'(1) If, at the end of a financial year, a company subject to the requirements of paragraph 13A of Schedule 8 to the 1948 Act whose business consists in, or includes, the supplying of goods does not have subsidiaries, then, unless the turnover for that year (so far as stated in the accounts in respect of that year in pursuance of that paragraph) does not exceed £1,400,000, there shall be contained in the directors' report relating to that year—
- if, in that year, goods have been exported by the company from the United Kingdom, a statement of the value of the goods that have been so exported from the United Kingdom during that year;
- if, in that year, no goods have been so exported from the United Kingdom, a statement of that fact;
- if, in that year, goods have been imported by the company to the United Kingdom, a statement of the value of the goods that have been so imported to the United Kingdom during that year;
- if, in that year, no goods have been so imported to the United Kingdom, a statement of that fact.
- (2) If, at the end of a financial year, a company has subsidiaries, then, except in a case in which neither the business of the company nor that of any of the subsidiaries consists in, or includes, the supplying of goods, or a case in which the company submits in respect of that year group accounts prepared as consolidated accounts in respect of itself and all its subidiaries and the turnover (so far as stated therein in pursuance of the said paragraph 13A) does not exceed £1,400,000, there shall be included in the directors' report relating to that year—
- unless, in the case of the company and of each of its subsidiaries, no goods have been exported by it in that year from the United Kingdom, a statement of the aggregate of the values of the goods which, in the case of the company and of each of the subsidiaries, have been exported by it in that year from the United Kingdom;
- if, in the case of the company and of each of its subsidiaries, no goods have been exported by it in that year from the United Kingdom, a statement of that fact;
- unless, in the case of the company and of each of its subsidiaries, no goods have been imported by it in that year to the United Kingdom, a statement of the aggregate of the values of the goods which, in the case of the company and of each of the subsidiaries, have been imported by it in that year to the United Kingdom;
- if, in the case of the company and of each of its subsidiaries, no goods have been imported by it in that year to the United Kingdom, a statement of that fact.
(3) For the purposes of this section, goods exported or imported by a company as the agent of another person shall be disregarded.
(4) The foregoing provisions of this section shall not require the disclosure of information in the director's report of a company if the directors thereof satisfy the Secretary of State for Trade that it is in the national interest that the information should not be disclosed.'.—[Mr. Geoffrey Robinson.]
§ Brought up, and read the First time.
§ Mr. Geoffrey RobinsonI beg to move, That the clause be read a Second time.
Mr. Deputy SpeakerWith this we may take amendment No. 178, in clause 16, page 25, leave out lines 39 and 40.
§ Mr. RobinsonIt is with the indulgence of my right hon. and hon. Friends who speak officially for the Opposition on these matters that I make my maiden speech from the Dispatch Box. If I approach it with something less than the tense excitement that I savoured in anticipation of it, I am sure that you, Mr. Deputy Speaker, and all right hon. and hon. Members will understand why. However, the legislation must go on. The Government have introduced it, and it is our duty, where we think it 95 inappropriate, to oppose it. The purpose of moving new clause 2 is to reinsert in company legislation information that we believe is properly the property of the public and necessary also in the national interest.
May I say at the outset that it is difficult, in drafting any clause of this kind, to know where to draw the line as to which companies should or should not be included within the legislation. I would not die at the stake for the figure of £1.4 million which we have stipulated as being the amount above which the sort of information that we regard as necessary concerning a company's imports and exports should be provided. I personally would be prepared, if the principle were conceded by the Government, to put it at a considerably higher figure.
We discovered during the Committee stage of this Bill that underlying the opposing views of the Government and the Opposition was a fundamental attitude of mind. The Opposition attitude had inspired the Labour Government's Green Paper entitled "The Future of Company Reports", and within that was a statement with particular reference to exports and imports of individual companies, the future of company reports and the international trade statement that we requested within it. The Tory document, "Company Accounting and Disclosure", was a complete misnomer. In other words, it was accounting and non-disclosure. However, not satisfied with not disclosing, the Government now propose to go even further and remove from the 1967 Act a part regarding the importing and exporting of particular companies, so that even less information is available than in the past.
