Education Bill

Part of the debate – in the House of Lords at 10:15 pm on 7 May 2002.

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Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 10:15, 7 May 2002

The answer to the first question is a basic tenet of company law: one cannot have a company in which there is a mixture of limit by guarantee and limit by shares. It has to be one or the other. If it were a company limited by shares rather than limited by guarantee—in other words, if outside people had to be shareholders rather than members in the guarantee sense—one would have to write the memorandum and articles to protect the interests of shareholders who are bodies corporate—in other words, schools. It would have to be clear that the extent to which they are responsible for the activities of the company and responsible for any risk taking is reflected in what they get out of the company, so that the schools' financial interest is protected. I do not think that it will be possible to write that in regulations, but it will certainly be possible to write it in terms of a model memorandum and articles for the companies. I am sure that we would wish to do that.

The second question was about the phrase, "if regulations so provide". The phrase puzzled me. My understanding is that paragraphs (a) and (c) of subsection (3) continue to use the word prescribe, so that there will have to be regulations in respect of them, whereas paragraph (b) does not. I think that it is simply a matter of drafting that three paragraphs with different relations to regulation have been included together. If there is any better explanation than that, I shall write to the noble Baroness, Lady Blatch.