HL Deb 04 March 1966 vol 273 cc874-83

11.7 a.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Hughes.)

On Question, Motion agreed to.

House in committee accordingly.

[The LORD AILWYN in the Chair.]

Clause 1 [Reconstitution of older Universities]:

(2) Before making an application under this section a University Court shall require to obtain the concurrence of the Senatus Academicus and shall consult the General Council, the Students' Representative Council and such body or bodies as appear to the University Court to be representative of the academic staff of the University.

LORD SALTOUN

I beg to move the Amendment standing in my name, and I can do it in very few words. I will ask Her Majesty's Government whether it is not a fact that the intention of the clause will be fully covered if the words I propose to delete are deleted. If that is not so, will Her Majesty's Government kindly explain to me the force of the words which I wish to delete. I beg to move.

Amendment moved— Page 1, line 16, leave out ("require to").—(Lord Saltoun.)

THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES)

The noble Lord, Lord Saltoun, is, as almost always, completely logical. Her Majesty's Government have pleasure in accepting the Amendment.

LORD SALTOUN

I am very much obliged.

On Question, Amendment agreed to.

Clause 1, as amended, agreed to.

Clauses 2 and 3 agreed to.

Clause 4:

Making of ordinances

4. The procedure for the making of ordinances as prescribed in section 21 of the Act of 1889 shall cease to have effect, but the following provisions of this section shall apply to the making of an ordinance under section 3 of this Act, that is to say—

(b) throughout the, period of one month from the sending of the draft of the ordinance to the Senatus Academicus and to the General Council, notices, stating that the draft has been sent to the Senatus Academicus and to the General Council and naming a place within the University where the draft may be inspected at all reasonable hours, shall be displayed publicly within the University;

LORD HUGHES

With permission, I will speak to Amendments Nos. 2, 3, 4 and 5, all of which hang together and give effect to an undertaking given by my right honourable friend in another place to look at the question of the time given for the consideration of ordinances. In the Bill as it stands, the period is one month. These Amendments change the period to eight weeks. Similar views in favour of a longer period were expressed in your Lordships' House during the Second Reading of this Bill, and I am very happy to put down these Amendments. I beg to move Amendment No.2.

Amendment moved— Page 3, line 14, after ("but") insert (",subject to the provisions of subsection (2) of this section,").—(Lord Hughes.)

On Question, Amendment agreed to.

LORD HUGHES

I beg to move Amendment No. 3.

Amendment moved— Page 3, line 14, leave out ("section") and insert ("subsection").—(Lord Hughes.)

On Question, Amendment agreed to.

LORD HUGHES

I beg to move the next Amendment.

Amendment moved— Page 3, line 19, leave out ("one month") and insert ("eight weeks").

On Question, Amendment agreed to.

LORD HUGHES

I beg to move Amendment No. 5.

Amendment moved—

Page 4, line 5, at end insert— ("(2) Before proceeding to make an ordinance, the University Court may determine that on the ground of urgency the foregoing subsection shall apply in relation to that ordinance as if every reference to period, except in paragraph (g), were construed as a reference to the period of one month; and forthwith notices to that effect shall be sent to the Senatus Academicus and to the General Council and shall be displayed publicly within the University.")

On Question, Amendment agreed to.

Clause 4, as amended, agreed to.

Clauses 5 to 10 agreed to.

Clause 11:

University staff ineligible to become rector, or assessor on Court except in certain cirmustances

11.No person holding an appointment from the University Court of any of the older Universities shall be eligible to be—

  1. (a) elected as rector of that University, or
  2. (b) nominated or elected as an assessor on the University Court by any other person or body than the Senatus Academicus:

Provided that nothing in paragraph (b) of this section shall prejudice the right of the University Court as provided for in Schedule 1 to this Act to co-opt a person holding such an appointment.

LORD HUGHES moved to leave out "from the University Court of" and insert "in". The noble Lord said: This Amendment brings the wording of the clause into line with that adopted in Schedule 1, Part I, paragraph (k), and Parts II, III and IV. In discussion on the Schedule in another place it was pointed out that the formula "person holding an appointment from the University Court" did not cover all the staff of a university since a professor or other member of the teaching staff may technically hold his appointment from the Crown or from some other patron. The formula "a person holding an appointment in the University" was substituted in the Schedule in order to ensure that the restriction on the co-option of members should relate to all university staff.

The same considerations apply in this clause. No member of a university staff, whoever his patron may be, should be eligible to be elected as rector or nominated or elected as assessor to the Court except by the Senate. The Amendment would make it impossible, for example, for a regius professor to be elected as rector in his own university. I beg to move.

Amendment moved— Page 6, line 24, leave out ("from the University Court of") and insert ("in").—(Lord Hughes.)