I shall not delay the House on this matter, because there is a sense of urgency to make progress this evening. However, I shall give one example from my personal experience when working as a senior executive with the Industrial Reorganisation Corporation. We were discussing a certain development programme involving Government aid to a large multinational company, Philips. The case was being made that Government aid was necessary so that the company could continue its marvellous export record. We were keen on the idea. The IRC was set up to stimulate investment and exports and, most important, to increase net exports. That must be the intention of all Governments, except this Government, who for some reason wish to increase imports and reduce output and exports. However, it must be the intention of all Governments to increase gross output and net exports.
When we considered the figures provided by the Philips corporation as a whole, we discovered that the corporation was a net importer. In other words, it imported more from its various plants abroad into this country than it exported from the United Kingdom. We then entered into a form of planning agreement with Philips, whereby the imbalance in its internal trade was eliminated, Government support of a certain kind was provided, and consequently the national economy benefited.
But, with the ineffable lucidity which characterised him throughout our debates in Committee, the Under-Secretary said that such information could be misleading. I quote what he said:
that figure is likely to be of little interest to shareholders and can be misleading—for example, when a company's exports consist largely of imported goods which may have been re-exported."—[Official Report, Standing Committee A, 18 June 1981; c. 138.] 96 That is precisely why we want the information. We want to know the net exports of the large multinationals or the large national companies.The only other reason given by the Under-Secretary in that debate for deleting what is already on the statute book was that a lot of companies provided goods to other companies, making goods in the United Kingdom which are subsequently exported, and that they would not receive credit for that. That is true, but the Under-Secretary does scant justice to those of us who are keenly interested in the performance of our manufacturing sector and the companies within it.
There is a further reason for disclosure. The Under-Secretary quoted as an example the motor components industry in the West Midlands, which both he and I have the honour to represent. He said that the motor components industry was one that largely supplied the domestic-based motor industry and therefore received little credit for it.
We all know that the motor components industry throughout the world is becoming increasingly internationally traded. Indeed, the reason that he gave for not having disclosure, is the very reason why we should have it.
I am pleased to see that the Minister of State in his elevated position, is present. He will recall the many late night sittings, which I hope will not be the case tonight, that we shared on two Finance Bills. There is no reason to withdraw the new clause. It should stay and be expanded. The new clause may be inadequately drafted—a matter on which the hon. and learned Gentleman is a greater expert than I. However, unless he is prepared to give something, we shall be bound to press the matter to a Division. This is a retrograde step—one which goes in the wrong direction.
§ Mr. TrotterI have given considerable thought to the issue, but I cannot see what use these figures would be. It is all very well to say "Let us have them", and Opposition Members may find them interesting, but millions of hours would be needed to produce them. There are no book-keeping entries now on imports and exports in companies' books. Separate analyses and separate statistics would be needed, and a great deal of cost would result, as well as additional overheads for no benefit. The hon. Member for Coventry, North-West (Mr. Robinson) should tell us who would benefit from those figures. They cannot be of interest to more than a few curious people. No doubt the examples that the hon. Gentleman gave from my hon. and learned Friend's speeches in Committee were right. The figures would often be misleading, even to those curious enough to look at them. It could also be argued that publication of those figures could be helpful to a company's competitors. Therefore, I cannot support the new clause.
§ Mr. Peter ReesI am sure that the House would like me to congratulate the hon. Member for Coventry, North-West (Mr. Robinson) on his maiden appearance on the Opposition Front Bench. We have had many amiable encounters in Committee proceedings on Finance Bills and I am delighted that the fortunes of war, or of politics, have brought us again into such close juxtaposition. However, I am not sure whether I am the appropriate person to offer congratulations as I have only recently taken up my present responsibilities.
I hope that the hon. Gentleman will forgive me if, having offered my congratulations—which I hope he will 97 feel able to accept—I take issue with him most strenuously on the substance of the new clause and the amendment. My hon. Friend the Member for Tynemouth (Mr. Trotter) puts the case succinctly and practically and we all depend on his experience as a practising accountant. He posed two questions: what use would the information be; and to whom?
