§ 3.8 p.m.
§ Moved, That the Commons amendments be now considered.—(Lord Trefgarne.)
§ Lord Bruce of Donington rose to move as an amendment to the Motion "that the Commons amendments be now considered" at end to insert—
§ "but this House deplores the fact that Members of this House have had only four days (including Saturday and Sunday) to examine the 242 Commons amendments; to relate them to the Bill  as first printed for the Commons; to formulate, if necessary, any amendments thereto; to consult with the professional, industrial and commercial interests affected by them; and places on record its displeasure at the treatment accorded to Members of this House by Her Majesty's Government.".
§ The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I should like to assure your Lordships that this amendment has not been put down as a means of in any way trying to impede the progress of the Companies Bill through the House. It raises no constitutional issue at all. At the end of the day, whether it be today or whether it be tomorrow, it is quite inevitable that the Government will get the House's assent to the agreement to the various amendments that have come from another place.
§ We on this side of the House would not wish in any way to avoid the constitutional consequences. What we seek to do is to raise, if I may say so, an institutional question; a question affecting the relationship of this House with those in another place who control the business in another place and who therefore have a very considerable influence on, and indeed determine the timing of, legislation in this House. The charge I make is not against the noble Lord the Government Chief Whip and his department; they have been most co-operative in the entire matters that are the subject of this amendment. The gravaman of my complaint is that those in charge of business in another place have made it impossible for this House to discharge its obligations in regard to the Bill.
§ I will briefly reiterate the history of the Bill so far, because it is important that we should understand precisely what has happened. Your Lordships will recall that it was first published as a House of Lords Bill on 3rd February. We had a Second Reading in this House on 26th February and it went into Committee in your Lordships' House on 11th, 17th, 19th, and 23rd March, and when it finished here it had four parts, some schedules, 75 clauses and it was 125 pages long; it was slightly larger than when it first arrived because some extra clauses were introduced while it 907 was going through this House. However, it did not leave here very much bigger in Committee than when it arrived. On 6th and 7th April we had the Report stage in this House and at the end of Report, because several more new clauses were added, it had 131 pages as against its original 109.
§ On 5th May it was brought before the Commons and on 2nd June it had its Second Reading. From 9th June to 9th July the Commons were in Committee on the Bill and when it emerged from Committee there it had increased in size to five parts plus the schedules, the number of clauses had increased to 106 and there were 165 pages. There was then a long pause, for over three months, and on the reassembly of the other place on 19th October, the Report stage took place and during that stage 14 new clauses were added, 13 by the Government and one accepted from the Opposition. That is roughly the history of the Bill.
§ As a consequence of all those events, noble Lords were last Friday presented by the Commons with 246 amendments to which our concurrence was invited, and the consideration of those is down for today. It cannot be said that those amendments are of a trivial, consequential or minor nature. Some of them of course are, but I have analysed the 246 amendments and have found that no fewer than 43 comprise new clauses and occupy 48 pages, and of those 43 amendments, no fewer than 14 were tabled on Report for consideration on 19th October last, including the one to which I referred that was put forward by the Opposition in another place and accepted by the Government. A further analysis reveals that the 246 amendments require 88 cross-references, needing checking with other Acts of Parliament, mainly those concerned with amendments to the Companies Acts 1948 to 1976 and the Companies Act 1980.
§ These are formidable considerations and we are complaining not because the time for discussion in this House of the amendments is likely to be curtailed—I repeat, the noble Lord opposite has offered extra time tomorrow should it be necessary to flow over and give more time—but because there has been no time for those Members of this House who are interested (and there are many, he they lawyers, accountants, businessmen, commercial people and so on) to consider in detail the impact of the amendments made in another place and which, as I say, were not in our hands until last Friday morning.
§ It has taken me from Friday morning until roughly 11.30 this morning, working on Saturday and Sunday, interpolating the various amendments where they should be in the Bill, to be able to understand exactly what has been done, let alone to formulate any view as to the correctness or otherwise of the amendments that have been made, whether they could conceivably be improved or whether further outside professional advice (from, say, the Law Society or the Consultative Committee of Accountancy Bodies) should be sought on specific items, particularly those which were introduced only on Report. And incidentally lest anyone has any illusion about it, those 43 amendments are not two or three line affairs; they occupy 48 pages, or half the original size of the Bill.
§ Those amendments cover a variety of subjects and are of a strictly non-party character in the sense that 908 I do not think their contents are likely to arouse party passions on either side. But they comprise some important proposals for, for example, financial assistance for the acquisition of shares and special provisions in connection therewith as regards private companies. They also touch on the important matter of a company's purchase of its own shares and a company's purchase of its own shares out of capital. Those are not world-shattering matters for the general public, but they are of very considerable importance to industry and commerce and are of particular importance to those of us who have to advise, either as accountants or lawyers, on the form in which particular transactions should take place and, moreover, on the accounting consequences of the actions they propose to take if those actions are to comply strictly with the law. These are highly important questions. Some of the amendments deal with insider dealings, the prohibition on directors of insolvent companies, registers of part-directors, privileged information, and they cover some important aspects of voluntary liquidations and the like.
