§ Mr. BelcherI beg to move, in page 4, line 11, to leave out "preliminary," and to insert "initial."
I feel that I owe an apology to the right hon. Gentleman the Member for Aldershot, because, on the Committee stage, I accepted his Amendment to leave out "initial" and insert "preliminary," and I am now asking the House to leave out "preliminary" and insert "initial." Since I accepted the Amendment which the right hon. Gentleman moved in Committee I have been advised that the expression "preliminary expenses" has a recognised meaning in connection with Companies Act companies, referring to the expenses incurred by the promoters in connection with, but prior to, the actual formation of a new company. The Corporation will not incur "preliminary expenses" in this sense, owing to its incorporation by statute. It will, however, have to spend money to provide itself with premises, office equipment, and so on, and this Clause of the Bill provides for the meeting of such expenses from the loans it will receive.
These expenses appear to be appropriately described by the expression "initial expenses." A point was made at an earlier stage that this expression is vague, and might be made to cover anything. I do not think that that is so. The natural meaning of the phrase is "expenses occurring at the beginning," and in its context in the Bill it is subject to the limitation that the expenses must be properly chargeable to capital account. I hope the right hon. Gentleman will accept that, and agree that the expression "initial" is most appropriate.
§ Mr. LytteltonI was, of course, fully aware of the technical significance of the word "preliminary," and it was for that reason I moved the original Amendment. If the Parliamentary Secretary never has to apologise to me for a more serious matter than this we shall get on well, because it is not one of great concern. We moved our Amendment originally to prevent the Corporation from writing off a great many expenses which would 1641 under normal company practice, be chargeable to revenue against capital, and the preliminary expenses in this case of course would be very small. Provided it is fully understood that these initial expenses are not to cover something which would normally come into the ordinary working of the Corporation, I think we can let it go. However, I give this warning, that we shall be particularly vigilant upon this point, which gives a loophole to some practices of which we might not approve.
§ Amendment agreed to.