---

Small Limited Liability Partnerships (Accounts) Regulations 2008

I thank the noble Baroness for explaining the regulations, the impulsion for which is, I understand, the reduction of the regulatory burden on limited liability partnerships through the application of certain provisions of the Companies Act 2006. As I said earlier, we strongly welcome any attempt to deregulate and make life simpler. Furthermore, I do not think that the regulations are hugely controversial in themselves. There are, however, a couple of matters that I would like to raise. First, the impact assessments each tabulate the number of small, medium-sized and large LLPs that were respectively in existence in May 2007. What are the dividing lines between small, medium and large? Are those dividing lines structured so as to move over time in line with inflation—which, after all, is now rather more significant than it has been in recent years? Secondly, I take this opportunity to make a gently critical point about BERR’s procedures for calculating the financial impact of an SI. Perhaps the Minister can confirm this, but I understand that to estimate the cost on LLPs of implementing the Companies Act 2006 BERR simply took its estimate of costs of implementation on limited companies, multiplied it by the number of LLPs and then divided the result by the number of limited companies. LLPs tend to be small, as the Government’s own figures show, and so do not tend to have in-house access to all the things that large companies do. If, for instance, a senior member of an LLP did his own accounts under the old system, the implementation of the new one will mean that he has either to retrain—Companies Act 2006 provisions being somewhat different from the 1985 ones—or to subcontract to an accountant, both of which will cost money. Furthermore, this SI does not blanket apply the Companies Act 2006. A number of exceptions are made—for instance, where the Act refers to specific numbers, and on definitions of company types and so on. I suggest that these render it yet more inappropriate to calculate the cost of implementation in this way. If I am correct, in essence the department has used a short-cut method of determining the costs to LLPs of implementing the Companies Act 2006 that is not up to its normal standards. Perhaps the Minister could respond to that suggestion.