Professional Qualifications Bill [HL]

Lord Palmer of Childs Hill Excerpts

2nd reading
Tuesday 25th May 2021 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, in a debate on professional qualifications, I need to declare that I am yet another fellow of the Institute of Chartered Accountants in England and Wales, although long retired from general practice. I compliment the noble Lord, Lord Bilimoria, and the noble Baroness, Lady Noakes, on their very interesting comments. I hope that, during the passage of the Bill, we can develop those comments, as I think there is room for co-operation on amendments. The noble Baroness said that this is not a Conservative Bill; I think there will be a number of noble Lords who would like to deny parentage of it as presently drafted.

First, I maintain that the professional and business sector provides high-value and good-value jobs. The UK is a major exporter in this sector, as sadly we are no longer the industrial giant of past years. I well remember being delighted, as a partner in a professional firm of chartered accountants, on the fairly rare occasions when a new client actually manufactured anything—most were pushing pieces of paper around from one place to another.

What are the priorities on the recognition of professional qualifications? It must be a flexible approach. I see this as giving UK professional bodies autonomy and flexibility over who they admit as members and on what terms. An authoritarian Government are not needed.

The noble Lord, Lord Sikka, was less than complimentary about the accountancy profession. I did not really recognise his description of what is happening; every profession has things about which some of its members say, “I wish some members of my profession did not do that—or they should not.” The noble Lord spoke about audit; there are a lot of conversations within the accountancy profession about audits and who should do them, and about the fact that large company audits are the province of a very small group of firms. I know that professional bodies are very interested in this, although it is outside the scope of this legislation.

The role of the UK Government is actively to promote professional mobility and recognition by striking recognition agreements with other Governments, particularly our major trading partners and—after the unnecessary Brexit—EU member states. UK professional bodies, without interference from the Government, should be free to recognise incoming professionals where they—not the Government—deem the level, scope and content of their qualification to be equivalent. But they should not be obliged to provide a bridging aptitude test where they do not reach that equivalent.

The experience of my professional body is that there will be times when the UK Government’s involvement will be necessary for agreements between UK and non-UK professional bodies, as happens. Reluctantly, I note that government involvement might be needed, as a recognition agreement may need approval by that profession’s regulator. For accountancy, as has been mentioned, this is the Financial Reporting Council, which controls access to UK audit rights.

As we move beyond Second Reading, we need to consider conflicting forces in any approach to recognition agreements. We will want to be seen as open for business with the EU, despite Brexit, and open to the rest of the world, thus replacing what has been lost by exiting the single market.

However, there will be professional concern to recognise only those who have met all legal requirements. Audit, as has been mentioned, is a relevant case. I am informed that many overseas professional institutes want deals that include UK audit rights, but to date only two non-EU qualifications have ever been accepted by the Financial Reporting Council, both of which are no longer available to new students.

Of course, there are multiple professional bodies. I understand that, for instance, the Engineering Council—mentioned by other noble Lords—has been involved, with other professional regulators, in round-table talks with BEIS. Clearly, the issues will vary by profession: chartered accountants are not dentists, and dentists are not accountants. The requirements will be different, and very often known by the professional bodies and not so much by government departments. I get the impression that some UK professional bodies have been more involved with the Government than others, but with a basic requirement that the Bill covers both inbound and outbound professional qualifications.

The Bill has powers to amend primary legislation with secondary legislation; on Clauses 5 and 6, the Library briefing states that it expects a “large number”—that is an understatement—of amendments to a wide range of Acts. It has been argued that it seems “prudent” to take a power rather than to capture all the amendments in the Bill. Others might well say that it smacks of a half-baked pudding. It suggests we will get a number of SIs which will need careful parliamentary scrutiny. Indeed, the memorandum available this morning from BEIS has an overview of the Bill in sections: the first is to “revoke”, the second to “introduce”, the next to “enable”, the next to “maintain”, the next to “create”—then there is another “create”, another “create” and another “facilitate”. That is only the tip of the iceberg of the statutory instruments that will be needed in the course of this Bill. We have an albatross here, which the Government do not seem to be dealing with.

On grandfathering, the briefing also reports that the Government have said that revocation of the 2015 regulations will not affect the status of qualifications already recognised and that applications could be completed. Can the Minister say whether there could be a discrepancy in qualifications after a certain date if that procedure takes place?