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Companies Bill [Lords]

I am conscious of the time, so I shall briefly set out the Opposition’s view on the new clause and amendments. We broadly support the limited liability agreement clauses and do not therefore support amendments Nos. 751, 752, 763, 802 and 803. The limited liability agreement is not made mandatory by the Bill. It will be a matter for companies and their auditors, an agreement between the audit firm and the business. It might, however, provide a tool for more carefully limiting the risk to auditors in relation to the corporate risk that they can influence and have some responsibility for. It is right that clauses 458 to 552 do not take an over-prescriptive approach. It will clearly be a matter for companies and their auditors to work through the fine details of structuring the agreement, and that process will no doubt be adapted with experience and time. New clause 86 provides for a limited liability agreement to be circulated to all parties entitled to receive company accounts. This would result in unnecessary bureaucracy, as any agreement would have to be approved by members through the normal company procedures anyway and at that stage the agreement would be available for scrutiny. Similarly, amendment No. 803 also seems to involve unnecessary bureaucracy. Clause 551 provides a reasonableness test against which to judge an agreement. Clause 552 provides that the Secretary of State could introduce regulations that require disclosure of an agreement in the annual accounts or the directors’ report. Will the Minister tell the House whether the Government intend to introduce such disclosure regulations and, if so, when she expects them to come into force?