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Companies Act 2006 (Consequential Amendments etc.) Order 2008

We are grateful to the Minister for her explanation of these detailed, technical statutory instruments. Before I raise a question or two, I need to declare an interest as a director of various companies, public and private, all of which are shown in the Register of Members’ Interests. When we finally finished the Companies Act, the Minister’s predecessor, the noble Lord, Lord Sainsbury, kindly threw us a party, which we had in the offices of what was then the DTI and is now DBERR in Victoria Street. It was a jolly affair. There was one man there who I thought looked rather down at the mouth about life. I went to talk to him because I thought that this was an occasion for an hour’s release from prison. It turned out that he was the parliamentary draftsman. I thought he was down at the mouth because we had extended the Bill from 600 to 1,200 clauses or, alternatively, because parliamentary draftsmen are by their very nature gloomy souls. It was not that. He said that it was all very well for us because we had finished with the Bill but he had to pick up the consequential amendments. I asked how many there were and he said that there were between 2,000 and 3,000. I had some sympathy with him, and this afternoon, faced with 73 pages of closely packed type, I have even more sympathy with his predicament that October evening. I am also aware that I am, in part, hoist by my own petard because we on these Benches pressed the noble Lord, Lord Sainsbury, and the Government very hard to consolidate as much of the Companies Act legislation as possible. There were too many layers of it, and it was almost incomprehensible to the non-expert. We argued that the Bill provided a great opportunity to make everything clear and understandable. We were very grateful to the Government for heeding those arguments and to the Bill team for the extra work they put in to make sure it happened. This is, in part, the result. When we get to an instrument where a clause has sub-paragraphs (a) to (z) and (aa) to (vv), we know that something pretty detailed has happened. If along the way we pass through the Gaelic Media Service and the accounts of the Governor and Freemen of the Corporation of Horse Breeders, in the County of Down and of the Downpatrick Race Club, we are clearly crawling across the frontiers of human knowledge with a hand lens. In looking at this, my first question to myself is: what am I missing? I see the trees, but is there any wood here that I should be probing the Government on? I have a couple of questions. First, I have explained my interest in and support for consolidation and for doing away with the old legislation, particularly the Companies Act 1985. I know it cannot completely be wound up yet—the Minister dealt with some of this in her opening remarks. The company investigations, the audit and community interest companies remain, and if the Minister happens to have a note from her officials about when we might be able to get to them and finally close out the 1985 Act, it would be extraordinarily helpful because they are appendages left behind. Leaving that aside, it is obviously satisfactory as we go through this instrument to read in many places, ““In place of Section X of the Companies Act 1985 substitute Section Y of the Companies Act 2006””. That is exactly what we want to see. However, the Companies Act 1985 makes a couple of rather unwelcome reappearances. I apologise to the Minister because, when we met yesterday to talk about regulatory enforcement, I referred her to Clause 18 when I meant page 18. I did not have the order with me at the time and I am sorry about that. At the top of page 18, we have some provisions. The first two concern financial assistance for the purchase of shares and the registration of charges. In both cases, they refer to the Companies Act 1985: chapter VI of Part V in respect of financial assistance, and chapter I of Part XII in respect of the registration of charges. That seems strange because we dealt with financial assistance and the registration of charges at some length in the debates, and I am not sure why, when everything else in that paragraph refers to 2006, those first two references to 1985 still remain. Further down that page, in Section 54, we again refer to Section 10(2) of the Companies Act 1985 and propose a substitution. I have a copy of the brute here. Section 10(2) reads: "““With the memorandum there shall be delivered a statement in the prescribed form containing the names and requisite particulars of … the person who is, or the persons who are, to be the first director or directors of the company; and … the person who is, or the persons who are, to be the first secretary or joint secretaries of the company””." I am slightly surprised that that should continue because we did away with the memorandum. It will no longer exist in the 2006 Act, yet here we are amending the 1985 Act and preserving the memorandum in a way that I do not understand. I have no doubt that the Bill team has precise answers as to why we have to preserve the memorandum here and why this part of the 1985 Act is not being done away with. However, we should bear in mind that we went through at great length the new, much simpler way of forming a company with much simpler formation documents, which do away with the old distinction between the memorandum and the articles. Again, perhaps I may briefly draw the Minister’s attention to paragraph (8) two-thirds of the way down page 26. It refers to: "““The extent of the director’s responsibility for any failure … to comply with any of the following provisions of the Companies Act 1985””." It talks about registers, annual returns and the registration of charges. All those seem to be fundamental issues, and it is not clear to me why the 1985 Act has a continuing locus there. That compels me to admit that I have not been through every line of this long and detailed instrument. However, there may be other places where this occurs and it would be good if the Minister could update us. My final, slightly anoraky, point concerns the Explanatory Note. This instrument is, by any stretch of the imagination, extraordinarily detailed, yet, at the end, the Explanatory Note says: "““This Order makes consequential amendments, repeals and revocations””." It then says: "““This Order also contains some further savings””." What have I missed there? What does that mean? Is it just a boiler plate? Is it a safety net or a catch-all? The fact that the order is very detailed with a wide statement at the end in the Explanatory Note triggers me to ask the Minister to set my mind at rest by confirming that I have not missed anything here and that this statement is trees and not wood. Having said that, we support the purposes behind the instrument, and we support the idea that there should be greater consolidation of the Companies Act legislation, which is important to the prosperity of UK plc. We are happy to give our support to this but clarification on those few points would be very helpful.