§ Mr. Cryerasked the Secretary of State for Trade if, in the light of the Peachey report, he proposes to introduce legislation to subject directors and company consultants to stricter legal obligations.
§ Mr. John SmithThe conduct of company directors is already governed by statute and common law. Proposals to strengthen the law were published in the White Paper "The Conduct of Company Directors", Cmnd. 7037, and form part of the Companies Bill which is currently under consideration in Standing Committee F. I am considering whether these provisions should be strengthened, but I should point out that the conduct described by the inspectors in their report on 177W Peachey Property Corporation Ltd. would appear to have been unlawful under the existing law. To prevent a recurrence of situations of that kind, the first essential is that directors of companies should examine whether they are meeting all their responsibilities within the existing legal framework, and in particular take steps to ensure that internal financial control systems are adequate.
I do not consider that it would be appropriate to legislate on the contractual relationship between companies and consultants. It is for the directors to determine whether particular expenditure is in the interests of the company.
§ Mr. Cryerasked the Secretary of State for Trade if he will introduce legislation to limit gifts to and from company directors to a maximum of £30.
§ Mr. John SmithNo.