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Written Ministerial Statements

Thursday 6 November 2008

Business, Enterprise and Regulatory Reform

Companies Act 2006

The Parliamentary Under-Secretary of State for Business, Enterprise and Regulatory Reform (Ian Pearson): As my predecessor announced by written statement on 13 December 2007, Official Report, column 45WS, the Companies Act 2006 is being commenced in tranches between Royal Assent on 8 November 2006 and 1 October 2009. I have today laid before Parliament the eighth commencement order, which commences the final provisions with effect from 1 October 2009. There are two minor sets of provisions in the Act that we are not proposing to commence. When a suitable opportunity arises, the Government will propose to Parliament the repeal of these provisions.

The first set are sections 327(2)(c) and 330(6)(c). Sections 324 to 331 deal with the use of proxies, whereby shareholders who do not attend company meetings can delegate their vote to someone who will attend. This can be a vote on a show of hands, or on a poll, where the number of shares of each person voting is taken into account. The 2006 Act restated the rules on proxies contained in the Companies Act 1985 and its Northern Ireland equivalent, the Companies (Northern Ireland) Order 1986, with a number of changes, including making it easier for a member to appoint more than one proxy.

Companies’ articles generally provide a deadline by which documents appointing proxies need to be received before a meeting. Section 327 prevents this deadline being set at more than 48 hours before the meeting. If a poll is called for at a meeting and if it is to be taken more than 48 hours later, then subsection 327(2)(b) provides that the deadline for appointing proxies will be not more than 24 hours before the poll. The intention behind subsection 327(2)(c) was to provide, that where a poll is taken within 48 hours of its being called at a meeting, the deadline would be 48 hours before the meeting, as for proxy voting at the meeting. As drafted, however, subsection 327(c) would have the unintended effect that the deadline would be the time at which the poll was called for. That is why the subsection has not been commenced so far, and why the Government believe that it should not be commenced, and that subsection 330(6)(c) which makes similar provision for withdrawing authority from a proxy should not be commenced.

The second set of provisions that are not being commenced are section 1175 so far as it relates to Northern Ireland and the associated part 2 of schedule 9. Part 16 of the Act replaces the rules on audit requirements from the Companies Act 1985 with a number of changes, including that there are no longer special rules for the
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audit of companies that are charities. This is because in future special rules for charities, whether companies or not, are to be included in charities legislation. As it seemed likely that charity law in England and Wales would be amended to replace these rules before the commencement of part 16 of the Companies Act 2006, schedule 9 included provisions to amend the Companies Act 1985 to remove the special rules for audit of charitable companies. In the event, the Charities Act 2006 (Charitable Companies Audit and Group Accounts Provisions) Order 2008 (SI 2008/527) came into force on 1 April 2008, and so part 1 of schedule 9 was commenced on that date by the Sixth Companies Act 2006 Commencement Order. Part 1 of the schedule covers England and Wales, and also Scotland where their charities legislation was also ready to take over.

Similar provisions to amend the Companies (Northern Ireland) Order 1986 were included in part 2 of schedule 9 to the Companies Act 2006, but at the time part 16 was commenced there were no provisions in Northern Ireland charity law to apply audit requirements to smaller charitable companies. The sixth Commencement Order therefore saved the existing rules on the audit of smaller charitable companies in the 1986 Order, and there will never be any need to commence section 1175 in relation to Northern Ireland, or part 2 of schedule 9.


Financial Support (Icelandic Bank)

The Chancellor of the Exchequer (Mr. Alistair Darling): On 8 October 2008, I announced to Parliament that the Government would ensure that no depositor in icesave, the internet product made available by the UK branch of the Icelandic bank, Landsbanki, would lose any money as a result of the closure of icesave. I have today laid a Treasury Minute to explain several contingent liabilities into which the Government has entered in order to give effect to part of this commitment.

The Government is also making an advance of approximately £800 million to the Financial Services Compensation Scheme (FSCS) in order to enable the FSCS to pay out that part of a depositor’s rights arising from deposits of over the FSCS depositor compensation limit of £50,000. The Bank of England is initially providing loan facilities to enable the FSCS to pay out that part of a depositor’s rights arising from deposits of under the FSCS depositor compensation limit. The Treasury will refinance these facilities.

Authority for this advance and for refinancing is sought in the winter supplementary estimate, which will be presented to the House later this month. Statutory authority for the expenditure will be provided on a retrospective basis by the Banking Bill.

Communities and Local Government

Local Government

The Minister for Local Government (John Healey): Earlier this year, Parliament debated and approved Structural Change Orders to create from 1 April 2009 nine new unitary councils—Bedford borough council,
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Cheshire East council, Cheshire West and Chester council, Central Bedfordshire council, Cornwall council, County Durham council, Northumberland council, Shropshire council and Wiltshire council. Working closely with those responsible locally for implementing these new unitary councils, we are completing the legislative framework needed to support the transition to these new councils.

Accordingly, I have today laid before the House, the Local Government (Structural Changes) (Transitional Arrangements) (No.2) Regulations 2008, made under part 1 of the Local Government and Public Involvement in Health Act 2007.

