Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)

I beg to move amendment No. 49, in clause 27, page 10, line 31, leave out ‘200' and insert ‘1,000'.

John Bercow (Buckingham, Conservative)

With this it will be convenient todiscuss amendment No. 50, in clause 27, page 10, line 31, at end insert

‘and, for continued contravention, a daily default fine of £100'.

Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)

The Minister may have noticed that I tend to speak to those amendments first raised in the other place only when I feel that I have something to offer that could move the argument forward. It is quite hard to do that on this clause. We are talking about whether a figure should be this amount or that amount.

The amendments are probing. I thought it was worth questioning what was said in the Lords. Lord McKenzie of Luton said:

“We consider that £200 is the right amount for the one-off civil penalty. It is not our intention to overpenalise companies through that route but rather to encourage compliance with the law.”—[Official Report, House of Lords, 30 January 2006;Vol. 678, c. GC23.]

I do not think that either side of the debate had a heavyweight legal argument. It comes down to the question of what is an appropriate amount to act as an incentive to companies to use the amended articles. For the average company, £200 is not much of a deterrent, especially given that preferably it would mostly be dealt with by way of civil rather than criminal proceedings. I know that the general mood is that such things should be dealt with as civil matters, and this is one such instance. We feel that if the amount was slightly higher, the civil route would be more attractive than the criminal route.

Margaret Hodge (Minister of State (Industry and the Regions), Department of Trade and Industry; Barking, Labour)

I welcome you to the Chair, Mr. Bercow, and I wish you well in your job. Given your record, I am delighted that you are in the Chair rather than anywhere else. I have looked up your details and I see that you went to Essex university to look for trouble; and you then became a member of Lambeth council to pick a fight. There is no better place to do that than  this Committee, so I am thankful that you are Chairman. I am even more thankful about it because of your record for asking lots and lots of questions—2,619 parliamentary questions in less than a year. I fear that had you been on the Opposition Benches in Committee, we might not have completed our business even by the end of October. I look forward to serving under your wise chairmanship.

The hon. Member for Huntingdon (Mr. Djanogly) was right that it is an issue of judgment as to where the fine should lie. It is our view that a civil penalty of £200 is about right if a company is given notice underclause 27 to remedy the breach within 28 days and fails to do so. All members of the Committee should note that the civil penalty does not take away from the ability to pursue a criminal case if required. The criminal penalty would be a level 3 fine, which is about £1,000. We are leaving it there; our judgment is that £200 is about right. Companies may be in arrears with their filing obligations through inadvertence. Clause 27 is a deregulatory measure that provides companies with the opportunity to bring their filing up to date without risking criminal sanctions. It is not intended as a substitute for the criminal sanctions that would have a higher penalty rate.

I accept that there is no particular magic in the figure that we have chosen. It is simply there to give some teeth and to encourage the companies to provide the registrar with up-to-date copies of their articles within the period of the prescribed notice. Equally, we cannot see any particular benefit in raising the penalty to the level suggested in the amendment. Given that the matter was also debated in another place, as the hon. Gentleman said, I hope that he will withdraw the amendment to enable us to continue with consideration of the Bill.

Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)

I remember you, Mr. Bercow, as a student looking for trouble. Thinking back to those days, I could hardly have thought that here we would be some 20 years later, but such is life. It could have been worse.

I hear what the Minister has to say. I am not sure that I entirely agree, but then again I do not think that this is a die-in-the-ditch point. I beg to ask leave to withdraw the amendment.