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Patient forums will cease to exist on 31 March, but many members, as the Committee might anticipate, are involved in the planning of the new system, as are many other individuals and community groups. We believe that the transitional period might last six months, which is about right. That was a matter of some discussion. After careful consideration and discussion, we felt that it was more appropriate to specify this in regulations rather than in the Act itself. All the parties concerned have advised on the period, and six months will provide the right amount of time for the vast majority of local authorities, if not all of them, to have their LINk arrangements in place.

It is important that that extra time enables local people, particularly the voluntary and community sector which will be active in this, to become aware of the opportunities afforded by LINks and to get involved with them. However, we think a safety net is also necessary in case there is any untoward delay. With that in mind, we have made regulations that specify the duration of the transitional arrangements, thus allowing us to extend the period in the unlikely event that that is needed. Nothing about that change penalises local authorities that have made excellent progress toward setting up their own LINks. The LINks will allow people operating the transitional arrangements to have the same powers as under the permanent arrangements.

Questions were asked about how the LINks are to be set up. They are to be networks of interested individuals as well as local user groups and voluntary and community sector organisations. So far it looks as though there is a great deal of interest. They will be based around the area of each local authority with social services responsibility. Every LINk will need to

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reflect the area for which it is responsible and, as such, its membership and structure will need to be appropriately determined for that area. They will be able to include organisations that have county-wide remits as well as small GP practice-based user participation groups that wish to promote and feed their interest and views into a more strategic commissioning level.

I have already dealt with the power to enter. What LINks can do and not do is a balance; for example, it would not be appropriate for LINks members to enter an operating theatre during surgery or to enter services outside opening hours. Those limitations are to cover that area. I shall close by saying that the duties on service providers to allow authorised representatives of LINks to enter and view premises where health and social care services are being provided is an integral activity which will enable the LINk to carry forward its policies and to make a real difference to the lives of citizens who use or know someone who uses those services. As I said earlier, that duty will ensure that LINks empower local communities to have a stronger voice in the process of commissioning health and social care and will enable them to truly influence important decisions about those services that we all use and pay for.

On Question, Motion agreed to.

Companies Act 2006 (Consequential Amendments etc.) Order 2008

5.40 pm

The Parliamentary Under-Secretary of State, Department for Business, Enterprise and Regulatory Reform (Baroness Vadera) rose to move, That the Grand Committee do report to the House that it has considered the Companies Act 2006 (Consequential Amendments etc.) Order 2008.

The noble Baroness said: I shall speak also to the Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008. The orders are being made under Sections 1292, 1294 and 1296 of the Companies Act 2006. They make amendments to other legislation consequential upon provisions of the Companies Act 2006. The Act is being implemented in phases, and the draft orders relate to provisions being commenced on 6 April 2008 or 1 October 2008. There is also a small number of amendments relating to provisions which were commenced earlier.

The Companies Act 2006 (Consequential Amendments etc.) Order 2008 makes consequential changes to many different pieces of legislation and can be categorised in four broad areas: first, consequential amendments to existing company law; for example, the remaining parts of the Companies Act 1985 and the Companies (Audit, Investigation and Community Enterprise) Act 2004. Secondly, amendments to insolvency legislation are required because the 2006 Act removes the link between the Companies Act 1985 and the Insolvency Act 1986. We have inserted provisions which were previously in companies legislation into insolvency legislation. Additional changes have been made to

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ensure that the two areas of legislation work effectively together. The third main area is statutory audit. Around 50 Acts provide for audits of certain non-company accounts by auditors who must be eligible for appointment under Part II of the Companies Act 1989. The order amends these requirements so that they refer to Part 42 of the Companies Act 2006. Some of the requirements are in Acts of Parliament affecting entities such as building societies and other mutuals, which must now be audited in accordance with the new EU audit directive. Finally, the order makes consequential amendments to around 100 other pieces of primary legislation—for example, the Harbours Act 1964—which refer to or include concepts from the Companies Act 1985 or the Companies Act 1989.

The second order amends legislation for which HMRC is responsible and which uses Companies Act references, definitions and concepts. It makes sense to debate the orders together as both make amendments consequential upon the implementation of the Companies Act 2006. The orders make two types of consequential amendment. The first relates to references and definitions in other Acts which are changed by the 2006 Act. They are purely mechanical amendments; for example, a reference to the “Companies Act 1985” is simply changed to the “Companies Act 2006”. The second type of amendment relates to a change in substance of company law; for example, there is no longer a requirement for private companies to hold an annual general meeting or to appoint a company secretary. Where Acts refer to a company secretary or annual general meeting, it is necessary to remove or amend those references.

