HC Deb 27 March 1963 vol 674 cc1408-27

7.45 p.m.

Mr. Diamond

I beg to move, in page 8, line 40, at the end, to insert: Provided that any advertisement, to which by virtue of this subsection section 5 (1) does not apply, shall require deposits offered in response to the advertisement to be accompanied by a statement that they are so offered and shall include an undertaking by the company that no deposit so offered will be accepted after the expiration of a specified period not exceeding one year after the date of issue of the advertisement.

Mr. Deputy-Speaker (Sir Robert Grimston)

I think that it might be convenient to discuss this Amendment with the Amendment in page 12, line 5, after "notice", insert: or with an undertaking required under section 10 (1)".

Mr. Diamond

I hope that we shall get the reciprocity which we naturally expect, having given the Government all their Amendments in such record succession, and that they will feel disposed to give us this small Amendment.

Clause 10 deals with what I might call the most sensitive part of the Bill. It deals with the problem of protecting proposed investors and proposed depositors at the point of time when a company, because it is a new company, has not had an opportunity of demonstrating its ability to carry on its business satisfactorily. By satisfactorily, I mean from the point of view of securing depositors. It is, therefore, right to concentrate on protecting depositors at that point of time.

The Amendment is an attempt to protect depositors as best one can. The form in which the Bill is drawn provides protection inasmuch as a company seeking a deposit which cannot by virtue of its newness produce accounts, produces instead a prospectus, or statement in lieu of prospectus, thereby giving an indication to the public of the kind of thing that it is going to do and of its make-up, capital structure and its financial soundness.

Time moves on, however, and although a company might at the point of time at which it issues its prospectus coincide, as I am sure it would do, precisely with the details in that prospectus, and although, therefore, anybody putting up money on the basis of a prospectus at that time would have an opportunity of knowing exactly what he was doing, this would not apply to somebody who was putting up money at a later date, by which time the circumstances may have altered but not sufficient time may have elapsed to necessitate the production of accounts. It is, therefore, this interim period in particular with which one is anxious to deal.

This is not a new problem—indeed few problems are new. This is a problem which was examined in a similar situation by the Jenkins Committee at paragraph 240. The conclusion reached by the Committee in paragraph 252 (c) is that no allotment of securities offered to the public should be permitted after the expiry of three months from the date on which the prospectus is first issued. The Committee was talking about shareholders and debenture holders, people who, as I have attempted to explain earlier, are not needing as much protection as a depositor.

The reasons given by the Committee appear in paragraph 240, the end of which states: we have been informed of cases in which securities for which such a quotation has not been sought have been offered to the public generally and have remained 'on tap' for an indefinite period in reliance on a prospectus containing information which may well have become obsolete or misleading. We think this is unsatisfactory and suggest that a general time limit of, say, three months, should be imposed. The circumstances in which the Committee was giving that advice were those of a company which does not have a quotation far the shares or debentures which are being subscribed.

As far as I am aware, no company has a quotation for its deposits. There is no market quotation for them. Therefore, we are in exactly parallel circumstances of a company, not having a market quotation, having issued a prospectus and people being invited to put up money on the basis of a prospectus which is correct at the time at which it speaks but which may cease to be correct for a later period.

The Jenkins Committee in its wisdom had no doubt whatever in advising on the length of period beyond which no subscriptions by way of shares or debentures should be accepted. The Committee's view was that the length of period should be three months. It took the view that one could not reliably allow a greater period than three months to elapse before checking the information to see that it was sufficiently accurate to justify a subscription by way of deposit.

My Amendment is more flexible than that. We say that the deposits so offered should not be accepted after the expiration of a specified period. We do not specify the period except to say that it should not exceed one year after the date of issue of the advertisement. That is a very flexible way of dealing with the matter.

We could have put down an Amendment suggesting three months, as the Jenkins Committee advised. I recognise that the advice of that Committee is not statute law. It is good advice, but the House has not yet had an opportunity of debating it nor the Government of letting us know their views about it. Nevertheless, it is clear from the evidence adduced to the Jenkins Committee that this is a difficult point. It is clear to anybody who is aware of the circumstances of the Bill and its provisions, and particularly to those of us who served in the Standing Committee, that this is the most difficult point at which to protect the depositor.

The Bill proceeds on the basis of supplying accounts. It supplies accounts so that a depositor will know, or be capable of finding out from those accounts, the strength of the company in which he proposes to deposit money. It is impossible to have such accounts for a new company. Therefore, one has to rely on something quite different—an honest bona fide estimate. Even an honest bona fide estimate, however, can be shown to be inaccurate after the passage of time in relation to subsequent circumstances.

