---

Company Law Reform Bill [Lords]

The other danger, though, is that the winners from the new procedure might well end up being not shareholders but insurers who offer to indemnify directors against such claims. Premiums are already shooting up. There is a risk, too, that the losers are likely to be British companies. As the provisions add to the liability of directors and the likelihood of litigation against them, it will become increasingly difficult to attract high-calibre candidates to be directors of UK companies. In extremis, it would make certain companies incorporate in another jurisdiction. I should like to turn my attention to the growing concern regarding the uses to which registers of shareholders are being put. The issue hit the headlines most recently with shareholders of GlaxoSmithKline being targeted by animal rights extremists. In typical fashion, that led the Government to ensure that they were seen to be doing something; to be fair, I think that in the end they did. It is essential that the Bill contains the necessary protections on members’ register. We have called for that repeatedly, and as the Bill progresses we will be looking to see whether the Government’s specific proposals are the right ones. The UK Shareholders Association certainly thinks that so far the changes have not been thought through. We want to make absolutely sure that those who face potential intimidation from animal rights extremists are thoroughly and comprehensively protected. This morning, we learned from the Financial Times that the Government are planning to reintroduce provisions in the Bill to compel institutional investors to disclose how they voted. The Committee will have to examine that in detail to ascertain exactly how it will be achieved and what it will achieve. We shall consider the Government’s proposals in detail to ensure that they are proportionate and avoid unnecessary burdens. Clearly, the Bill deserves proper scrutiny. We are concerned that the Government still intend to move a programme motion for such a large measure about which there is so much agreement. We appreciate that the Secretary of State does not want it to spill over into the next Session and we understand that that is the bookend for the debates. However, in another place, three days were allowed for Report and one for Third Reading—a total of four days. It would therefore be unfortunate and dismaying to allow only one day for the House to consider the Committee’s work on Report. We understand that the Committee will have to debate more than 1,000 amendments. Given that we will work hard until we rise for the summer and then have the summer to examine everything that has happened, I hope that the Secretary of State will consider a proper extended period for Report and Third Reading, probably when we come back in October. There is much to commend in the Government’s aims for the Bill. The consultations and reviews that preceded it have been long and detailed. We want company law to be brought up to date and we want to give firms in Britain a legal framework that promotes their success. In recent times, some British businesses have struggled under an ever greater burden of regulation and red tape. On productivity, the rate of growth has slowed since the Government took office. In competitiveness, Britain has dropped from fourth to 13th in the World Economic Forum’s league table. Our trade deficit is at a record high and our deficit with China jumped by 20 per cent. last year alone. Britain’s tax burden is rising to all-time record levels while many other countries are lowering theirs. That is why we believe that the Bill is important and repeat our offer to work with the Government to improve it, and why my hon. Friends will table amendments in Committee to give British business the best chance of succeeding by giving it the best legal framework in which to operate.