HC Deb 21 May 1979 vol 967 cc675-7
5. Mr. Clinton Davis

asked the Secretary of State for Trade if he will make a statement on the action he proposes to take in the light of the report of the inspectors on Ferguson and General Investments Ltd., formerly Dowgate and General Investments Ltd.

The Under-Secretary of State for Trade (Mr. Reginald Eyre)

No action is called for by my Department in relation to the present directors and officers of Ferguson and General Investments Limited, formerly Dowgate. With respect to earlier events in that company and CST Investments Ltd., publication of the report will be of value to all concerned with improving standards of company behaviour. The inspectors make a number of recommendations for changes in the law as it applies to inspectors' powers, directors' duties and the operation of company affairs. My Department is considering these and will discuss them with interested parties.

Mr. Davis

Will the Minister give an undertaking that the serious criticisms implicit in the inspectors' report about the adequacy of inquiries undertaken by the takeover panel will also be investigated by him, and that the whole question of the adequacy of the self-regulatory system will be examined by the Department? Furthermore, will he undertake that that and other abuses will figure in his consideration of company law reform, which is desperately needed?

Mr. Eyre

My right hon. Friend the Secretary of State and I are reviewing procedures for company investigations, including many of the matters to which the hon. Gentleman referred. We need to assess the facts in such reports and to consider how far changes in the law are the best way to raise the ethical standards and standards of competence for directors of companies.

Mr. Dalyell

Will the Minister explain why nobody in CST is being investigated?

Mr. Eyre

The hon. Gentleman will remember that CST was the company that was the subject of this report. I have described the methods by which we shall carefully consider the nature of that report.

Mr. George Robertson

Is it not time that all the blethering was over, since this report and other such reports illustrate that the role of self-regulation in the City has now been exposed for what it is and that urgent action is required to toughen up the law on company investigations?

Mr. Eyre

There will be no lack of urgency in carrying out the review. The programme of company legislation referred to in the Queen's Speech will give us an opportunity to bring forward our proposals at an appropriate stage.

Mr. Tim Renton

Does not the Minister think it strange that Labour Ministers are now pressing hard for the reform of company law when, for five years, when the Labour Party was in office, they spoke about it but did nothing?

Mr. Eyre

My hon. Friend makes a valid point, and I emphasise that due urgency will be shown by this Conservative Government.

Mr. John Smith

Will the Minister confirm that our Companies Bill was before Parliament immediately before the election? That Bill contained important provisions on insider dealing and loans to directors. Will he undertake that these aspects will feature in any new Bill to reform company law?

Mr. Eyre

A Bill dealing with the implementation of the EEC second directive will be ready for introduction in June. A second companies Bill, covering company accounts and a number of other measures of reform, including those referred to by the right hon. Gentleman, will be introduced early in 1980.