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Session 2008 - 09
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Public Bill Committee Debates

The Committee consisted of the following Members:

Chairman: Mrs. Janet Dean
Burt, Lorely (Solihull) (LD)
Cawsey, Mr. Ian (Brigg and Goole) (Lab)
Crabb, Mr. Stephen (Preseli Pembrokeshire) (Con)
Davies, David T.C. (Monmouth) (Con)
Heppell, Mr. John (Nottingham, East) (Lab)
Ingram, Mr. Adam (East Kilbride, Strathaven and Lesmahagow) (Lab)
Kaufman, Sir Gerald (Manchester, Gorton) (Lab)
Leigh, Mr. Edward (Gainsborough) (Con)
Lucas, Ian (Parliamentary Under-Secretary of State for Business, Innovation and Skills)
Marsden, Mr. Gordon (Blackpool, South) (Lab)
Prentice, Mr. Gordon (Pendle) (Lab)
Robertson, Mr. Laurence (Tewkesbury) (Con)
Stoate, Dr. Howard (Dartford) (Lab)
Thurso, John (Caithness, Sutherland and Easter Ross) (LD)
Tredinnick, David (Bosworth) (Con)
Wicks, Malcolm (Croydon, North) (Lab)
Gosia McBride, Committee Clerk
† attended the Committee

Eighth Delegated Legislation Committee

Wednesday 24 June 2009

[Mrs. Janet Dean in the Chair]

Draft Companies House Trading Fund (Amendment) Order 2009
2.30 pm
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): I beg to move,
That the Committee has considered the draft Companies House Trading Fund (Amendment) Order 2009.
It is a great pleasure to appear in Committee before you for the first time, Mrs. Dean. Today, we are debating the Companies House Trading Fund (Amendment) Order, and I shall begin by setting it in context. Companies House is an Executive agency of the Department for Business, Innovation and Skills and became a trading fund in 1991. It registers companies and other forms of business organisations and records information that must be filed with that, such as accounts. Those records are then made available for public inspection.
Companies House became a trading fund because it met the requirements as set out in the Government Trading Funds Act 1973. The requirements are that its revenue is made up principally of receipts and that it could achieve efficiencies through acquiring the status. For example, trading fund status has enabled Companies House to respond more quickly to changing customer needs. As a trading fund, Companies House also has greater flexibility to pass on efficiency savings to customers in reduced fees.
Companies House has worked closely with the Department on the staged implementation of the Companies Act 2006. That will be implemented fully on 1 October 2009. At that point, the scope of company law will be extended to apply to Northern Ireland at the request of the Northern Ireland Executive and following consultation, which showed clear support.
Applying the law to the whole of the United Kingdom sets the scene for a single UK registry of companies. We propose that the Northern Ireland registry should be fully integrated into Companies House. That would have significant benefits. In practical terms, customers could refer to a single register for information relating to all UK companies, with a single set of fees. As a result, all UK customers will have access to a broader range of products and services, including more electronic and premium or same-day services. It would also allow for greater economies of scale. There will continue to be a registrar for Northern Ireland, and the Belfast office will remain open.
In order to integrate the two registries, the Companies House Trading Fund Order needs to be amended, and it is that amendment we are debating today. It will allow the operations of the registrar to be funded on the same basis throughout the whole of the United Kingdom. I commend the order, which I believe is the most efficient and beneficial method of achieving a United Kingdom-wide approach.
2.33 pm
Mr. Laurence Robertson (Tewkesbury) (Con): I, too, welcome you to the Committee, Mrs. Dean. I have not had the pleasure of serving under your chairmanship. If I had done, you would be aware that it is not my practice to drag out proceedings in Committee for the sake of it if there is not a lot to say, and I do not intend to do so. I should explain that I am a Front-Bench spokesman on Northern Ireland. We had some debate about who should speak in Committee for the Opposition, and it fell to me because of the Northern Ireland involvement in the order.
I am grateful to the Minister for his brief but clear explanation of the order. I support it, but I have one or two questions. What steps will the Government take to ensure that customers and businesses are aware of the changes? Does the hon. Gentleman have an estimate of how much it would cost Companies House to update and modify the existing structure and how long does he think it would take to incorporate the Northern Ireland registry into Companies House? The Minister has already said that he expects the Belfast office to remain open. That is good news, certainly these days.
Will the order restrict the ability in any way of the Northern Ireland Assembly to change company law in Northern Ireland? My understanding is that it will not, but I would like the Minister’s assurance about that. The overriding concern is whether the order will impact on devolution. Again, my understanding is that it will not, but again I should like the hon. Gentleman’s reassurance. Beyond that, I have no further questions to ask or points to make.
2.34 pm
Lorely Burt (Solihull) (LD): I welcome you to the Chair, Mrs. Dean, for what seems to be a brief debate on the statutory instrument. We welcome the order as a sensible and cost-effective method of affording individuals the ability to look up companies and companies’ information, and to register that information.
The Minister said that all sorts of information on different types of companies can be found on the register, and I wonder whether he would consider a suggestion that I have made several times but he probably has not heard before, which is that in addition to different types of information about a company, would it not be possible to incorporate a register of the number of administrations that directors had been through? We have talked about the amount of savings the register will elicit, but an administrations register would elicit even bigger savings, because directors of companies who are considering trading with another company could have fast and easy access to find out how many companies the directors had previously put into administration. I have been asking for a register of administrations. Whether here or a separate entity, I ask the Minister to take that proposal on board.
2.36 pm
Ian Lucas: I am grateful to hon. Members for the brevity of their responses. I will try to deal with the issues raised. The hon. Member for Tewkesbury referred to the important issue of informing companies in Northern Ireland of the action being taken. It is the intention of Companies House to write to all companies there to inform them of the change taking place, and to hold a number of customer information events throughout Northern Ireland to clarify what is happening.
In the impact assessment the cost of the integration of the Northern Ireland registry was originally estimated to be about £200,000. That was substantially outweighed by the benefits set out in the impact assessment, but in fact the costs have now been estimated to be as little as £64,000, which includes £40,500 on analysis and development and £23,500 on testing, travel and subsistence. That calculation shows that it is extremely sensible to proceed with this step. It has been widely supported and is, of course, supported by the Northern Ireland Executive. As for the length of time that it will take to incorporate the registry, it is anticipated that the process will be completed by 1 October 2009, so it is a swift process and that is the date on which we will proceed.
With regard to the impact on company law in Northern Ireland, company law remains a devolved area, but on this occasion the NI Executive have chosen to transfer the responsibility to the UK Government, although they still have responsibility for the issue.
The hon. Member for Solihull is right to say that I have not heard her suggestion before. I will look into it and write to her about it. There will probably be other occasions when the hon. Lady will be able to raise the issue, but I will look into it and see whether it is something with which we agree. I commend the order to the Committee.
Question put and agreed to.
2.39 pm
Committee rose.

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