Therefore, there must be a time limit to make the estimate a reliable guide to investment. I hope, therefore, that in these circumstances the Government will at long last accept an Amendment which is put forward, again from no partisan spirit but purely to strengthen the Bill.

Mr. du Cann

The hon. Member for Gloucester (Mr. Diamond) quite rightly described the position in relation to Clause 10, which permits a newly incorporated company, in the period of nine months following its incorporation, to advertise for deposits if, instead of delivering accounts, it delivers a prospectus or similar document. The reason for this provision is simply that the company would not be able to deliver accounts as it could not comprise a profit and loss account covering a period of six months.

We had substantial discussion of this situation during the Committee stage and it was refreshing to me, for various reasons which I need not go into now, to find that there was entire acceptance, on both sides of the Committee, of the point that it would be unreasonable to prohibit newly incorporated companies from engaging in business provided that they gave the appropriate information. We agreed also that the likelihood was that new companies would probably wish to give slightly more information than that which they might feel ordinarily obliged to provide had they been in business for some time. I am sure that all that is right and appropriate.

In Committee, the hon. Member for Gloucester made some of the points which he is now making, although his Amendment tonight raises a new point. The hon. Member has referred in particular to the Report of the Jenkins Committee and has made the point that the danger against which we wish to seek to protect depositors is that they should not make deposits on the basis of information which is out of date.

I should like particularly to refer to the paragraph of the Jenkins Report to which the hon. Member alluded. He quoted the words of the fourth line from the end of paragraph 240: and have remained 'on tap' for an indefinite period". Perhaps the House will be good enough to remember those words for a moment. The hon. Member then quoted the last two lines: We think this is unsatisfactory and suggest that a general time limit of, say, three months, should be imposed. The hon. Member was good enough to say—indeed, he and I have mutually discussed and complained, if that is the right word, about this previously—that the House has not yet had an opportunity to discuss the Jenkins Report and express a view upon it, even if many of us in various ways accept different portions of the Report.

There are, however, two aspects of paragraph 240 of the Report to which I should like particularly to draw the hon. Member's attention. The first is that the Jenkins Committee's suggestion of a three-month period is in the nature of a suggestion—"of, say, three months". The Committee could, presumably, although I agree that it did not do so, equally as well have said "say, nine months". The Committee was not suggesting any fixed and definite period. It was drawing attention to the real evil here, and that is that securities—and I would ask the House to be good enough to remember these words— have remained 'on tap' for an indefinite period". 8.0 p.m.

That is not the situation here. We have, I suppose, to judge, first, whether or not three months is an appropriate length of time. Second, we must recognise, and recognise at once, that the situation which we are discussing in relation to Clause 10 is not on all-fours with that paragraph, because securities in the sense of deposits could not remain open to the public for an indefinite period, for there must be accounts within the period of nine months. I agree that it is a matter of judgment whether one chooses six or whether one chooses nine or whether one chooses three months. We have thought it right—and the Board of Trade does have, I think it is fair to say, great experience in these matters—to take this period of nine months, and regard it as being the most practicable period one can arrive at. But I hasten to reassure the hon. Gentleman that there is no question of securities being available for an indefinite period. I hope that he will feel that goes some way towards answering his point.

The hon. Gentleman has fully described the effect of his Amendment and I shall not go over it again in detail, but I should like to say that, the object of the Amendment being, as I understand it, to try to ensure that a person does not make a deposit on the basis of information contained in a prospectus which is out of date, I have every sympathy with that object. I think it important. On the other hand, one cannot help feeling that perhaps it is true to say that cases where this is likely to apply would on the whole be exceptional. I want him to understand that I take his point seriously and that I am endeavouring to establish the fact that this would be the remarkable rather than the usual case.

Having said that I express sympathy, I suppose that the hon. Gentleman will quite rightly want to know what I am prepared to do about it, to what extent I am prepared to give practical expression to my sympathy. He will recall that during the discussions we had in Committee I promised to look into the three months point which was raised then. That we have done, and, as I have already indicated, we came to the conclusion that the way the Bill was drafted was just about right. I hope the hon. Gentleman will accept that that was the result of a substantial amount of thought. I want to go on to say to him what it is we are endeavouring to do to achieve his objective in the Bill.

I come back to what I was talking about earlier. Clause 10 (3, a) requires any newly incorporated company which has issued an advertisement on the basis of a prospectus to deliver audited accounts within nine months after the date of its incorporation. In other words, we are saying accounts will be available at the earliest possible moment. So, therefore, we are ensuring that this information will be on the file and will he available—I will say more about it—as soon as it is practicable to do that.

