Company Law

HC Deb 10 June 1974 vol 874 cc1205-6

5. Mr. Dixon

asked the Secretary of State for Trade whether he will make a further statement about the reform of company legislation.

Mr. Shore

My Department is currently undertaking a wide-ranging review of companies legislation and of the machinery for enforcing it, and will take account of recent studies, including the proposals in the report on the reform of company law published on the reform of Party. This review will extend to the arrangements for supervision of the securities market, about which there have already been consultations with the Bank of England, and also to my own Department's policies and powers on enforcement; it will be undertaken on a wide scale in consultation with interested outside bodies, and will be published.

Mr. Dixon

Does not the right hon. Gentleman agree, however, that if, as he has indicated, the Government's policy in these matters is going to correspond to the views of the left wing of the Labour Party, all they will be doing is erecting such a mass of complication in this country that no foreign investor will conceivably contemplate investing here in future and every Englishman, if he possibly can, will seek to invest abroad?

Mr. Shore

The hon. Gentleman has misunderstood the degree and scope of the criticism that there has been from many sources—including, certainly, the Labour Party—about the way in which a number of these matters have been looked after in recent years. There is a widespread view that there is need for change and for increasingly vigorous enforcement in this sector.

Mr. Skinner

Does not one of the reasons for company law reform lie in certain examples in recent months, including the rather strange case of London and County Securities, bailed out in an exercise in community politics by the leader of the 1922 Committee, the right hon. Member for Taunton (Mr. du Cann), and the equally strange subsequent affair in which the First National Finance Corporation, which assisted in bailing out. London and County Securities by taking over some of its debts, has now found itself in almost as difficult a position? Does not my right hon. Friend also agree that, when we hear an important group chairman talking about investing in cash, something badly needs doing?

Mr. Shore

Many criticisms could legitimately be made about certain aspects of affairs in the City, including the secondary bank problem. The range of matters on which we are now starting an inquiry does not, however, include secondary banks, which are being looked at in a different context. In my view, this will lead to serious consideration of proposals which should bring about significant improvements.

Mr. Redmond

What special provision in company legislation will the right hon. Gentleman make for small firms?

Mr. Shore

The question of small firms in terms of the securities market, the Stock Exchange and other matters, does not come first to mind. As the hon. Gentleman knows, what we are concerned with is the way in which take-overs take place and the way in which the present machinery of investigation is operating.