§ [No. 25]
§ Clause 20, page 16, line 37, leave out "or controller" and insert "controller or auditor".
§ 5.34 p.m.
§ THE EARL OF LIMERICKMy Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 25. This Amendment adds the present or past auditor of an insurance company to the persons who may be required to provide an explanation of books or papers of the company produced for inspection under this clause. The auditor could be in a position to give most useful explanations of matters in books or papers which he will probably have examined.
§ Moved, That this House doth agree with the Commons in the said Amendment.—(The Earl of Limerick.)
§ LORD DIAMONDMy Lords, I want to ask whether the Government have considered this matter with due care, and whether, possibly, they have been in touch with outside professional advice about it. What is going to happen now is that the auditor of a company where both parties thought that they were communicating with one another in complete confidence may be required to disclose to a person other than his client information which may be thought to be useful by the Department. One is anxious that all information which may be useful ought to be given, but if the result of this is to be that whenever companies consult their auditors they are inhibited by the knowledge that they are not having private and confidential discussions, then one is doubtful whether the benefit that the Department may obtain by invoking this practice may be greater than the benefit which is lost through the inhibition which directors and others may feel. No doubt this matter has been carefully considered, but perhaps the noble Earl would care to say a word about it.
§ THE EARL OF LIMERICKMy Lords, I can say that this matter was considered. It is not envisaged that this is a matter which would arise very frequently, but there could be occasions when it would be very much to the disadvantage of an 1578 inquiry not to be able to seek to consult with an auditor. I may add—and I hope that this will be of reassurance to the noble Lord—that informal soundings were taken in the accountancy profession before this Amendment was added to the Bill, and the indication was that they would see no objection to such a proposal.