Clause 57
Company Law Reform Bill [Lords]
9:00 am
Vera Baird (Parliamentary Under-Secretary, Department for Constitutional Affairs; Redcar, Labour)
This is my first opportunity to welcome you to the Chair, Mr. Illsley, and to tell you how pleased I am that such an experienced Chairman will be presiding over my first attempt at helping a Bill through Committee.
The. Member for Hornchurch (James Brokenshire) had put forward his argument on the amendments. Under the clause, anyone who wishes to use a sensitive name in their company’s name must apply to the Secretary of State, but to support that application he must ask any public body or Department whose sensitive words he wishes to use in his name to comment on his application. The hon. Gentleman feels that if a public body does not reply to such a request within 30 days, the presumption should be that it does not object to its words being used.
I have already said how sympathetic I am to people who get held back by bureaucracy, but the point of the clause is to prevent people from being misled by a company having a name that wrongly suggests a connection with a public body. The amendment would change the balance of the clause. Where a person is looking for exceptional permission to be allowed to use these sensitive words, public protection remains the most important thing. The immediate mischief is that it would be possible to send in the application for a response in a way that made it unlikely to get one back, perhaps by sending it to the wrong part of the relevant organisation or by couching it in a long letter about something else.
Let me set out what I think is a greater mischief. The process in the clause is in two stages. First, the person who wants the name writes to the body that holds the words he wants to use. Then he sends any response that comes back to the Secretary of State. The words “any response” specifically envisage that there may be no response. That is clear. It is the Secretary of State who is ultimately responsible for approving the name, and although he would be assisted if there were a response from the public body, the lack of response under the terms of the clause is not fatal to the application.
We are talking about words like “charity”, “nurse”, “police”, “Her Majesty”, which it would be extremely advantageous for someone to use in their company title to try to show some connection with totally virtuous organisations. What goes a little further than the mischief I have described is if the application has been with the public body for 30 days, and there is automatically a deeming of no objection and therefore approval, it would be extremely difficult for the Secretary of State to refuse because the public body that the provision was trying to protect would have raised no objection and would have been deemed to approve. How could he differ from that and not be subject to judicial review for being unreasonable?
The consequence, I fear, is that as we are talking about a public body that has had the application for 30 days and not responded, it probably has not considered it and the Secretary of State will not be able to do so. Consequently, public protection from the mischief would be seriously challenged by such a deeming provision.
The other specific difficulty that could be envisaged is that although at the end of the 30 days no response had been received and the body was deemed to have approved, a long and detailed objection might be received the day afterwards from a public body to the proposed use of its name and the Secretary of State would not be entitled to take it into account. That would be most undesirable, bearing in mind that the purpose is to protect the public.
Those are good reasons to invite the hon. Gentleman to think again. We hope that he will feel able to withdraw the amendment. I repeat that the Government will not tolerate bureaucratic inefficiency. Public bodies will be expected to respond as quickly as they realistically can. None the less, the emphasis has to be on protecting the public and not on facilitating people skilfully to get around the provision.