We are shortly to discuss Amendments standing in the name of my hon. Friend the Minister of State to Clause 11. I do not wish to make reference to those in detail at this moment, but the House may remember that in Committee we had substantial discussion at the option of my hon. Friend the Member for Torquay (Mr. F. M. Bennett), whose intervention on this point was so valuable, and at the option of the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison), and it was suggested that it was just not good enough to provide that the accounts should be made available to those who actually made deposits, but they should be made available to all those proposing to make deposits with the company. It is not practicable for everyone to come to London and go to the Board of Trade to see the registrations and so on.

I suggest that the situation is completely altered by these Amendments, for the prospective depositor—if I may use that phrase, although we are not using that wording, as my hon. Friend may have noticed, and for good reason—now can get up-to-date information which he was not in a position to do before.

It is perfectly true that that leaves us with the position—I make a joke of it but I want the hon. Gentleman to understand that I follow his point—of, say, a chap who goes into a fish and chip shop and finds his fish wrapped up in a very old newspaper, a year old, let us say—I think this is the kind of case the hon. Gentleman had in mind—with a coupon in it, and he fills it in and makes his deposit on the basis of information given in that way. Does the hon. Gentleman wish to make a point?

Mr. H. Lever

I was merely saying that to have that experience one would not necessarily have to have a cutting from a newspaper in a fish and chip shop. One can get it from the current issues in the Members' Tea Room.

Mr. du Cann

I really cannot accept that from the hon. Gentleman the Member for Manchester, Cheetham (Mr. H. Lever) because I go into the Tea Room—indeed, I was there not very long ago for a quick moment—and I found the newspapers there very up to date. Indeed, they were what I may call "railroading" along in the sense of being up to date. However, that is another subject and I had better not go into that now.

The point I was making particularly is that this, of course, could happen, not only in relation to newly incorporated companies but in relation to advertisements put in by companies which have been established for a very long time. The logic, therefore, is that if one wants to try to do something about this in one case one has to do something about it in the other case also. This was not suggested by the hon. Gentleman. I understood that his interest was peculiarly directed towards newly incorporated companies. I agree that they are especially important, but I cannot help feeling that in general it is thoroughly unlikely that one would fill up a coupon in the way which is suggested without making some positive attempt to get up-to-date information. One cannot force that now. There is nothing in the Bill which does that and there is nothing which could be in the Bill to do that.

During the whole of these debates, on Second Reading, in Committee, and now—though not to the same extent now—we have made the point that investors must protect their own interests by endeavouring not only to get advice, which was one point we talked on particularly, but to get the latest information, and we should do our very utmost to see that that information is available for them. I hope, therefore, that the hon. Gentleman may feel that we are endeavouring to meet his point to the best of our ability.

Mr. Diamond

Perhaps I misunderstood the position, but is it not that accounts to be rendered are to be rendered within nine months of incorporation of the company? It will take, therefore, some little time for those accounts to circulate, shall I say, before they get to everybody who may want to see them. Perhaps there will be another short period. The Amendment I propose refers to a maximum of 12 months. What the hon. Gentleman has referred to is accounts available some time after nine months. We need not argue about the difference between nine months plus and 12 months, but we are still left with the new company about which no information is available till its first statement the new company about which no information available for nine months plus.

Mr. du Cann

Yes, that is perfectly true, but the accounts of any company might necessarily be a little out of date. One cannot get them as hot off the presses as all that.

Mr. Diamond

Why not?

Mr. du Cann

I would suggest that in the case of a newly incorporated company it is unlikely to have transacted any great volume of business and the accounts will be available after the nine months' period and perhaps before that. Perhaps therefore, the difficulty is not as great as imagined. What is abundantly clear, I think—that is why I made the point at the beginning of my remarks on the Amendment—is that the newly incorporated company would be anxious to get its accounts out as early as possible in order to indicate to the public its creditworthiness and general stature.

Another difficulty about this Amendment, I feel, is that it is probably impossible to police. That I find somewhat unsatisfactory. I do not think that it would be possible to check exactly what was happening in the way desired by the hon. Gentleman.

Mr. J. T. Price

The Treasury could do it.

Mr. du Calm

I hope that the hon. Gentleman the Member for Westhoughton (Mr. J. T. Price), who, I know, has a great regard for the Treasury, has an equal regard for the Board of Trade, and he will appreciate that policing this is a Board of Trade matter, not a Treasury matter. If we were to let the Inland Revenue and the Customs and Excise loose on the whole problem perhaps they might be successful, but I doubt it very much.

