House of Commons Hansard Debates for 26 Oct 1989

Mr. Cousins : I should be grateful if the hon. Member for Richmond and Barnes (Mr. Hanley) and the Minister could clarify a few points. I well recollect our discussions on this matter in Committee when I believe that it was the hon. Member for Richmond and Barnes who informed us that the Prime Minister of Ireland, Charles Haughey, was an accountant and would be qualified under these provisions. Even the most devoted Unionist might have a slight feeling of trepidation about that eventuality. None the less, horse racing is popular in both the United Kingdom and the South of Ireland, so we may look forward to a happy coming together on that point. Is my thinking correct?

Mr. Hanley : A chartered accountant, whether trained in the Republic of Ireland or the United Kingdom, divorces himself from his political feelings and preferences when practising as a chartered accountant, so whatever the hon. Gentleman's feelings about the President of the Republic of Ireland, I assure the hon. Gentleman that as

Column 1154

a chartered accountant Mr. Haughey would be totally independent. In other words, the hon. Gentleman's thinking was indeed correct.

Mr. Forth : As my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) has just said, the Institute of Chartered Accountants in Ireland is specifically recognised in the present provisions on the qualifications of auditors in section 389 of the Companies Act 1985. All its members--whether trained in the Republic or in Northern Ireland--are therefore qualified in law to audit the accounts of British companies. That reflects the way in which company law and auditing practices in Britain and Ireland have developed hand in hand. Auditing standards and guidelines developed by the Auditing Practices Committee apply equally to the Republic of Ireland and to Great Britain. That answers the point raised by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins).

There may be a case for considering whether the work involved in auditing companies in the Irish Republic is so similar to United Kingdom company audit work that practical training in such work could count towards the Bill's requirements on the content of practical training. In any case, I am happy to give my support to the amendment moved by my hon. Friend the Member for Richmond and Barnes, and I hope that the House will join me.

Amendment agreed to.

Clause 43

Time limits for prosecution of offences

Mr. Forth : I beg to move amendment No. 71, in page 56, line 27, after tried' insert on an information laid'.

Mr. Deputy Speaker : With this it will be convenient to consider Government amendment No. 72.

Mr. Forth : These two amendments take account of a point that came to light only at a late stage in our proceedings. They bring the period in clause 43, within which prosecution in England and Wales of a person who has committed an offence under part II must take place, into line with the standard provisions on time limits for the prosecution of offences. At present clause 43 has the effect that the trial must commence no later than three years after its commission. The amendments correct that to three years after the relevant information was laid, which is already the effect of the clause as far as Scotland is concerned.

Amendment agreed to.

Amendment made : No. 72, in page 56, line 40, after information' insert laid'.-- [Mr. Forth.]

Mr. Forth : I beg to move amendment No. 73, in page 59, line 28, leave out the order' and insert an order under section 46'. This is a consequential amendment to an amendment agreed in Committee which enabled the Secretary of State to make further orders after the delegation order conferring more functions on the statutory body or resuming functions already conferred. This amendment extends the immunity and damages given to the statutory body in clause 48 so that it covers functions conferred on it by further orders. The immunity conferred on the statutory body will therefore, as intended, be co-extensive with any functions and exercises under the Bill.

Column 1155

Amendment agreed to.

Amendments made : No. 74, in page 60, line 16, leave out clause 50.

No. 75, in page 261, line 33, leave out schedule 15.-- [Mr. Forth.]

Clause 52

Minor Definitions

Amendment made : No. 76, in page 61, line 8, at end insert "enactment" includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978 ;'.-- [Mr. Forth.]

Clause 53

Index of Defined Expressions

Amendment made : No. 77, in page 61, line 38, at end

'enactment section 52(1).-[Mr. Forth]

New Clause 45

Investigation of unregistered companies

. In Schedule 22 to the Companies Act 1985 (provisions applying to unregistered companies), for the entry relating to Part XIV substitute--

"Part XIV (except section 446) Investigation of companies and their affairs ; requisition of documents. --".'.-- [Mr. Redwood.]

Brought up, and read the First time.

Mr. Deputy Speaker : With this it will be convenient to discuss Government amendments Nos. 78 to 80.

Mr. Redwood : I beg to move, That the clause be read a Second time.

As a consequence of certain repeals of provisions in the Companies Act 1985 by the Financial Services Act 1986, unregistered companies which at present fall within the scope of section 447 of the 1985 Act would no longer be covered. Section 447 gives the Secretary of State power to require documents for inspection. These amendments will ensure that section 447 powers continue to apply to unregistered companies.

