§ Order for Second Beading read.
The PARLIAMENTARY SECRETARY to the BOARD OF TRADE (Mr. Bridge-man)
I beg to move, "That the Bill be now read a second time."
961 In asking the House to assent to a Second Reading of this Bill, perhaps hon. Members would like a short explanation of what it seeks to achieve. At present, as hon. Members generally are aware, gas and water companies—the only companies to which this Bill refers—are subjected to a very close restriction in relation to their issues and the payment of dividends under the special Acts which constitute them. For example, in some companies preference capital cannot be raised at all under the Act; in others the issue of loan capital is limited to one-third of the total. During, and since, the War things which have occurred have led to a depreciation of the capital of these companies, and has made it almost impossible for them to get new capital subscribed under the conditions of their original Acts. The only way they could do this would be to come to this House in each case with a private Bill. We have been in consultation with the authorities of this House who deal with private Bill legislation, and they agree with us that it would very much simplify procedure and save the time of this House if some general measure like the present were passed: it would also save the companies expense in the matter of private Bill legislation. I should like to point out that what this Bill authorises the companies to do under various paragraphs of Clause I is to issue other denominations of capital, and under paragraph (e) to pay a higher rate of dividend or interest than they can do under their original Act; but not in excess of the total authorised capital, only with the consent of the Board of Trade, and only after an order had laid upon the Table of this House for twenty-one days, during which a resolution against it can be presented by Members of this House. I hope, subject of course, to any small alteration of detail of this Bill, which can be done in Committee, that the House will agree to the Second Beading of this measure.
§ Sir F. BANBURY
I should like to offer a few remarks on one or two points. As I understand the Bill, there can be an issue of debenture stock or money borrowed to an extent not exceeding half the share capital for the time being issued and paid up. I have seen the Bill to-day for the first time, and, therefore, have not had an opportunity of refreshing 962 my memory, but I think, as a rule, the amount of debenture stock which Parliamentary companies are allowed to issue is one-third of the capital, including the preference and ordinary stock.
§ Sir F. BANBURY
I am always rather concerned when an attempt is made—and many attempts, I am sorry to say, have been made during the last two years—to injure the property of debenture holders. Debenture stock is held by trustees and people of that description, and any attempt to depreciate that security ought, I think, to be very carefully watched, I do not quite gather whether the effect of paragraph (d) of Sub-section (1) of Clause 1 is to increase the proportion of one-third to one-half, to make it one-half of the share capital. On page 2 of the Bill there is a definite Clause which saysThe expressions 'stock' and 'stockholder' include shares and shareholders.I do not know whether that means that under this Bill debenture stock may be issued amounting to half the share capital or half the preference and share capital? What does it mean? If it is only to be half the share capital, I do not know that it will make very great increase in the amount.
§ Mr. BRIDGEMAN
I am not quite sure whether I appreciate the point of my right hon. Friend. The difference is only to change one-third to one-half as the amount of the debentures that can be raised in proportion to the total share capital, excluding debentures.
§ Sir F. BANBURY
Then the effect of the Bill-whether the drafting is quite right or not, does not matter—the intention of the Bill is to increase the amount from one-third to one-half. I am rather sorry about that. It is a dangerous matter. Perhaps the point is a Committee point which can be dealt with later. I have no comment to make upon the rest of the Bill until we come to the Schedule, which 963 I do not quite understand. The Schedule says2. If it is so provided in the resolution, the company may—(i) call in and pay off the stock, or any part thereof, at any time before the date fixed for redemption." Then it goes on—(ii) redeem the stock, or any part, thereof,and so on. Does this apply to what is about to be issued, or to the debenture stock already in existence I It is certainly not clear. It ought to be made clear, because if it does apply to debentures or preference stock already in existence I do not think this power ought to be given. The money has been lent on certain fixed terms. Perhaps my hon. Friends, before we get into Committee, will see that these things are all made quite clear. The only other point which remains is as to whether it is advisable to increase the power to issue debentures. I do not think it is very advisable even in the interests of the company. I can understand the temptation. I think some alteration in that will have to be made in the Committee stage; otherwise I have no objection to the Bill.
§ Mr. GRIFFITHS
May I ask how many municipal authorities and private companies have made an appeal for the introduction of this Bill in order to avoid coming with private Bills? We desire in this matter to protect the consumers against the private people imposing an increased price for gas.
§ Question put, and agreed to.
§ Bill accordingly read a second time, and committed to a Standing Committee.