I see the point which the hon. Gentleman is making. It has relevance even though it is a little exceptional. I do not think that the Jenkins Report is quite a parallel, for the reasons which I have endeavoured to explain. I hope that if the House agrees that it would be appropriate to accept the Amendments to Clause 11 the hon. Gentleman and others interested in this point will feel that we have done our best to meet them in another way. I am certainly willing to say that we will consider very carefully everything that the hon. Gentleman has said, but my first feeling is that we are dealing with the situation, and dealing with it satisfactorily.

8.15 p.m.

Mr. J. T. Price

The Economic Secretary has just made an interesting and good-natured statement, after his usual fashion, but he has not quite lived up to his reputation for either lucidity or logicality in the arguments that he has put to us.

It has been briefly and fairly argued by my hon. Friend the Member for Gloucester (Mr. Diamond), without unduly punishing the question, that this period of grace ought to be admitted now in the Bill and that deposits should not be accepted after the expiration of a reasonable period, the period being left in doubt and to be defined later.

The difference in principle as between the Minister's attitude and ours is as follows. Companies registered under the Companies Act which are seeking to raise new equity capitals, debentures, or some other form of capital are under a statutory obligation to provide a prospectus in great detail about their prospective operations, the amount of capital and the people concerned with the company, so that those who are asked to entrust money to them shall have the fullest information before doing so.

We are not dealing with the same proposition here. I have to keep returning to the point—not, I hope, with any tedious repetition—that this is a Bill to protect depositors who are being invited to deposit money on loan with companies which advertise for money on loan, whether merchant bankers, hire-purchase companies, or all the other categories which are seeking to get their hands into the pockets of the public for their own purposes. I am not saying that these are illegitimate purposes. Many are perfectly reputable and legitimate. Nevertheless, many companies are competing in the market for the money of people who have surplus funds to lend.

In dealing with this, we are seeking to put restraint upon the types of blandishment and advertisement by which the public are being induced to part with money to companies which are not worthy of their confidence. This is a further sanction that we suggest to deal specific- ally with new companies, by which I mean companies which have not so far established themselves as to comply with the requirement in another part of the Bill that they should deposit their accounts with the Board of Trade in the usual way.

Demonstrably, a person who is prepared to lend substantial sums of money to a new company when he sees an advertisement in a newspaper is not in the same position of security as one who is lending a similar sum of money to an old-established company whose accounts are well known and whose operations are secure. Therefore, it is inadmissible for the Economic Secretary to argue that the provision in relation to the advertisements provides also that accounts shall be produced and that at some time in the future, after perhaps six or nine months, the accounts of the new company will be available for inspection by the person who has lent money. What good is that information after the person has made his investment? All the restrictive provisions and sanctions in our present legislation are designed to protect people so that they may have full information before they lend money to public companies which are seeking to raise equity and other forms of capital.

The raising of loans is not in the same category. If the case was strong for requiring under the Companies Act that the fullest information should be provided by new companies, the case is even stronger for greater safeguards to be provided where people are lending money on deposit and are not covered by the safeguards of the Companies Act. This is a serious, valid and major point which my hon. Friend, not wishing to weary the House, perhaps did not labour as much as he could have done.

Where a company is starting in business with purely nominal capital to satisfy the requirements of the Companies Act, but it is seeking to raise a major portion of its future resources by loans from a credulous public very often too ready to pour money into all kinds of dubious concerns which are capable of drafting seductive advertisements, and where the Bill gives no adequate protection, I seriously submit to hon. Members opposite that we are entitled to argue that the paragraphs in the Jenkins Report which have been quoted by my hon. Friend the Member for Gloucester in support of the Amendment are particularly valid when they are tied to the special conditions of depositors who have not the protection of the Companies Act, in another sense.

The Minister, whom I followed with the closest attention, conveyed the impression that the advertisements of hire-purchase and merchant banking concerns to the public are published prospectuses in the same way as advertisements for raising equity capital under the Companies Act. That is not the case. Consequently, I believe that we have made the case that there should be some added safeguards in this legislation so that advertisements are not allowed to run for an indefinite period with the money rolling in until accounts are produced in six, nine or twelve months' or two years' time.

I reinforce what I have said in general principle by a recital of what occurred in the case of the MIAS group of companies in Manchester, which defrauded the public of what is known to be about £750,000 and was probably a great deal more. In operations over nearly four years it never published a single account of any kind.

The group was in breach of the Companies Act. It published no accounts and I see no sanction in the Bill which would improve the situation with regard to the publishing of accounts. The intention of the Bill is proclaimed to be that of protecting investors against exploitation by crooked people. If investors are to lend money in response to advertisements, they should have the fullest information and there should be a time limit to the period of advertisement.