The purpose of this amendment is to preserve the status quo. There will be no widening or narrowing of the powers.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 46

Amendment of the Building Societies Act 1986

. In section 53 of the Building Societies Act 1986 (confidentiality of information obtained by the Building Societies Commission), in subsection (7)(b) (functions of Secretary of State for purposes of which disclosure may be made) after sub-paragraph (ii) insert--

", or

(iii) Part II, III or VII of the Companies Act 1989 ;",'.-- [Mr. Redwood.] Brought up, and read the First time.

Column 1156

Mr. Deputy Speaker : With this it will be convenient to discuss Government new clause 47-- Amendments of the Banking Act 1987 --and Government amendments Nos. 81 and 82.

Mr. Redwood : I beg to move, That the clause be read a Second time.

These amendments are consequential on other provisions in parts II, III and VII of the Bill. They amend the Building Societies Act 1986, the Banking Act 1987 and clause 84 of the Bill, to provide gateways for the disclosure of restricted information for the purpose of enabling or assisting the Secretary of State's functions under parts II, III and VII of the Bill.

Mr. Cousins : Some dimensions of the new clause commend themselves to me, because I believe that it is important to have gateways through which information about activity in the building society world can be made available to the Government in pursuit of their necessary regulatory activities.

Those of us who have dealt with constituency and other problems arising from the demutualisation of Abbey National are very well aware of the need for much better information to be available to the public authorities to carry out their duties. The Minister has been perfectly fair but a little mysterious about how he proposes to use the powers that he is taking under the new clause. A little elucidation on that point would not come amiss in view of public disquiet about Abbey National and the way in which that affair was conducted.

Mr. Redwood : The idea is to provide gateways for information such as that passed to inspectors appointed under sections 94 or 177 of the Financial Services Act 1986, as well as inspectors appointed under part XIV of the Companies Act 1985. These are the normal types of investigations launched when there is reason to suspect fraud or malfeasance or other such problems.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 47

Amendments of the Banking Act 1987-- .--(1) In section 84(1) of the Banking Act 1987 (disclosure of information obtained under that Act), the Table showing the authorities to which, and functions for the purposes of which, disclosure may be made is amended as follows. (2) In the entry relating to the Secretary of State, in column 2, for "or the Financial Services Act 1986" substitute ", the Financial Services Act 1986 or Part II, III or VII of the Companies Act 1989". (3) For the entry relating to inspectors appointed by the Secretary of State substitute--

"An inspector appointed under Functions under that Part or that Part XIV of the Companies section".

Act 1985 or section 94 or 177

of the Financial Services Act

1986

(4) For the entry beginning "A person authorised by the Secretary of State" substitute--

Column 1157

"A person authorised to exercise powers under section 44 of the Insurance Companies Act 1982, section 447 of the Companies Act 1985, section 106 of the Financial Services Act 1986 or section 80 of the Companies Act 1989. Functions under that section.".

(5) For the entry relating to a designated agency or transferee body or the competent authority (within the meaning of the Financial Services Act 1986) substitute--

"A designated agency (within the meaning of the Financial Services Act 1986). Functions under the Financial Services Act 1986 or Part VII of the Companies Act 1989.

A transferee body or the competent authority (within the meaning of the Financial Services Act 1986). Functions under the Financial Services Act 1986.".'.-- [Mr. Redwood.]

Brought up, read the First and Second time, and added to the Bill.

Clause 62

Secretary of State's power to require production of documents

Amendment made : No. 78, in page 65, line 22, at end insert-- (1A) Omit subsection (1) (bodies in relation to which powers exercisable), and--

(a) in subsections (2) and (3) for "any such body" substitute "a company",

(b) in subsections (4) and (5) for "any body" and "a body" substitute "a company", and

Clause 64

Provision for security of information obtained

Amendment made : No. 79, in page 68, line 3, at end insert-- (aa) in the opening words for "body" (twice) substitute "company" ;'.-- [Mr. Redwood.]

Clause 65

Punishment for destroying, mutilating, &c. company documents

Amendment made : No. 80, in page 69, line 37, at end insert-- (1A) In subsection (1) for the opening words down to "insurance company" substitute "An officer of a company, or of an insurance company", for "body's" substitute "company's" and for "the body" substitute "the company".'.-- [Mr. Redwood.]

