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Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their amendments to the Bill; Mr. Henry Bellingham, Mr. Alistair Carmichael, Dr. Stephen Ladyman, Mr. Frank Roy and Mr. Andrew Slaughter; Dr. Stephen Ladyman be the Chairman of the Committee; Three to be the quorum of the Committee.— [Mr. Cawsey.]
Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.
Safeguarding Vulnerable Groups Bill [ Lords] (Programme) (No.2)
Motion made and Question put forthwith, pursuant to Standing Order No. 83A(6) (Programme motions),
That the following provisions shall apply to the Safeguarding Vulnerable Groups Bill [ Lords] for the purpose of supplementing the Order of 19th June 2006 (Safeguarding Vulnerable Groups Bill [ Lords] (Programme)):
Consideration of Lords Message
1. Proceedings on consideration of the Lords Message shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement at this day’s sitting.
Subsequent stages
2. Any further Message from the Lords may be considered forthwith without any Question being put.
3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.— [Mr. Cawsey.]
Safeguarding Vulnerable Groups Bill [ Lords]
Orders and Regulations
8.43 pm
The Parliamentary Under-Secretary of State for Education and Skills (Mr. Parmjit Dhanda): I beg to move, That this House agrees with the Lords in the said amendment.
Mr. Deputy Speaker (Sir Michael Lord): With this we may discuss Lords amendments Nos. 237A and 250A.
Mr. Dhanda: All three amendments respond to recommendations from the Delegated Powers and Regulatory Reform Committee and relate purely to parliamentary procedure. As hon. Members may be aware, the Committee met on 31 October to consider all the amendments made to the Bill during its passage in the Commons. The Committee raised procedural concerns in relation to three amendments. These further amendments fully address those concerns.
Amendments No. 237A and 153A reflect the advice of the Committee as to the appropriate parliamentary procedure for orders made under paragraph 14 of the new schedule, “Appropriate verification”, and the new clause, “Devolution: alignment”, respectively. Both Lords amendments provide that orders are subject to the affirmative resolution procedure.
Lords amendment No. 250A resolves an uncertainty raised by the Delegated Powers and Regulatory Reform Committee and makes it clear that the procedure referred to in sub-paragraphs 2(3)(c) and (d) of the new schedule on transitional provisions will be prescribed in regulations, and that the regulations will be subject to the negative resolution procedure.
I am grateful to the Committee for the time that it has taken to consider the amendments, and I am pleased that we were able to table amendments to respond to the Committee’s advice. I hope that the House will agree to the amendments.
8.45 pm
Mrs. Maria Miller (Basingstoke) (Con): At whatever stage we discuss this Bill, it is important that we remember the tragic events that led to the call for fundamental reform of the vetting and barring procedures in this country. The tragic deaths of two young children in Soham led to the Bichard inquiry, which made 31 recommendations. Recommendation 19 resulted in the establishment of a new vetting and barring procedure in the Bill.
The Bill has been some four years in the making, yet we are still debating its details at the eleventh hour. Unlike most of the Lords amendments under debate today, the amendments are not the result of a disagreement with the other place. Indeed, two of the three are the result of concerns expressed by a Select
Committee in the other place about the excessive use of the negative resolution procedure in the Bill. We have expressed that concern at every stage of the Bill, both here and in the other place.
The third Lords amendment that we are considering today is a legal correction regarding the use of the word “prescribe”, which now, under devolution, appears to take on different meanings in England and Wales. Perhaps this is another example of two countries being divided by a common language. The Government should certainly have thought about this before they used the word in the Bill.
The main focus of the Lords amendments is the use of the negative resolution procedure. Our concern about the Government’s approach in the Bill was firmly rooted in the Bichard report, which stressed that any new vetting and barring scheme should be as transparent and simple as possible. We feel that the use of vague terms in conjunction with negative resolution procedures is not consistent with that objective, and that it leaves too much important detail in the Bill to debate that would not be open to public scrutiny.
The Government’s excessive use of the negative resolution procedure has been overtly criticised by the Delegated Powers and Regulatory Reform Committee in the other place. Two of the Lords amendments that we are considering today are a direct response to the concerns that that Committee expressed over the powers that the Government have articulated in the Bill. The Lords amendments underscore the veracity of the argument, which my hon. Friends and I have been making over the past eight months of debate: that more of the detail of the Bill should be agreed through the affirmative resolution procedure. We therefore welcome Lords amendment No. 153A on devolved powers and No. 237A on procedure verification. Both will increase the power of Parliament to scrutinise the Government’s proposals in those two important areas of the Bill.
