people outside would expect us to do. We are attempting to get the framework of company law right for the next generation. On that basis, and in the hope that we can save time on this part of the proceedings, I commend the programme motion to the House.
4.7 pm
Mr. Alan Duncan (Rutland and Melton) (Con):
The House has just heard a highly inadequate justification for a programme motion that curtails debate on a massive piece of legislation. We are about to move on to consideration of the largest Bill ever to come before Parliament. I believe I am right in saying that this is the biggest Bill in parliamentary history. Indeed, some people have estimated that if all the documents relating to the Bill, its amendments, its explanatory notes and its reprinted papers were put in a pile, the pile would be
even taller than I am, and perhaps even taller than my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski).
The Bill has been eight years in preparation and has undergone significant changes already during its parliamentary study, before we come to consider 100 proposed new clauses and—perhaps the Minister can remember this figure—836 amendments, not to mention three new schedules. The vast majority of these are being proposed by the Government.
Despite the eight years of preparation, and the fact that the parliamentary Session began back in May last year, this enormous Bill did not receive a Second Reading in another place until 11 January this year. Unsurprisingly, it took their lordships nearly six months to complete their consideration of it. They did that in a thorough and expert way and did their best to consider the Bill, as Parliament should, clause by clause, line by line and argument by argument. The Bill received its Second Reading on the third sitting day after the House received it from another place and duly proceeded to Committee. The Bill, which was already enormous when it left another place, was then made into a parliamentary leviathan by the Government’s late but none the less welcome acceptance of the argument that it should be a consolidation measure and should replace the whole of the Companies Act 1985. The Opposition welcomed that decision, but we consistently urged the Government to enable us to do our duty as legislators on the detail of the Bill in Committee, and asked them to take the summer recess as additional time to get the generally uncontentious consolidation measures right and allow the Committee stage to extend into October.
Mr. Douglas Hogg (Sleaford and North Hykeham) (Con): My hon. Friend has made it plain that the Opposition will be perfectly willing to assist the Government if they give us sufficient time. Does he agree that a carry-over motion might be appropriate, as in the case of the Corporate Manslaughter and Corporate Homicide Bill of last week?
Mr. Duncan: That option is definitely available to the House, but I doubt whether I will persuade the Minister to entertain it, because instead the Government insisted on the Committee stage finishing in July, and Standing Committee D was not able to examine any of the consolidation measures that were passed without debate at the end of the Committee stage, as the programme motion required.
As a consequence, we estimate that, during the next three days, the House is being invited to consider about 200 amendments to amendments that the Committee was not able to consider in July, but which have since turned out to be defective in some way. Those amendments to amendments, together with the hundreds of other new amendments and 88 new clauses, were tabled only last week. That has inevitably placed the Opposition Front-Bench spokesmen in some difficulties, even with the assistance of their advisers— and even with the best will in the world, it is simply beyond the capacity of any Back Bencher to have any sensible appreciation of the scale of what is being attempted.
Mr. Hogg: I am sorry to intrude on my hon. Friend again, but he has spoken of the problems experienced by his advisers and himself. Would he also confirm that one of the consequences of so many amendments being tabled last week is that the outside interest groups do not have an adequate opportunity to make representations to the House?
Mr. Duncan: My right hon. and learned Friend is absolutely right. Perhaps I can just pay credit to those on the Opposition Front Bench, particularly my hon. Friend the Member for Huntingdon (Mr. Djanogly), and those who have slaved away with him for the best part of a year on the Bill. No sooner have they climbed the mountain and reached the summit than the Minister gives us yet another mountain to climb. Unbelievably, a further 24 new amendments have been tabled only today. Not only are some of these politically sensitive, but we did not even have so much as a courtesy call from the Government to say that they had been tabled.
In trying to put some order around the vast array of amendments that the House is being invited to consider, you, Mr. Speaker, have identified nine separate debates for today, 12 separate debates for Wednesday, and under the programme motion presented by the Government, 31 debates on Thursday. Proceedings on Report on Thursday will be further curtailed by the weekly business statement and by the Third Reading debate, which I understand is due to commence at 4 o’clock. That means that each subject identified by you under the rules of the House, let alone individual amendments, will have less than seven minutes for the Government to explain the case for their amendments, for the Opposition then to raise their concerns and for the Government to reply, let alone leaving any time at all for Back Benchers to make a contribution—and that is only if there are no Divisions, which would eat into the time available.
There is simply no way that the House has been or will be able to discharge its duty to exercise proper scrutiny over this enormous piece of legislation. We contend that the way in which the Government have managed and programmed the Bill during its progress through the House has further undermined the reputation of the House of Commons in its role as scrutineer of legislation.
