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Companies Bill [HL]

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 1 to 4. I shall speak also to Amendments Nos. 40, 45, 46, 49, 50 to 55, 57 to 59, 67, 69, 71 to 73, 79, 81 to 83, 108, 119, 175, 176, 209 to 211, 213, 215, 216, 218, 530, 531, 643 to 645, 758, 833 to 837, 839, 844, 846, 862 to 865, 867 to 870, 873, 874, 877, 878, 881 to 883, 885, 886, 889 to 893, 898, 900, 946, 953, 955, 956, 958, 969, 993, and 1018 to 1022. Before turning to the amendments before us, it may be useful if I say a few words about the amendments we will consider today, particularly in the light of the remarks of the noble Lord, Lord Hodgson; it would be appropriate. Clearly we are considering a lot of amendments. They cover 319 pages, which is surely a record, and the amendments themselves are lengthier than the Financial Services and Markets Act 2000. On the other hand, it has to be said that this Bill is not least a consolidation measure and is probably the largest Bill that has ever come to Parliament. It is important to remember the genesis of these amendments. The great bulk are due to the restatement exercise which was undertaken at the prompting of this House. It will mean that the Bill as amended will in effect be a complete code of company law. All the company law provisions of the 1985, 1989 and 2004 Acts have been brought into the Bill, other than the self-standing provisions on community enterprise companies and the provisions on investigations which go wider than in companies. This I feel sure makes the Bill very much more useful to practitioners and that, after all, has been the common aim of both sides of the House. We are grateful to parliamentary counsel for the considerable work involved over the few months since the Bill left this House, and to the Law Society in particular for carefully checking that the restatement does not make unintended changes to the law. Our intention in this exercise has been to restate the old law in more modern terms, but not to change its substantive effect except for two reasons: to ensure consistency with other provisions in the Bill and to ensure that we comply with our EC obligations. As we go through the amendments I will not try to list which ones are restatements as there are over 400 of them, but I can assure the House that parliamentary counsel will produce a full destination and derivations table so that practitioners can see exactly which these clauses are. Most of the remaining amendments we are considering today are indeed technical improvements suggested during the parliamentary passage through this House or another place, and many of them have come from professional bodies such as the Law Society and others, all of which were consulted in great detail before the Bill ever came to the House. It is not surprising that on further reflection and detailed scrutiny they have come up with further improvements, and I think it would have been utterly ridiculous for us to say to those professionals that where they raised points of detail which improved the Bill we would not accept them. On the contrary, we have taken a totally different approach because we think the value of this Bill lies in the fact that it provides a good framework for practitioners, lawyers, accountants and other professionals to conduct their business. We have therefore made it a matter of policy to give them the very greatest scrutiny and accept every amendment where it makes sense to do so. I am not in any way ashamed of having done that, nor do I think it is wrong. This is what this kind of Bill should be about. There is a small handful of contentious issues on which I expect we will have a lively debate today, but let us be clear that what we are talking about is some 13 amendments, a couple of which are government amendments. If we conduct our business in a sensible way, that is not too great a burden for this House. If we do not go over endlessly the many technical points, we should be able to tackle this within a reasonable time. That is against the background that there is now consensus on the Bill, which is very important for the competitiveness of the UK. My right honourable friend the Minister of State for Industry and the Regions said in another place that we would announce our timetable for implementation before the Bill completed its passage, and I am happy to take this opportunity to do so. We have, of course, discussed this important issue with business and others and recognise that we will need to allow some time after the necessary regulations are in place for the business community to gear up to using the new law. On this basis we intend to produce for consultation further details of how the Bill will be applied to existing companies by early next year. We will follow this with further consultation on other aspects. However, we will implement the provisions on company communications to shareholders and others in January 2007. This will include provisions facilitating electronic communication. We are doing this because, more than any other measure in the Bill, it will bring many millions of pounds of savings to business. It is the aspect of the Bill which business is most keen to see brought forward. I appreciate that many groups will have their own priorities for implementation. Unfortunately, we cannot accommodate all of those, but we thought it right to make an exception in the case of electronic communications because it will bring significant and tangible benefits very quickly. We will consult in February on our detailed implementation plans. Our intention is to commence all parts of the Bill by October 2008. We will continue to work with stakeholders in implementing the Bill. In particular, we will work with the business community to ensure widespread and effective communication of the Bill’s provisions so that all parties fully understand the new provisions and are in a position to take advantage of the benefits. The noble Lord, Lord Hodgson, asked what was left behind in the 1985, 1989 and 2004 Acts. As I have explained, all the company law provisions of those Acts have been brought into the Bill, other than the self-standing provisions on community enterprise companies and the provisions on investigations which go wider than companies. The non-company-law parts of those Acts which will remain relate to some Scots law provisions, which are now devolved to and have been replaced by the Scottish Parliament; provisions about the Financial Reporting Council and the operation of that body and its subsidiaries, but not about how companies generally conduct themselves; and provisions about assisting overseas regulatory authorities in relation to the financial markets, the Financial Reporting Review Panel and insolvency, all of which relate more to financial services than to company law. Finally, I stand by the words that I used at the beginning of the Grand Committee—which, as I remember it, were provoked by a rather angry letter from the noble Lord to the Times to which I thought we should give careful consideration. I hope that in this debate, in which we have to consider 1,029 amendments, the same spirit will prevail as in many of our Committee sittings. We have only a limited number of contentious amendments to get through. The amendments in the first group are mainly technical. They have the effect of tidying up the drafting of the Bill, largely as a result of the restatement exercise. I therefore suggest that we do not spend a long time examining them. They make changes to the drafting where needed—for example, to amend references to the former Companies Act which are no longer needed as a result of restatement; to amend references to the name of the Bill, which is now the Companies Bill and not the Company Law Reform Bill; or to ensure the clarification of terms and a smoother reading of the Bill as a whole. Moved, That the House do agree with the Commons in their Amendments Nos. 1 to 4.—(Lord Sainsbury of Turville.) On Question, Motion agreed to.