HC Deb 09 February 1939 vol 343 cc1188-90

There shall be added at the end of Subsection (2) of Section eleven of the Currency and Bank Notes Act, 1928, the following words: The term 'person in the United Kingdom' shall not include a lank or company incorporated and having its principal place of business outside the United Kingdom by reason only of the fact that such bank or company has a branch or agency within the United Kingdom. and the said Sub-section shall be read and construed accordingly.—[Colonel Nathan.]

Brought up, and read the First time.

5.26 p.m.

Colonel Nathan

I beg to move, "That the Clause be read a Second time."

There is no question of principle involved in this proposal, but I hope I may be allowed to trace the history of this matter. When the 1928 Bill was introduced it read: Any person owning any gold. I emphasise the words "any person." When the Bill was in Committee Sir Laming Worthington-Evans, who was in charge of it, moved after the word "person" to insert the words "in the United Kingdom," as he said: To make it clear beyond a shadow of doubt that this Clause is not intended to interfere with the holding of gold in England on behalf of foreign banks or firms. That is the intention of the Clause. It is not quite clear and we are adding these words."—.[OFFICIAL 'REPORT, 17th May, 1928; col. 1389, Vol. 217.] I still do not think the matter is quite clear, and I have had brought to my notice real difficulties and doubts which arise. What is "any person" in the United Kingdom, or, alternatively, what is a person who is not in the United Kingdom in such circumstances as these? You have great foreign institutions and banks like the Société Generale de Paris, the Banque Beige, the Swiss Banking Corporation and the Guarantee Trust, which may hold gold in this country. They may hold it through, and in the custody in this country of, their English branches. If the Guarantee Trust hold gold in the hands of the Westminster Bank no question would arise; they would not come under the Bill. If they hold gold in the custody of the Guarantee Trust in London would they or would they not come under the Bill? My proposal is to clarify the position. I think it must be the intention of the Legislature than a branch of what is a bona fide bank abroad is to be treated as if it were part of the bank carrying on business abroad, and not as an independent person in the United Kingdom.

5.29 p.m.

Sir J. Simon

The hon. and gallant Member says that he has come across instances in which this question has arisen. Naturally he raises the point. I do not think I can agree that we should now embroider the provision passed by the House of Commons in 1928. It is true that at the time the language used was more general and simply said "any person," and that the Minister who was then dealing with the matter Sir L. Worthington-Evans, made the observations which the hon. and gallant Member has quoted, and proposed the insertion in the 1928 Act of the phrase "person in the United Kingdom." I do not think it would be wise or useful for the Committee to endeavour further in this Bill to provide as to how those words apply, because the hon. and gallant Gentleman has an instance or two in mind in which he thinks there may be a difficulty. The phrase "person in the United Kingdom" is fairly plain, and if there were a case of difficulty, I think the matter would be decided according to the circumstances of the case. I do not think we can safely put in a provision that the term shall not include a bank or company incorporated by reason only of the fact that such a bank or company has a branch or agency in the United Kingdom. If we did that, the next thing we should have to do would be to define what is an agency or a branch.

As far as I know, the provision in the law as it stands has not raised any difficulty ever since it was inserted. That provision, when it was inserted ten years ago, dealt, and naturally dealt, with persons in the United Kingdom. Every lawyer knows how that should be applied in the case of incorporated bodies. Every case where there is a person in the United Kingdom who is the owner is covered. If there be a case where the property is held but is not owned by a person in the United Kingdom, it is not covered. If there be a difficulty, it is rather a matter to be decided according to the circumstances of the case than by further Amendments to the Bill. I am afraid I cannot accept the Clause, but I will look into the point which the hon. and gallant Gentleman has mentioned, and if there be any real difficulty about it, I shall do my best to deal with it.

5.33 P.m.

Colonel Nathan

Does the right hon. Gentleman realise that in the case of a foreign bank owing gold held by its branch in this country, the statement which he has just made is an invitation to every such bank forthwith to withdraw its gold from this country?

Question, "That the Clause be read a Second time," put, and negatived.

Schedule agreed to.

Bill reported, without Amendment; read the Third time, and passed.