The fifth commencement order for the Companies Act 2006 was a negative instrument and therefore not debated. Two of the previous four commencement orders under the Act have been affirmative and therefore had their own debates. To allow debate on the fifth commencement order, the then Minister for Competitiveness, Stephen Timms, offered to the shadow Solicitor-General that today’s debate could be used also to pick up points relating to the fifth commencement order. I commend the orders to the Committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Companies Act 2006 (Consequential Amendments etc.) Order 2008. 12th Report from the Joint Committee on Statutory Instruments.—(Baroness Vadera.)

Lord Hodgson of Astley Abbotts: We are grateful to the Minister for her explanation of these detailed, technical statutory instruments. Before I raise a question or two, I need to declare an interest as a director of various companies, public and private, all of which are shown in the Register of Members’ Interests.

When we finally finished the Companies Act, the Minister’s predecessor, the noble Lord, Lord Sainsbury, kindly threw us a party, which we had in the offices of what was then the DTI and is now DBERR in Victoria Street. It was a jolly affair. There was one man there who I thought looked rather down at the mouth about life. I went to talk to him because I thought that this was an occasion for an hour’s release from prison. It turned out that he was the parliamentary draftsman.

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I thought he was down at the mouth because we had extended the Bill from 600 to 1,200 clauses or, alternatively, because parliamentary draftsmen are by their very nature gloomy souls. It was not that. He said that it was all very well for us because we had finished with the Bill but he had to pick up the consequential amendments. I asked how many there were and he said that there were between 2,000 and 3,000. I had some sympathy with him, and this afternoon, faced with 73 pages of closely packed type, I have even more sympathy with his predicament that October evening.

I am also aware that I am, in part, hoist by my own petard because we on these Benches pressed the noble Lord, Lord Sainsbury, and the Government very hard to consolidate as much of the Companies Act legislation as possible. There were too many layers of it, and it was almost incomprehensible to the non-expert. We argued that the Bill provided a great opportunity to make everything clear and understandable. We were very grateful to the Government for heeding those arguments and to the Bill team for the extra work they put in to make sure it happened. This is, in part, the result. When we get to an instrument where a clause has sub-paragraphs (a) to (z) and (aa) to (vv), we know that something pretty detailed has happened. If along the way we pass through the Gaelic Media Service and the accounts of the Governor and Freemen of the Corporation of Horse Breeders, in the County of Down and of the Downpatrick Race Club, we are clearly crawling across the frontiers of human knowledge with a hand lens.

In looking at this, my first question to myself is: what am I missing? I see the trees, but is there any wood here that I should be probing the Government on? I have a couple of questions. First, I have explained my interest in and support for consolidation and for doing away with the old legislation, particularly the Companies Act 1985. I know it cannot completely be wound up yet—the Minister dealt with some of this in her opening remarks. The company investigations, the audit and community interest companies remain, and if the Minister happens to have a note from her officials about when we might be able to get to them and finally close out the 1985 Act, it would be extraordinarily helpful because they are appendages left behind.

Leaving that aside, it is obviously satisfactory as we go through this instrument to read in many places, “In place of Section X of the Companies Act 1985 substitute Section Y of the Companies Act 2006”. That is exactly what we want to see. However, the Companies Act 1985 makes a couple of rather unwelcome reappearances. I apologise to the Minister because, when we met yesterday to talk about regulatory enforcement, I referred her to Clause 18 when I meant page 18. I did not have the order with me at the time and I am sorry about that. At the top of page 18, we have some provisions. The first two concern financial assistance for the purchase of shares and the registration of charges. In both cases, they refer to the Companies Act 1985: chapter VI of Part V in respect of financial assistance, and chapter I of Part XII in respect of the registration of charges. That seems strange because we dealt with financial assistance and the registration of charges at some

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length in the debates, and I am not sure why, when everything else in that paragraph refers to 2006, those first two references to 1985 still remain.

Further down that page, in Section 54, we again refer to Section 10(2) of the Companies Act 1985 and propose a substitution. I have a copy of the brute here. Section 10(2) reads:

I am slightly surprised that that should continue because we did away with the memorandum. It will no longer exist in the 2006 Act, yet here we are amending the 1985 Act and preserving the memorandum in a way that I do not understand. I have no doubt that the Bill team has precise answers as to why we have to preserve the memorandum here and why this part of the 1985 Act is not being done away with. However, we should bear in mind that we went through at great length the new, much simpler way of forming a company with much simpler formation documents, which do away with the old distinction between the memorandum and the articles.

