A year on, and how should the accountancy profession measure New Labour’s success in government?
There is a consultation document on insolvency practitioner regulation and the government has said that when parliamentary time allows, it intends to introduce legislation to improve the effectiveness of the procedure for disqualifying unfit company directors.
This would allow a person who, under present law, could be subject to an application for a disqualification order instead giving an undertaking to the Secretary of State and which would have the same legal effect as a court’s disqualification order.
The government also wishes to make it easier for firms in financial difficulty to make voluntary arrangements with their creditors by introducing into the existing statutory framework the option of a moratorium. This would give the company’s management breathing space to put a rescue plan to creditors.
A draft bill on limited liability partnerships is due to be published shortly and the DTI select committee will be looking at this as part of its summer deliberations.
On joint and several liability, this may be a longer haul, given the views of the Law Commission on reform, but perhaps there can be a menu of change that will achieve the same result. That is, through an amended section 310, possibly on the lines of the Law Society’s ‘opt-in’ proposals, limitation by contract, statutory capping, and an amended law of contributory negligence.
On regulation, the profession has recognised it must meet the government’s objectives of ‘effectiveness, independence and transparency,’ as the Minister of State announced in the Commons 17 June 1997.
Any acceptable proposals on regulation are likely to make the profession more accountable to external interests, ensuring continuous independent review of standards, and procedures to maintain public confidence in the impartiality and effectiveness of professional regulation.
In short, New Labour is steadily moving forward on a programme of reform, which may take some time to fulfil, but which will be fulfilled nevertheless.
Stuart Bell is Labour MP for Middlesbrough and adviser to Ernst & Young.
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