COMMONS AMENDMENT (Hansard, 13 November 1989)

§ Lord Trefgarne
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 319. That brings certain provisions of the Bill into effect upon Royal Assent. The most important of these are in Part VI of the Bill on mergers. They are the new powers to accept undertakings to divest instead of making a reference, the temporary restriction on share dealings once a reference is made, and the improved powers for looking at so-called creeping acquisitions. These provisions are likely to prove of sufficient immediate use to warrant having immediate effect on Royal Assent. They do not need complicated commencement arrangements and will not impinge unfairly on business. I beg to move.

§ Lord Williams of Elvel
My Lords, I beg to move Amendment No. 319A. The reasons for this amendment are to introduce a relatively small delay in introducing Part I. Briefly, the reasons are: first, the comparative figures rule will require 1989 figures to be referred under the Dearing rules—the new rules—as well as the 1990 figures. This is going to mean that there is a problem for companies who have not prepared their 1989 figures under the new rules.
The second point is that presenting information—requires the appropriate underlying records to be in place. If we take the new definition of subsidiaries, or undertakings to be consolidated under the new definitions for a group—for instance, partnerships and other entities—the relevant records which would enable the 1989 figures to be adjusted would probably not be available because they are not currently subject to Companies Act rules. It has clearly not been possible to finalise plans for doing all this while the Bill has been progressing through Parliament and contantly amended.
Therefore, it seems to us that it would be sensible to have the commencement date for Part I delayed for six months, or indeed three months if that is the wish of the Government. It would at least relieve accounts made up to the two most popular balance sheet dates, which are of course the end of December and the end of March.

§ Lord Trefgarne
My Lords, in replying to the noble Lord's amendment, I can best and most shortly say that our position is that we are doing our best to meet the 7th Directive in a timely and prompt way. That is why we have the dates that we have in the Bill. If we were to agree to what the noble Lord is proposing, we would find ourselves departing a little further from the 7th Directive, and that would be regrettable. In the light of these considerations, I hope that the noble Lord will not press his amendment.

§ Lord Williams of Elvel
My Lords, I understand the pressure of time that the directive places upon us. Nevertheless, I am sure that this will create enormous difficulty, and I hope that the Government recognise the difficulty. If the noble Lord would like to intervene again, I would be perfectly happy to give way.

§ Lord Trefgarne
My Lords, I am grateful for your Lordships' permission to intervene again. I recognise the fact that companies will have to prepare prior year figures. However, I emphasise that we have received no representations on the point beyond that made by the noble Lord. Therefore we do not believe that there will be any real problem. The provision 1129 will apply only to the financial years after January, 1990.

§ Lord Williams of Elvel
My Lords, I am grateful to the noble Lord. My advice comes from the Institute of Chartered Accountants. If it has not made representations and nor have any of the major accountants, it is their fault rather than anyone else's. However, I thought that the Government should consider the fact that inevitably there will be problems as a result of the new definition of undertakings to be consolidated.
If there is some way by some form of regulation that the Government can allow auditors and companies to alleviate the problems, I hope that they will take that route. However, I believe that as it stands the provision will cause many companies and auditors a great number of problems. I recognise that the Minister has said all that he can on the subject, and I beg leave to withdraw the amendment.