Insolvency Act 1986 (Disqualification from Parliament) Order 2012

Lord Rennard Excerpts

Tuesday 20th March 2012 Grand Committee

[Lord Shutt of Greetland]

My Lords, the purpose of this order is to bring the law as it applies in Northern Ireland into line with England and Wales in relation to parliamentary disqualification resulting from personal insolvency. The law applying in England and Wales was amended by the Enterprise Act 2002. Someone who is bankrupt is no longer disqualified from sitting or voting in Parliament and, in the case of a Member of the House of Commons, will no longer lose his seat after six months. Someone against whom a bankruptcy order has been made will be disqualified from Parliament only if he becomes subject to a further order, termed a bankruptcy restrictions order, or if he gives a bankruptcy restrictions undertaking.

Bankruptcy restrictions orders are made by the courts and bankruptcy restrictions undertakings are given to the Secretary of State or, in the case of Northern Ireland, to the Department of Enterprise, Trade and Investment. They are a means of placing a bankrupt under continuing restrictions following his discharge on the grounds of being culpable. Discharge from bankruptcy normally takes place after one year.

The 2002 Enterprise Act aimed to provide a modern bankruptcy regime, allowing those who have failed honestly to have a second chance. A second objective behind the provisions of the 2002 Act dealing with personal insolvency was to protect the public from the actions of the culpable. That is why there is provision for a regime of bankruptcy restrictions orders and undertakings. It would not be right to allow a person who has been found to be culpable to continue sitting or voting in Parliament or to be elected as a Member of Parliament.

A system of bankruptcy restrictions orders and undertakings equivalent to the one operating in England and Wales was brought in for Northern Ireland by the Insolvency (Northern Ireland) Order 2005. The necessary preconditions are therefore in place to allow the making of the order that noble Lords are being asked to approve.

The order will have the consequential effect of amending the grounds for disqualification from the Northern Ireland Assembly because, under the Northern Ireland Act 1998, a person is disqualified from being a Member of that Assembly if he is disqualified from membership of the House of Commons, other than under the House of Commons Disqualification Act 1975.

This order will extend the benefits of a more liberal disqualification regime to Members of this House, Members of the other place who are from Northern Ireland and Members of the Northern Ireland Assembly. I beg to move.

[Lord Rennard]

My Lords, I shall be very brief because the principle behind the order is without any significant controversy, and I note that the Explanatory Notes say that no consultation is necessary on this order. I would ask whether any consultation with the Electoral Commission was considered, particularly over the issue of making candidates and potential candidates aware of changes in relation to eligibility and disqualification.

I ask partly because of the controversy in Wales last year when two Assembly candidates were subsequently found to be ineligible for membership of the Welsh Assembly. Out-of-date information was provided to them by the Electoral Commission. Every time we change the rules about eligibility to stand for bodies or on disqualification, we need to make sure that candidates and potential candidates are aware of the up-to-date rules. Perhaps the Electoral Commission should be involved in making sure that people know where they stand in relation to matters such as this.

[Baroness Smith of Basildon]

My Lords, I am grateful to the noble Lord, Lord Shutt, for his detailed explanation of the order. As the noble Lord, Lord Rennard, says, it is not controversial and it is one that we would also support, having introduced the original legislation in 2002 for England and Wales. It was a very sensible piece of legislation, which was then introduced by my noble friend Lord Mandelson. Since the Northern Ireland DETI, of which I am a former Minister, brought its own legislation into line in 2005, it is a bit of a shame that it has taken us so long to bring what happens in England and Wales also into line.

I have only one question for the noble Lord. I, too, noticed that there was no consultation. It is highly unusual for Northern Ireland legislation not to be consulted on, but given that the original 2002 legislation and the 2005 order had been consulted on, there was clearly no need. My comment is not unrelated to the information supplied by the noble Lord, Lord Rennard, on the arrangements for sharing information across jurisdictions.

I notice that the Explanatory Notes make it quite clear that the Department of Enterprise, Trade and Investment has to notify the Speaker of the House of Commons or House of Lords if it accepts a bankruptcy restrictions undertaking from a Member of that House or if there is an order. Again, it responds to candidates. It is clear that if somebody was to be appointed to your Lordships’ House, the Appointments Commission would look into their background and would understand if there was a bankruptcy restrictions order or undertaking. However, if somebody was standing for election, how would the information be shared between jurisdictions so that the bodies for which they were standing for election would know the position? Somebody who is subject to an order or an undertaking in Northern Ireland could well wish to stand for a seat in England or Wales, or someone from England or Wales could wish to stand for a seat in Northern Ireland, although that is probably less usual. Therefore, on the point about sharing information between jurisdictions, those standing for election and electoral registration officers who accept nominations for elections should also be aware of this information.

Subject to the satisfactory answers to those questions that I am sure the noble Lord will be able to give, we are entirely content with the order.