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7.7 pm
Mr. Mitchell: I had not intended to take part in this debate, but the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) provoked me to do so by arguing that Labour Members were attacking accountants. We were not attacking accountants; we were primarily attacking the power of the big five accountancy houses, which inflict damage on the rest of the profession by their failures, by the sort of cases that come up against them and by stealing business from smaller accountants. We should protect the smaller accountants. We should use the power of Government and Parliament as a countervailing power against the over-weaning dominance of the big accountancy houses, which are now such a power in the land.
In the United States, the Securities and Exchange Commission is attacking such power assiduously. The difference between the two countries is that the Bill is another milestone on the rise to power of such companies. In that situation, it is right to insist on concessions in return for the privilege of limited liability partnership that is being given--concessions on consumer protection, protection for stakeholders and more effective regulation. In this country, those concessions come later, and I hope that they will do so.
The Bill does not show the House at its best. All the speeches, apart from those of my hon. Friends the Minister for Competition and Consumer Affairs and the Member for Newcastle upon Tyne, Central (Mr. Cousins) and myself, were a defence of professional privilege and attitudes, even those of the Liberal Democrats--that party should be speaking for the people, but its members concentrated on the purpose and privileges of solicitors and the professions, not on countervailing their power. That does not show scrutiny at its best.
In conclusion, to recoin an old Irish joke, like the man in Little Grimsby who asked the way to Great Grimsby and was told, "I wouldn't start from here," I would not start from here. Unfortunately, we are doing so. It is right now that we should ensure the proper regulation of the powerful accountancy houses and of the profession. It is right now to enhance the power of stakeholders in response to the privileges that are being conferred on the accountancy profession. It is also right to argue that audit work should be split from the sale of other services. That is the next agenda on reform, and I hope that we go on to undertake it. In conclusion, I thank my hon. Friend the Minister for a sterling performance: he has listened, responded and treated all the arguments with respect, intelligence and courtesy, and I congratulate him on that.
7.10 pm
Mr. Fabricant: I support the Bill and, as the Minister knows, I served on the Committee that considered it. The Bill had its genesis in the last Parliament, and it is right and proper that the present Government should continue with the measure.
The hon. Member for Great Grimsby (Mr. Mitchell) gave a long catalogue of complaints against the larger accountancy firms. Even if he were right, I can see no reason why that should inhibit the Bill's passage, as the Bill relates to a very different issue. Certain concerns were raised by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb). I am especially concerned that, in this Bill, as in other Government Bills, there is yet again, a blank cheque in relation to secondary legislation. Something that is important and ought to be included in the Bill is going to be left to delegated legislation.
On this occasion, the issue is the level of offences and the penalties that will accrue to them. That is particularly strange, as I pointed out in Committee, because clause 9(6) deals with the level of offence. It states:
- A person guilty of an offence under subsection (4) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.
Government Members have expressed concern about the principle of the Bill, which is the removal of joint and several liability of partners. However, as the Liberal spokesman, the hon. Member for Torridge and West Devon (Mr. Burnett), pointed out, along with my hon. Friend the Member for Bognor Regis and Littlehampton, nothing under the law on civil torts prevents a prosecution against a particular partner for duties that are not carried out in accordance with the law. That is right and proper, and that facility will not be removed by the Bill's enactment.
The Bill is needed. The movement since 1890 towards a global economy means that a partnership alone is not enough in this day and age. The hon. Member for Great Grimsby highlighted the growth of the larger accountancy firms. I agree that that has happened in the United States of America, which has protection similar to that proposed in the Bill. We need that protection here in the United Kingdom. As I said in Committee and earlier today, there must be equity between the protection afforded in overseas countries and that offered in the UK.
With those reservations, I join my hon. Friend the Member for Bognor Regis and Littlehampton in wishing the Bill a fair passage. Despite our reservations about it, it will be good for business and, more important, good for British jobs.