Clause 84

Exercise of powers in relation to Northern Ireland

Amendment made : No. 81, in page 84, line 27, after 1985,' insert section 53 or 54 of the Building Societies Act 1986.'. No. 82, in page 84, line 28, after 1986' insert , section 84 of the Banking Act 1987'.-- [Mr. Redwood.]

Column 1158

New Clause 20

Charges requiring registration

. The following sections are inserted in Part XII of the Companies Act 1985 --

" Registration in the company charges register

Introductory provisions

395.--(1) The purpose of this Part is to secure the registration of charges on a company's property.

(2) In this Part--

"charge" means any form of security interest (fixed or floating) over property, other than an interest arising by operation of law ; and

"property", in the context of what is the subject of a charge, includes future property.

(3) It is immaterial for the purposes of this Part where the property subject to a charge is situated.

(4) References in this Part to "the registrar" are--

(a) in relation to a company registered in England and Wales, to the registrar of companies for England and Wales, and

(b) in relation to a company registered in Scotland, to the registrar of companies for Scotland ;

and references to registration, in relation to a charge, are to registration in the register kept by him under this Part.

Charges requiring registration

396.--(1) The charges requiring registration under this Part are-- (

(a) a charge on land or any interest in land, other than (

(i) in England and Wales, a charge for rent or any other periodical sum issuing out of the land,

(ii) in Scotland, a charge for any rent, ground annual or other periodical sum payable in respect of the land ;

(b) a charge on goods or any interest on goods, other than a charge under which the chargee is entitled to possession either of the goods or of a document of title to them,

(c) a charge on intangible movable property (in Scotland, incorporeal moveable property) of any of the following descriptions-- (

(i) goodwill,

(ii) intellectual property,

(iii) book debts (whether book debts of the company or assigned to the company),

(iv) uncalled share capital of the company or calls made but not paid,

(d) a charge for securing an issue of debentures, or

(e) a floating charge on the whole or part of the company property.

(2) The descriptions of charge mentioned in subsection (1) shall be construed as follows--

(a) a charge on a debenture forming part of an issue or series shall not be treated as falling within paragraph (a) or (b) by reason of the fact that the debenture is secured by a charge on land or goods (or on an interest in land or goods) ;

(b) in paragraph (b) "goods" means any tangible movable property (in Scotland, corporeal moveable property) other than money ; (

(c) a charge is not excluded from paragraph (b) because the chargee is entitled to take possession in case of default or on the occurrence of some other event ;

(d) in paragraph (c)(ii) "intellectual property" means

(i) any patent, trade mark, service mark, registered design, copyright or design right, or

(ii) any licence under or in respect of any such right ; (

(e) a debenture which is part of an issue or series shall not be treated as a book debt for the purposes of paragraph (c)(iii) ; (

(f) the deposit by way of security of a negotiable instrument given to secure the payment of book debts shall not be treated for the purposes of paragraph (c)(iii) as a charge on book debts ; (

Column 1159

(g) a shipowner's lien on subfreights shall not be treated as a charge on book debts for the purposes of paragraph (c)(iii) or as a floating charge for the purposes of paragraph (e).

(3) Whether a charge is one requiring registration under this Part shall be determined--

(a) in the case of a charge created by a company, as at the date the charge is created, and

(b) in the case of a charge over property acquired by a company, as at the date of the acquisition.

(4) The Secretary of State may by regulations amend subsections (1) and (2) so as to add any description of charge to, or remove any description of charge from, the charges requiring registration under this Part.

(5) Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(6) In the following provisions of this Part references to a charge are, unless the context otherwise requires, to a charge requiring registration under this Part.

Where a charge not otherwise requiring registration relates to property by virtue of which it requires to be registered and to other property, the references are to the charge so far as it relates to property of the former description.".'.-- [Mr. Forth.]

Brought up, and read the First time.

Mr. Deputy Speaker With this it will be convenient to discuss Government new clause 21-- The companies charges register.

9.45 pm

Mr. Forth : I beg to move, That the clause be read a Second time. New clause 20 would replace clause 89 in the Bill. It contains a number of amendments to clauses 395 and 396. The amendments mostly make some technical but important alterations to terms and provisions that determine whether a charge is registrable. The broad aim is to ensure that we do not require registration if it will cause undue damage to commercial practice. New clause 21 would replace clause 90 of the Bill. It contains amendments to new section 397 but inserts no new provisions. The amendments simply omit an illustrative list and a provisional notice that is replaced by a new provision in clause 30. Question put and agreed to.

Clause read a Second time, and added to the Bill.

Next Section

Home Page