CLAUSE 13.—(Banks, etc.) (Hansard, 14 February 1939)

§ The Solicitor-General
I beg to move, in page 16, line 8, to leave out "in Great Britain."
This is a Clause which provides for exemptions. As it stands at present it provides that an exemption can be granted to a person whose main business in Great Britain consists of certain specified activities, and who also deals in securities in one of the ways described in the latter part of the Clause. We propose to delete the words "in Great Britain" because it is not really material whether his main business is carried on in Great Britain or not. The important thing is that he is dealing in securities. If we left in the words, "in Great Britain," we should probably cut out institutions like mining and finance houses, which would not be able to say that their main business is done here. I think it was the hon. and gallant Member for North Paddington (Mr. Bracken) who stressed the 1640 matter in Committee, and the Amendment I now propose is to implement a promise then made to deal with the matter.

§ The Solicitor-General
I beg to move, in page 16, line 11, to leave out from "on," to "the," in line 12, and to insert "some business other than."
The reason for this Amendment is that there is a rather tiresome rule of law which says that if you find in a Clause mention of one specific activity and then there are general words after it, there is an inclination to say that the general words ought to be construed in the light of the specific words. That might be the result in the present case if the specific word "banking" were retained. I therefore move that it be omitted and general words put in to replace it.

§ The Solicitor-General
I beg to move, in page 16, line 26, to leave out from "securities" to the end of line 28.
This is an Amendment by which subparagraph (1) will be simplified.

§ Mr. Stanley
I beg to move, in page 17, line 14, to leave out from "securities," to the end of line 21, and to insert: or to purchase securities on the first sale thereof. This provision deals with the type of business which may be done. It is necessary by this new arrangement to provide for a type of business which is not provided for in the Clause as it stands, that is, a type of business where a block of shares in a company is taken by a company or individual, and in which a note 1641 or statement in lieu of a prospectus is published in the Press and an application subsequently made to the Stock Exchange for dealing in those securities. This type of business can only rank for exemption if such an application for these shares is granted by the Stock Exchange.

§ The Solicitor-General
I beg to move, in page 18, line 1, to leave out Sub-section (3) and to insert: (3) If, with respect to any exempted dealer, the Board of Trade consider that the order declaring him to be an exempted dealer ought to be revoked on either of the following grounds, that is to say—

(a) that the conditions subject to which the order was made have not been fulfilled in his case; and

(b) that the circumstances relevant to the making of the order have materially changed since the making thereof;
the Board may serve on the exempted dealer a written notice that they are considering the revocation of the order on that ground, specifying particulars of the non-fulfillment of the said conditions or of the change of the said circumstances, as the case may be, and inviting the exempted dealer to make to the Board, within the period of one month from the date of the service of the notice, any representations which he desires to make with respect to the proposed revocation of the order; and the Board may revoke the order after the expiration of the said period, but, before deciding whether or not to revoke the order, shall take into consideration any representations so made by the exempted dealer and, if he so requests, afford him an opportunity of being heard by the Board within that period. This Amendment gives effect to a pledge I gave in Committee, where it was suggested that in the case of the revocation of an exemption there should be a right of appeal. I said that my right hon. Friend was not prepared to grant an appeal in the ordinary sense, but that he was prepared to insert in the Bill some check on the capricious use of the powers of revoking an exemption. The object of the Amendment is to ensure that there shall be an obligation to give a hearing, an obligation to proceed on the ordinary principles of natural justice. The effect of this proposal will be that if natural justice is affronted, and there is not a 1642 proper hearing, if the President of the Board of Trade does not carry out the machinery provided by tie Bill, there can be an application to the court by way of certiorari, to compel him to give a proper hearing. The provision is not dissimilar from a Section which appears in similar legislation where a Minister is called upon to perform a function which is partly judicial and partly administrative. It has worked successfully in other forms of legislation and is a valuable check. I hope it will be accepted by the House as an implementation of the promise made in Committee.

Mr. Johnston
The Solicitor-General has not told us whether he would prevent a man whose licence has been revoked from going to the tribunal set up under the Bill. The Clause deals only with the revocation of an exemption. If a man has his exemption withdrawn he can, it is true, apply for a licence, and if his application is refused he can then go to the tribunal. Is not that a long, laborious and roundabout way of getting it done? Any man whose exemption is withdrawn has to go through the tortuous and roundabout way of getting a hearing by applying for a new licence. That is the procedure. Would it not be far simpler and better in everybody's interest if, when you revoke a licence—and I presume you will do so on very good and substantial grounds—you should give the man whose licence is revoked the right of going at once to the tribunal? In nine cases out of ten he would never go, because your grounds would be so substantial for taking away the licence, but in the tenth case, if an injustice were done, you would at any rate remove what appears to some of us to be repugnant in these proposals, that is, that the appellant should also be the judge. The Solicitor-General talks about "natural justice." I do not know what it means: it is a good phrase. But what is "natural justice" in this case? Is it natural justice that the Board of Trade, which has come to the conclusion to revoke a man's licence, is itself to hear whether the Board of Trade is wrong?

§ Mr. Stanley
It is not revoking a licence.

Mr. Johnston
Withdrawing a licence and revoking an exemption are, for all practical purposes, the same thing. All that this Amendment says is that if a 1643 man's exemption is withdrawn the Board of Trade, who are the prosecutors, will also be the judge as well as the appellants in the case. If the words "natural justice" are to come into this discussion, I submit that they are irrelevant here. The President of the Board of Trade undoubtedly deserves the thanks of the community for the steps he has taken in this Bill, but I think he would be well advised to remove the slightest suspicion of bureaucracy from his Bill. I know that the only way you can administer a check on these rogues is to be able to act quickly and prevent long struggles in the law courts. I think the President is wrong in making the Board of Trade or any Government Department judge in its own case, and I submit that the Government would be well advised to give this hypothetical man, who has had his exemption withdrawn, the right, if he chooses to exercise it, of going to the tribunal which is set up by the Bill. It is not the Board of Trade but a tribunal of two lawyers appointed by the Lord Chancellor and a man appointed by the Treasury who is skilled in matters of finance, an impartial tribunal and, presumably, above reproach. Why not give him the right to go to this tribunal and remove the taunt that we are creating a hide-bound bureaucracy. In 99 cases out of 100 no injustice will be done, but in the hundredth case an injustice may take place and bring our whole efforts into public odium and disrepute. I suggest that the right hon. Gentleman might consider again whether it is not wise to take steps to make this an appeal to the tribunal rather than to the Board of Trade.

§ Mr. Stanley
I will certainly think over the proposal between now and another stage. I would point out one thing which the right hon. Gentleman has overlooked in Clause 13. The giving of an exemption is the conveying of a privilege. A man has the right to go to the Board of Trade and apply for a licence, and without that licence he cannot carry on his work. In that case we have provided that if a licence is refused, he is able to go to the tribunal. An exemption stands on quite a different footing. It is a matter which is purely within the discretion of the Board of Trade. Unless a man belongs to a certain class and carries on a certain class of business, they 1644 cannot give an exemption, but if he fulfils everyone of the conditions, then it is within the discretion of the Board of Trade whether they confer this privilege. If a privilege is withdrawn, it is not like the revocation of a licence, but I will think over the case which the right hon. Gentleman has put.