One must balance the burden on companies—their directors and accountants—with the value of the information disclosed to those who have a right, whether shareholders, creditors or perhaps employees, to require it. Merely because companies have the privilege of incorporation and perhaps of limitation of liability, we are not obliged to demand that they should disclose a wealth of information that is of little relevance to those who have a right to scrutinise their activities. A balance must be struck.
The hon. Member for Coventry, North-West gave us an interesting example, which was derived from his considerable and distinguished industrial experience. We all know the contribution that he has made to the motor industry. I do not say that in any pejorative, critical, spirit. We know how successful he was in the areas of management to which he devoted his talents. We also know the contribution that he made to the activities of the IRC. He drew on that. However, if a company legitimately applies to the Government for financial support—whether through the Department of Industry or some agency of Government—the Department or agency is normally entitled to require information that will enable it to assess fairly the claim. Therefore, I was not impressed by that example.
Is it important that the shareholders and creditors should have detailed knowledge of the breakdown of the company's turnover as between exports and imports? It may be a matter of curiosity and of some general interest, but we must continually bear in mind the burden placed on the corporate sector. In our sophisticated, late twentieth century society the State imposes many burdens. We must scrutinise them and ask ourselves whether the value is justified. With a little diffidence, I differ from the hon. Gentleman—although he has more managerial experience than I—and argue that it is not justified.
I have less experience of this matter in relation to the Department of Trade than the hon. Member for Hackney, Central (Mr. Davis). However, I doubt whether the Department would benefit from such information. The resources are not available to process company accounts in such detail.
The hon. Member for Coventry, North-West might press me and argue that if the House were to decree that such information should be included, additional people would have to be hired to process it. However, the Department of Trade has other sources of information. No doubt the hon. Member for Hackney, Central can confirm that. It bases its analysis of the country's trading position on the statistical information collected by the Customs and Excise. That is probably a better source of information than that required under the new clause.
With his great experience, the hon. Member for Coventry, North-West will recognise that the Department of Trade would find such information out of date for macro-economic purposes. After all, the company report is concluded at the end of the company's financial year. 98 It would not be as up to date as the statistical information collected by Customs and Excise officers at our ports on exit and entry.
I hope that there is nothing much between the two sides of the House about the importance of having some information about exports and imports. However, the way suggested is probably not the right way. Even if it commended itself to some sections of the House, we must reflect on the burdens that we are placing on the corporate sector. We are not entitled to make unreasonable demands upon it merely because it has the privilege of incorporation.
I return to the point so trenchantly and succinctly made by my hon. Friend the Member for Tynemouth—what use would the information be, and to whom? I hope that the hon. Member for Coventry, North-West will not press the new clause to a Division. If he does, I hope that my right hon. and hon. Friends will reject it.
§ Mr. Geoffrey RobinsonI appreciate the tones and terms in which the counter-arguments were put by the Minister. However, I regret that they were not convincing. Each time we discuss this subject we hear the parrot cry about the burdens we are putting on the private sector and manufacturing companies. I am sensitive to them and I try to simplify the system. If ever there were a Bill that was meant to complicate the private sector's life, it is this. That is the irony. We are trying to leave in the legislation the requirement for this one simple piece of information. We are operating against a tidal wave of complexity and cross-referencing, rendering necessary consolidation of company legislation at the earliest opportunity. But again we hear the parrot cry of the burdens imposed on private sector companies.
The hon. Member for Tynemouth (Mr. Trotter) is a chartered accountant. He knows that if the information is recorded at source, at the point of entry, little extra administrative burden is imposed.
At the heart of the argument is the secrecy that the Government wish to achieve for company legislation. We believe that secrecy is the worst enemy of Government and of management. That is what the new clause is about. The information is there. We are asked "Who needs it?". The Minister of State, with his narrow, tunnel vision, can get to creditors and shareholders and then suddenly remembers that employees are mentioned in some legislation.
We believe that a further accountability is necessary—to the nation. The Minister admitted the relevance of the national importance when he referred to information in its consolidated form in the national expenditure accounts and trade accounts.
The country must live from its net exports of manufactured goods when the oil runs dry. The Minister says that so long as the information is aggregated we need nothing else. However, we are now importing more manufactures than we are exporting and the information must be available readily. It must be available to the Government who must act in a spirit of co-operation, and effectively. For those reasons and in the light of the Minister's unsatisfactory reply I urge my right hon. and hon. Friends to join me in the Lobby.
