HL Deb 10 May 1988 vol 496 cc964-6

2.41 p.m.

Earl Alexander of Tunis asked Her Majesty's Government:

Whether they intend to allow listed public companies the option of supplying shareholders with a short form of their annual report and accounts.

The Secretary of State for Trade and Industry (Lord Young of Graffham)

Yes, my Lords, we announced on 25th March last our intention to legislate to allow all listed public companies to supply shareholders with an abbreviated version of their annual reports and accounts.

Earl Alexander of Tunis

My Lords, is the Minister aware that his Answer will be warmly welcomed by commercial concerns both large and small and especially by the smaller plc? May we hope that his Answer will encourage government departments to do the same?

Lord Young of Graffham

My Lords, I suppose that the Government's annual accounts are the autumn expenditure White Paper. I shall be perfectly happy to ask my right honourable friend the Chancellor of the Exchequer to provide an abbreviated version of those accounts but I suspect that there will be those who will object.

Lord Williams of Elvel

My Lords, can the noble Lord inform us whether the proposed short form report for which there is to be legislation will be in addition to the statutory annual report that companies have to issue according to the listing agreement; or will it be in lieu of that report? If it is in lieu of the report, will it contain all the information that small shareholders in particular will need in order to make their judgments about their investments?

Lord Young of Graffham

My Lords, companies will have to prepare the normal set of annual accounts which will be filed at the company's registration office and will be open for inspection in the normal way. We shall shortly be publishing a consultative document detailing the proposed regulations that will be issued. That will show that companies may be able to consult their shareholders to decide which form of accounts they should then issue. Of course it will always be possible for shareholders to receive the full form of accounts, either by application to the company or to the company's registration office.

Lord Rochester

My Lords, on a related point, will the Secretary of State agree that listed public companies should be encouraged to provide their employees with a short form of their annual report and accounts?

Lord Young of Graffham

My Lords, this is a matter that all listed companies—indeed, all companies—should take into account in order to have better relationships between all who work in the company.

Lord Glenamara

My Lords, does this change make companies less accountable to their shareholders? For a Government that are always referring to the accountability of local authorities, is this not an odd rule to make?

Lord Young of Graffham

My Lords, no. Companies will still be issuing full sets of accounts, but such has been the growth in numbers of shareholders over the last few years that the burden on many large ex-nationalised industries—the privatised companies—is such that they will be happy, if their shareholders so wish, to issue a short form of accounts. Should there be anything wrong in the accounts and should the auditors have to qualify in any event, then that qualification will of course be carried through to the short form of accounts.

Lord Bruce-Gardyne

My Lords, I must declare an interest, as a director of the TSB which is very much interested in this affair. Is my noble friend aware, in contradistinction to the question of the noble Lord, Lord Glenamara, that easily comprehensible shorter accounts are liable to make a company more, rather than less, accountable to its shareholders?

Lord Young of Graffham

My Lords, I am very happy on this occasion to agree with my noble friend.