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Lord Phillips of Sudbury: I oppose the amendment. I believe it is very important to have this provision in the Bill in order to safeguard the integrity of the CIC

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regime. I am afraid that there are naughty people in the world who do not take on formal directorships but operate as real directors or shadow directors in Companies Act terms. I believe that this is a desirable provision to have in the Bill.

Lord Evans of Temple Guiting: I am grateful to the noble Lord, Lord Phillips of Sudbury, for his support.

In relation to a CIC, as for a company, the phrase "shadow director" means a person in accordance with whose directions or instructions the directors of the company are accustomed to act. A person is not deemed a shadow director by reason only that the directors act on advice given by him in a professional capacity. Shadow directors are generally subject only to statutory provisions that are expressly stated to apply to them.

The amendment would allow a shadow director to escape punishment for offences committed by his company under this part of the Bill, even if the person concerned was responsible for the commission of the offence through their neglect, consent or connivance. To me and, I am sure, the whole Committee, that does not seem desirable. If there is a person in the background and the directors of the company habitually do what that person says, it seems reasonable that that person should be liable to be punished, if he is the real reason why the company committed the offence.

The noble Lord, Lord Glentoran, asked about the role of the regulator. In order to be a shadow director, the regulator will have to be a person in accordance with whose directions or instructions the directors of the CIC are accustomed to act. It is most unlikely that that would ever apply to the regulator. Other than the specific supervisory powers in the Bill, the regulator has no general power to require CICs to follow his directions or instructions.

The exercise of the specific supervisory powers in the Bill is unlikely to be frequent or wide-ranging enough with regard to any individual CIC for the regulator to be regarded as a shadow director. Few of the powers allow the regulator to tell the directors of a CIC what to do, other than in a very targeted way. For example, the regulator can order a CIC to submit to an audit, to answer questions or provide documents or to transfer property to the Official Property Holder.

I hope that that explanation will reassure the noble Lord, Lord Glentoran. There are another two pages of speaking notes on the regulator and the board. I would be happy to send the full speaking note to the noble Lord.

Lord Glentoran: I thank the noble Lord for that explanation. Not being considered right on this occasion, I shall consider the matter again. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 57 agreed to.

Clause 58 agreed to.

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Clause 59 [Regulations]:

Lord Evans of Temple Guiting moved Amendment No. 143:


    Page 47, line 2, leave out subsection (6).

The noble Lord said: In moving Amendment No. 143, I shall speak also to Amendment No. 144.

The amendments are a response to the report on the Bill by the Select Committee on Delegated Powers and Regulatory Reform, for which we are grateful. My noble friend Lord Sainsbury of Turville wrote to the noble Lord, Lord Dahrendorf, on 29 January to thank him for the report and to confirm that the Government accepted its recommendations.

The amendments will provide that regulations requiring the payment of fees in connection with the regulator's functions made under Clause 54 will be subject to annulment in pursuance of a resolution of either House of Parliament. The Government have accepted that regulations setting fees should be subject to the scrutiny of both Houses. We were persuaded by the fact that regulations setting the fees for Companies House were also subject to the scrutiny of both Houses and felt that that was a logical precedent to follow. I beg to move.

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On Question, amendment agreed to.

Lord Evans of Temple Guiting moved Amendment No. 144:


    Page 47, line 5, leave out "or subsection (6) applies to it"

On Question, amendment agreed to.

Clause 59, as amended, agreed to.

Clauses 60 and 61 agreed to.

Schedule 8 [Repeals]:

Lord Sainsbury of Turville moved Amendment No. 145:


    Page 70, line 13, leave out "69(4)" and insert "69(2) and (4)"

The noble Lord said: We realised that, because paragraph 20(a) of Schedule 2 replaces Section 452(1) of the Companies Act 1985, we should have included in Schedule 8 a repeal of Section 69(2) of the Companies Act 1989, which amended existing Section 452(1). The amendment will rectify that omission. I beg to move.

On Question, amendment agreed to.

Schedule 8, as amended, agreed to.

Remaining clauses agreed to.

Bill reported with amendments.

        The Committee adjourned at sixteen minutes past seven o'clock.

Written Statements

Monday 29 March 2004

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Falkland Islands: "Almirante Irizar"

The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): On 15 and 16 March 2004 the Argentine naval Icebreaker, "Almirante Irizar" sailed through the Falklands Outer Conservation Zone and the Falklands Interim Conservation Zone. These are areas for which the Falkland Islands Government issue fishing licences. During the time that it was inside these zones, the Argentine vessel was challenging other vessels to identify themselves. While transit of the conservation zones is permissible, the policing of the zones by a foreign vessel contravenes the Falkland Islands exclusive jurisdiction.