§ In other words, we are not dealing with trivia. Consider the important amendments, my Lords—and so far I have dealt only with the new clauses. In addition to new clauses, there are about 10 extremely important amendments (occupying 13 pages) of which five were made available only on 19th October last. They cover extremely important aspects of company law. So we are not dealing with trivial matters.
§ What is the result of this situation? I have already indicated the time that it has taken working full out —and I am no sluggard when it comes to working at this kind of thing—to go through the amendments in order to arrive at a position where one can understand, follow and trace exactly what the Government have done ever since the Bill went to the other place. I am sure that the noble Lord opposite would agree that when Bills of this kind come before your Lordships' House, it is the duty of an Opposition Front Bench spokesman, or one or two of them for that matter, to make themselves fully acquainted with the position to which the amendments relate, in order that they can both carefully follow the case for the amendments that is put up by the Government and draw the attention of the House to matters on which the House may wish to pronounce judgment.
§ Therefore, the position is this. Speaking personally, as someone who took an active part in the Second Reading and Committee stage of the Bill in this House, I have been unable to put down any amendments at all because there has simply been no time to carry out the complete appraisal of a Commons amendment that is necessary before one starts to try to amend it. All the amendments that are down in our names today have been prepared, with very great speed and under considerable stress, by my noble friend Lord Wedderburn of Charlton, who, as the House will know, is an expert in this particular field, and even he will say that much more time was required in order to put down proper amendments.
§ The other aspect of the position is that I have been able to contact outside professional opinion closely associated with the Consultative Committee of Accountancy Bodies. I received observations by telephone yesterday. In the middle of other work I was 909 able to scribble them down on the backs of envelopes, and I shall try to appraise them while the debate proceeds. At this stage I can give the House the view of the profession, so far as I have been able to ascertain its position in regard to some of these long and complicated amendments, and the verdict is that they are diabolical and that they will in fact cause very considerable difficulty in the professions themselves.
§ It might be argued—the noble Lord might argue it in reply—that this is of course only tit for tat, that other Governments of my political persuasion have done precisely the same thing, in precisely the same circumstances, and that therefore that somehow justifies the present situation. It might be thought that I am saying that the Tory party has done it this time, and perhaps the noble Lord will rise and say that the Labour Party did it last time, and so it is six of one and half a dozen of the other. I very much doubt whether the noble Lord will be able to recall an occasion when the House has been invited to consider, within the time limitations that I have indicated, and which are quite factual, 43 new clauses, covering 48 pages. But even assuming that he can, and even assuming that a Government of my political persuasion has in fact done an identical thing in the past, I would not try to justify it. Had I been here at the time that such a thing occurred, I would have protested just as diligently as I am protesting today, and should such a thing ever happen again, most certainly I shall be one of the first to protest about it.
§ The other answer that could be given is that it is always open to us, to Members of this House, to follow closely the deliberations in another place. It could be argued that those of us on all sides of the House who are interested in the Bill could have searched through the colossal document covering the Committee proceedings in another place and so been forewarned and forearmed. Of course that completely begs the question in that the Commons operate on a different Bill, they operate under different pagination than do we, and it is not easy to relate the amendments that they make to the Bill that they consider with the Bill that we have to consider. It would be a very formidable job to trace the points through.
§ The other factor that operates against the situation even more than that is that most of your Lordships on this side of the House, and on the other side, save those who are fortunate enough to have an income on which to retire, have to earn their own livings during the day, and of course time is necessarily restricted. So I do not think that the horse about closely following what happens in another place will run.
§ The question is quite simply this: Do we believe in a bicameral legislature? Do we believe in the continued existence of this House as a revisory Chamber? That is the real question. Of course it can be argued that the Minister is so well advised in the drafting of particular clauses, which most of your Lordships have not had the opportunity to examine, that the House is quite safe in relying on his saying: "It is really not necessary for your Lordships to look at them at all, because the parliamentary draftsman is so expert, our intentions are known, and therefore no real harm is done by your Lordships not having the opportunity to study them and to put down your own amendments".
§ I invite your Lordships to consider the serious impli- 910 cations of that argument, because if it is the argument that is advanced, then it is an argument for the abolition of this Chamber; that is precisely the argument. If it is unnecessary to perform our function, why should we go through the pretence of performing it? For the past 50 years there have been moves towards abolishing the House of Lords, and I believe that at the moment there is some dubiety as to the position of the House of Lords so far as the Labour Party is concerned. However, in view of the troubles that the Labour Party will inherit on regaining power, one never knows, when it comes to action, what priority will be given to that question. So far as I am concerned that is quite immaterial. So long as your Lordships' House continues, it should be enabled to perform, and should insist on performing, its proper function. I am surprised that the Conservative Government, who have arranged business in another place, and who are supposed to be all in favour of the retention of this House, in perhaps more legislative form, should put forward an argument such as is now before us.
