Performance of Companies and Government Departments (Reporting) Bill

Part of the debate – in the House of Commons at 2:10 pm on 30th January 2004.

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Photo of Mike O'Brien Mike O'Brien Minister of State (Trade), Department of Trade and Industry, Minister of State (Trade), Foreign & Commonwealth Office 2:10 pm, 30th January 2004

I begin by expressing my thanks to my hon. Friend Andy King for entering into substantial discussions with my right hon. Friend the Minister for Industry and the Regions, who has responsibility for these matters, on developing the key proposals of this private Member's Bill.

As that consultation will have confirmed, the Government fully appreciate and support the general objectives that lie behind my hon. Friend's Bill. I believe that we all want business to make a full, positive and constructive contribution to Britain's society. Business is not just about jobs, wealth creation and delivering the goods and services that we expect—important though they all are; it is also critical to achieving our environmental and social objectives.

This Government set up the first major review of company law for more than a generation. I pay tribute to the members of the independent steering group, to those who were involved in the CORE coalition and to the hundreds of people who took part in the work of examining company law. We are working hard to bring forward a Bill, building on the review's recommendations. In the interim, the Companies (Audit, Investigations and Community Enterprise) Bill is in the other place. That is as tightly focused as its title suggests. It is designed chiefly to implement the recommendations of the post-Enron reviews, to allow for the creation of community interest companies and to improve the company investigation regime.

The first seven clauses of my hon. Friend's Bill deal with the operating and financial review—the OFR. The company law review rightly criticised the fact that company accounting and reporting remain essentially backward-looking and based on financial indicators. There are few statutory requirements to report on the main qualitative factors that underlie past and especially future performance, such as business strategies, a skilled work force or successful brands. The review recommended that companies of significant economic size should be required to publish an OFR as part of their annual report and accounts.