§ Question put, That the clause be read a Second time:—
§ The House divided: Ayes 143, Noes 207.
99| Division No. 302] | [8.40 pm] | |
| AYES | ||
| Allaun, Frank | Lamborn, Harry | |
| Anderson, Donald | Lamond, James | |
| Archer, Rt Hon Peter | Lestor, Miss Joan | |
| Bennett, Andrew(St'kp't N) | Lewis, Arthur (N'ham NW) | |
| Bidwell, Sydney | Lewis, Ron (Carlisle) | |
| Boothroyd, Miss Betty | Lofthouse, Geoffrey | |
| Bottomley, Rt Hon A.(M'b'ro) | Lyon, Alexander (York) | |
| Bray, Dr Jeremy | McCartney, Hugh | |
| Brown, Hugh D. (Provan) | McDonald, Dr Oonagh | |
| Brown, Ronald W. (H'ckn'y S) | McElhone, Frank | |
| Buchan, Norman | McGuire, Michael (Ince) | |
| Callaghan, Rt Hon J. | McKay, Allen (Penistone) | |
| Callaghan, Jim (Midd't'n & P) | MacKenzie, Rt Hon Gregor | |
| Campbell, Ian | McNamara, Kevin | |
| Campbell-Savours, Dale | McWilliam, John | |
| Carmichael, Neil | Magee, Bryan | |
| Clark, Dr David (S Shields) | Marks, Kenneth | |
| Cocks, Rt Hon M. (B'stol S) | Mason, Rt Hon Roy | |
| Concannon, Rt Hon J. D. | Maynard, Miss Joan | |
| Conlan, Bernard | Millan, Rt Hon Bruce | |
| Cook, Robin F. | Mitchell, R. C. (Soton ltchen) | |
| Cowans, Harry | Morris, Rt Hon A. (W'shawe) | |
| Crowther, Stan | Morris, Rt Hon C. (O'shaw) | |
| Cryer, Bob | Mulley, Rt Hon Frederick | |
| Cunliffe, Lawrence | Newens, Stanley | |
| Cunningham, G. (Islington S) | Owen, Rt Hon Dr David | |
| Cunningham, Dr J. (W'h'n) | Palmer, Arthur | |
| Dalyell, Tam | Park, George | |
| Davidson, Arthur | Parry, Robert | |
| Davis, Clinton (Hackney C) | Pavitt, Laurie | |
| Davis, T. (B'ham, Stechf'd) | Powell, Raymond (Ogmore) | |
| Deakins, Eric | Prescott, John | |
| Dewar, Donald | Price, C. (Lewisham W) | |
| Dixon, Donald | Race, Reg | |
| Dormand, Jack | Radice, Giles | |
| Douglas, Dick | Roberts, Albert (Normanton) | |
| Dubs, Alfred | Roberts, Ernest (Hackney N) | |
| Duffy, A. E. P. | Robertson, George | |
| Eadie, Alex | Robinson, G. (Coventry NW) | |
| Eastham, Ken | Sandelson, Neville | |
| Ellis, R. (NE D'bysh're) | Sever, John | |
| Ennals, Rt Hon David | Shore, Rt Hon Peter | |
| Evans, John (Newton) | Silkin, Rt Hon J. (Deptford) | |
| Ewing, Harry | Skinner, Dennis | |
| Faulds, Andrew | Snape, Peter | |
| Field, Frank | Soley, Clive | |
| Fitch, Alan | Spearing, Nigel | |
| Fletcher, L. R. (Ilkeston) | Spriggs, Leslie | |
| Fletcher, Ted (Darlington) | Stoddart, David | |
| Ford, Ben | Summerskill, Hon Dr Shirley | |
| Forrester, John | Thorne, Stan (Preston South) | |
| Foster, Derek | Tilley, John | |
| Foulkes, George | Torney, Tom | |
| Fraser, J. (Lamb'th, N'w'd) | Urwin, Rt Hon Tom | |
| Garrett, John (Norwich S) | Wainwright, E.(Dearne V) | |
| Garrett, W. E. (Wallsend) | Walker, Rt Hon H.(D'caster) | |
| George, Bruce | Watkins, David | |
