Several interesting questions have been asked. Let me see if I can answer them. The first was the question from the noble Lord, Lord De Mauley, about how culpability would be decided. The mechanics of this are covered in Schedule 4A to the Insolvency Act 1986, paragraph 2 of which makes it clear that,"““the court shall grant an application for a bankruptcy restrictions order if it thinks it appropriate having regard to the conduct of the bankrupt””."
The paragraph gives a list of the grounds for making the order. It is an indicative list that could result in the regime being applied. I should say, however, that the list is not exhaustive, and permits any form of culpable conduct to be brought to the court’s attention. The court is obliged to make a bankruptcy restriction order provided that the allegation is properly evidenced. Those are the mechanics of it.
I think the noble Lord also asked whether there is a graduated response. I do not think so in this case; you either have a restriction or you do not. There is a list of things that form the basis of that decision.
The noble Lord also asked about the rise in bankruptcies. I do not think that bankruptcy is now, or has ever been, an easy option. Nor is it an opportunity to walk away from your debts.
On the level of bankruptcies, there is no current evidence that the changes introduced by the Enterprise Act have caused the continuing increase in personal insolvencies. Although bankruptcy has increased by 51.2 per cent on the corresponding quarter last year, IVAs in England and Wales increased by 141.9 per cent and sequestrations in Scotland increased by 36.7 per cent. That is not seasonally adjusted for the same period. The Enterprise Act has changed neither of these procedures, so I think we can say that no effect can yet be seen.
I think I dealt with the question about MEPs in my opening statement. The noble Lord asked about MEPs from other countries. I think this applies only to our legislation. I am afraid that we have no information to hand about the precise procedure in the case of someone who is bankrupt in this country but an MEP from, say, France. I do not think it would affect this because we are talking about our MEPs, who are disqualified under our legislation on bankrupts. I doubt whether this applies to the disqualification of French MEPs. I will check that position and write to the noble Lord with the answer. I fear that if our legislation says MEPs in France cannot sit representing France because of bankruptcy in the UK, that is likely to lead to a difficult international situation. If that was the nature of his question, I think that the answer is no, but I shall check.
The question of Members of this House was also raised. I think that Members here, whether appointed or elected, are allowed to sit if they are bankrupt. However, if they become subject to a bankruptcy restrictions regime, they lose the right to sit and vote in this House, in any committee of this House and on any Joint Committee of both Houses. I do not know exactly what the procedure for that would be, but whether you are bankrupt or have a bankruptcy restriction is a clear decision, so there should not be a difficulty.
Enterprise Act 2002 (Disqualification from Office: General) Order 2006
Proceeding contribution from
Lord Sainsbury of Turville
(Labour)
in the House of Lords on Monday, 19 June 2006.
It occurred during Debates on delegated legislation on Enterprise Act 2002 (Disqualification from Office: General) Order 2006.
Type
Proceeding contribution
Reference
683 c88-9GC 
Session
2005-06
Chamber / Committee
House of Lords Grand Committee
Subjects
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Timestamp
2024-04-22 01:42:21 +0100
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