7.14 pm
Mr. Stuart Bell: I shall briefly commend the Bill and add to the comments of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb). It is perfectly right to say that the Bill owes its origins to Lord Freeman, who was Minister at the time. It was quickly taken up by the Labour party in opposition, and in our manifesto we said that we would introduce a Bill on limited liability partnerships. We also made a commitment to independent regulation, to which I shall return in a moment.
I commend the hon. Members for Bognor Regis and Littlehampton and for Torridge and West Devon (Mr. Burnett) and Opposition Back Benchers. I have forgotten which queen said that when she went to her grave and they opened her heart, they would see Calais written upon it. [Hon. Members: "Mary Stuart."] I thought it was, but I did not dare say so on the spur of the moment, in case I would stand corrected later. I commend my hon. Friends the Members for Great Grimsby (Mr. Mitchell) and for Newcastle upon Tyne, Central (Mr. Cousins), as I have a feeling that, when the LLP graves of the accountants and solicitors are opened up, they will see "Great Grimsby" and "Newcastle, Central" engraved inside. Anyone wishing to know what my hon. Friend the Member for Great Grimsby will do for an encore on independent regulation was given a reasonable impression tonight.
Finally, I commend with the utmost sincerity my hon. Friend the Minister and his staff at the Department of Trade and Industry, who have lived with the substance of the Bill for four years--one year in opposition and three in government. The Bill has followed the new parliamentary procedures introduced by the new Labour Government, has gone through a Select Committee and pre-legislation Committees and, after three years, has emerged as better legislation. This is a great day for parliamentary procedure, the Ministry, the Government and the House of Commons. I commend the Bill to the House and, as the hon. Member for Lichfield (Mr. Fabricant) said, I wish it a safe passage.
7.16 pm
Mr. Stephen O'Brien: As I did at the beginning of Second Reading and in Committee, I declare an interest as a fellow of the Institute of Chartered Secretaries and Administrators and as a parliamentary adviser to that body. I have been a non-practising solicitor since 1988.
I welcome the Bill and I pay particular tribute to the way in which it was handled in the other place before it came here. I pay special tribute to my colleague Baroness Buscombe who made a number of points that helpfully illuminated ways in which the Bill could be improved and in which the Houses of Parliament could introduce legislation that would be welcome and, we hoped, would improve company competitiveness and international location, so that companies that need to compete can make sure that they reside appropriately in this country.
I made a number of points on Second Reading and in Committee, many of them born out of my personal business experience, in so far as I have dealt with--indeed, I have established--an LLP in overseas territories and was responsible for it. I therefore have some experience which I have tried to bring to the attention of the House. I certainly wish to support fully all the points made by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) and to back his careful, well-judged scrutiny of the Bill, especially the default provisions and, indeed, the Henry VIII clause.
It is disappointing, however, that the Government's approach to retaining that clause in the Bill has left a residual doubt about whether there will be proper scrutiny of potentially serious provisions that could be added later and which would have a direct effect on the competitiveness and effectiveness of this form of corporate entity. Above all, there is a need to take account of what the hon. Member for Great Grimsby (Mr. Mitchell) said and to ensure that there is total transparency and disclosure, which is the price to be paid for conferring limited liability on what were unlimited corporate entities.
I fully acknowledge that the Government have acknowledged the matters that I have raised, but it is disappointing that they have not acted on a couple of important points that highlight the concerns of those with experience of these issues. I shall re-emphasise a couple of those points, and I crave the indulgence of the House to place them on the record. First, the Bill has focused, quite understandably, on large professional partnerships, and I fear that implications about the way in which the new corporate entity will be used have been missed.
Again, from my experience, I think that it is clear that the LLP will be a very attractive vehicle for overseas partnering and joint ventures in this country. Certainly that is the way in which a similar measure was applied in California and other states in America. It carries certain tax advantages and also rightly reflects the business relationship in manufacturing companies, with which I am familiar.
Despite raising those issues in earlier debates, I have not heard a reply from the Minister, and I note that he has been well supported by a raft of advisers here--they are sitting in the box--and in Committee. I asked whether advice had been fully taken on the experience of those
overseas territories in which there are joint ventures for manufacturing companies, and it would have been helpful to have heard a reply.
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