§ Amendments made: No. 22, in Schedule 2, page 26, line 32 after 'Agency', insert '(a)'.
§
No. 23, in page 26, line 34, after 'relates', insert
'and
(b) in respect of their administrative expenses'.—[Mr. Millan.]
§ Mr. MillanI beg to move Amendment No. 24, in page 26, line 37, at end insert
'other than functions under section 5 of this Act'.This amendment is basically a drafting amendment relating to borrowing by the Agency. The same comments apply to Government Amendment No. 25.
§ Amendment agreed to.
§
Amendment made: No. 25, in page 26, line 48, after 'borrow', insert
'from him under paragraph 3(1) above. '—[Mr. Millan.]
§ Mr. MillanI beg to move Amendment No. 26 in page 29, line 7, at end insert
'being a form which shall conform to the best commercial standards'.
Mr. Deputy SpeakerWith this it will be convenient to take Amendment No. 27, in page 29, line 18, at end insert—
(4A) Where the Agency conducts activities of a commercial or industrial character, the accounts of the Agency in respect to these activities shall also be audited by auditors appointed by the Agency after consultation with the Secretary of State, and a person shall not be qualified to be so appointed unless he is a member of one or more of the following bodies:and 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—section 155(1)(a) of the Companies Act (Northern Ireland) 1960; but a Scottish firm may be so appointed if each of the partners is qualified to be so appointed".
- The Institute of Chartered Accountants of Scotland,
- The Institute of Chartered Accountants of England and Wales,
- The Association of Certified Accountants,
- The Institute of Chartered Accountants in Ireland,
§ Mr. MillanThe matter was raised in Committee by the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith). He was concerned that the accounts of the Agency, which is to have commercial functions, should conform to the best commercial standards. In Committee I took the view that it was not necessary to insert this provision in the Bill but that we should ensure that the accounts were drawn up in accordance with the best standards. On reconsideration, in view of the importance attached by the hon. Gentleman to the matter, I think that it would be desirable that these words should appear in the Bill. That is what Amendment No. 26 does. I know that it will be acceptable to the hon. Gentleman.
I shall not say anything about Amendment No. 27, which is the hon. Gentleman's amendment. I prefer to hear what he says, after which I shall answer him.
§ Mr. Buchanan-SmithI am grateful to the Minister for anticipating and meeting my wishes in this matter. Amendment No. 26 helps to meet the points made in Committee. I know that it is welcomed by the accountancy bodies in the United Kingdom.
396 Although I sought to include in Amendment No. 27 the points made in Committee, with modifications, to achieve the ends which the Minister now seeks to achieve, I realise that that amendment is no longer necessary. However, I should like the Minister to reassure me on one point. The question of proper auditing is partly anticipated in Amendment No. 7, which reads:
The functions of the Agency mentioned in subsection (2)(b) above may only be exercised through a company within the meaning of the Companies Act 1948 or through a partnership firm.".Therefore, the auditing must be carried out to the highest commercial standard.I have one reservation, which has already been raised by the accountancy bodies in correspondence with the Department. I refer to the definition of "partnership firm". I do not wish to press my amendment as the matter can be dealt with by the Department and the accountancy bodies. If I receive an assurance from the Minister on this matter I shall be happy to let the matter rest.
§ Mr. MillanThat is a fair statement. The earlier amendment provided for the industrial activities to be dealt with through a separate company or partnership firm. This will automatically attract the audit provisions of the Companies Act, which the hon. Gentleman mentions in Amendment No. 27. However, Amendment No. 27 would attract other matters which it would not be appropriate to audit under the normal arrangements, other than those of the Comptroller and Auditor General. What the hon. Gentleman has in mind is covered.
I was not aware that there was any difficulty about the partnership point, but I will examine it. If it is still true that partnerships are not under the same obligations as are companies in terms of the qualification of auditors, it is well recognised that partnerships are often audited in exactly the same way. Any partnership with which the Agency is involved will be audited by a person who is qualified to audit company accounts. As a matter of practice that would be done. As far as I am aware, the accountancy bodies are perfectly happy with the Bill.
§ Amendment agreed to.