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House of Lords

Wednesday, 17th January 1996.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Southwark.

The Earl of Oxford and Asquith --Took the Oath.

Accountants and Assets Offshore

Lord Haskel asked Her Majesty's Government:

    Whether they will continue to deal with those accountancy firms whose partners are moving their assets offshore.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, Her Majesty's Government will consider whether to continue to deal with an accountancy firm which moves its assets offshore if and when the partners decide to embark on such a course of action and make detailed proposals available for consideration.

Lord Haskel: My Lords, as the Government must be one of the largest clients of those firms, have the firms consulted the Government so that we can be assured that in the event of rightful claims the taxpayers' compensation will be met?

Lord Mackay of Ardbrecknish: My Lords, as I indicated in my original reply, those firms have not consulted the Government. However, if they were to make that move, and we were then to consider employing one of those firms, we should look carefully at the terms of registration in Jersey.

It has to be said that media reports suggest that Jersey is to introduce a limited liability partnership law which, subject to parliamentary and UK Privy Council approval, would come into effect by the end of 1996. United Kingdom audit firms could then register as limited liability partnerships in Jersey. However, we ought to wait to see the print on anything that occurs before we come to a judgment.

Lord Bruce of Donington: My Lords, in declaring a possible personal interest as a practising chartered accountant, perhaps I may ask the noble Lord whether his replies are in any way conditioned by the fact that the Government may be seeking advice on where to put their funds in the light of the forthcoming defeat at the general election?

Lord Mackay of Ardbrecknish: My Lords, the latter part of the noble Lord's question represents an amazing amount of conjecture coming, as it does, from such a serious person as an accountant. However, I was relieved that he was not telling me that he was intending to remove himself to Jersey because that would deprive me of many interesting jousts at this Dispatch Box.

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Viscount St. Davids: My Lords, will my noble friend please explain this? As the Government do considerable business with companies that have limited liability, why should they have any problem doing business with firms that have unlimited liability but whose assets are beyond the reach of recompense for UK taxpayers?

Lord Mackay of Ardbrecknish: My Lords, if in the future any of the companies decides to register in Jersey, we would have to examine the terms on which the registration was made. There are other options for the companies: they could establish limited companies rather than partnerships to perform the audits. The Companies Act 1989 permits limited companies to undertake audits of other limited companies. Indeed, one accountancy firm has already taken advantage of that provision. However, reaction to that course of action from other accountancy firms appears to be mixed.

Lord Monkswell: My Lords, the Minister mentioned that legal changes in Jersey were subject to Privy Council approval. Can he advise the House whether such Privy Council approval is automatic and also whether there would be an opportunity for this House and the other place to debate such matters before they are approved by the Privy Council?

Lord Mackay of Ardbrecknish: My Lords, not being a member of Her Majesty's Privy Council, I am in some difficulty in answering the noble Lord's question. If he will forgive me, I shall have to write to him.

Lord Eatwell: My Lords, will the Government agree that the privilege of operating an accountancy business within the United Kingdom carries with it the responsibility of providing appropriate compensation in the case of unsatisfactory service?

Lord Mackay of Ardbrecknish: My Lords, I believe that the existence of the possibility of a firm being sued by its client is a factor that we ought to retain. It concentrates the firm's mind on ensuring that it gets the job right and that it is well done. If and when we come to examine possible changes, we will have to take into account the general good; not just the position of accountancy firms but also that of any other firm involved on the other side of the fence--that is the client.

Lord Boyd-Carpenter: My Lords, my noble friend did not answer the question as to whether the issue would be debatable. Surely any such issue must be debatable, if this House wishes to debate it.

Lord Mackay of Ardbrecknish: My Lords, my noble friend is quite right. However, I was asked a specific question about the Privy Council and this House debating proposals to change the law in Jersey. As I said to the noble Lord, Lord Monkswell, I am afraid that I shall have to take advice on that.

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International Health Service

2.44 p.m.

Lord Molloy asked Her Majesty's Government:

    Whether they would support the creation of an international health service.

The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, although we co-operate through international organisations such as the World Health Organisation, and more informally through professional and other networks, we do not believe it realistic to set up an international health service with every country operating an identical system.

Lord Molloy: My Lords, I thank the Minister for that reply. However, the object of my Question was to ensure that despite the terrible diseases spreading in many parts of the world, the British people should not be called upon to make any unjust contribution. We are willing to help and to do our best, but we must not be put upon. There must be a fair contribution from all the nations that can afford it. Will the Minister agree that it is vital for the interests of the health organisation that the generosity of the British people should not be exploited?

Baroness Cumberlege: My Lords, I am grateful to the noble Lord for explaining the purpose behind his Question. Worldwide, we all have a responsibility to ensure that infectious diseases are contained within the countries affected, but we do not believe it appropriate that we should become involved in other countries' health systems.

Lord Winston: My Lords, is the Minister aware that in West London at present there are many patients on waiting lists who cannot get into hospital? Expensive operating theatres are lying idle. Does she agree that it might be more important to concentrate on a national health service rather than an international one?

Baroness Cumberlege: My Lords, I believe that we have a remarkable National Health Service; it is a near miracle. It is interesting, when one examines waiting lists, that we have seen tremendous progress in the past two or three years through health reforms. In March 1990, over 200,000 people were waiting over one year for treatment and today it is 28,000.

The Countess of Mar: My Lords, does not the British National Health Service have an international dimension in that it provides training for overseas doctors? They go back to their own countries with our expertise. Many patients come from overseas to benefit from the provisions not of the National Health Service but of private medical treatment which they have often heard of through the National Health Service.

Baroness Cumberlege: Yes, my Lords, the noble Countess is right. The training of doctors in this country is recognised as being among the best in the world. When one travels abroad it is encouraging to see many

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of the students now taking on positions of clinical responsibility and leading medical practice in their own countries.

Lord Bruce of Donington: My Lords, will the Minister confirm that the reciprocal arrangements which were concluded by the Council of Europe regarding the interchange of facilities between the European countries affected are still fully in force? Will she ensure that people here are aware of the reciprocal arrangements whereby participants in the National Health Service here are entitled to equivalent treatment in other countries with whom arrangements have been negotiated through the aegis of the Council of Europe?

Baroness Cumberlege: Yes, my Lords.

Lord Skelmersdale: My Lords, will the Minister advise the noble Lord, Lord Bruce, that when he next goes to Europe he should take with him Form E.111? It gives him the right to treatment in any European Union country.

Baroness Cumberlege: My Lords, far be it from me to give the noble Lord, Lord Bruce, any advice.

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