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Mr. Cousins: The debate has been short but illuminating. I especially thank my right hon. Friend the Minister for her remarks and for taking this opportunity to set out the Government's approach. We shall obviously be able to debate all these matters again in the context of the companies Bill that we have been promised this afternoon. That is a joyous prospect for those of us gathered here today. What an opportunity it will be to convince many of our colleagues that they should join us in considering these intricate and interesting matters.
3.30 pm
I sound a warning to my right hon. Friend, however: the test for a rules-based or a principles-based approach cannot be absolute. Through the International Accounting Standards Board, we must seek reconciliation between the different approaches being developed in the United States and in Europe. It would be a disaster if we closed our minds, and our legislation, to acceptance of some of the rules-based requirements that are emerging from the US. That could produce tensions for companies registered both in this country and the United States, especially the larger ones. We must avoid the conflict between the two systems that is now a real possibility.
We may want to create a truly competitive market in the provision of audit services, but we are already in an extreme situation. The competitive market is eroding before our eyes. When we return to these matters, I
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suspect that the Minister will find that the measures required to preserve a competitive market are even more extreme than those she is willing to consider at present.
Finally, Senator Sarbanes himself wanted to go for radical separation of audit and non-audit services, especially in relation to tax avoidance, which has become a profitable global industry of the most powerful kind. The Government tried to address that aspect in the Finance Act 2004, which requires for the first time the registration of tax avoidance schemes—or tax mitigation schemes, if that is a more acceptable formulation. A real issue will emerge under our regime for companies supplying the same company with both tax mitigation devices and audit services. Whatever happens to new clause 9, that issue will certainly not go away. None the less, I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
Clause 21
Mr. Andrew Mitchell: I beg to move amendment No. 1, in page 27, line 29, at beginning insert
'Where there appears to be good reason.'.
Mr. Deputy Speaker (Sir Michael Lord): With this it will be convenient to discuss the following amendments: No. 20, in page 27, line 29, after '(1)', insert
'If he thinks there is good reason to do so'.
No. 2, in page 29, line 12, in clause 23, leave out 'thinks' and insert 'reasonably believes'.
No. 3, in page 29, line 12, in clause 23, after 'thinks', insert 'on reasonable grounds'.
No. 21, in page 29, leave out line 14 and insert—
'(2) Subject to subsection (9) an inspector or investigator may at all reasonable times within the first 30 days following his authorisation under subsection (1)(a)–'.
No. 4, in page 29, line 14, after 'may', insert
', subject to subsection (3A),'.
No. 5, in page 29, line 14, at end insert 'during normal office hours'.
No. 6, in page 29, line 16, after 'there', insert 'during normal office hours'.
No. 7, in page 29, line 16, leave out 'thinks' and insert 'reasonably believes'.
No. 8, in page 29, line 16, after 'necessary', insert 'on reasonable grounds'.
No. 9, in page 29, line 16, after 'necessary', insert
', not exceeding one month,'.
No. 10, in page 29, line 16, after 'necessary', insert
'not exceeding one month (or such longer periods as may be authorised by the Secretary of State)'.
No. 22, in page 29, line 17, at end insert
'provided that unless authorised to do so by the Secretary of State under subsection (9) he shall not remain on the relevant premises for the whole or substantially the whole of the company's normal working hours for a period of more than 7 consecutive days.'.
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No. 11, in page 29, line 17, at end insert—
'(2A) Except when the investigator or inspector reasonably believes that the exercise of his functions under this Part would otherwise be seriously impaired the powers under subsection (2) shall be exercised between the hours of 9 am and 5.30 pm and between Monday and Friday.'.
No. 23, in page 29, line 18, after second 'premises', insert
', or if in mixed use the parts or parts thereof,'.
No. 12, in page 29, line 20, after subsection (3) insert—
'(3A) Where the relevant premises consist either of premises all parts of which are used for residential purposes or of premises which can only be accessed via premises or parts of premises which are used for residential purposes an inspector or investigator shall not exercise his powers under subsection (2) without a warrant issued under section 453C by a justice of the peace and if such a warrant is issued the inspector's or investigator's powers under subsection (2) shall be limited to his powers under such warrant.'.
No. 13, in page 29, line 21, after '(2)', insert
'subject to the terms of any warrant issued under section 453C'.
No. 24, in page 29, line 32, at end insert—
'(9) The Secretary of State may on the written request of the inspector or investigator—
(a) if satisfied that it is necessary for the purpose mentioned in subsection 1(b) extend for a period which he may specify beyond the initial 30 days the period of authorisation under subsection 1(a); or
(b) extend the number of consecutive days during which the inspector or investigator may remain on the relevant premises.
(10) There shall be no limit on the number of extensions which may be requested of or granted by the Secretary of State under subsection (9).'.
No. 14, in page 30, line 7, at end insert—
'(c) the grounds for his belief that entry onto the company's premises will and that remaining thereon for a period will be necessary to materially assist him in the exercise of his functions under this Part,'.
No. 15, in page 30, line 42, at end insert—
' "453 C Entry into residential premises
(1) A justice of the peace may issue a warrant under section 453A(3A) if satisfied on information on oath given by or on behalf of the inspector or investigator authorised under section 453A(3A) that there are reasonable grounds for believing that access to any premises falling within section 453A(3A) will materially assist the inspector or investigator in the exercise of his functions under this Part.
(2) A warrant under section 453A(3A) may authorise the inspector or investigator, accompanied by a constable and any persons thought appropriate under section 453A(4) and any other constables—
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