Scotland Act 1998 (Insolvency Functions) Order 2017

Debate between Baroness Donaghy and Lord Foulkes of Cumnock

Wednesday 29th November 2017 Grand Committee

[Lord Foulkes of Cumnock (Lab)]

My Lords, I share the delight of my noble friend on the Front Bench that the noble Lord, Lord Rogan, is presiding over our proceedings today. The last time that I mentioned the Chair in a Grand Committee I was told that I was not supposed to do that, but I am delighted that I did. I agree completely with the question raised by my noble friend on the Front Bench and amplified by the Liberal Democrats.

I will make a few more points. First, I am increasingly worried about the number of important matters that are being dealt with through statutory instruments. This one is perhaps okay. In fact, I think it is, as my noble friend on the Front Bench said, and he is supporting it. I go along with that. However, I suspect that as we move into the new year, we will get hundreds if not thousands more statutory instruments, many in areas that might more properly be dealt with by primary legislation. It is very important that we on this side of the House—and indeed all sides—keep an eye on the Government to make sure that some important matters which should more properly be dealt with by primary legislation on the Floor of the House are not slipped through on statutory instruments, particularly in Grand Committee.

I welcome the Minister to the Front Bench—I should have done so right at the very start. I have not had the opportunity to appear opposite him before. I know of his work in the European Parliament, which he carried out with distinction. No doubt, like me, he would have preferred that European Parliament to go on and on into the foreseeable future, which it may well do, if my noble friends the Liberal Democrats have their way. I am right behind them on that.

However, I am worried about one aspect of this order in relation to limited liability partnerships. The Minister understandably mentioned nothing about the controversy of limited liability partnerships, particularly in relation to Scotland. He will know that there has been a lot of publicity and concern expressed about the way in which limited liability partnerships are being used for tax evasion, tax avoidance and money laundering. These limited liability partnerships can be set up quickly and cheaply. I think they cost £35. As a result, corporation tax and capital gains tax are being avoided by people who set up these limited liability partnerships. Very often, there is no need for the partnership to be in writing; it can just be a verbal agreement between people, which is very unsatisfactory. There has been great controversy, not just in Scotland but in other places too. A lot of controversy has arisen in Jersey in relation to them. More recently, the suggestion that people with self-employed status could be treated as employees by a limited liability partnership has caused some genuine concern.

I know that this is not directly covered by the winding-up procedures. However, as my noble friend rightly pinpointed, there could be a difference of opinion between Holyrood and Whitehall about whether a limited liability partnership should be wound up. It may be that Westminster, in its wisdom, will want such a partnership to be wound up because it had been involved in some kind of activities and it would be more appropriate for it to be wound up, but Holyrood might not. In that case, I endorse the questions asked by my noble friends in relation to this. I hope the Minister will amplify in his answer what might happen specifically in relation to limited liability partnerships.

[Baroness Donaghy (Lab)]

I, too, congratulate the noble Lord, Lord Rogan, on being in the chair, and I also congratulate the Minister. I read his moving maiden speech and welcome him to the Front Bench.

I am worrying away at the same point that four other noble Lords have raised. It is the phrase,

“by the Scottish Ministers and a Minister of the Crown”.

It may be because of my former ACAS chair hat, but I look for trouble—for how to sort it out before it happens, and for codes of practice. My questions are about what might seem a narrow point, but it is an extremely important one. Would this relationship be mutual? Would they both have to agree? That question has already been asked. Does one have precedence over the other? I think that has already been asked. Is there an intention to think about something like a code of practice for any eventuality, such as when they do not agree? If they do not agree, how will the delays that take place affect not only the companies but the workers involved in the lack of future of those companies? It is extremely important that, in any inbuilt possible conflict, we should consider the people who are going to be at the bottom end of it and might be detrimentally affected.