§ Amendments made: In page 24, line 40, leave out "subsection," and insert "section."
In line 44, after "unlawful," insert:
unless carried out with the consent of the Treasury."—[Mr. Gaitskell.]
§ Mr. Eccles
I beg to move, in page 25, line 14, at the end, to insert:Provided that nothing in paragraphs (c) or (d) of this subsection shall apply to any issue or transfer of shares or debentures made for full consideration paid in cash.This is an important Amendment. Under the Clause transactions are made unlawful in respect of the raising of 2047 capital abroad by companies controlled from this country and such action raises diplomatic issues as well as purely financial considerations. Particularly, subsection (c) seems to us much too wide because it would have the effect of extending Treasury control over all issues of shares or debentures made, whether in good faith and for good reasons, or to avoid tax. That is equivalent to setting up a capital issues committee here whose permission must be obtained when any foreign company belonging to or controlled by a United Kingdom company seeks to expand its business.
We feel quite sure that the Government do not intend the Clause to be as wide as that and it seemed to us, as we listened to the debate in Committee, that right hon. Gentlemen on the Treasury Bench were in ignorance of the modern practice of operating British investments overseas through a local company with a local board and allowing that local board more or less to run the company themselves, although the controlling capital interest remains in this country. That is a compromise of the kind at which British genius always arrives.
The old days, with London as the provider of capital and initiative and as the sole controller and manager of the overseas company, are passing away. The new fashion is for overseas territories to wish to have a large say in all business conducted within their boundaries. How were these two to be compromised, the old and the new? I think our business men have arrived at a very ingenious method. We retain the capital control here, but we let the local company operate on a very loose string. In particular, it is often a matter of the legal provisions of overseas territories that local directors must join the board. When those nationals become directors of these companies, they have their own responsibilities to their own people under their own laws and they will resent very much indeed the action of the Government at this particular time, with all our diplomatic troubles, in suddenly putting on a new Whitehall control over the issue of capital abroad.
Therefore, we have sought to exclude from the provisions of these two subsections what we believe the Government never had any intention of bringing into 2048 them, namely, issues of shares and debentures made "for full consideration paid in cash." The House will know that the phrase is the Government's own words taken from the Amendment to Clause 29 which the House has passed. In these days, when working capital is scarce and when the investment capacity of the British capital market is not what it used to be, it is very necessary that we should be able to draw on the capital resources of the countries where our subsidiaries or controlled companies are operating. All hon. Members would agree that it is in the interests of British overseas companies to expand, and it is very difficult now to find in this country adequate savings to meet their requirements.
That being so, our companies will have to go to the local markets, and I have no doubt that in many of these countries where very large profits are now being made by the sale of raw materials at very high prices there is capital to be invested. It seems extraordinarily foolish that we should frighten off that capital by clauses of the type of Clause 33. The fact is that foreigners will not like this Clause at all. If hon. Gentlemen opposite could imagine the Ford Company at Dagenham desiring to raise fresh capital and having to go to Mr. Snyder and the American Treasury for permission to do so, they would, I think, realise the kind of feelings which will be stirred up by putting this sort of legislation on the Statute Book. As British people we are more conversant with the ways of international investment and we should not be so prickly about such permission as, let us say, the people in the Middle East or elsewhere, will be if they have to come to the old seat of what they believed to have been colonial exploitation.
This Clause is a measure of colonial exploitation reintroduced, and it is ironic that we should at this very time be having almost daily statements in the House about the troubles of the Anglo-Persian Oil Company and at the same time be discussing a Clause of this kind. It is a tremendous mistake to prefer the necessity of the Revenue and the counting house to the real needs of trade, and of getting on with our business. But I fear that this is all part of the insensitiveness of the Socialist Party to anything that goes on overseas. Last week it was the banishment of Tshekedi without trial; this week it is throwing this Clause in the face of 2049 foreign Governments. It is part and parcel of a philosophy which is national and inward-looking, and which has no knowledge of the new trends going on in the world. I cannot conceive how hon. Gentlemen opposite can allow their Government to insult overseas Governments and business men in this way.
I know the sort of answer which is given, that when a company wishes to raise money for a good purpose the Treasury will give their consent. That is no answer at all. The friction is caused by having to ask for consent. That is the point at which the damage is done, and unless we can get this Amendment through I warn hon. Gentlemen opposite that it will become exceedingly difficult to carry on our overseas business in this very ingenious and delicately poised manner of the capital control resting in London, but the local directors having, as it were, enough authority to satisfy the national susceptibilities.
We hope, therefore, that we shall not have any difficulty with this Amendment. It seems to me to follow the concession we have had on the previous Clause. Where capital is issued for full consideration, that must be in the interests of the business. It is not likely here that there will be family businesses which issue debentures for which an exception was made in the previous Clause. This is concerned with overseas investments, which on the whole are carried out by largish companies. I commend the Amendment to the House.