Mr. du Cann

I apologise if my explanation was not as lucid as it should have been. I drew the attention of the House to Clause 10 (3, a), which indicates that a balance sheet must be provided. The hon. Gentleman has quoted the case of the MIAS Group. Had this Bill been in operation, that group would have been obliged to lodge the accounts. I only answer that particular point. It is clear that if this Bill had been in operation then there might not have been the same trouble.

Mr. Price

I quite agree, and I am obliged to the hon. Gentleman for bringing my attention to the point. I had my thumb on that Clause. I agree that in future there will be this safeguard as far as established companies are concerned, but there will be none for those lending money to new companies unless we amend the Bill. If I spoke much longer I do not think that I could make the point clearer. It is a matter of judgment. We want additional safeguards.

Nevertheless, I have a little doubt in my mind even about the form of words used in this Amendment. It says: … shall require deposits offered in response to the advertisement to be accompanied by a statement that they are so offered and shall include an undertaking by the company that no deposit so offered will be accepted after the expiration of a specified period not exceeding one year after the date of issue of the advertisement. What may be legitimately criticised in that form of words is that new companies seeking to get a footing in the money market by raising public deposits on a large scale often enter into lengthy periods of extensive advertising in tile provincial press. A company may have advertisements published weekly in a newspaper for six months or more. One may ask how long the period of advertisement should run. Will this cover a series of advertisements? One cannot assume that there will only be one advertisement. There may be a whole series of them.

We are on a very fair point here. We spent much time upstairs arguing the technicalities of the Bill and we have had few concessions from the Government. There are times when one feels that the diligence of hon. Members who have applied themselves to this Bill in a non-party manner should be more adequately recognised. This is a fair proposal, which would strengthen the Bill, and I hope that the Government will yet see fit to accept the Amendment.

Mr. H. Lever

The Economic Secretary has been exceedingly lucid and courteous throughout, running in harness with the Minister of State, whom we also respect for his consideration. I understand that if a new company solicits deposits, for a period of at least nine months it is not obliged to deliver its accounts. During that period it can go on soliciting deposits from the public. I absolutely agree with the general tenor of what was said by my hon. Friend the Member for Westhoughton (Mr. J. T. Price).

The most devastating criticism of the whole Bill is that it is based upon what we believe to be the naïve view that, if we give would-be depositors proper information, that constitutes a safeguard. Indeed, the total safeguard offered by the Bill is that depositors have balance sheet information available. Whether they use it or not is a matter for discussion on Third Reading. The value of it can be disputed.

The whole core of the Government's case is that they are protecting depositors by ensuring that they get adequate information. That is certainly the case, so long as it is not a new company. If a new company is involved, the Bill will not apply practically for nine months and the depositors in that period will be unprotected. The Government are relying on information, claiming that information is the only real protection that we can give. How can they allow companies to solicit deposits from the public before they are in a position to give that information?

When the Minister says that it is a new company, a child, as it were, in these matters, and cannot have a balance sheet until it has traded for a year and hence cannot give the information which the older companies are forced by the Bill to give, the answer is that if the Government's view is right and has any substance—that the public can be protected by enforcing this flow of balance sheet information—no company should be allowed to solicit deposits from the public until it is in a position to give the public the kind of assurance upon which the Government rely for the protection of the public.

It is not I who say that the balance sheet is an adequate protection. For reasons which I hope to elaborate on Third Reading, I do not think that it is. It is the Government who have said that this is the great protection for the public and the only way in which depositors can be protected. In those circumstances, the Government dare not hold the view they hold and allow companies to go before the public and take its money without being in a position to give this protection of balance sheet information.

What my hon. and learned Friend the Member for Kettering (Mr. Mitchison) wants to do is to tighten that a little. If there is any criticism of my hon. and learned Friend's proposals it is that they are too modest. He should have demanded that the new company not yet in a position to provide the safeguard of a balance sheet information ought not to solicit deposits from the public. Having made my point that the Government, having relied on information as the great weapon for the protection of the public, are the last people who should defend the position which allows new corn panics, because they are not in a position to give this information, to trade in this way—

Mr. Diamond

In support of what my hon. Friend is saying, may I say that it is my recollection—and I go only on my recollection—that the Finance Houses Association accepts this limitation and does not allow its members to seek deposits, no matter how substantial their capital, until they have been trading for a substantial period.

Mr. Lever

I am greatly obliged for what, as is usual from my hon. Friend, is a helpful intervention. I would have said that the minimum period of probation, as it were, before companies should be allowed to solicit deposits from the public would be one which enabled them to show a year's trading without having so solicited.

It would not be out of point to say a sentence or two about the dominant neurosis affecting the Board of Trade and, alas, by affection, the Treasury, and which has made the Bill as bad as it is. I will come to the other neurosis, the neurotic obsessions about appearing to be the endorser of companies seeking deposits from the public, later. The second obsession of the Treasury is that of bogus democracy, that any company, big or small, old-established or new-established, should be entitled freely to enter up soliciting deposits from the public.

