§ Mr. Riddick
To ask the Secretary of State for Trade and Industry whether he has received reports from the Director General of Fair Trading under part II of the Companies Act 1989 on the effect on competition of the rules and guidance of qualifying and supervisory bodies for auditors; and if he will make a statement.
§ Mr. Redwood
Yes. The director general has submitted reports on the rules and guidance of all the applicants for recognition under part II of the Companies Act 1989, and I have placed copies of his reports in the Library. Further copies can be obtained from his office. Copies of the applications can be obtained from the applicants on request.
The director general discerns no significant anticompetitive effects in the rules and guidance of the qualifying bodies which have applied for recognition. He finds that a number of rules of some of the supervisory body applicants relating to the ownership and control of audit firms are likely to restrict or distort competition to a significant extent.
I would welcome comments on the director general's findings, and in particular on whether the rules he finds anticompetitive are nevertheless reasonably justifiable having regard to the purpose of part II of the 1989 Act. I should be grateful if any comments reached me by 15 May. Comments on any other aspects of the applications made under part II should also reach the Department by that date.