§ (1) The accounts of the Trust shall be audited annually by an auditor appointed by the Trust.
§ (2) No person shall be qualified to be appointed auditor under this section unless he is a member of one or more of the following bodies—
- (a) the Institute of Chartered Accountants of Scotland;
- (b) the Institute of Chartered Accountants in England and Wales;
- (c) the Association of Certified and Corporate Accountants;
- (d) the Institute of Chartered Accountants in Ireland;
- (e) any other body of accountants established in the United Kingdom and for the time being recognised for the purposes of section 161(1)(a) of the Companies Act 1948 by the Secretary of State;
§ Brought up, and read the First time.
Mr. Edward Taylor
I beg to move, That the Clause be read a Second time.
Since the Committee stage, we have been asked by the bodies mentioned in the new Clause, through their Parliamentary agents, to insert this provision in the Bill, following a number of precedents, including, in particular, an amendment made to Section 124 of the Education (Scotland) Act 1962 by Section 27(1) and paragraph 35 of Schedule 2 to the Education (Scotland) Act, 1969.
We believe that it is inconceivable that the Trust would appoint an auditor who was not qualified in these terms, but, in view of those recent precedents and the amount of funds involved, we think it desirable to put the matter beyond doubt.
The Secretary of State exercising the function of recognition of auditors under Section 161(1)(a) of the Companies Act, 1948 will, in practice, be the Secretary of State for Trade and Industry. In the circumstances, we have thought it best to include all the references to audit in a new Clause. As a consequence of subsection (1), the reference to audit presently contained in Clause 1(4) will be deleted by the next Amendment.
§ Mr. Carmichael
Again, I must thank the hon. Gentleman for taking up some of the points that were raised during the Committee stage. However, there are two points on this Clause about which I am a little concerned. The first concerns the last two lines which read:but a Scottish firm may be so appointed if each of the partners therein is qualified to be so appointed.I understand that these words are necessary because there is a difference in the law relating to accountants in Scotland as against those in England, but I should be grateful if the hon. Gentleman could confirm that. Secondly, if this Amendment is thought to be necessary, may I ask whether it will be possible at some stage to make a similar Amendment to the 1953 Act which is considerably amended by this Bill?
I am most grateful to the hon. Gentleman for his very interesting questions on this new clause. On the fist point, I can assure him that the word- 1224 ing of the Clause is the standard form, which has been introduced in recent Scottish legislation because of our special Scottish situation. On the second and, perhaps, more important point of whether we should amend the 1953 Act, the position is that we have been inserting Clauses like this in recent legislation at the request of the professional organisations. Of course, in all such matters it has been the normal practice for qualified persons from these organisations to be so appointed.
I can certainly give the hon. Gentleman an assurance that, if we received an approach from the professional organisations, proposing that such a provision should be inserted in previous legislation such as the 1953 Act, then we should certainly give it sympathetic consideration when a suitable opportunity arose. I hope that with those explanations the hon. Gentleman and the House will be able to accept the new Clause.
§ Mr. William Ross (Kilmarnock)
Since this is being done not at the desire of the Government, but in order to placate the professional organisations, and since the Bill includes Amendments to the 1953 Act, I should have thought it was only right to make a similar Amendment there. Otherwise, it would appear that the Amendment to this Bill is not really necessary. I do not have the slightest doubt that even without this Amendment we should still get qualified auditors. It is interesting that the Government found it necessary to introduce this Amendment, bearing in mind that under the first new Clause the Trust hasto obtain advice on the investment of any property held by them … from a person whom the Trust reasonably believe to be qualified".There is no guidance given as to what should be the qualification in respect of the professional adviser. It is difficult to understand why it is necessary to insert this provision here, but not to apply it to the 1953 Act which set up the Hospital Research Trust unless somebody asks for it. It would be as well to show initiative and to make the Amendment in the earlier Act, if it is considered necessary here. But I raise no objection to the new Clause.
§ Question put and agreed to.
§ Clause read a Second time and added to the Bill.