I have often been chastised by my democratic hon. Friend the Member for Westhoughton for saying that this is not a business for small companies if we value the rights of the public and want the public to be able to avoid having deposits at risk. It is not a lack of democratic sympathy with my hon. Friend's views that makes me insist that they should be substantial companies which are taking or soliciting deposits from the public. The reason is not that I love rich companies and hate poor ones, but that rich companies are better receptacles for deposits from the public and more appropriate persons to canvas for deposits than are small, insubstantial companies. If we yield to spurious democracy and say that small companies should be allowed to compete with large companies for deposits from the public, the unsophisticated depositor runs the risk of being robbed because of the insolvency of the small company.

For these reasons, apart from the personal ones, I hope that my hon. and learned Friend will press this matter to a Division. I hope that he will not yield to the blandishments of the Minister. The Minister was exceedingly lucid, but he took up an untenable position.

8.30 p.m.

Mr. Mitchison

The hon. Gentleman began by assuring us that he would think this matter over, that he would give it careful consideration and that we could rely on him giving special attention to it. I would have found that a little more convincing if I had not happened to look at what occurred in Committee. This point, which is very short and limited, was made quite clearly by my hon. Friend the Member for Gloucester (Mr. Diamond) in Committee. I have no fault to find with the hon. Gentleman's courtesy, which is impeccable, but in reply to my hon. Friend he said: I have listened with very great interest to what has been said both by the hon. and learned Member for Kettering (Mr. Mitchison) and the hon. Member for Gloucester (Mr. Diamond). I understood that they both asked me to pay attention to these points and to have a very good look at them. I am certainly most willing to do that, especially at the latter point which, I am bound to say, had not occurred to me. Certainly I can give the Committee that assurance, and I do so willingly."—[OFFICIAL REPORT, Standing Committee A, 14th February, 1963; c. 409.] The point in question which had not occurred to the hon. Gentleman, and to which he was going to devote particular attention, is the point that we are now considering.

Mr. du Cann

With respect to the hon. and learned Member, I think that he missed the part of my speech this evening in which I dealt with this point. I said that I remembered very well this earlier Committee discussion. The point in this Amendment is slightly different from the point we discussed in Committee. The point we discussed then was whether we should narrow the period from six months to three. We had considered that and thought that we had the matter right.

Mr. Mitchison

The hon. Gentleman's recollection may be very clear, but I have the Committee proceedings before me, and what my hon. Friend was referring to was the recommendation of the Jenkins Committee, which he quoted again today, under paragraph 252 (c). The question was the stale advertisement or the stale prospectus. This is the point that was under discussion there, and is the point raised by this Amendment. Though it is possible that the discussion has gone on to other matters—all, of course, within the rules of order—this is the substantial point, and, with respect to the hon. Gentleman, is exactly the point that my hon. Friend raised, in exactly the same way and on exactly the same grounds, in Committee, and we are not content with the further consideration which the matter ought to have received, and no doubt did receive, by the hon. Gentleman at the time.

I go from that to the merits of this matter, and this is a very narrow point. It relates to a small minority of cases. It may well be that the Amendment is, or is not, properly drafted, and that it ought to cover rather more or rather less. I am not concerned about that. What I am concerned about is the obvious intention of the Amendment, which is to carry out in this respect the kind of matter which the Jenkins Committee recommended in a slightly different context.

If the hon. Gentleman said that a year was too long, or that there ought to be a further definition of what is meant in this context by the issue of an advertisement, or anything of that sort, I should not have quarrelled with him, provided he had accepted the matter in principle. But when we came to the principle of the matter, all he said was, in effect, that there was no need to bother too much about the advertisements because the information would be available in the form of accounts.

I do not know how often that has been said by the Government. I do not know why they put in a Clause about advertisements. That appears to be the foundation of the Bill, and yet whenever they are asked to do anything about advertisements they hop rapidly from one foot to the other and say that the advertisement may not be much good but that it will be all right by reason of the accounts. How many times have we had to say that the unsophisticated depositor cannot be expected to see the faults of advertisements—which are what he acts on—by looking at accounts which he may not have asked for and will not understand when he sees them? This is such a silly excuse that I have become sick of hearing it again and again.

The Government must know that all this business about the protection of depositors is pretty illusory, and that at the end of the day what will be done by the Bill is very small beer. But when we make small suggestions as to what should be done, the only answer the Government have is the one which

they have put forward time after time. People can say what they like. They can say, "This Amendment is reasonable," and "That Amendment is not reasonable", but I have never yet met a Government that turned down every Amendment with such insignificant and wholly irrelevant arguments as those which have been put forward from time to time today.