On Question, Amendment agreed to.

Clause 11, as amended, agreed to.

Clause 12:

Annual Reports and Financial Statements

12.—

(3) No person shall be qualified to be appointed as an auditor under this section who is, or any member of whose firm is, a member of the University Court or of the staff of the University concerned.

11.18 a.m.

VISCOUNT COLVILLE OF CULROSS moved to add to subsection (3):

Provided that this subsection shall not apply:—

  1. (a) to a member of the staff of the University concerned if he is employed by that University only as a part-time teacher; or
  2. (b) to the appointment as auditor of the University concerned for the period of three years commencing with the passing of this Act of a person who immediately before that date held office as auditor of that University.

The noble Viscount said: I am bound to say that when I put this Amendment down I was not aware that the matter had been discussed at some length in another place, as I believe it was. Nevertheless, I think that this Amendment raises two points which might be considered again by your Lordships' Committee. Subsection (3) disqualifies from appointment as an auditor any person who is, or any member of whose firm is. a member of the University Court or of the staff of the University concerned. There are two points here. The second paragraph of my Amendment is, as it were, a transitional one, and I will deal with that first because it is perhaps the less important.

I would suggest to your Lordships that where there is a person on the Court of one of the universities at the moment who would be disqualified under subsection (3), it would be reasonable to give a limited period of exemption from this particular provision, during which time another arrangement can be made. I do not think that it is unusual, in the case of a new provision (such as I believe this to be), for a short period, at any rate, to be given while the matter may be considered and the change required by the Statute put into force. If no such provision as appears in my paragraph (b) is incorporated in the Bill, then anyone who is disqualified under this subsection will immediately have to leave the Court; or, alternatively, he and his firm will have to give up their post as auditors to the university. I believe this to be a matter which ought to be dealt with gradually, and not at once, and I therefore hope that your Lordships will agree that this is a reasonable provision.

The first paragraph is rather more important. The words of subsection (3) simply say, … the staff of the University concerned ". Now it so happens that in some, if not all, of the universities covered by this Bill the readers or lecturers in accountancy are very often appointed part-time: they do not form part of the permanent staff of the university at all, but come in as and when their duties require. If these people and their firms are disqualified from auditing the accounts of the university, merely because they are part-time lecturers or readers, it may very well be that a difficult choice will have to be made: either the university will have to give up the extremely eminent services of one or more of these part-time teachers or, alternatively, the firms will have to stop auditing the accounts.

There is not the slightest suggestion in my Amendments that the principle behind Clause 12 is not quite sound; indeed, I am sure it is right that a person upon the Court or the staff, and that person's firm, should not be involved in auditing the university accounts. But I believe that an exception should be made for somebody who is a part-time lecturer and somebody who is not on the staff of the university at all. For these reasons I suggest that your Lordships may like to reconsider the absolute disqualification in subsection (3). I beg to move.

Amendment moved— Page 7, line 12, at end insert the said proviso.—(Viscount Colville of Culross.)

LORD SALTOUN

May I say a word in support of my noble friend? I should like to put this point to the Government. It does not often happen that a chartered accountant becomes very distinguished, but it does sometimes happen. I think in that case it might be the wish of the university not to deprive themselves of the teaching power of somebody extremely distinguished; rather would they want to avail themselves of it. If that accountant were a member of a firm who were the university auditors the university would be deprived by this clause of that advantage. I think, therefore, it might be worth while to consider the noble Viscount's Amendment very carefully.

LORD BALERNO

I am unwilling to take issue with my noble friend, Lord Colville of Culross, but I think it would be a retrograde step to go back to include part-time staff. The exclusion of part-time staff, if I recall rightly, was in the Bill at one stage and then it was removed; and its removal from being exempted from this kind of thing was, in general, approved, as I understand it, by the Scottish universities. I believe that the form of words for the whole of this clause has been redrafted since the Bill was originally presented in another place, and that this has been brought into line with the common practice and the desires of the profession. I may be wrong in that; but there was considerable redrafting of the clause. In that case, I think it would be inadvisable to rush into an Amendment at the present moment without having considered all the implications in the matter. I agree that the second part of my noble friend's Amendment may well bear hardly upon the auditor or the professor of accountancy in the University of Edinburgh, both of whom belong to the same firm. It is doubtless that case which he has in mind. But whether an exception should be made to what I think is the established principle does require the Committee's most careful consideration.