| Grant, George (Morpeth) | Weetch, Ken | |
| Hamilton, James (Bothwell) | Welsh, Michael | |
| Hamilton, W. W. (C'tral Fife) | White, Frank R. | |
| Hardy, Peter | Whitlock, William | |
| Harrison, Rt Hon Walter | Wigley, Dafydd | |
| Hart, Rt Hon Dame Judith | Williams, Rt Hon A.(S'sea W) | |
| Haynes, Frank | Wilson, Gordon (Dundee E) | |
| Heffer, Eric S. | Wilson, William (C'try SE) | |
| Holland, Philip (Carlton) | Winnick, David | |
| Home Robertson, John | Woolmer, Kenneth | |
| Hooley, Frank | Wright, Sheila | |
| Hoyle, Douglas | Young, David (Bolton E) | |
| Hughes, Mark (Durham) | ||
| Hughes, Roy (Newport) | Tellers for the Ayes: | |
| Jay, Rt Hon Douglas | Mr. George Morton and | |
| John, Brynmor | Mr. Joseph Dean. | |
| Jones, Barry (East Flint) | ||
| NOES | ||
| Alexander, Richard | Hawksley, Warren | |
| Ancram, Michael | Hayhoe, Barney | |
| Aspinwall, Jack | Heath, Rt Hon Edward | |
| Atkins, Rt Hon H.(S'thorne) | Henderson, Barry | |
| Baker, Nicholas (N Dorset) | Higgins, Rt Hon Terence L. | |
| Banks, Robert | Hill, James | |
| Beaumont-Dark, Anthony | Holland, Philip (Carlton) | |
| Beith, A. J. | Hordern, Peter | |
| Bendall, Vivian | Hunt, David (Wirral) | |
| Bennett, Sir Frederic (T'bay) | Hunt, John (Ravensbourne) | |
| Benyon, Thomas (A'don) | Jenkin, Rt Hon Patrick | |
| Benyon, W. (Buckingham) | Johnston, Russell (Inverness) | |
| Berry, Hon Anthony | Jopling, Rt Hon Michael | |
| Biffen, Rt Hon John | Kershaw, Sir Anthony | |
| Biggs-Davison, Sir John | King, Rt Hon Tom | |
| Blackburn, John | Kitson, Sir Timothy | |
| Blaker, Peter | Knight, Mrs Jill | |
| Bonsor, Sir Nicholas | Lamont, Norman | |
| Boscawen, Hon Robert | Lee, John | |
| Boyson, Dr Rhodes | Le Marchant, Spencer | |
| Braine, Sir Bernard | Lennox-Boyd, Hon Mark | |
| Bright, Graham | Lloyd, Ian (Havant & W'loo) | |
| Brinton, Tim | Lloyd, Peter (Fareham) | |
| Brittan, Rt. Hon. Leon | Loveridge, John | |
| Brooke, Hon Peter | Lyell, Nicholas | |
| Brown, Michael(Brigg & Sc'n) | Macfarlane, Neil | |
| Bruce-Gardyne, John | MacGregor, John | |
| Bryan, Sir Paul | Macmillan, Rt Hon M. | |
| Budgen, Nick | Major, John | |
| Bulmer, Esmond | Marland, Paul | |
| Burden, Sir Frederick | Marlow, Antony | |
| Cadbury, Jocelyn | Mather, Carol | |
| Carlisle, John (Luton West) | Mawby, Ray | |
| Carlisle, Kenneth (Lincoln) | Mawhinney, Dr Brian | |
| Carlisle, Rt Hon M. (R'c'n ) | Maxwell-Hyslop, Robin | |
| Chalker, Mrs. Lynda | Mellor, David | |
| Chapman, Sydney | Miller, Hal (B'grove) | |
| Churchill, W. S. | Mills, Iain (Meriden) | |
| Clark, Hon A. (Plym'th, S'n) | Mitchell, David (Basingstoke) | |
| Clarke, Kenneth (Rushcliffe) | Moate, Roger | |
| Clegg, Sir Walter | Monro, Sir Hector | |
| Cope, John | Montgomery, Fergus | |
| Corrie, John | Morgan, Geraint | |