It makes one wonder what they think discussions in Committee and on Report are for. What purpose do they think a legitimate and hard-working Opposition serves in matters of this kind? We could have been abusive about the Bill and criticised it much more than we have done, but at a very early stage we said that we would do our best to help the Government put some teeth into the thing. This is a very small tooth. It will apply in very few cases. It has been turned down on grounds which appear to me to be hopelessly inadequate. Therefore, we shall divide the Committee.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 119. Noes 155.

Division No. 83.] AYES [8.37 p.m.
Abse, Leo Fraser, Thomas (Hamilton) McKay, John (Wallsend)
Ainsley, William Galpern, Sir Myer Mackie, John (Enfield, East)
Allaun, Frank (Salford, E.) George, Lady MeganLloyd (Crmrthn) Mallalieu, J.P.w. (Huddersfield, E.)
Allen, Scholefield (Crewe) Gourlay, Harry Manuel, Archie
Awbery, Stan (Bristol Central) Griffiths, David (Rother Valley) Mapp, Charles
Baxter, William (Stirlingshire, w.) Grimond, Rt. Hon. J. Mason, Roy
Beaney, Alan Hamilton, William (West Fife) Millan, Bruce
Bennett, J. (Glasgow, Bridgeton) Hannan, William Milne, Edward
Blackburn, F. Hayman, F. H. Mitchtson, G. R.
Blyton, William Herbison, Miss Margaret Morris, John
Boardman, H. Hill, J. (Midlothian) Oliver, G. H.
Bowden, Rt. Hit. H. W. (Leics, S.w.) Hilton, A. V. Parker, John
Bray, Dr. Jeremy Holman, Percy Pavitt, Laurence
Brockway, A. Fenner Holt, Arthur Pearson, Arthur (Pontypridd)
Broughton, Dr. A. D. D. Houghton, Douglas Pentland, Norman
Butler, Herbert (Hackney, C.) Hoy, James H. Price, J. T. (Westhoughton)
Carmichael, Neil Hughes, Cledwyn (Anglesey) Probert, Arthur
Castle, Mrs. Barbara Hunter, A. E. Redhead, E. C.
Cliffe, Michael Hynd, H. (Accrington) Rhodes, H.
Collick, Percy Hynd, John (Attercliffe) Ross, William
Corbet, Mrs. Freda Irving, Sydney (Dartford) Short, Edward
Craddock, George (Bradford, S.) Johnson, Carol (Lewisham, S.) Skeffington, Arthur
Dalyell, Tam Jones, Rt.Hn. A. Creech (Wakefield) Slater, Joseph (Sedgefield)
Davies, S. O. (Merthyr) Jones, Dan (Burnley) Small, William
Jones, J. Idwal (Wrexham) Smith, Ellis (Stoke, S.)
Delargy, Hugh Kelley, Richard Sorensen, R. W.
Dempsey, James Key, Rt. Hon. C. W. Soskice, Rt. Hon. Sir Frank
Diamond, John Lawson, George Spriggs, Leslie
Dodds, Norman Ledger, Ron Stewart, Michael (Fulham)
Duffy, A. E. P. Lever, Harold (Cheatham) Stonehouse, John
Ede, Bt. Hon. C. Lewis, Arthur (West Ham, N.) Stones, William
Edwards, Rt. Hon. Ness (Caerphilly) Lubbock, Eric Stross, Dr. Barnett (Stoke-on-Trent, C.)
Edwards, Robert (Bilston) Mabon, Dr. J. Dickson Symonds, J. B,
Finch, Harold McCann, John Taylor, Bernard (Mansfield)
Fitch, Alan MacColl, James Thompson, Dr. Alan (Dunfermllne)
Fletcher, Erie MacDermot, Niall Thornton, Ernest
Foot, Dingle (Ipswich) McInnes, James Wade, Donald
Wainwright, Edwin Willis, E. G. (Edinburgh, E.) Zilliacus, K.
Watkins, Tudor Woodburn, Rt. Hon. A.
Wilkins, W. A. Woof, Robert TELLERS FOR THE AYES:
Williams, W. R. (Openshaw) Yates, Victor (Ladywood) Mr. Ifor Davies and Mr. Whitlock.
NOES
Agnew, Sir Peter Gower, Raymond Noble, Rt. Hon. Michael