LORD HUGHES

I have been so eminently reasonable on this Bill so far that it will probably be a disappointment, at least to a certain number of your Lordships, if I say I cannot accept this Amendment. I hope, however, that the noble Viscount, Lord Colville of Culross, and the noble Lord, Lord Saltoun, will accept what I am going to say as reasonable justification and that they will not press the Amendment. The noble Viscount, in fact, accepted that the principle was right: that the accounts of any body should not be audited by persons who have any connection whatever with that body. This is normal commercial practice. Indeed, the Companies Act contains a section (Section 161(2)) to the effect that no person shall be appointed an auditor of a company who is an officer or a servant (or is a partner of an officer or a servant) of that company. So far as the universities are concerned, the position is really very similar. I should have said at the outset that the noble Viscount was wrong in assuming that there had been a long discussion in another place on this point. In fact, it was not discussed, so his Amendment serves the purpose of enabling this point now to be discussed for the first time. I think that what he had in mind was the point made by the noble Lord, Lord Balerno, that there was discussion in advance, which had the effect of the Bill's appearing in the form in which it did.

As far as the universities are concerned, a provision on the lines of subsection (3)—excluding any member of the staff from being an auditor—is included in the "model charter" which the Privy Council have prepared as a guide to new universities; and it is included in most, if not all, of the new charters: for example, those of Strathclyde and Heriot Watt. It appears in the Universities of Durham and Newcastle Act 1963; and I think I may therefore say with propriety that the principle has already been accepted and approved by both Houses as appropriate to the circumstances of a university. In fact, we know of no university Act or charter which includes a provision on the lines of the Amendment.

I have sympathy with the purposes lying behind the Amendment, because I understand that there are members of the staff at Edinburgh, and perhaps elsewhere, who would be disqualified by this provision. There is no suggestion in the Amendment that the present practice has in any way led to the slightest impropriety. One has sympathy with particular individuals who may be affected by this embargo. Nevertheless, the Government are quite certain that the principle is right and that there ought to be no question at all of tampering with it, either temporarily or permanently, for the benefit of any particular individual or even groups of individuals, which is what would be done if we limited it by restricting the exclusion to whole-time members of the staff or by delaying its operation until, presumably, present connections between members of staff and auditing firms have run their course. For these reasons, therefore, I hope that the noble Viscount will see his way to withdraw this Amendment.

VISCOUNT COLVILLE OF CULROSS

I am much obliged to the noble Lord for giving the Government view on this Amendment. I am glad that I have not turgidly repeated arguments put forward elsewhere. Would the noble Lord be good enough just to confirm this one point: that the Government intention as to the meaning of this clause is quite clearly that part-time staff of whatever sort are to fall within the embargo? I think it might be useful guidance for the universities, and indeed for the accounting profession in Scotland, if the Government's intention behind these words were at least made certain, rather than that there should be some doubt and for the matter in due course to have to be adjudicated upon in a tiresome and expensive way. It would go some way if the noble Lord were to make this clear. I will say in a moment the view I take about the Amendment in general.

LORD DRUMALBYN

May I make one point arising out of the noble Lord's speech? It is not so much a matter of having sympathy with the individuals concerned as having sympathy with the universities concerned, because the univer- sities have presumably chosen these people as lecturers or professors as being those with the best experience, as best qualified to hold those offices and—what is important from the point of view of professional men not always accustomed to teach—as also those who are the best teachers available. It is not a question of sympathy with the individuals but sympathy with the universities. With all respect to the noble Lord and what he said, while one does not want to make exceptions unnecessarily to a general principle, there is not an exact parallel between companies who are trading and universities who are teaching. It is a little difficult to see how there could be in any way a conflict of interest in this particular case.

LORD HUGHES

May I first answer the question put by the noble Viscount, Lord Colville of Culross? The exclusion will apply to the part-time members of the staff. It will apply to all staff. Then, coming to the point made by the noble Lord, Lord Drumalbyn, I would say that there is no need to have sympathy with the universities. The sympathy is necessary only for the individuals, because the Bill as it stands meets the wishes of the universities on this point. As the noble Lord, Lord Balerno, stated, if there were any need to extend sympathy to the universities it would be if this House were to impose on them this Amendment which they do not wish.

LORD HAWKE

May I ask the noble Lord a question? As a "quarter Scot", I am rather tremulous about interfering in this matter, but suppose a university wanted to have a lecture on accountancy, for example, or some such subject—an isolated lecture. Would they be unable to ask their auditor, who might be the best qualified person, to give it because he would run foul of this clause, even were he not paid?

LORD HUGHES

Without notice, I should not wish to give an answer to that. I am certain that universities will be just as ingenious as anyone else in enabling teaching to be carried out without infringing the law.

VISCOUNT COLVILLE OF CULROSS

I think it has been worth while to have this discussion, but in view of what has been said by the noble Lord. Lord Hughes, and also having heard what my noble friend Lord Balerno had to say about the matter, I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

Remaining clauses and Schedules agreed to.

House resumed: Bill reported, with Amendments.

Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of March 2) Report received; Bill read 3ª, with the Amendments, and passed, and returned to the Commons.