§ Mr. Selwyn Lloyd
I beg to second the Amendment.
I endorse every word my hon. Friend has said on the general aspect of this matter. I think the right hon. Gentleman will admit he has been impressed by the degree of criticism of Clause 33—Clause 32, as it was on the Committee stage. In the course of his speech in Committee, he made certain comments and promises. I am quoting from the OFFICIAL REPORT of 12th June, cols. 2202 and 2204. The first concession which he indicated he was prepared to make I think he has incorporated in a later Amendment, which reads:(6) Notwithstanding anything in the preceding provisions of this section, in no event shall a mere transfer of assets by a body corporate not resulting in a substantial change in 2050 the character or extent of the trade or business of that body corporate be treated for the purpose of this section as a transfer of part of the trade or business thereof.I think that is an Amendment which he is introducing pursuant to a promise he made in col. 2202.
Then in col. 2204, he went on to deal with the question of the issue and transfer of debentures made for full consideration paid in cash. I must say that I am disappointed not to find that the right hon. Gentleman has seen fit to incorporate in the form of words the indication he then made. I agree that it was not a definite promise, but only a matter which he indicated he would consider. The right hon. Gentleman said:It may be that we could exempt the parent company from obtaining Treasury permission for the issue of the subsidiary of additional shares to it for cash as part of a programme for development. That, I think, is certainly something which could be considered."— [OFFICIAL REPORT, 12th June, 1951; Vol. 488, c. 2204.]So far as I can trace through these rather complicated Amendments, there is nothing in them which incorporates that matter. It seems to me that the form of words which my hon. Friend has moved certainly includes such an issue by a subsidiary company of additional shares for cash as part of a programme of development. I think the whole of this Amendment should be accepted, but if the Chancellor finds himself unable to accept the whole of it, even at this stage I hope he will consider incorporating in the Clause something covering the point he himself said he would consider.
Unless the Clause contains something like what we are proposing in this Amendment, it is definitely going to be a bar to imperial and colonial development. All the time the Government are giving lip-service to that and putting forward the pretence that they have it at heart, but when it comes to a practical matter, they are not prepared to remove such an obstacle as this. I am firmly convinced that if this Clause remains in its present form, it will be a practical obstacle to imperial and colonial development. I urge the right hon. Gentleman to reconsider what he said in col. 2204 and even at this late stage to attempt to devise means of incorporating our suggestion in the Bill. I think that much the best way is to accept this Amendment.
§ Mr. Gaitskell
The hon. and learned Member for Wirral (Mr. Selwyn Lloyd) quoted what I said in Committee on this particular issue of substance. What I said then was that this was the kind of thing which might be covered by Treasury consent. I was proposing then to introduce a subsection to amend the Bill in order to enable the Treasury to exempt certain categories and classes of transactions. As hon. Gentlemen will be aware, I have fulfilled that promise, and we shall be coming to the Amendment in a moment or two. It was a different thing that I had in mind there from promising to think over the introduction of an Amendment to the Bill. What was in my mind then was that this should be covered by Treasury consent.
I have nevertheless considered whether it would be possible to accept this particular form of words. I can understand that the hon. Gentleman the Member for Chippenham (Mr. Eccles) and the hon. and learned Gentleman the Member for Wirral will say to me, "If you are going to give a Treasury consent of a general character to these precise cases, that is to say, the issue or transfer of shares and debentures made for full consideration paid in cash, why do you not accept our Amendment?" The answer is that we could not in fact accept the Amendment in these terms. It would have to be much more qualified, and I will tell the House why.
If we were to accept the Amendment as it stands, it would let out one of the most serious cases of tax avoidance which we have come across. It was, in fact, I understand, proposed by one company that it should transfer shares that it held in one subsidiary to another subsidiary, and that the second subsidiary should pay the parent company by instalments in cash out of dividends received. The parent company was, in effect, receiving capital repayment instead of income, and, therefore, was avoiding taxation.
There is nothing in this Amendment to prevent that happening so I am advised, and the words "full consideration paid in cash" would very probably cover the kind of case I have mentioned. We have to lay down conditions to prevent that sort of thing from occurring. I can give the House two or three other examples of cases where this particular wording would, in fact, let out some serious cases of tax avoidance. For example, there is the case 2052 where a company may in fact decide to split control over a subsidiary with another company, so that there are two companies instead of one and it cannot be said exactly where the control is, but there will be the same shareholders and directors. Nevertheless, they would get out of the effects of the Clause if the Amendment were carried in this form.
That is not to say that I do not appreciate the points which have been made. I do appreciate the desirability of letting out as much as we can reasonably let out, so as to interfere as little as possible, as I have said earlier, with legitimate business. But we are sure that the way to do it is by the consents, general, specific or particular, which are proposed in the later Amendment in my name.
