§ 47. Mr. Prittasked the Prime Minister whether he can make any statement in regard to the memorandum recently submitted to him by the hon. Member for Hammersmith North, on the subject of Ministers holding company directorships?
§ The Prime MinisterI have now had an opportunity of considering the memorandum submitted to me by the hon. and learned Member. The well-known rule laid down by Sir Henry Campbell-Bannerman in March, 1906, is in the following terms:
All directorships held by Ministers must be resigned, except in the case of honorary directorships, directorships in connection with philanthropic undertakings, and directorships in private companies.At the time when this rule was announced the term "private company" had no statutory significance and was used probably to cover companies dealing wholly or mainly with family interests. Since then the term has received a statutory definition which covers a very wide held and examples of existing private companies submitted by the hon. and learned Gentleman show that such companies may control very large amounts of capital while their shares may be in turn controlled by public companies engaged in the widest possible range of activities. In these circumstances it is clear that if the term "private companies" in Sir Henry Campbell-Bannerman's ruling were to be interpreted in the statutory sense it would 1938 travel far beyond the intentions of the original framers of the rule.Accordingly, after consultation with my colleagues, I propose to interpret the term in future as applying only to concerns dealing wholly or mainly with family affairs or interests and not primarily engaged in trading. Since this is not a rigid definition, the Prime Minister of the day must be the final judge of whether any particular directorship held by a colleague comes within the rule or not, and Ministers will, therefore, doubtless submit to his consideration any case about which there might be a doubt. This applies to honorary directorships as well as to directorships of private companies. I would add that, as was observed by Lord Baldwin when he was Prime Minister on 5th July, 1926:
The safeguard against any difficulty such as the hon. Member appears to have in mind lies in the traditional standards of public life in this country.
§ Mr. BellengerMay I ask whether that rule applies to members of the present Cabinet, and whether the Prime Minister proposes to take any steps to ascertain whether any members of his Cabinet come under the rule?
§ The Prime MinisterIt applies to the present Cabinet, and I have already taken such steps.