REPEALS (Hansard, 19 October 1976)

§ Mr. Higgins

I am grateful to the Minister for moving the motion formally, but no doubt he will be able to say a few words in a moment or two. We have had a long series of debates—indeed 36 of them in all—and I do not wish to weary the House at this hour, but there are one or two points that need to be made.

This is an unusual Bill in many respects. The Opposition have consistently pressed the Government to improve the Bill by including various provisions that were contained in the 1973 Conservative Bill. I am glad that the Government have incorporated some major provisions on warehousing and have now improved the drafting of those clauses.

The important point for an Opposition concerning legislation is that our task is to persuade and illuminate rather than merely to vote. Often it is difficult for Governments, however careful they may be in the drafting of Bills, to see some of the snags in the wording. My experience in the Treasury suggests that the House has a flair for putting its finger on faults in drafting or on flaws in conception which internally Ministers and officials cannot do. Therefore, I emphasise that it is right where possible to operate by persuasion and illumination rather than by voting.

However, we thought it right to register a protest to the 10 o'clock motion and subsequently because the Government insisted on going through the night. We have now been discussing the Bill from 1389 10.18 p.m. yesterday until 5.38 this morning. That is a very long time, and I suggest that it is wrong to press through legislation of this technical, though noncontroversial, kind at that sort of pace. I hope that the Government will have learned the lesson for next Session and will not seek to push through other legislation at the same pace, because it means that Bills are not properly considered.

I hope that in their legislative programme for the new Session the Government will carefully consider dealing with the Bullock Report on employee participation and the other matters that need to be clarified in this sphere. The Prime Minister said only a few days ago that priority must be given to company law reform. However, I do not think that the Department of Trade carries as much weight as it should in obtaining legislative time for such proposals. Therefore, we hope that the Prime Minister's view will be expressed in legislative form next Session.

There is a case for splitting such a measure into two parts rather than to have some of the highly controversial matters in the Bullock Report, on which Labour Members are far from unanimous, contained in one Bill. I think that could be done with the co-operation of the Under-Secretary of State for Trade and his colleague the Parliamentary Secretary to the Law Officer's Department, who have borne a heavy burden. I express my thanks to both of them and I add particularly my thanks to my colleagues who in Committee and on the Floor of the House have been concerned with the major parts of the Bill and a number of matters concerning small businesses. We should carefully consider reducing the burden which company law at present places upon small businesses.

I still feel that we should rely as far as possible on self-regulation, but I recognise that we require a framework of law which prevents the abuse of limited liability and the benefits that companies enjoy. I believe that that is the right way to proceed and I hope that we shall continue to do that. I hope we shall manage to complete the process of reform which is so necessary in this area.

§ Mr. Clinton Davis

I agree with the hon. Member for Worthing (Mr. Higgins) that very many of the Members on both sides of the Committee who participated during its 10 sittings made a substantial contribution to the debate. In particular, I thank my hon. Friend the Parliamentary Secretary to the Law Officers' Department. Willingly or not, he participated fully in our deliberations and took a great deal of the burden from my shoulders.

It is the view of the hon. Gentleman that the Department of Trade does not carry substantial weight. That suggestion is not borne out by the state of my stomach.

As regards the legislative programme, the Bullock Report will certainly be a subject of important debate not only in the House and among hon. Members but throughout the community. That is a debate in which we have to engage.

The Bill in its original form was said to be a technical measure, but it contained a number of matters which in the Government's view needed to be dealt with at the first available opportunity. That has been done and I think that we have improved the Bill. It is true to say that it covers a number of important areas. For example, there are the important provisions against warehousing. We have many other things to do, and we have made it clear that the company law programme will be an important part of our programme in the forthcoming Session and, indeed, in the one after that.

We had to reject the underlying philosophy of the 1973 Bill because it was out of date. It continued to reflect the basic principle that company law should relate solely to the providers of capital, whether shareholders or creditors. We have to take into account in a real way the interests of employees and trade unions in companies' affairs. They are the people who invest their working lives in companies. That is an asset and a form of investment that is at least as valuable as the capital that comes from shareholders and creditors. That is why we have placed such great importance on the work of the Bullock Committee.

I have already dealt with the time when the Bullock Committee is to report. 1391 We are looking forward to the presentation of the report before the end of the year. On Second Reading I outlined the programme for our changes and reforms in company law. They include, notably, a study of the arrangements for the supervision of the securities market. We expect to make a statement on that shortly but I cannot anticipate its contents. We have already touched on the important matters revealed by the inspectors' reports and on the role that my right hon. Friend and I have played in engaging in discussions with the accountancy profession, including the steps that it is currently taking. I think that is is cognisant of the duty that falls upon it to remedy the difficulties that have been revealed by the reports.

There is also the committee of inquiry, established under the chairmanship of my right hon. Friend the Member for Huyton (Sir H. Wilson), that is to look into the financial institutions. The committee follows on to some extent the review which we have been carrying out. Among other things, it will examine arrangements for the supervision of financial institutions and their associated markets connected with the channelling of savings in the economy. It will review in particular the provision of funds for industry and trade and will report in due course to the Prime Minister. We intend that other work already in progress will continue without interruption. For example, we are preparing legislation relating to insider dealing and loans by companies to their directors.

In short, there is a great deal of work to be done in relation to company law and the attendant problems of the capital market, more work than perhaps will ever have been done before. The total of this work will be a massive programme of modernisation of company law to meet the needs of our society.

This measure is a modest step in the direction in which we have to go. It will help to correct some long-standing abuses. It will strengthen the position of auditors and provide for disclosure in relation to the shares of companies. I do not pretend that in itself it amounts to a major reform, but in the context of the Government's long-term intentions which I have spelt out I commend it to the House.