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Lord Borrie: My Lords, I add my thanks to my noble friend the Minister, particularly for what he has said in relation to the amendments this evening. When I spoke in favour of such amendments on Report, I spoke fervently—possibly aggressively—in favour of freedom of the press and may, thereby, have implied that the Minister was in some way less in favour of freedom of the press than myself. I know that is not the
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case and that he has been a fine example of the Government being a listening government. I am most grateful for his amendments this evening.
Lord Davies of Oldham: My Lords, I am grateful for all sentiments expressed, particularly because we are considering the withdrawal of an amendment which we have not even reached yet. That is an excellent bonus. I also pay tribute to my Bill team, who have done an excellent job. I hope that the spirit that we have all got with regard to this Bill will follow all efforts with regard to the Olympic Games. Indeed, I never had any doubt that—as far as this House is concerned, and as is true of the whole nation—that we wish the London Games in 2012 to be the greatest success that we have mounted in sporting terms. It is a fine ambition and we have done a small amount towards achieving that end.
On Question, amendment agreed to.
Lord Davies of Oldham moved Amendments Nos. 2 and 3:
"(1A) But the exceptions in subsection (1)(a) and (b) do not apply to advertising material which is published or broadcast at the same time as, or in connection with, a report or information."
On Question, amendments agreed to.
Schedule 4 [London Olympic Games Association Right]:
Lord Davies of Oldham moved Amendment No. 4:
On Question, amendment agreed to.
Lord Davies of Oldham moved Amendments Nos. 6 and 7:
"(2) But the exceptions in sub-paragraph (1)(a) and (b) do not apply to advertising material which is published or broadcast at the same time as, or in connection with, a report or information."
On Question, amendments agreed to.
On Question, Bill passed, and returned to the Commons with amendments.
House adjourned at twenty-one minutes before ten o'clock.
Grand Committee
The Committee met at half-past three of the clock
[The Deputy Chairman of Committees (VISCOUNT ALLENBY OF MEGIDDO) in the Chair.]
Company Law Reform Bill [HL]
(Eighth Day)
Links to other Grand Committee Sittings on the Bill
The Deputy Speaker (Viscount Allenby of Megiddo): The time is just after half-past three. I need hardly remind your Lordships that if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bell rings and resume after 10 minutes.
Clause 492 [Senior statutory auditor]:
Baroness Noakes moved Amendment No. 317BZZA:
The noble Baroness said: This is a probing amendment, which would delete Clause 492(1). Clause 492(1) provides for the senior statutory auditor to be identified by the audit firm in accordance with standards issued by the European Commission or, if there are no such standards, in accordance with guidance issued by the Secretary of State or a body appointed by the Secretary of State.
How does the Minister see this working when the Bill receives Royal Assent? Will the Commission have issued standards under Article 28 of the directive on statutory audit by then? If it will have not done so, will he explain the process through which it intends to go? Will the Minister say something also about the consultation that the Commission will undertake before issuing standards?
The Institute of Chartered Accountants in England and Wales, which suggested the amendment, is concerned that interim guidance may have to be issued by the Secretary of State or, presumably, one of the bodies within the FRC. That would be a problem only if the UK's approach was not then aligned with the ultimate European solution.
The institute points out that International Auditing Standards already contain a definition of an "engagement partner". This appears in IAS 220, which deals with quality control for auditors of historical information. Would this definition be adopted for UK purposes? Perhaps more importantly, do the Government intend to back this definition for European purposes and help the Commission resist a uniquely European solution when an acceptable international definition already exists? I beg to move.
Lord McKenzie of Luton: Clause 492(1) states that audit firms should identify who is to sign an audit report as senior statutory auditor in accordance with standards issued by the European Commission or with
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guidance issued in the UK by the Secretary of State or somebody to whom he has delegated the task by order. If the Commission issues standards that address this point, firms will need to comply with them. If the Commission does not address this point, we believe that it should be possible to issue UK guidance, which could be issued by the Secretary of State, or the Secretary of State could delegate the task to somebody such as the FRC or one of its boards.
There will not be different UK and European descriptions of the senior statutory auditor, because UK guidance can apply only if there are no applicable Commission standards. In practice, we would issue UK guidance only if there was a need and it was seen that there would be a sustained period without European guidance. Even then, we would seek to ensure that the UK's guidance was consistent with any developing proposals in Europe.
More specifically on the questions that the noble Baroness raised, we believe that the Commission will issue standards in due course, but possibly not by the time this Bill comes into force. Therefore, we shall see a process involving the FRC and consultation to arrive at an appropriate definition. The point about having one that would be a good starting point for European standards, which we would seek to encourage Europe to pick up, is a good one and one that we would seek to take forward. On the matter of the IAS definition, it is a suggestion that we shall certainly look into as we have no interest in reinventing wheels if there is a suitable definition already available—particularly one that might be a good starting point for Europe. So it will probably not be issued by the Commission in time for implementation, but there will be consultation and the FRC will almost certainly be involved. We would want to have something that would become the European definition, if that was possible.
Lord Clinton-Davis: I thought for one moment that there was a sort of knee-jerk reaction whenever the European Commission was mentioned, so I am very glad to hear that the noble Baroness does not have quite the same views as the noble Lords, Lord Stoddart or Lord Tebbit. As has been pointed out, it is inevitable that the Government should take notice of what the European Commission says, but in the mean time it is right that they should negotiate about the particular points. I agree with the noble Baroness.
Baroness Noakes: The noble Lord, Lord Clinton-Davis, is waving a red flag in front of a bull, as my views on Europe are fully in line with those of the noble Lord, Lord Stoddart, and my noble friends Lord Tebbit and Lord Pearson of Rannoch. However, for the purposes of this amendment I was seeking clarity on how the measures would work in practice to affect accountants. I do have another speech on the completely unnecessary involvement of the European Union in matters that we could perfectly well deal with ourselves. But I shall save that speech for another day. I am very grateful for what the Minister has put on record and I shall consult the Institute of Chartered Accountants, but I am sure that it will be happy too. I beg leave to withdraw the amendment.
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Amendment, by leave, withdrawn.
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