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Companies Bill [Lords]

Let me first declare my interest in the business under discussion. Although I am a non-practising solicitor, before entering this House, I advised on company law for some 14 years. I therefore draw hon. Members’ attention to the entries appearing by my name in the Register of Members’ Interests. I should also like to put on record that this is the first time that I have had the opportunity to address the House from the Front Bench. It is an honour and a privilege to be able to debate several key aspects of this very important Bill on behalf of Her Majesty’s Opposition. My only regret is that the timetabling means that we do not have as much time as we would like to debate some of the issues. The amendments relate to parts 12 and 13 and the continuing position of company secretaries within the corporate environment. Before speaking to our amendments, I want to say how much we welcome the about-turn that the Government have made on this issue. The amendments tabled by the Government give proper statutory recognition to company secretaries in private companies. Conservative Members have argued steadfastly that the company secretary provides a crucial role in ensuring good corporate governance and legal compliance, as well as fulfilling several important administrative tasks within the company. Secretaries are also officers of the company with the legal liabilities that that brings with it, and have a recognised ability to sign documents on behalf of the company. Until now, the Government have said that there is no need to recognise private company secretaries in the Bill. While they implemented greater flexibility on the need for private companies to have a secretary, they argued quite forcefully that there was no need to keep any records of such persons if the secretary was appointed by a private company, or for third parties to have any automatic ability to check whether somebody was a company secretary. The Government said that if the secretary was appointed and there was a need for such a secretary to sign documents on behalf of the company, they would have to be appointed as an authorised signatory under part 13. During our debate in Standing Committee, the Solicitor-General did not appear to have any concerns about the approach that was being taken, telling me:"““Private companies should have a greater degree of freedom and choice. We believe that that will not lead to any significant problems and that this deregulatory approach is the better one.””—[Official Report, Standing Committee D, 27 June 2006; c. 264.]" The problems of implementation and the effect of the Government’s proposals have forced them to revise their whole stance. The Institute of Chartered Secretaries and Administrators set out the position well, saying:"““For any of the 2 million private companies which find their secretary useful, and want to continue employing such a person, there will be the confusing burden of having set up appropriate authorisations to try and mimic the current statutory powers that are well understood.””"