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Company Law Reform Bill [HL]

moved Amendment No. 155:"Page 69, line 5, at end insert ““, and" (   )   always interpret his duties so that he can demonstrate that he has at all times acted within both the spirit as well as the letter of the company’s constitution and all laws that might apply to it.”” The noble Lord said: The background to this amendment is the vigorous debate now breaking out among the professional bodies—indeed, between them and HM Revenue and Customs—about taxation and the ethics of aggressive tax planning, based on an over-literal interpretation of the law. The second strand of the debate is the wider context of globalisation, multinational corporations, tax havens and the whole issue of transfer pricing. It is difficult to capture the rapidly changing world in national frameworks of company law. We will have a lot more to say about this as the years go by. A significant debate took place at the Institute of Chartered Accountants in 2004; the motion was that tax is about the letter of the law. The motion was defeated, with the support of speeches from HM Customs and the Inland Revenue. It is significant that the issue of tax havens around the world is increasingly central to some of the wider concerns in the context of north/south. Oxfam made an important statement about this and the South African Government have initiated an inquiry into it. The amendment ties up with the later, more detailed, amendment; they could have been grouped together. That is why this more general point is made here about the relationship between developing practice in companies in the real world and the limits of self-regulation. On this logic, now is the time that the duties of a director, as these provisions will do in conjunction with Clause 154, go along with the letter and spirit of the law.