Companies Act 2006 (Commencement No. 2, Consequential Amendments, Transitional Provisions and Savings) Order 2007

rose to move, That the draft order laid before the House on 8 February be approved. 10th Report from the Statutory Instruments Committee. The noble Lord said: My Lords, your Lordships will be aware that the Companies Act 2006 had a long history, both in its policy development and its passage through this House. The Act is a large one and its implications are far-reaching, and it is important that we ensure its provisions are brought into force in an orderly fashion if we are to maximise the benefits to businesses. In the context of the present debate, it might be useful to say something about our overall approach to the commencement of the Act. The Minister for Industry and the Regions, my right honourable friend Margaret Hodge, made a Written Statement in the other place on 28 February setting out, in comprehensive terms, the commencement timetable. On the same day, the Department of Trade and Industry published a consultation document providing further information concerning implementation, the issues involved and the proposed way forward. We hope that all stakeholders will wish to engage with us to help us make the implementation package as good as possible. A first commencement order was made in December 2006, commencing important provisions, facilitating electronic communications by companies and implementing EU obligations. The present instrument, the second commencement order, would come into force from 6 April this year, the common commencement date. It would commence further provisions that we felt it right to implement ahead of the main body of the Act. The draft order would bring into force Part 28 of the Act concerning takeovers. Throughout the passage of the Companies Bill, the Government made clear their intention to bring the provisions of Part 28 on takeovers into force at an early stage following Royal Assent. These provisions place the regulatory activities of the Takeover Panel within a wholly statutory framework. They will replace regulations which took effect in May last year and implemented the European takeovers directive on an interim basis while the Bill completed its parliamentary passage. Section 943 of the Act confers a rule-making power on the Takeover Panel. The rules on takeovers have long been laid down in the takeover code, which historically had no statutory basis. Yesterday, the Code Committee of the Takeover Panel adopted the necessary changes to the takeover code to reflect commencement of Part 28 of the Act. These will come into force on 6 April. The Takeover Panel has made a significant contribution to the competitiveness of UK financial markets over the past four decades. We are convinced that it will continue to do so within the new legal regime that underpins its activities. The draft order would also extend to Northern Ireland the availability of community interest companies—CICs. These are limited companies, with special additional features, created for the use of people who want to conduct a business or other activity for community benefit, and not purely for private advantage. CICs were introduced in Great Britain by the Companies (Audit, Investigations and Community Enterprise) Act 2004—the CAICE Act. There are now more than 700 incorporated CICs. It was always intended that CICs would be extended to Northern Ireland. The necessary secondary legislation was, however, never finalised. The Companies Act 2006 will introduce a single legislative regime for companies applying throughout the United Kingdom. The order seeks to apply to Northern Ireland both the relevant provisions of the CAICE Act relating to CICs and the supporting secondary legislation. In making this instrument, we rely on powers in the Companies Act to make consequential amendments, transitional provisions and savings and to commence the provisions of the Act. The consequential amendments provision—Section 1294—is subject to affirmative procedure. We believe that we are making common-sense use of this power. The draft order repeals or revokes redundant legislation, such as the interim regulations giving effect to implementation of the takeovers directive. It also updates references in other legislation to provisions replaced by the Companies Act 2006. The provisions of the Companies Act 2006 that this order would bring into force have been extensively debated during the passage of that Act. These provisions are self-contained and offer immediate benefits in terms of securing regulatory independence for the Takeover Panel and extending choice of corporate vehicles. We think that there is a good case to give early practical effect to the takeovers and Northern Ireland CICs’ provisions which the draft order is designed to do. I beg to move. Moved, That the draft order laid before the House on 8 February be approved. 10th Report from the Statutory Instruments Committee.—(Lord Truscott.)