§ Mr. Pethick-Lawrence(by Private Notice) asked the Chancellor of the Exchequer whether the prohibition of bonus issues during the war will be effected by legislation and whether he proposes to withdraw any sanctions for such issues which may have been given prior to his Budget announcement and remain un-exercised?
§ Sir J. SimonUnder the Defence (Finance) Regulations, all proposals to make bonus issues require the consent of the Treasury, which is advised in this matter by the Capital Issues Committee. The machinery for control is therefore already in existence and no legislation is necessary on this point. The prohibition is already in operation, and Treasury sanction will not be given to bonus issues during the war save where entirely exceptional circumstances are present.
I do not propose to withdraw sanctions given prior to the Budget announcement and not yet exercised. I feel sure that in taking this course I can rely upon the 546 good will of the companies which are affected to observe the spirit of the prohibition to the utmost and not to proceed further with these issues unless their arrangements have reached so advanced a stage that abandonment of the issue would involve serious embarrassments.
§ Mr. J. WilmotDoes what the right hon. Gentleman has just said apply to the issue of shares and rights on special terms but which are not technically bonus shares?
§ Sir J. SimonI should like to look into that question. Perhaps the hon. Gentleman will communicate with me.
§ Mr. WoodburnWill the right hon. Gentleman take steps to prevent the sale at inflated value of ordinary shares because it will have exactly the same effect in the avoidance of Super-tax as the issue of bonus shares?
§ Sir J. SimonI am afraid that I could not give an answer to that Question without knowing the circumstances of the particular case.