We asked the Argentine Government for an explanation of the vessel's actions. Their response was not satisfactory. We have therefore made a formal protest to the Argentine Government concerning the actions of the "Almirante Irizar", underlining the need to ensure that this type of incident does not happen again. This note also reiterated that Her Majesty's Government have no doubts about UK sovereignty over the Falkland Islands.

My right honourable friend the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Bill Rammell) has spoken to Falkland Island councillors about this incident. He shares their concerns and has briefed them on our response. He assured them of our continued firm support.

Nuclear Weapons: Safety

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach): My right honourable friend the Minister of State for Defence (Mr Adam Ingram) has made the following Written Ministerial Statement.

In 1992, the then Chief Scientific Adviser to the Ministry of Defence, Sir Ronald Oxburgh, conducted a review of the safety of nuclear weapons. It was reported to Parliament (Commons Hansard, 13 July 1992: col. 520) that he had recommended the inauguration of a safety "champion". A position entitled nuclear weapon safety adviser was subsequently created, and this has had two incumbents. More recently, further work has been done on safety management arrangements in the department in general, and in the nuclear programmes in particular, to reflect policy and organisational developments. As a result, we have appointed a nuclear weapon regulator to provide assurance about safety in the nuclear weapons programme. In so doing, it was recognised that the tasks of this official would

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be very similar to those of the nuclear weapon safety adviser, and it was decided that, when the regulator was ready to conduct business, the safety adviser post should close. This has recently occurred.

Ministry of Defence: Regional Prime Contract South-West

Lord Bach: My honourable friend the Parliamentary Under-Secretary of State for Defence (Mr Ivor Caplin) has made the following Written Ministerial Statement.

Debut Services (South West) Limited, a joint venture between Babcock International Group and Bovis Lend Lease, has been awarded the regional prime contract for the Ministry of Defence's estate in the south-west. This follows successful completion of the clarification phase.

The seven-year contract, worth in the order of £480 million, is the second in a series of five such arrangements covering the estate and will provide for capital works, property maintenance and facilities management services throughout the south-west of England.

The MoD has undertaken to make significant improvements in the overall condition of its estate by changing its organisational structures and introducing prime contracting methods. Encouraging innovation and efficiency, regional prime contracting is a key initiative that aims to provide a better quality of service and greater value for money through suitably incentivised contracts conforming to the principles of smart acquisition.

Bowman Tactical Communication System

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach): My right honourable friend the Minister of State for Defence (Mr Adam Ingram) has made the following Written Ministerial Statement.

On 19 July 2001 I informed the House that, after years of delay and forecast cost growth, we had selected a preferred supplier to take forward the Bowman programme. Although our approved in-service date was December 2004, we set a demanding target to deliver by 30 March 2004. This target is just 30 months from the September 2001 contract awarded to General Dynamics United Kingdom Ltd, a challenge unprecedented on such a major and complex acquisition project. Our priority was to deliver a secure, reliable voice communications replacement for Clansman and I am pleased to report to the House that Bowman has achieved its in-service date on this basis, ahead of the target. This achievement and the capability it provides will enable the programme to progress to its next key milestone, the delivery of war fighting capability in 2005.

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Once fully implemented, Bowman will provide a secure, tactical, voice and data communications system for our land forces and selected elements of the Royal Navy and Royal Air Force, until at least 2025. As well as being man-portable, it will be an integral part of the communications fit of major equipments such as warships, main battle tanks and helicopters. The provision of secure voice communications down to section level represents a step-change in capability for the Armed Forces as they migrate from Clansman to Bowman. Other functions which Bowman is designed to deliver, such as automatic position reporting and an ability to pass digital data around the battlefield, have been demonstrated in principle on field trials and their development is on course.

At the end of 2002, nearly a year and a half into the Bowman contract, we extended it to further develop the battle management system and to enhance integration with systems and sensors on board our key armoured platforms—a programme known as CIP. A key advantage of aligning both programmes is that time and cost are saved through converting vehicles only once. There has been positive progress on CIP but the performance of the battle management system in recent field trials leads us to conclude that a few more months of work will be required to develop and fully demonstrate its effectiveness.

Bowman will provide a marked increase in operational tempo, firepower lethality and survivability across all our Armed Services and will be a key enabler for the UK's network enabled capability. There is a widespread commitment to Bowman across the Services and industry stakeholder community and it has already demonstrated greater military capability overall than Clansman. The first brigade converted to Bowman will undertake a further 15 months of unit and collective performance training. As with the programme hitherto, the brigade will be closely involved in the development and proving of Bowman.

Achieving the Bowman in-service date is an important step on the road to the ultimate goal of delivering a robust war-fighting capability that fully meets the requirements of the user in service. It is a key milestone on the path to achieving war-fighting operational readiness in 2005 and represents a huge success for smart acquisition as well as a big step forward for the British Armed Forces.


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