| Cranborne, Viscount | Morrison, Hon C. (Devizes) | |
| Critchley, Julian | Morrison, Hon P. (Chester) | |
| Crouch, David | Mudd, David | |
| Dorrell, Stephen | Murphy, Christopher | |
| Dover, Denshore | Myles, David | |
| Durant, Tony | Neale, Gerrard | |
| Edwards, Rt Hon N. (P'broke) | Needham, Richard | |
| Elliott, Sir William | Nelson, Anthony | |
| Eyre, Reginald | Newton, Tony | |
| Fairgrieve, Sir Russell | Osborn, John | |
| Faith, Mrs Sheila | Page, John (Harrow, West) | |
| Fenner, Mrs Peggy | Page, Richard (SW Herts) | |
| Finsberg, Geoffrey | Patten, Christopher (Bath) | |
| Fisher, Sir Nigel | Pattie, Geoffrey | |
| Fletcher, A. (Ed'nb'gh N) | Pawsey, James | |
| Fletcher-Cooke, Sir Charles | Penhaligon, David | |
| Forman, Nigel | Percival, Sir Ian | |
| Fox, Marcus | Pink, R. Bonner | |
| Fraser, Peter (South Angus) | Pollock, Alexander | |
| Gardiner, George (Reigate) | Prentice, Rt Hon Reg | |
| Garel-Jones, Tristan | Proctor, K. Harvey | |
| Goodhew, Victor | Raison, Timothy | |
| Goodlad, Alastair | Rathbone, Tim | |
| Gorst, John | Rees, Peter (Dover and Deal) | |
| Gow, Ian | Rees-Davies, W. R. | |
| Gower, Sir Raymond | Rhodes James, Robert | |
| Gray, Hamish | Rhys Williams, Sir Brandon | |
| Greenway, Harry | Rifkind, Malcolm | |
| Griffiths, E.(B'y St. Edm'ds) | Roberts, M. (Cardiff NW) | |
| Griffiths, Peter Portsm'th N) | Roberts, Wyn (Conway) | |
| Grimond, Rt Hon J. | Rossi, Hugh | |
| Grist, Ian | Royle, Sir Anthony | |
| Hamilton, Michael (Salisbury) | Sainsbury, Hon Timothy | |
| Hampson, Dr Keith | St. John-Stevas, Rt Hon N. | |
| Haselhurst, Alan | Shaw, Giles (Pudsey) | |
| Hawkins, Paul | Shaw, Michael (Scarborough) |
| Shelton, William (Streatham) | Trippier, David |
| Shepherd, Colin (Hereford) | Trotter, Neville |
| Shersby, Michael | Vaughan, Dr Gerard |
| Silvester, Fred | Viggers, Peter |
| Skeet, T. H. H. | Waddington, David |
| Smith, Dudley | Wakeham, John |
| Speed, Keith | Waldegrave, Hon William |
| Speller, Tony | Walker, B. (Perth) |
| Spence, John | Walker-Smith, Rt Hon Sir D. |
| Spicer, Jim (West Dorset) | Wall, Sir Patrick |
| Squire, Robin | Waller, Gary |
| Stainton, Keith | Warren, Kenneth |
| Stanbrook, Ivor | Watson, John |
| Stanley, John | Wells, John (Maidstone) |
| Stevens, Martin | Wells, Bowen |
| Stewart, Ian (Hitchin) | Wheeler, John |
| Stewart, A.(E Renfrewshire) | Whitney, Raymond |
| Stokes, John | Wickenden, Keith |
| Tapsell, Peter | Williams, D.(Montgomery) |
| Tebbit, Rt Hon Norman | Winterton, Nicholas |
| Temple-Morris, Peter | Wolfson, Mark |
| Thatcher, Rt Hon Mrs M. | Young, Sir George (Acton) |
| Thomas, Rt Hon Peter | |
| Thornton, Malcolm | Tellers for the Noes: |
| Townend, John (Bridlington) | Mr. Selwyn Gummer and |
| Townsend, Cyril D, (B'heath) | Mr. Donald Thompson. |
§ Question accordingly negatived.