§ I hope that the House will be persuaded that I have raised this matter quite temperately and on an absolutely non-partisan basis. This is a constitutional question which affects our own House. Obviously I cannot invite the Front Bench opposite, but I invite your Lordships, in whatever part of the House you sit, to support this amendment when it goes to a vote, because a vote against the amendment that I have ventured to put on your Lordships' Order Paper would in fact be a vote for the abolition of the House of Lords.
§ Moved, as an amendment to the Motion "that the Commons Amendments be now considered" at end to insert—
§ "but this House deplores the fact that Members of this House have had only four days (including Saturday and Sunday) to examine the 242 Commons Amendments; to relate them to the Bill  as first printed for the Commons; to formulate, if necessary, any amendments thereto; to consult with the professional, industrial and commercial interests affected by them; and places on record its displeasure at the treatment accorded to Members of this House by Her Majesty's Government.".
§ —(Lord Bruce of Donington.)
§ 3.30 p.m.
§ Lord Lloyd of Kilgerran
My Lords, whatever may be the reasons why your Lordships find yourselves in the uenviable position of having to deal with these complex amendments at such short notice—amendments to a Bill of very considerable commercial importance—I am personally satisfied at least that the existing parliamentary procedures which have given rise to this situation are heartily to be deplored. First of all, from time to time these procedures have been shown in practice to be inconsistent with, and inappropriate to, a modern parliamentary democratic system for dealing with legislation of this nature, which is merely technical and largely non-controversial from a political point of view. Secondly, these procedures—and I urge the Government to endeavour to modify them in some way—have today resulted in there coming before your Lordships' House to be 911 amended a Bill which, when it is passed (as of course it will be) will put a heavy burden on commercial and industrial interests already hard-pressed at the present time.
As the noble Lord, Lord Bruce of Donington, has indicated, it seems that many of the amendments are largely incomprehensible; their elucidation in the context of the business of individuals, firms and institutions will undoubtedly need the expenditure of vast sums of money; and, once again, professional advisers, whether they be lawyers or accountants, will no doubt benefit substantially. The haste with which this Bill has been put together is well illustrated by a new clause which purports to deal with the relaxation—and I emphasise the word "relaxation"—of certain restrictions for private companies. I think it is Amendment No. 62. This new clause, ironically intended to induce some sort of relaxation, is over two pages long and has nine subsections, and one of these subsections comprises a sentence of about 320 words.
I doubt whether a search through the whole of the statute law of this country would unearth a sentence of more fuliginous obscurity. That phrase is an oft-quoted phrase of the late Lord Justice McKinnon in a dissenting judgment in the Court of Appeal in a famous trade mark case called Bismag v. Ambling, when, late in the afternoon, he was called upon to construe a clause of a mere 253 words in the Trade Marks Act. I am sure that if this subsection of the new Amendment No. 62 comes before the Court of Appeal it will also induce some kind of relaxing observations, as did the other clause before Lord Justice McKinnon. I must say that I am very pleased to see that the noble Lord, Lord Wedderburn, will be asking your Lordships not to agree with Amendment No. 62 which has come to us from the other place.
I must agree, however, that this Government alone are not wholly responsible for the unsatisfactory position in which your Lordships find yourselves. If I am critical of the Government, I am not in any way criticising the Ministers who have been dealing with the Bill. The noble and learned Lord the Lord Advocate has always been courteous and cogent in dealing with these intricate matters. As for the noble Lord, Lord Trefgarne, I am increasingly in admiration of his versatility and of his ability to grasp the essentials of complicated matters. I should also like to recognise the vast amount of work which has been done behind the scene by civil servants and others, particularly during the last Summer Recess, in dealing with the many representations that have been made to the Government about this Bill.
My Lords, as I have indicated, this Bill is basically highly technical and contains matters on which there should be the minimum of political controversy. However, the Bill is a remarkable example of legislation having to be conducted by second or third thoughts, thus leading to these most unsatisfactory results. In my view, of course, it was premature for the Government to have ever introduced another Companies Bill in this year, but I am not going to trace the history of the Bill as it left this House a much better Bill, as it went to the other place and as it has now come back with these amendments.
During the Summer Recess discussion still ensued, as 912 I have said, between Government departments and outside bodies, and new amendments arose even as late as this month. I suppose that in some ways the Government should be praised for being so flexible in these matters as to consider representations from outside bodies up to the last minute. But our parliamentary procedures, as I again emphasise, are ill-equipped to deal with a technical Bill of this kind, where the issues are non-controversial. I therefore again urge the Government to consider how these procedures may be modified to make them more flexible and helpful, particularly in regard to legislation of importance to British trading interests.
Therefore, my Lords, for a wide variety of reasons I am really appalled at the problems with which companies and their advisers will be faced in trying to understand whether much of this Bill has application to their business interests. Accordingly, I shall support the amendment moved by the noble Lord, Lord Bruce of Donington.
§ 3.37 p.m.
§ Lord Denham
My Lords, I think it might possibly be for the convenience of your Lordships' House if we were to take the Statement next, which I understand has been cleared.