HC Deb 16 July 1947 vol 440 cc521-4
Mr. Glenvil Hall

I beg to move, in page 52, line 45, after "1945," to insert: (except that, if an undertaking has been given in relation to the use of a sum representing any of the net amount of the refund in the trade or business of the subsidiary and Subsection (3) of this Section takes effect so as to negative the operation of that undertaking as to that sum, the said references shall be construed as references to a part of the net amount of the refund equal to the said net amount recoverable less that sum). The Clause to which this Amendment refers deals with refunds to nationalised undertakings. Some time ago my hon. Friend the Member for Chesterfield (Mr. Benson) put a question to my right hon. Friend the Chancellor of the Exchequer, asking him what the situation would be of a company which received refunds and had to plough them back into its undertaking, if that particular undertaking became nationalised. My right hon. Friend indicated that steps would be taken at the appropriate time, by legislation, to see that undertakings of that kind would be set free. By that he meant that they could share the amount which had come to them by way of E.P.T. refund on a liquidation of the particular concern.

The Clause itself deals with the three or four eventualities that could arise here. There is the case of a concern which receives the refund before it has been nationalised. There may be another company or group of companies which receives the E.P.T. refund after it has been nationalised. In that case, the refund can be distributed in just the same way as any refund can be distributed which had been paid before the undertaking had been nationalised.

Subsections (4) and (5) of this Clause deal with what I might describe as "splitting," where only one part of an undertaking has been nationalised or where, in the case of a group of companies, only one or two of the group are concerned. It is this last type of concern that we deal with in this Amendment. Where payments have been made on account of some of these concerns, the payments have been made to the parent company. The parent company can hold on to all the money or pass it on to a subsidiary at will. In some cases, of course, it may have passed to a subsidiary payments amounting to more than the subsidiary is entitled to, and the subsidiary is afterwards nationalised. We have no intention of interfering with a transaction of that kind. But what we feel that we must do is to safeguard the Exchequer from the obligation to release more than a due percentage of what is payable to a group of companies in respect of that part of the concern, or group of companies which has been nationalised.

It is a rather complicated business, but I hope I have explained to the House just what we want to do by this Amendment. Really, we are tightening up the Clause because, as we see it, certain loopholes have become apparent. We think that we carry the House with us when we say we do not desire that money which is not due to the subsidiary which is to be nationalised should be paid without the usual undertakings.

Mr. Assheton

I do not know whether the hon. Lady the Member for the Exchange Division of Liverpool (Mrs. Braddock) entirely understood this point, but I certainly did not though I listened with a great deal of attention. Difficult as it was to understand at what the Financial Secretary was driving, it is much more difficult to understand what the words on the Order Paper mean. I weld like to direct the attention of the House to them for a moment. The Amendment says: after '1945,' insert '(except that, if an undertaking has been given in relation to the use of a sum representing any of the net amount of the refund in the trade or business of the subsidiary and Subsection (3) of this Section takes effect so as to negative the operation of that undertaking as to that sum, the said references shall be construed as references to a part of the net amount of the refund equal to the said net amount recoverable less that sum).' Honestly, Mr. Speaker, I think those words are as near nonsense as I have ever seen in any draft presented to this honourable House of Commons. I know the immense difficulties with which Parliamentary draftsmen are confronted when they have to put into a Bill an idea which is conveyed to them by the Chancellor of the Exchequer and his representatives. On this occasion, I can neither congratulate the Chancellor of the Exchequer and his advisers nor the Parliamentary draftsmen on the success which they have had in this particular case.

Sir Arnold Gridley (Stockport)

As one concerned with a company which, I think, may be affected by this, I would like to know what the Financial Secretary intended us to understand. I would like to know whether I understand it clearly. Suppose a holding company has certain undertakings that are to be nationalised but is left with others that are not to be nationalised, and there is some refund of E.P.T. due to the group. Of course, we know that in the past E.P.T. has been allowed to be dealt with either by the parent company treating all the subsidiaries as one undertaking, or subdividing for the subsidiaries, each taking liability for a part. If I understood the Financial Secretary correctly, the position will be that, if there is an E.P.T. refund, that part of it which should go to the subsidiary undertaking that is being nationalised will accrue to the State on acquisition, but, in respect of the other subsidiaries not being nationalised, they will be entitled to their proper proportion of the refund. Am I correct in that interpretation of what the right hon. Gentleman said?

9.45 p.m.

Mr. Glenvil Hall

The non-nationalised undertaking will be held strictly to the undertaking which has been given to plough the refund back into its business. So far as the nationalised part is concerned, the percentage due to it will be available for distribution.

Amendment agreed to.

Further Amendment made: In page 53, line 5, at end, insert: (except that if an undertaking has been given in relation to the use of a sum representing any of the net amount of the refund in the original trade or business and Subsection (3) of this Section takes effect so as to negative the operation of that undertaking as to that sum, the said references shall be construed as references to the net amount of the refund reduced as aforesaid and less that sum)."—[Mr. Dalton.]