This represents a significant milestone in the completion of the necessary legislative framework. These regulations make transitional provisions in relation to the following matters:

I am confident that these regulations represent the most practical and pragmatic way forward for both predecessor councils and their successor new unitaries to implement the new arrangements and achieve a seamless transition protecting the delivery of local services.

No one underestimates the scale of the task those leading the changes in these areas face over the coming months. But we in central Government will continue to play our part in supporting the transition, completing the legal framework, and helping those in the front line to set up and run successfully the new unitary councils from April.

Home Department

Security Industry Authority

The Parliamentary Under-Secretary of State for the Home Department (Mr. Alan Campbell): In their recent report “Regulating the Security Industry” published on 17 October 2008, the National Audit Office concluded that as a regulator the Security Industry Authority (SIA) is an effective organisation. Notwithstanding that, the Home Office has had concerns about the SIA’s organisational capabilities. Drawing on the model of Government Departmental Capability Reviews, in agreement with the chair of the SIA, an independent delivery review has recently been conducted looking at the leadership and management of the organisation.

The SIA board are currently considering how to respond fully to the recommendations of the review and I have asked that they report to me with a detailed action plan within the next two weeks.

With the delivery review underway, we have become aware of some failings in the SIA’s compliance with Home Office requirements for security clearance for SIA employees. Home Office guidance issued to the SIA stipulates that no person should be employed, in a permanent or temporary capacity, without appropriate
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confirmed security clearance. All permanent SIA staff have confirmed security clearance. It became clear, however, that some agency workers had not received appropriate security clearance before commencing employment with the SIA. The SIA currently has 38 agency workers. As soon as the Home Office became aware of the issue, it asked the SIA to take immediate action. All those without confirmed security clearance were removed from SIA premises and had all access to SIA systems withdrawn. Security checks are now being conducted and as of 9 am this morning, 32 had confirmed clearance and the remaining six were pending.

The SIA has a commercial delivery partner, LDL—a subsidiary of British Telecom (BT). LDL are responsible, through BT, for ensuring security clearance of their staff. The Home Office’s Departmental Security Unit is satisfied that LDL recruitment and clearance procedures are robust.

There are significant safeguards in place within the SIA to ensure that decisions to award licences are taken appropriately and not open to abuse. No single individual can decide to award a licence. Two individuals must be involved in each decision—one from the SIA, who takes the ultimate decision to award a licence and one from the LDL. These individuals are based in separate sites in different cities. Managers sample decisions taken every day to ensure SIA procedures are followed and an external audit of decisions is also undertaken.

Nevertheless, I have asked the SIA to review urgently a targeted sample of decisions taken by any individual for whom the SIA did not have confirmed security clearance, whether or not that individual is still working for the SIA.

The Home Office’s Departmental Security Unit has advised that the SIA’s security checking procedures are now fully compliant with Home Office standards.

The Home Office will work closely with the chair and board of the SIA as they respond to the delivery review recommendations to ensure that similar problems do not arise in the future. Plans are being made for an interim chief executive to be appointed once discussions between the current chief executive and the SIA board about his imminent departure are concluded.

National Identity Scheme (Cost Report)

The Parliamentary Under-Secretary of State for the Home Department (Meg Hillier): The fifth Cost Report of the National Identity Scheme is being laid before Parliament today. It sets out an estimate of the public expenditure likely to be incurred on the scheme over the next 10 years, in accordance with section 37 of the Identity Cards Act 2006. It reports on developments over the past six months, since the fourth Cost Report was published on 6 May 20078.


Crown Court (Means-testing)

The Parliamentary Under-Secretary of State for Justice (Bridget Prentice): My noble Friend, the Parliamentary Under-Secretary of State, Lord Bach, has made the following written ministerial statement:

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Written Answer (Correction)

The Parliamentary Under-Secretary of State for Transport (Jim Fitzpatrick): Subsequent to a written answer I gave on 15 October 2008 to a parliamentary question regarding the disclosure of vehicle keeper data by the Driver and Vehicle Licensing Agency, further investigation has revealed additional information that may be of interest and provide a more helpful answer to the question.

The response to the hon. Member for Lewes (Norman Baker)—(Question 226731), 15 October 2008, Official Reportcolumn 1255W—should read as follows:

DVLA is able to disclose data held on the vehicle register to both public and private sector organisations that are able to demonstrate reasonable cause for requesting that information.

The table below shows the total number of requests rejected along with the number of requests made by private sector organisations and by individuals. These figures also include requests made by individuals for information on their own vehicles.

DVLA discloses data to public sector organisations under numerous different legislative gateways, including the reasonable cause provision. Disclosures are recorded by reference to the vehicle being inquired against and not by the legislative provision enabling that disclosure. Therefore I am unable to provide figures on the number of disclosures made under the reasonable cause provision to public sector organisations.

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Electronic enquiriesManual enquiries.Reject 1(*)Reject 2(*)Reject 3(*)









































































(* )Rejects:
1. No/incorrect fee
2. Not meeting reasonable cause criteria
3. Other (for example, incorrect vehicle registration mark)

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