§ (1) Where any provision in the articles of association of a registered company is designed to restrict or limit, or has the effect of restricting or limiting, the proportions or amounts of the share capital of the company or of the voting power of the company which may be held or exercised by or on behalf of foreigners, or is other- 2145 wise designed to restrict, or has the effect of restricting, the interests of foreigners in the company or the control of the company by foreigners, an alteration of that provision shall not be of any effect, notwithstanding anything in any other Act, until it has received the written consent of the Board of Trade.
§ (2) The decision of the Board of Trade as to whether an alteration of a provision requires the consent of the Board under this Act or not shall be final and conclusive.
§ (3) This Act shall apply to any regulations or provisions in the nature of regulations affecting a company, not being a registered company, which can be altered by the company, in the same manner as it applies to the articles of association of a registered company.
§ Mr. PRINGLE
I beg to move, in Subsection (1), to omit the word "foreigners"["exercised by or on behalf of foreigners"], and to insert instead thereof the words "alien enemies."
In order to check the unseemly haste with which the Bills are passing through this evening, I feel it my duty to move this Amendment. This Bill, as was explained on Second Reading, is intended to restrict foreign interests in companies. It arises, I believe, out of the policy pursued by the Board of Trade in relation to the sale of alien enemy interests in certain British companies. In connection with these sales, apparently, the Board of Trade have made Regulations restricting the amount of the share capital and of the voting power which may be exercised by or on behalf of foreigners generally. The Amendment proposes to substitute for the word "foreigners" the words "alien enemies." I submit that it is not in the national interest that we should have a general restriction against all foreigners in relation to interests which they may hold in British companies. On the Second Reading of the Bill this question was raised, and on the general question of principle I do not think the representative of the Board of Trade had a satisfactory answer to give to us. Under this provision, interests in these companies can only be held by British subjects. All foreigners, 2146 not only alien enemies, but subjects of Allied countries and friendly neutrals, are equally excluded from placing their capital in these companies. That seems to be a very exclusive provision and a provision which is not calculated to benefit British industries. Apparently our doctrines as to the desirability of attracting foreign capital to this country have been altogether modified by the War. Before the War we understood it was advisable to get as much capital into the country as possible. It is true the War has shown that it has been necessary to deal with the capital invested here by alien enemies, but I do not think any case has been made out for checking the investments either of Allied capital or of neutral capital here. Consequently, I think the Board of Trade will be well advised to accept this Amendment.
§ The PARLIAMENTARY SECRETARY of the BOARD of TRADE (Mr. G. Roberts)
I appreciate the spirit in which the hon. Gentleman has approached this subject, and I hope to be able to persuade him to withdraw his Amendment, or at any rate not to pursue it. The hon. Gentleman is aware of the fact that the firms dealt with under this Bill are those that have been dealt with under the Trading With the Enemy Act, and it provides that where shares previously held by enemy subjects have been sold to British subjects provision should be made in order to prevent the relapse of those shares under enemy control. It may be, of course, that my hon. Friend is not aware of this further fact. This Bill does not exclude entirely foreign interests in these companies. It is a restrictive and not merely an exclusive proposal. When these companies are dealt with under the Trading With the Enemy Act, the Board has required to be inserted in the articles of association of these companies provisions whereby the control shall be retained as British, and the holdings that can be held by foreigners are limited to 25 per cent. I take it that after that explanation my hon. Friend's objection will be at least modified, and that it will not be necessary to pursue the subject further.
§ Mr. WATT
I do not think the hon. Gentleman has disposed very satisfactorily of this Amendment. This Bill puts foreigners at a great disadvantage in respect to holding shares in British companies, and the idea which my hon. Friend (Mr. Pringle) and myself had in proposing 2147 this Amendment was that that disadvantage should be limited to our enemies, and that those foreigners who are our Allies or neutrals should not be so disadvantaged. I do not think the observations of the Under-Secretary have in any way clearly shown why these Allies of ours and neutrals like America should be placed in the same category as our enemies in this respect. He said the measure dealt only with companies that have come under the Trading With the Enemy Act, and that it was with a view to preventing the control of these concerns again getting into German hands; but may I point out that there is quite a possibility that the German control could be rehabilitated by means of British holders, and that therefore his measure does not prevent that? Still, I think he ought not to make his Bill in this particular so sweeping that all foreigners should suffer this disadvantage. Will he explain why Frenchmen and Russians and other Allies should be put to this disadvantage? I hope he will reconsider the question. While the Bill was before the House on Second Reading there was a widespread feeling that our Allies should not be treated in this way, and, as my hon. Friend (Mr. Pringle) has 2148 said, the idea of all parties, and particularly of the Tariff Reformers, has been to bring capital into this country, but by this. measure foreigners will be precluded from doing that. I think the trading community of the country will suffer considerably unless our Amendment is. inserted.
§ Amendment negatived.
§ Clause ordered to stand part of the Bill
§ Clause 2 (Short Title) ordered to stand part of the Bill.
§ Bill reported, without amendment; read the third time, and passed.
§ The remaining Orders were read, and postponed.
§ Whereupon Mr. SPEAKER, pursuant to the Order of the House of the 12th February, proposed the Question, "That this House do now adjourn."
§ Question put, and agreed to.
§ Adjourned accordingly at Two minutes before-Eight o'clock till to-morrow (Friday), pursuant: to the Resolution of this House this day.