HL Deb 06 December 1973 vol 347 cc860-2

8.30 p.m.

THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF TRADE AND INDUSTRY (THE EARL OF LIMERICK) rose to move, That the Draft Companies (Fees) Regulations 1973, laid before the House on November 29 be approved. The noble Lord said: My Lords, I feel it might be for the convenience of the House if I were to introduce these Regulations briefly. I might add that I am fairly formidably briefed, and will gladly respond to any questions that your Lordships may wish to ask. As will be known to Members of this House who regularly use the facilities of the Companies Registration Office, some of its fees are of considerable antiquity. The fee paid by a member of the public to search a company's records remains at the level of 5p, the level it has been since Mr. Gladstone, as President of the Board of Trade, established it in 1844. The fees with which this Motion is concerned are not of such antiquity. They were fixed at their present levels by the Companies Act 1967, and the purpose of the increases now proposed is to deal with a narrow and specific problem which has been for some years adversely affecting the efficiency of Companies House and the service it gives to the public. The Jenkins Report drew attention to the growth in the annual numbers of new incorporations, and the dangers of abuse through the incorporation with limited liability of very small, under-capitalised businesses. The Jenkins Committee recommended that the fee for new registration should be increased, and this was done in the Companies Act of 1967. Despite this, the rate of new incorporations has increased from just over 19,000 in 1968, to nearly 54,000 in 1972. and is expected to attain 65,000 in 1973. Against this background, the Government have decided that further steps must be taken to discourage what the Jenkins Report described as frivolous incorporations. The new companies legislation which will shortly be introduced into Parliament contains measures to that end.

The Order now before this House is intended to deal with the interim period until the new legislation has been enacted, provided it receives the support of both Houses. Its primary purpose, therefore, is to increase the minimum fees to a level which will act as a deterrent to new incorporations ahead of the commercial need. The Order introduces one flat fee of £50 for all new incorporations. By fixing a flat fee, instead of the present range from a minimum of £20 to a maximum of £68, we are abolishing the 522 intermediate steps, according to the amount of the nominal capital, on the present scale. We are also eliminating the 64 steps in the current scale of fees for the registration of a company not having share capital, and for the regis- tration and re-registration of a company limited by guarantee and not having a share capital. The fee for registering a change of name is increased from £10 to £40. The fees for the re-registration of a company, and for the registration of annual returns, are unchanged at £5 and £3, respectively. I commend the Motion to the House, and I beg to move.

Moved, That the Draft Companies (Fees) Regulations 1973 laid before the House on November 29 be approved.—(The Earl of Limerick.)

LORD GARNSWORTHY

My Lords, if my noble friend Lord Jacques had been here, he would probably have spoken at greater length than I shall. The House will be grateful to the noble Earl, Lord Limerick, for his explanation, and will appreciate his brevity. He told us he would be brief; I shall be more so. We on this side of the House regard this as a generally useful Order. I have no comment on the first two articles. The increase from £10 to £40 seems a very substantial increase. One wonders why it is so great. We have no intention of opposing the Order.

THE EARL OF LIMERICK

My Lords, I am most grateful to the noble Lord, Lord Garnsworthy. I think I can answer him in this way. I myself raised the same question when I saw the proposal. We looked carefully at the work which is actually involved, and it is surprising, but nevertheless true, that the work involved in a change of name is, as nearly as can be ascertained, 80 per cent. of the work involved in registering a new company. This is the basis of the £40 as against the £50 for registering a new company.

On Question, Motion agreed to.

House adjourned at twenty-five minutes before nine o'clock.