Aitken, W. T. Green, Alan Oakshott, Sir Hendrie
Allason, James Gresham Cooke, R. Osborne, Sir Cyril (Louth)
Ashton, Sir Hubert Grosvenor, Lt.-Col. R. G. Page, Graham (Crosby)
Atkins, Humphrey Gurden, Harold Pannell, Norman (Kirkdale)
Awdry, Daniel (Chippenham) Hall, John (Wycombe) Partridge, E.
Balniel, Lord Hamilton, Michael (Wellingborough) Pearson, Frank (Clitheroe)
Barber, Anthony Harrison, Col. Sir Harwood (Eye) Peel, John
Barter, John Harvey, John (Walthamstow, E.) Perclval, Ian
Batsford, Brian Hastings, Stephen Pickthorn, Sir Kenneth
Barter, Sir Beverley (Southgate) Hay, John Pott, Perclvall
Bell, Ronald Heald, Rt. Hon. Sir Lionel Prior, J. M. L.
Berkeley, Humphry Henderson, John (Cathcart) Proudfoot, Wilfred
Biffen, John Hendry, Forbes Ramsden, James
Bingham, R. M. Hiley, Joseph Rawlinson, Sir Peter
Bishop, F. P. Hill, Mrs. Eveline (Wythenshawe) Redmayne, Rt. Hon. Martin
Black, Sir Cyril Hill, J. E. B. (S. Norfolk) Renton, Rt. Hon. David
Bourne-Arton, A. Hirst, Geoffrey Ridley, Hon. Nicholas
Box, Donald Holland, Philip Ropner, Col. Sir Leonard
Boyd-Carpenter, Rt. Hon. John Hornsby-Smith, Rt. Hon. Dame P. Russell, Ronald
Braine, Bernard Howard, John (Southampton, Test) Sharples, Richard
Brown, Alan (Tottenham) Hughes-Young, Michael Shaw, M.
Buck, Antony Irvine, Bryant Godman (Rye) Sheet, T. H. H.
Bullard, Denys Jennings, J. C. Smith, Dudley (Br'ntf'd & Chiswick)
Campbell, Gordon (Moray & Nairn) Johnson, Dr. Donald (Carlisle) smithers, Peter
Channon, H. P. G. Johnson, Eric (Blackley) Speir, Rupert
Chataway, Christopher Johnson Smith, Geoffrey Steward, Harold (Stockport, S.)
Chichester-Clark, R. Jones, Arthur (Northants, S.) Stodart, J. A.
Clark William (Nottingham, S.) Kerans, Cdr. J. S. Studholme, Sir Henry
Clarke, Brig. Terence (Portsmth, W.) Langford-Holt, Sir John Summers, Sir Spencer
Cleaver, Leonard Leburn, Gilmour Taylor, Sir Charles (Eastbourne)
Legge-Bourke, Sir Harry Taylor, Frank (M'ch'st'r, Moss Side)
Cooper, A E. Lewis, Kenneth (Rutland) Teeling, Sir William
cordeaux, Lt.-col. J. K. Lilley, F. J. P. Thomas, Sir Leslie (Canterbury)
Corfield, F. V. Linstead, Sir Hugh Touche, Rt. Hon. Sir Gordon
Craddock, Sir Berestord (Spelthorne) Litchfield, Capt. John Turner, Colin
Crawley, Aidan Lucas-Tooth, Sir Hugh Turton, Rt. Hon. R. H.
Critchley, Julian McLaren, Martin Tweedsmuir, Lady
Cunningham, Knox Maclay, Rt. Hon. John van Straubenzee, W. R.
Curran, Charles McMaster, Stanley R. Walder, David
d'Avigdor-Goldsmid, Sir Henry Macpherson, Rt. Hn. Niall (Dumfries) Walker-Smith, Rt. Hon. Sir Derek
Deedes, Rt. Hon. w. F. Maddan, Martin Wall, Patrick
Donaldson, Cmdr. G. E. M. Marten Neil Ward, Dame Irene
du Cann, Edward Matthews, Gordon (Meriden) Webster, David
Emmet, Hon. Mrs. Evelyn Mawby, Ray Wells, John (Maidstone)
Erroll, Rt. Hon. F. J. Maxwell-Hyslop, R. J. Whitelaw, William
Farey-Jones, F. W. Maydon, Lt. Cmdr. S. L. C. Wills, Sir Gerald (Bridgwater)
Farr, John Mills, Stratton Wilson, Geoffrey (Truro)
Finlay, Graeme Miscampbell, Norman Woodnutt, Mark
Fletcher-Cooke, Charles Montgomery, Fergus Worsley, Marcus
Gammans, Lady More, Jasper (Ludlow)
Gilmour, Sir John (East Fife) Neave, Airey TELLERS FOR THE NOES:
Goodhart, Philip Nicholson, Sir Godfrey Mr. Ian Fraser and Mr. MacArthur.