Patrick Hall (Bedford) (Lab): Will the hon. Gentleman give way?
On the basis of the evidence, we ask the House to reject the programme motion and make it clear that the Bill’s management has been highly unsatisfactory, to request the Government to learn from the experience of the Bill, and to invite them to provide a better opportunity for the House to undertake its primary responsibility as legislator.
4.14 pm
David Howarth (Cambridge) (LD):
I sympathise with what the hon. Member for Rutland and Melton (Mr. Duncan) has just said. The real problem is not just the amount of time allowed on Report, given all the new amendments and new clauses, but more
importantly, the timing of this stage of the Bill. As the hon. Gentleman said, Opposition Members have had only a short time to digest, understand and consider the various late amendments.
However, most of the problems go back to a decision, which unfortunately seemed to have had universal consent, at least in all parts of the other place, to bring into the Bill’s scope a massive consolidation exercise, including hundreds of new clauses from existing company law. This Bill was originally called the Company Law Reform Bill, and its intention was to reform parts of company law. It is now called the Companies Bill, thanks to an interesting vote in Committee, which the Government managed to lose—technically it was a free vote on their side. The Bill is now a general Companies Bill. It tries to consolidate the whole of the existing law, and it is that specific decision which has led to the various difficulties.
The Government have been courteous and helpful to Liberal Democrat Members in making sure that there is enough room to debate the topics that we want to debate. Given how much is going on in the Bill, however, the fundamental problem is that there is not enough time for debate, because at this time of year there is not enough time to allow additional days for discussion. We are in a very difficult position, which was entirely foreseeable when all sides decided to change the Bill from a reform Bill into a consolidation Bill. As it stands, the programme motion is not adequate.
4.16 pm
Mr. Austin Mitchell (Great Grimsby) (Lab): I must preface my remarks by saying that I will, of course, vote with the Government on the programme motion. Having been absent from so many votes owing to illness, I want to burnish my record of loyalty and show just how grovelling and subservient I can be.
This is a fairly shocking way to proceed, because we do not have time adequately to consider the Bill and the amendments. The Bill is based on a series of concessions to the vested interests in the field, which is the antithesis of what we should be doing. We should learn from America, where running a company has become a matter of engaging in financial manipulation to enhance the share price, which enhances the income of the people at the top through share options and pay schemes. Those dodges are being used both here and in the United States, and such practices led to the collapse of Enron and many prosecutions by the Securities and Exchange Commission, which is now, as they say in the United States, “seeing the perps walk”. We should be countering those practices, which brought about the collapse of huge American companies and which are all practised here. We should also combat the trend towards excessive rewards, and collusion between auditors and people who run companies to enhance profits, share prices and returns to shareholders and directors.
Mr. Speaker: Order. The hon. Gentleman is putting a case for or against the Bill—I do not know which—but we are concentrating on the programme motion.
Mr. Mitchell: You are, of course, right, Mr. Speaker. I am expressing my pent-up feelings, which would have come out earlier.
The Government have clearly claimed their prerogative to amend the Bill, because they have tabled more than 800 afterthoughts. If the Government are rethinking at this stage, it indicates that the thinking process at an earlier stage was not satisfactory: we are effectively dealing with a new Bill. The strongest critics of the Bill were not members of the Standing Committee, so they were unable to table amendments in Committee. The Bill has not been given the intense scrutiny that it needs.
The Bill is effectively a new Bill, because there are so many amendments. My head bursts when I read through the amendments. Some hon. Members are accountants and auditors, and they cluck appreciatively when they read such amendments, but my head is strained by trying to digest them. If I were to read out the amendments, it would take three days. There is just not time for us to deal with all the inherent complexities and all the changes that need to be made from any point of view that is either critical of the way in which companies are run or deferential to the vested interests that deal with those companies.
We need more time if we are to produce a Bill that will endure. After all, the Government have had nine years in which to introduce this Bill. A new companies Act was necessary to change the balance when we first came to office. Now, after nine years of gestation, we have a Bill that requires, at this very late stage, 800 amendments that there will be no time to consider. I have tabled, with my hon. Friend the Member for Newcastle upon Tyne, Central (Jim Cousins), several amendments of genius that I would want to discuss in full. Some have been selected, mercifully, while some have not, but there are serious issues to discuss in relation to each one. Having read the selection list, I find that all my amendments are crammed into Thursday, when we have about 36 groups to deal with. Thursday is going to be hell on the basis of this timetable. I plead for more time, while affirming my deference to our Front Bench and to the purposes of this Government whom I so loyalty support.
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