On balance, we believe that the Bill represents a step in the right direction and an improvement on the present situation. I only wish that the Lords amendments provided for even closer scrutiny of the Government to ensure that they do not use their extensive powers in the Bill unnecessarily to extend the numbers of people required to be monitored. Were they to do so, it could easily unbalance the consensus that has been built up behind the Bill and undermine the support for, and the credibility of, this important piece of legislation.
Annette Brooke (Mid-Dorset and North Poole) (LD): I echo what the hon. Member for Basingstoke (Mrs. Miller) said about the long process leading up to the Bill’s introduction, which makes it all the more remarkable that so much redrafting has been necessary. So many amendments were tabled late, so it is not surprising that further changes are required at this even later stage. I am concerned that, where there has been little time for scrutiny, aspects of the Bill will have to be revisited because we will run into problems. I and my party desperately want the Bill to work, but we are concerned about the complexities and the lack of full scrutiny of what is before us today.
On the amendments, we welcome anything that strengthens the parliamentary process, which has to be a step in the right direction. There has been a tendency this year for more and more aspects of legislation to be left to regulation. Personally, I would prefer to see more provisions built directly into the Bill, but the affirmative resolution is clearly a step in the right direction.
Amendment No. 250A was, I feel, the result of an omission in the rush to get the Bill through in this Session. It is sad to reflect that there have been such omissions, but having said that, I sincerely hope that the Bill will work and genuinely provide protection for our children and vulnerable people.
Lords amendments Nos. 237A and 250A agreed to.
COMPANIES BILL [ LORDS] (PROGRAMME) (NO. 4)
Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6) (Programme motions),
That the following provisions shall apply to the Companies Bill [Lords] for the purpose of supplementing the Orders of 6th June, 5th July and 17th October 2006 (Company Law Reform Bill [Lords] (Programme), Company Law Reform Bill [Lords] (Programme) (No. 2) and Companies Bill [Lords] Programme (No. 3)):
Consideration of Lords Message
1. Any Message from the Lords may be considered forthwith without any Question being put.
2. Proceedings on that Message shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement at this day’s sitting.
Subsequent stages
3. Any further Message from the Lords may be considered forthwith without any Question being put.
4. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.— [Mr. Cawsey.]
Companies Bill [ Lords]
8.52pm
The Minister for Industry and the Regions (Margaret Hodge): I beg to move, That this House does not insist on its amendment.
Mr. Deputy Speaker (Sir Michael Lord): With this, it will be convenient to discuss Lords amendments Nos. 245A and 245B.
Margaret Hodge: I hope that the debate can be brief because the issues have been debated at length in both Houses over a long period of time. As I explained when the amendment was tabled in this House, the original wording was not about companies providing lists of suppliers or customers or any other people with whom they have or had a contract, but about reporting significant relationships that are likely to have an impact on the performance or value of the business. It is up to the directors to exercise their judgment about what should be incorporated in the business review. They need include information only to the extent necessary for the understanding of the development, performance or position of the company.
The amendment does not impose a disproportionate burden on business and the costs, which are based on costings that the CBI provided to us when the operating and financial review was being considered, are minimal. However, in the discussions that have taken place in the past couple of weeks, I was persuaded by representatives of the pharmaceutical industry that there was a possibility that the information could be misused by animal rights extremists. Amendments were tabled in another place on that basis. The intention behind the revised amendments is to deal with legitimate concerns around animal rights terrorism.
The amendment is framed, first, to exempt directors from disclosing information about a person if disclosure would, in their opinion, be seriously prejudicial to the interests of that person. The prejudice might be direct or indirect. Secondly, disclosure must also be contrary to the public interest. That requirement is to ensure that exclusion is not used to cover up wrongdoing on the part of the contractor. For example, if a supplier has supplied dangerous goods and may have been negligent in so doing, it is clearly not in the public interest to conceal his identity.
We are not trying to exempt the directors from reporting information that would be prejudicial merely to the company. That would create an unjustifiable let-out. It is not necessary to do that to ensure that the interests that we want to protect are covered.
