Clause 256 - Disqualification from office: general

Enterprise Bill – in a Public Bill Committee am 6:30 pm ar 14 Mai 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Amendment made: No. 483, in page 177, line 16, at end insert ''or body''.—[Miss Johnson.]

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

I beg to move amendment No. 559, in Clause 256, page 177, leave out lines 26 to 28.

This takes us back to the stigma problem. Looking at this from the other end of the telescope, whatever one's views on it, the Government's policy is to reduce the stigma of bankruptcy. However, Clause 256(8)(c) actually extends the definition of a bankrupt to include those in England and Wales who are subject to IVAs and deeds of arrangements and those in Scotland who are subject to something called trust deeds for creditors. According to PricewaterhouseCoopers, such people have never before been treated as bankrupts for any purpose and have never been subject to any of the restrictions on bankrupts. One of the attractions of a composition of creditors is that they enable the debtor to avoid the stigma and restrictions of bankruptcy, including, for example, any restrictions on exercising their profession. So we take the view that this is a retrograde step and I would like the Minister to justify why there should be this significant change from the current practice.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

Amendment No. 559, if passed, would create a harsher regime for those who are not bankrupt than for those who are, so I am not quite clear how that relates to the hon. Gentleman's earlier remarks. Many debtors come to an agreement with their creditors outside of bankruptcy, through composition of debts, through a deed or through a settlement or an arrangement. Those people have tried to face up to their financial position by attempting to discharge their debts and we believe that is a responsible attitude that should be encouraged. The effect of these amendments would be that restrictions could still be lifted and amended for those who are bankrupt, but not for those who are in agreements with creditors outside of the bankruptcy. That seems paradoxical, as it would lead to a harsher regime for those who are not bankrupt than for those who are. I therefore trust that that was merely a probing amendment, that I have now persuaded the hon. Gentleman and that he will withdraw it.

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

Absolutely. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 484 in clause 256, page 177, line 27, after second 'a', insert 'trust'.—[Miss Johnson]

Question proposed. That the clause, as amended, stand part of the Bill.

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

As the excellent explanatory notes make clear, this clause

''will provide a wide order-making power for any Secretary of State or the National Assembly for Wales, to review legislation under his or her policy control and to maintain, repeal, amend or abolish such restrictions on bankrupts as they deem appropriate.''

It is, on the face of it, an extraordinarily wide provision.

I am curious as to what kind of people, situations and officers that we may be referring to here. We have gone to the lengths of having in the Bill clauses dealing with the situation of justices of the peace, Members of Parliament and members of local councils, so what situations do the Government envisage under the clause? It is a very wide provision, it gives tremendous powers, presumably it could impose disqualification

where none exists, and also the opposite. With what areas is it designed to deal?

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

The Bill provides an opportunity to review the relevance of restrictions that appear unnecessary or outdated and there are a great number of other restrictions in both primary and secondary legislation that are automatically imposed on bankrupts by other legislation that might be appropriate for culpable bankrupts, but not in the remaining cases. Examples of restrictions include not being able to be a school governor, a member of a regional flood defence committee or a registrar of births, deaths and marriages. [Laughter.] Well, the hon. Gentleman asked, so I am telling him.

One area that is greatly affected by the automatic provisions is health. Numerous boards and tribunals that deal with health matters require members who have been made bankrupt to resign. Following an internal review, the Department of Health has confirmed that it intends to remove references to bankrupts in the legislation and replace them with references to bankruptcy restriction orders.

A number of the bodies that prohibit a bankrupt's involvement have never met. An example is the arbitration tribunal set up under the Wireless Telegraphy Act 1949—I am trying to vie with my hon. Friend the Member for North-East Derbyshire in going back to previous times. A number of bankrupts serve the local community in one way or another, and requiring them to refrain from such service is often one of the most embarrassing and traumatic effects of bankruptcy.

Colleagues in other Departments will review on their merits each of the restrictions for which they have policy responsibility, and appropriate proposals will be made in secondary legislation. That does not mean that all restrictions will be lifted, because they may be appropriate in certain cases. However, I have given a flavour of the wide diversity of cases covered by the clause and the reasons for supporting it.

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

The Under-Secretary has certainly given us a flavour of those cases, which is helpful. I can imagine that it would be intolerably embarrassing to be asked to resign from a regional flood committee on the basis of one's bankruptcy, so I immediately withdraw all my reservations about the clause.

Question put and agreed to.

Clause 256, as amended, ordered to stand part of the Bill.

Clause 257 ordered to stand part of the Bill.

Schedule 23 agreed to.