§ 7.3 p.m.
§ Mr. BensonI beg to move, in page 20, line 16, after "income," to insert "prior to the fifth day of April, nineteen hundred and forty."
I think that in the discussion the hon. Member for North Paddington (Mr. Bracken) said that the Attorney-General was one of the most agreeable members of the Government. This afternoon he has agreed to nothing. I was rather perturbed when I saw the Solicitor-General following very carefully in his footsteps. This Amendment and the next deal with the question of the right of a bank to refuse disclosure of the actual owners of securities which it holds. Subsection (5) of the Clause very rightly protects a certain number of foreign holders who have invested here but who do not wish their names to be known owing to unsettled conditions on the Continent and the powers of totalitarian Governments. It is perfectly true that disclosure by the bank to the Board of Inland Revenue means a disclosure to a very secret body but the mere fact that there is a disclosure might make those investors afraid. There is, therefore, a very definite group of investors for whom we may tolerate secrecy. On the other hand there are British companies regarding whose investors we cannot tolerate secrecy. For instance, it would be intolerable that German money should be secretly put into one of our newspapers or our armament factories.
We had a long discussion some months ago on the question of the secret ownership of important shares particularly in companies dealing with organs of public opinion. If there is any foreign ownership in companies of that kind there should not be any right by the bank to refuse disclosure. Therefore, I suggest that any foreigner who wants to invest money in this country secretly should confine himself to trustee securities. On the other hand one must give adequate time for adjustments to be made, so I propose that a bank shall be compelled to disclose 12 months hence any holdings other than holdings of trustee securities where those securities are held by foreigners.
§ The Solicitor-GeneralI have the greatest sympathy with the motive of the hon. Member for Chesterfield (Mr. Benson) in the Amendment, and I know that he has sympathy with the attitude which I must inevitably take up in resisting this Amendment. This is a Clause which has as its object to enable the Special Commissioners to get information as to persons beneficially entitled to income from United Kingdom securities either when they are registered in the name of nominees or when they are in bearer form. In relation to both these matters, of course, the banks and the bank nominee companies are most closely concerned, and the Clause has been drafted in close consultation with representatives of the banks. The application of the Clause is confined to income from United Kingdom securities and there is no obligation on banks to disclose where the person beneficially entitled is not resident in the United Kingdom. Admittedly that introduces an illogicality in the structure. The justification for it is this. If disclosure is insisted upon, in the present state of the world, the banks, having very large deposits of cash and securities from sources abroad in respect of which they have given assurances that they would not be likely to be submitted to any investigation of ownership, would feel the greatest possible embarrassment in relation to their foreign customers on account of the assurances that they have given. That situation exists because these depositors have relied upon the traditional secrecy of our banking system. The Amendment which the hon. Gentleman proposes would in fact create a very grave difficulty for the reasons I have given. I knew, apart from what the hon. Gentleman said, by looking at his Amendment that he anticipated these objections and desired to meet them because he has limited his Amendment to 1940 so as to give time for the change to be made, and he has also limited his case to non-trustee securities. But we are advised that that really would not be satisfactory as a reassurance by the banks to their foreign depositors, who would be entitled to feel that, qua the banks, it would be a breach of assurance and the thin end of the wedge.
As regards discrimination between trustee and non-trustee securities that, I 500 think, is not justified, because either type might give rise to Surtax liability, providing the very material which the Clause is designed to assist us to discover. We do not think the appropriate method would be to try and force foreigners into trustee securities by a discrimination as between the methods by which we are to obtain information. For those reasons I hope that the hon. Gentleman, recognising the grave international difficulties in volved, will not think that this is an appropriate moment for his Amendment. Perhaps when the world settles down and so much refugee money is not finding its way here, and so many balances are not being built up in what is deemed to be a place of great security, where people do keep and honour their pledges, in those happy days we may look forward to rounding off this Clause by just such an Amendment, but I am afraid we cannot accept it for the reasons given.
§ Mr. BensonI beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ 7.11 p.m.
§ Sir A. BeitMay I ask the Solicitor-General how he proposes to enforce on companies that they should reveal who are the beneficial owners of their bearer shares when they never know themselves? The Solicitor-General probably knows that a number of bearer shares in South African gold-mining companies are very popular on the Paris market and the companies in question never have the least idea who are the owners of the shares or what proportion is held at home or abroad. The dividends are collected by coupon. I merely seek information on how it is proposed to get this information as to the owners of bearer securities.
§ The Solicitor-GeneralYou cannot get blood out of a stone but you can go to a bank and ask in whose name is the real share deposited, and if you find the bearer you can ask on whose behalf he holds it. That would get us a little further.