Clause 28
Serious Crime Bill [Lords]
12:45 pm

Powers to wind up companies etc: England and Wales

Amendment proposed: No. 36, in clause 28, page 16, line 28, after to, insert ‘—

(a) ’.—[Mr. Coaker.]

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John Bercow (Buckingham, Conservative)

With this it will be convenient to discuss the following: Government amendments Nos. 37 to 49.

Government amendments Nos. 200 and 201.

Government new clause 15—Powers to wind up: supplementary.

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James Brokenshire (Shadow Minister (Police Reform), Home Affairs; Hornchurch, Conservative)

I rise briefly to seek clarification on petitioning and the powers of winding up. From my reading of clause 28(1), those are intended to apply when an offence has been committed under section 26 and the Director of Public Prosecutions, the Director of Revenue and Customs Prosecutions or the director of the Serious Fraud Office determines that it would be in the public interest to seek a petition to wind up the company; in other words, an offence has been committed and that is deemed the appropriate way to dispose of the breach.

My question about the amendments and how they apply relates to the factors that the directors would take into account in determining what is in the public interest. Are they intended to be as wide as possible? Can the Minister give examples of what would be appropriate in the circumstances? We are talking about corporate entities and there would have been some sort of breach. In some ways, the issue goes back to my intervention during the debate about the liability of directors during our discussion of clause 26. I want to gain an understanding of how the Bill is intended to operate and how discretion is intended to be applied in allowing the winding up of companies for such breaches.

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Vernon Coaker (Parliamentary Under-Secretary, Home Office; Gedling, Labour)

The hon. Gentleman is right; as he says, the clause deals with companies that have breached a  serious crime prevention order. In such cases, the applicant authorities can go back to the court to seek a winding-up order against such companies. The hon. Gentleman asks what sorts of offences the companies would have to have committed. The obvious answer is that if the company had not complied with the conditions imposed by the serious crime prevention order, it would clearly be in breach of the order, and the applicant authority would go back to the court to seek the winding-up order.

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James Brokenshire (Shadow Minister (Police Reform), Home Affairs; Hornchurch, Conservative)

I understand that point. Obviously, the Minister has mentioned the first limb of the test for whether an offence has been committed under clause 26. I was seeking to press him on the second limb—the application of the consideration of the public interest.

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Vernon Coaker (Parliamentary Under-Secretary, Home Office; Gedling, Labour)

The hon. Gentleman should come back to me if I have misunderstood his question. If he is asking me how we define “in the public interest” in respect of determining whether a company should be wound up, that would be a matter for the court, which would determine what was reasonable and proportionate. The public interest test is the prevention of crime and the reduction of harm. The conditions placed on the company are about reducing harm and preventing crime; if they are broken, the applicant authorities will apply for a winding-up order. That is the public interest test, which we want to be observed.

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James Brokenshire (Shadow Minister (Police Reform), Home Affairs; Hornchurch, Conservative)

I do not want to labour the point, but to be clear, we are talking about the application rather than the discretion of the court, and about the determination by the director, rather than the court, on whether the application should be made.

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Vernon Coaker (Parliamentary Under-Secretary, Home Office; Gedling, Labour)

The point is that the applicant authorities will make a general consideration—

It being One o’clock,The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.