Serious Crime Bill [HL]

I decided to use a stand part debate to explore some of the Government’s thinking on Clause 27. I have not tabled anything about opposing the Question whether Clause 28 should stand part, but I am sure that the Minister will appreciate that my comments apply with equal force to the Northern Irish equivalent. As we have discussed, Section 124A of the Insolvency Act already allows the Secretary of State to present a petition allowing for the winding up of a company in a number of circumstances, including investigation under the Companies Act 1985 or the Financial Services and Markets Act 2000, or following information obtained under Section 2 of the Criminal Justice Act 1987. The basis for winding up under Section 124A is that it is, "““expedient in the public interest””," that the company be wound up and that the court has to consider that it is just and equitable. The Minister read out the equivalent parts of Clause 27 earlier. The one difference is the word ““expedient””, which is in Section 124A of the 1986 Act. Will the Minister say why that word, which presumably had some significance when it was drafted for the purpose of the 1986 Act, has been omitted from the equivalent provision in Clause 27? The one significant difference between Section 124A and Clause 27 is that Clause 27 has a very specific requirement that the body has to have been convicted of an offence under Clause 25 on failing to comply with a serious crime prevention order. Section 124A is much more broadly based, because it does not require any kind of conviction. It does not even require insolvency. The Section 124A provisions have been used significantly. I understand that between30 and 70 petitions are presented each year, and I have not been made aware of any problems in using that power. I invite the Minister first to say in what respects the existing power under Section 124A was felt to be insufficient for the purposes of catching companies that have been convicted of an offence under Clause 25? Is Section 124A not wide enough to allow petitions in those circumstances? I am aware that Clause 27 allows various persons other than the Secretary of State to present a petition, but that is not the focus of my inquiry. I am seeking an explanation about the powers to obtain a winding-up order under Clause 27 in comparison with those under Section 124A, rather than about the persons who may use the power. My first concern is why we have Clause 27 instead of Section 124A? Let us assume that the Minister will convince me, as I am sure she will, that Clause 27 is necessary. Will she explain why the Government have chosen to include substantive provisions relating to the winding up of companies in the body of criminal law rather than that of insolvency law? Concern has been expressed by R3, the association that I referred to earlier, about the fragmentation of insolvency law between different statutes. It believes that fragmentation carries a risk of anomalies and inconsistencies for the treatment of different companies in substantially similar circumstances. Which Minister or Secretary of State will be responsible for bringing forward secondary legislation under Clause 27? Will it be the Secretary of State for Trade and Industry, who has primary responsibility for insolvency law, or the Home Secretary? Does the Insolvency Service, which acts as a repository of technical expertise in the highly complex law relating to company insolvencies and winding up, agree with the drafting of Clause 27? I suggest that a more satisfactory way of achieving the policy objective behind Clause 27, which we do not have a problem with, would be to amend Clause 124A of the Insolvency Act 1986 so that all relevant insolvency provisions were kept together as an integrated and coherent whole. That is the preference of R3, as I mentioned earlier. The fear is that the Bill creates a tiny island of insolvency law and a great ocean of criminal law, which could in due coursehave unintended consequences for the coherenceof insolvency law overall. I look forward to the Minister’s response.