Again, perhaps I may briefly draw the Minister’s attention to paragraph (8) two-thirds of the way down page 26. It refers to:

It talks about registers, annual returns and the registration of charges. All those seem to be fundamental issues, and it is not clear to me why the 1985 Act has a continuing locus there. That compels me to admit that I have not been through every line of this long and detailed instrument. However, there may be other places where this occurs and it would be good if the Minister could update us.

My final, slightly anoraky, point concerns the Explanatory Note. This instrument is, by any stretch of the imagination, extraordinarily detailed, yet, at the end, the Explanatory Note says:

It then says:

What have I missed there? What does that mean? Is it just a boiler plate? Is it a safety net or a catch-all? The fact that the order is very detailed with a wide statement at the end in the Explanatory Note triggers me to ask the Minister to set my mind at rest by confirming that I have not missed anything here and that this statement is trees and not wood. Having said that, we support the purposes behind the instrument, and we support the idea that there should be greater consolidation of the Companies Act legislation, which is important to the prosperity of UK plc. We are happy to give our support to this but clarification on those few points would be very helpful.



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Lord Sharman: I, too, declare an interest as a director and chairman of a number of companies, all of which are set out in the register of interests of your Lordships’ House.

Like the noble Lord, Lord Hodgson, I support the consolidation that we have managed to achieve. I shall go back to my day job and look at the implications of putting this legislation into place, but I am sure that the annual general meetings of plcs will be quite interesting this year as we seek to get authority to do all sorts of things that we have never had to do before. As the noble Lord, Lord Hodgson said, the volume and detail of the regulations in these orders have come about largely as a result of the consolidation which we had sought so eagerly and, from that point of view, I support them.

I have no points of detail to raise with the Minister, because the noble Lord has done that admirably, but I, too, should like to hear when it is thought we will finally bury the 1985 Act. I support both orders.

Baroness Vadera: I thank noble Lords for their consideration of these draft instruments, detailed and technical as they are. I also thank the noble Lord, Lord Hodgson, for his enormous contribution to this epic Companies Act.

There are still references in the order to the 1985 Act partly because the implementation timetable is phased and those references are a function of that phasing. The implementation timetable was decided after detailed discussions with business. Companies and their advisers made it clear that they needed time to prepare for the full implementation, but they also wanted to see the main deregulatory benefits—for example, in electronic communications—as soon as possible. The phased implementation of the Act reflects some complexity—greater complexity than perhaps a big bang implementation.

However, we believe that it is the right approach and it has enabled us to bring in the major deregulatory benefits more quickly. For example, with the financial assistance that can be provided, it has been possible to repeal the current restrictions on private companies now without commencing the 2006 Act provisions prohibiting financial assistance which apply only to public companies. Instead, these provisions will be commenced in October 2009, along with most of the other parts of the Act dealing with share capital. We believe that that approach will be simpler and more straightforward.



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The noble Lord has asked a number of detailed questions about various other references to the 1985 Act which, if he will permit me, I shall explain in a note. With reference to the continued existence of the 1985 Act, there are no plans yet to repeal certain provisions in that Act—namely, those concerned with company investigations, orders imposing restrictions on shares following an investigation and provisions about Scottish floating charges and receivers—but the remainder of the Companies Act 2006 will be brought into force over a period of time in a phased implementation, as my predecessor, the Minister for competitiveness, Stephen Timms, put in a Written Answer earlier in November. I hope that satisfies the Committee.

Lord Hodgson of Astley Abbotts: I quite understand that the Minister would wish to write to the noble Lord and myself about these detailed questions. However, if this is all about phasing, could she explain when she replies whether we will get another order like this as more of the previous Act drops away? We could have a rerun.

Baroness Vadera: I fear so.

On Question, Motion agreed to.

Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008

The Parliamentary Under-Secretary of State, Department for Business, Enterprise and Regulatory Reform (Baroness Vadera): I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Grand Committee do report to the House that it has considered the Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008. 12th Report from the Joint Committee on Statutory Instruments.—(Baroness Vadera.)

On Question, Motion agreed to.

The Deputy Chairman of Committees (Lord Haskel): That completes the business before the Grand Committee this afternoon. The Committee stands adjourned.

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