§ 50 and 51. Sir John Mellor
asked the Chancellor of the Exchequer (1) whether the policy of the Government to require certain limitations of the holding of foreign securities in the case of investment trust companies extends also to other companies, firms, and persons; and whether he will state the nature of the considerations which influence the Government in this matter;
(2) whether the recent communication of the chairman of the Foreign Transactions Advisory Committee to the chairman of the Association of Investment Trust Companies, with regard to the limitation of foreign investments, applied exclusively to investment trust companies which were proposing to make new issues, or whether it had reference to the holding by investment trust companies of foreign securities generally?
§ Lieut.-Colonel Colville
The policy of His Majesty's Government is that any proposal belonging to certain defined types should be submitted to the Foreign Transactions (Advisory) Committee for examination, whether it originates with an investment trust company or any other company, firm, or person. To avoid misunderstanding I will repeat the various types of proposal; they are (i) financing on behalf of foreign Governments, States or other public authorities, (ii) offers of share or loan capital to the public which involve the remittance of funds directly or indirectly to any country outside the British Empire, (iii) offers (involving such remittances) made otherwise than to the public in respect of which permission to deal may be sought from the Stock Exchange, and (iv) the acquisition from foreign holders of large blocks of securities, including securities dealt with on the London Stock Exchange, with a view to their sale in this country either by an issue to the public or otherwise.
Proposals for raising capital which would or might be employed for the purchase of foreign securities fall under the second or third of these heads. Such proposals in the absence of special circumstances would not ordinarily be accepted, but I understand that applications made by investment trust companies to the committee are likely to be given favourable consideration by them 2749 provided that they receive such assurances as they require on the lines mentioned in the reply given to my hon. Friend on 16th March by my right hon. Friend the Chancellor of the Exchequer. My right hon. Friend regrets that even this degree of interference with the affairs of investment trust companies should be necessary, but lie cannot see how any further concession could be made to them consistently with the general policy of His Majesty's Government. The reasons for that policy were explained to the House on 7th April last, and he considers that they are still valid.
§ Sir J. Mellor
Is that reply intended to define the limits of Government policy in the matter, and will my right hon. Friend give me a specific answer to Question 51?
§ Lieut.-Colonel Colville
Only applications connected with the raising of new capital come before the committee. In regard to my hon. Friend's first supplementary, the answer that I have given is intended to define the way in which Government policy is applied.