Company Law Reform Bill [HL]

moved Amendment No. 223:"Page 196, line 22, leave out second ““accountant’s”” and insert ““independent examiner’s””" The noble Lord said: My Lords, in moving Amendment No. 223, I also speak to Amendments Nos. 238, 295 to 300, 492 and 507, which concern Clauses 427, 437, 467, 468, 769 and Schedule 9. We return to an issue that we discussed in Grand Committee on 7 March. I was very disappointed then, which is putting it mildly, at the Minister’s initial response. He said:"““Whenever we change the conditions for the audit exemption, we believe that it is important to have a public consultation to allow any interested parties to argue the case for the existing regime. In this case too, we would prefer to consider this change in the normal way. We will consider the merits of the proposal further, with a view to consultation if appropriate. If the results of consultation were to justify it, we would be pleased to make the appropriate deregulatory changes to the legislation””—[Official Report, 7/3/06; col. GC 283.]" As I said then, to talk about the need for more consultation after an eight-year gestation period is candidly absurd. The Minister was kind enough to be slightly more conciliatory in his closing remarks when he said:"““I have tried to acknowledge the issues that he has raised. If it will help, I will say more definitively that we will certainly consider this in more detail so that we may be able to respond in a way which helps him by Report; I understand that he is passionate about this. We will try to meet that in due course””.—[Official Report, 7/3/06; col. GC 284.]" That was a kind and generous offer. Now I see on the Marshalled List two groups of government amendments, led by Amendments Nos. 282 and 290 respectively, which, as I read it, are the Government’s considered response. I look forward to hearing from the Minister in due course but, in the meantime, we have retabled our amendments. I think that, on the last occasion, tabling one large group of amendments did not give enough focus to our discussions. We did that then because we imagined—how wrong we were—that what we were proposing was totally uncontroversial. So now we have split the group into two; the position of independent charity examiners, and the audit thresholds. This group deals with the position of independent charity examiners. The amendments seek recognition of the specialist position of independent charity examiners in relation to the accounts of charities. We have here a clear opportunity to bring the Bill into line with the Charities Bill, which has already passed through your Lordships’ House and is now in another place. Independent charity examiners fulfil the audit requirements of charities whereby, below a certain asset and turnover threshold, they are eligible for an independent examination of their accounts rather than the more costly accountant’s report. The noble Lord, Lord Phillips of Sudbury, speaking for the Liberal Democrats, the noble Lord, Lord Bassam of Brighton, speaking for the Government, and the Opposition discussed the merits of this regime in depth during the passage of the Charities Bill, and for several hours in Committee, and the Government came to the conclusion that a change was desirable. Indeed, the Government introduced amendments to this effect. It is therefore extremely frustrating to see now that the Bill does not match up to its counterpart and give the required recognition to independent examiners. It will therefore bar charities, at least for the time being, from using a specialist body that was created to fulfil exactly this purpose and that has been checked out and verified by the Minister’s colleagues in the Home Office. I am sure the noble Lord, Lord Bassam of Brighton, will be happy to confirm this. A charity is not like a commercial company. Its approach and objectives are quite different. Its supporters need different information from that required by shareholders in a commercial enterprise. This is recognised by the Charity Commission and the accounting profession, in that there is a special charities statement of recommended practice. After all this work, including the creation of a recognised professional association, the Association of Charity Independent Examiners, to control the development of the profession and to set professional standards and so forth, the Minister wants more consultation. I respectfully suggest that this would be superfluous. We have, as I said, already had eight years of a general consultation on the Bill, and much debate on this point during the passage of the Charities Bill. As the Minister said himself in Grand Committee on 7 March:"““Discussion of charities law is the right context in which to consider those thresholds””.—[Official Report, 7/3/06; col. GC 282.]" So, we have already discussed this issue in a charity forum, and the Government have decided that now is the time to link the Bill to the results of that debate. The amendments would allow small charities, for which provision is made in the Charities Bill for independent examination instead of an accountant’s report, to have the same eligibility in this Bill, thus avoiding the confusion and expense of overlapping authorities in this important area. Finally, when the Minister comes to reply, I hope that he will not rely on government Amendment No. 282. Please let us have not yet another general power which may or may not ever be used. Today is the day for joined-up government between the Home Office, on the one hand, for the charities and the DTI, on the other hand. This is a day for action. I beg to move.