§ 7.47 p.m.
§ Lord Beaverbrook rose to move, That the regulations laid before the House on 16th May be approved. [27th Report from the Joint Committee].
§ The noble Lord said: My Lords, these regulations set out the fees for the main statutory activities of the companies registration offices, which cover the incorporation of companies, the examination and registration of annual returns and other documents by the registrars of companies and the provision of inspection facilities for all documents kept by the registrars.
§ CROs received some£27 million in fee income in 1987-88 and there will be no change in the majority of existing fees, including fees for incorporation, change of name and annual returns. These latter fees have remained unchanged since the mid-1970s, even 228 though the demand for these services has increased substantially. This has been made possible by raising productivity at the CROs. Staff levels in recent years have been contained in the face of this rising demand. At the same time the quality of CRO services has been improved.
§ The fees that are subject to change are those for inspection of documents kept by the registrars. The£1 inspection fee was introduced in 1981, but for some time now the income from this service has fallen short of the costs of providing it. However, the overall income received by the CROs has been sufficient to cover this shortfall but the latest review of costs against income has forecast an overall deficit.
§ The CRO has a duty to recover, taking one year with another, all costs arising out of the regulation of companies as such, and the development of the law relating to them. Increasing the inspection fee to£2.50 would avoid this system of company regulation becoming a burden on the taxpayer and remove the element of subsidy which those using the search services have been enjoying. A number of related fees and charges have also been increased, all on the basis that the income received should fully cover the costs of the services involved, which is a Treasury requirement.
§ At£2.50 the fee still represents value for money. There are about 1 million companies on the register of companies and the fee buys the microfiche record of any one of these. On average, a company record comprises some five microfiche totalling 300 pages of information. This information includes incorporation documents, annual returns giving details of registered office, directors, shareholders, share structure, annual accounts—except for companies with unlimited liability—and other documents providing information, for example, about mortgage charges, changes in directors, company secretaries and registered office addresses.
§ In 1984, the Public Accounts Committee was critical of the state of the register because at that time, only about 40 per cent. of companies were up to date with the filing of their annual returns and accounts. The compliance figure is now just double that, at 80 per cent. This and other improvements in CRO services may have encouraged more inspection of company records which is reflected in a steadily increasing demand for this service. This provision of more complete and more up-to-date information emphasises the value-for-money aspect of the CRO search services. It has also improved the contribution CRO company information can make to stimulating business activity.
§ Your Lordships should note that the registrar of companies in England and Wales informed his user group last February that fees were being reviewed and that there was a possibility of an increase in the inspection fee. This information received wide circulation. The department also issued a press notice giving details of the proposed fee structure following the laying of the order before Parliament. I beg to move that the Companies (Fees) Regulations 1988, be approved.
§ Moved, That the regulations laid before the House on 16th May be approved. [27th Report from the Joint Committee].—(Lord Beaverbrook.)229
§ Lord Ponsonby of Shulbrede
My Lords, in the absence of my noble friend Lord Bruce of Donington, I should like to thank the noble Lord for so ably explaining the purpose of this order. At face value it seems that the percentage increase in the amount of fees is very high, but because the fees have not been increased since 1980, one realises that in real terms they are not as high as they might seem. I believe the noble Lord would have been pleased to know that the compliance figures are higher than they were in the past and that more companies are filling their returns more quickly. I am sure that this is a good thing and that noble Lords will look forward to hearing in perhaps seven years' time that the compliance figures are even better.
§ On Question, Motion agreed to.
§ [The Sitting was suspended from 7.50 to 8.45 p.m.]