Sir HENRY DALZIEL(by Private Notice) asked the Chancellor of the Exchequer whether he is now in a position to make an announcement in regard to the control of capital issues?
Mr. CHAMBERLAINI have given very careful consideration to the various representations which have been made to me in regard to Defence of the Realm Regulation 30 F providing for the control of capital issues, and I have now, after consultation with Members of this House who have shown a special interest in the question and with my City advisers, come to the conclusion that, in view of the general movement towards the removal of restrictions upon trade and industry, I am no longer justified in attempting to maintain Government control over the distribution of capital for domestic purposes.
An amending Regulation is accordingly being prepared, which will exempt from the requirement of a Treasury licence all issues by companies established in this country where the issuing company certifies upon the prospectus that no part of the proceeds of the issue is to be applied to capital purposes outside the United Kingdom.
As regards issues by British companies for capital purposes abroad, and issues by or on behalf of persons resident abroad, the position is to some extent altered by the recent decision to set free 46 the foreign exchanges, but, until the full effects of that decision have become apparent and as long as the domestic demands for new capital both for trade and industry and for national purposes, are so pressing, I do not think it would be safe to remove the restrictions upon investment outside the United Kingdom. The new Regulation will, therefore, provide that no such issues shall be permitted except under licence.
The restrictions will not apply to rearrangements of existing capital where no new money is raised, or to the renewal of maturing securities except where the person responsible for repayment is a person resident outside the United Kingdom.
Mr. CHAMBERLAINIt is now being drafted, and I will get it passed as early as I can. The decision to which I have now come—not that contemplated a little time back—involves a new Order, and I am afraid it must take a day or two.