The business review is an important matter. We have had long, lively debates on it throughout the Bill’s passage. Clearly, some have argued for more detailed prescription in the requirements but others—on the
Opposition Benches—have argued for weakening the provisions. We have struck the right balance and I hope that we will agree today that we can put the matter to rest.
Mr. Jonathan Djanogly (Huntingdon) (Con): The Bill is a more comprehensive version of the measure that was first presented to the Lords on 11 January this year. It is in three volumes rather than two and has 1,264 clauses instead of 885. It has broken many records along the way. One must be the 1,029 amendments that were pinged back to the Lords last week. The fact that only a few amendments have been ponged back to the Commons shows that they were mainly uncontentious. Indeed, most were needed to consolidate the Bill with company legislation from 1985, 1988 and 2004.
We had called for such consolidation for four years. However, the harsh implications of the Government’s decision to implement that just before the second Chamber’s Report stage have been unfortunate for the legislative process. Despite a valiant and expert effort by the Bill team, we have a good example of how making law on the hoof is clearly unsatisfactory. I sincerely hope that the rush will not come back to haunt the Government.
Without much pleasure, let me deal with amendments Nos. 245A and 245B. I shall begin by putting the debate in context. The business review was born of the Government’s cack-handed approach to the operating and financial review. When the Chancellor scrapped the OFR in November 2005, without consultation with the Department of Trade and Industry or Ministers, let alone any stakeholders, the Government left companies with a bill for the OFR preparations running into millions of pounds.
The business review was introduced to fulfil the EU directive requirements. After much bungling by the Government, we reached a position that was broadly supported by the Government, business and the Conservative party. On Report, we discussed at length our commitment to encouraging companies to develop their corporate responsibility and we accept that the business review, with its requirements for listed companies to report on environmental and community issues, should play a role in that process.
However, at the last moment, two days before the final debate of the final parliamentary stage, the Government tabled amendment No. 822, which required directors to provide
“information about persons with whom the company has contractual or other arrangements which are essential to the business of the company”.
We were immediately contacted by numerous stakeholders, such as the Association of British Insurers, representing investors, the Institute of Directors, the British Chambers of Commerce, the Quoted Companies Alliance, the CBI, representing large and small companies and the Association of the British Pharmaceutical Industry, representing pharmaceutical companies. They all believed that, whatever the issue, such a method of making significant policy change was unacceptable. Let it not be forgotten that the Bill has been eight years in the making and the business review provisions had been agreed after months of significant debate. To throw
that aside by tabling the amendment with one and a half day’s notice was, to stakeholders, let alone Opposition parties, staggeringly irresponsible.
On Report, my hon. Friend the Member for Putney (Justine Greening), who is present in the Chamber, voiced the Opposition’s concerns about the broad scope of the amendment. She queried what the Government wanted companies to disclose, as the amendment was so vague that it provided little guidance on business reporting obligations. Stakeholders were already attempting to calculate the cost to companies in terms of compliance and related legal advice and guidance. The Government spin machine had stated that the provision would apply to suppliers. Clearly, however, it applies much more widely—to customers and possibly even to bank arrangements or arrangements with Government.
Following Report, and amid the understandable storm of controversy over the Government’s actions, business representatives met the Government to discuss their concerns. We understand that the meeting did not provide much comfort. The Government stated that, at that stage, the amendment would not be changed. Owing to the concern of stakeholders and the vagueness of the wording, and in the light of the Government’s intransigence, our noble Friends tabled an amendment to the provision, which introduced a caveat allowing directors to refrain from disclosing information that, in their opinion, would be seriously prejudicial to the interests of the company or other persons involved. We were therefore surprised to discover that, having told everyone that there would be no movement on the matter, the Government tabled their own amendment narrowing the scope to allow the omission of information about a person if, in the directors’ view, it would be seriously prejudicial to that person and contrary to the public interest.
We support the position of our noble Friends that the provision should also apply to the company, and that the public interest element should be separated by replacing “and” with “or”. The clarification provided by Lord Sainsbury on the Government amendment, and on our counter amendment, was welcome. I repeat, however, that it was all much too late. There has simply not been enough time to review how the provision will work in practice. For instance, can the Minister please advise the House how directors are expected to know what may or may not be in the public interest? Does the provision to omit information about a company apply equally to the holding company or subsidiary of the third-party person with whom the company is contracting?
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