Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 — House of Lords, 2017-03-30
Topic: Domestic Commerce
Peta Buscombe (Conservative, Centre-right): I thank both noble Lords for their contribution to this debate. To respond first to the noble Lord, Lord Palmer, on his question of whether legal advice is obtained by the Government before making the ECHR statement, the answer is very much yes. Ministers are advised by government legal advisers before expressing such a view. Further than that, or on what happens post-Brexit, I would not like to comment My experience of insolvency goes right back to the Insolvency Act 2000, when I was in the same position as the noble Lord, Lord Stevenson of Balmacara, is now. The language of regulations and primary legislation in those days was very different but ever since then I have been able to understand where the noble Lord, Lord Palmer, is coming from with regard to the not insubstantial fees of the insolvency process. The question, of course, is what the Government are doing, if they can do anything, to interfere in the marketplace with regard to who charges what fees. In October 2015, the Government introduced the need for officeholders to provide a fees estimate, which creditors are asked to agree. These rules will be reviewed and possibly revised, depending on how effective they are proving. I hope that is helpful. I absolutely understand why the question was asked I thank the noble Lord, Lord Stevenson, for helpfully expanding on where we have come from in terms of the rule of 10, as, yes, on the face of it, these appear quite narrow changes. It was also helpful of him to suggest to the noble Lord, Lord Palmer, that on the question of expenses and so on, we should look back in Hansard to when these issues were discussed in much more detail then they can be in relation to the regulations before us The proposal to abolish meetings of creditors is important. It struck me when I first looked at it because, as the noble Lord suggested, of course some people want to be at the insolvency meeting to put forward their case, particularly the smaller creditors involved. I am advised that research shows that physical meetings are very poorly attended by creditors and, as a result, are not an effective means of engaging with them. They do not reflect modern methods of communication that are available and could be used to seek decisions from creditors. There are better ways of seeking a view, such as using video or telephone conferencing or online voting methods, and officeholders are now being given the flexibility to identify and use the most appropriate of these. We very much hope that these new provisions will give more scope for creditors to actively participate in making case-related decisions I am reminded of a debate on a recent order before your Lordships’ House, when the noble Lord, Lord Mendelsohn, talked about the need to find more savings in regard to the cost to business. We estimate that this will be a £22 million saving, which is one small contribution to that difficult process. There is always the possibility of unintended consequences when trying to make things more streamlined, effective, efficient or 21st century—whatever that can mean. We have to be very careful that we do not compromise people such as the small creditor who is having to push his or her weight against the larger creditor, who can take his or her place more aggressively—if I may use that term I am glad that the noble Lord, Lord Stevenson, referenced the change of language. I agree that it really does help. It is important that we think about language when drafting legislation in areas such as this—the change from "must" to "may" is a good move in that sense I thank noble Lords for their consideration of the regulations and for their valuable contributions to the debate. I hope we can agree that these regulations will bring important benefits from updating the legislation to ensure that it is efficient and effective, delivering the best returns possible for those affected by insolvency. I commend these regulations to the House.