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Company Law Reform Bill [HL]

I very much share the approach of my noble friend Lord Clinton-Davis to what my noble friend Lord Lea has said. I, too, think that my noble friend Lord Lea has made some important points, which I very much understand and recognise the force of. For example, he made a point about the work that this country is doing to promote a better code of practice and way of working in the extractive industries in Africa. That is very important if we want to play our role in helping to combat the evils of corruption and exploitation in a number of countries in the world. But, like my noble friend Lord Clinton-Davis, I do not think that this is the Bill or the way in which to do it. There are several reasons for that. First, in so far as we are trying to impose particular obligations with regard to tax legislation, I do not believe that a company law Bill is really the place to do it. It should be done under tax legislation. I would go further and say that, although I very much admire my noble friend’s amendment, it would carry with it some very difficult issues if it were passed in this form. For example, there is reference to the apportionment of income,"““in accordance with best accounting practice””." Like other Members of the Committee, I have been in the area of disputed questions of what is best accounting practice. That is perhaps illustrated by the way in which my noble friend’s amendment then goes on to refer to the,"““country or territory within which””," the income arose. I suspect that that, too, might be a very controverted question. Many of us might have a clear view of what the answer is, but it would not necessarily be the legal answer. When one reaches the point of looking at,"““the letter of the taxation legislation of the country””," where it arose, one is faced with the question of whether the UK courts, for example, could find themselves both enforcing the revenue legislation of other countries, which on the whole we have not been prepared to do, and identifying what that legislation means in its letter—still more in its spirit. I hope that my noble friend will not take those last observations as in any sense dismissive of his concern but, regretfully, I have to tell him that I do not think that this is the place to deal with it. Having said that, I very much sympathise with and understand the request that on some of the big issues the Government should explain what our reasons are, perhaps more fully than I have done today. I am certainly not relying simply on what the Company Law Review said, although there was a great deal of concentration on it and a big debate on it. I have no doubt that on a future occasion, perhaps even between now and Report, that will be done. But, for the reasons that I have given, I am afraid that I cannot support my noble friend’s amendment.