We will certainly try to find a proper form of words to cover these legitimate transactions to which reference has been made, but I cannot accept the words on the Order Paper. It will need care, ingenuity and experience to devise words to take effect under the Amendment I am shortly to move, if we are to get the right wording. That is the reason I cannot accept the Amendment, and must ask the House to deal with the matter on the lines we have indicated.
§ Mr. Assheton
Certainly on this side of the House we are disappointed with the Chancellor's reply. He did not deal with the very cogent case put by the hon. Member for Chippenham (Mr. Eccles), and in particular with one aspect of it. My hon. Friend made one very strong point when he said that friction was caused in these overseas territories by the very fact that they had to ask for consent. It is no good the Chancellor saying that the Treasury will always give consent in appropriate cases. The Chancellor is always keeping his eye upon on or two cases of tax avoidance which he has come upon. He is always thinking of the odd case of tax avoidance, instead of the most important consideration of the financial position of the country.
Clause 33 is one of the most reactionary Clauses put into a Finance Bill throughout the time that I have been in the House of Commons. I cannot help thinking that he is going to make a great mistake if he does not accept the Amendment. The policy underlying the Clause is short sighted nationalism and one is 2053 tempted to think that someone like Dr. Schacht had devised it. I suggest that we ought to accept the Amendment, and I hope that my hon. Friends will divide the House on it.
§ Viscount Hinchingbrooke
I think that the right hon. Gentleman's words were not chosen with the greatest care towards the end of his remarks, because he left the House, or at any rate some hon. Members on this side of the House, in some doubt whether he was going to introduce an Amendment at some stage dealing with the points raised by my hon. Friends, or whether he was going to rely ultimately upon the Treasury to secure that there shall be no tax evasion.
We have always, from the first, disliked the idea that tax avoidance should be dealt with administratively by the Treasury from time to time as, in the opinion of the Chancellor of the Exchequer, cases arise which require treatment of that kind by the Treasury. We prefer to see the matter covered by legislation. I cannot understand why the right hon. Gentleman has not been able to devise a form of words, between the Committee and Report stages, to take specific care of just these cases which he has quoted to the House.
This Amendment has been on the Order Paper for some few days. There has been knowledge in the Treasury of these cases of tax avoidance, and the Chancellor could have elaborated the Amendment which he is about to move regarding a slightly different issue by inserting words which would have taken care of these tax evasion cases. We object fundamentally to the idea that the Treasury should pounce upon people at will without coming to the House for specific approval. For that reason, I very much hope that, even if it too late this year, in next year's Finance Bill there will be introduced some words which will safeguard the situation.
§ Sir John Mellor (Sutton Coldfield)
I think that the Chancellor of the Exchequer ought to be able to formulate his intentions. It seems clear from his speech that he cannot do so. He reminds me very much of a cartoon which appeared in Punch, a long time ago, of a lady who, while driving a car, had an accident. Asked why she had not given a signal, she replied, "There was no signal for what I wanted to do."
2054 I really feel that the Chancellor ought to be able to tell us about his intentions. If he knows them, he should be in a position to suggest appropriate words for the qualification of the Amendment which has been put forward which would give a reasonable result. As it is, the right hon. Gentleman is asking us to rely upon Treasury consents. We have had a lot of experience of that sort of thing. The right hon. Gentleman has talked about having advisory committees to assist the Treasury. I do not attach much importance to that. I am disappointed that he has not accepted the Amendment or suggested an alternative.
§ Mr. F. Harris
When the hon. Member for Chippenham (Mr. Eccles) raised this matter in Committee, we felt as strongly about it as we do tonight. It appears from the Chancellor's speech that he assumed that the House agreed with the arguments which he has put forward; but apparently he has not seen fit to consult with the Treasury officers to see if something could be devised to find an answer to this problem. From a colonial point of view, nothing will give our friends overseas more concern than to have to apply to the Treasury over here for permission for any transaction they wish to make for the just development of their own interests.
It is extraordinarily shortsighted that the real effect of this Clause is not fully understood either by the Chancellor or by his advisers. If the Chancellor had paid real and due regard to the importance of the issue that has been raised, he would have done something about it and not just assumed that the answer is to apply for and automatically obtain Treasury consent. Surely to devise no answer to this problem and merely to assume that everybody is working with some warped mind to try and avoid tax is a poor way of looking at such a serious issue.
As far as the colonial interests are concerned, I can say with real feeling that many of our interests abroad will be deeply perturbed if they believe that in any action they take to develop their businesses and eventually to benefit this country they have to come cap in hand to the Treasury for permission. We are taking a retrograde step here which one day we shall know should never have been taken.
§ Mr. Eccles
I can only speak with the leave of the House, but I should like to say to the Chancellor that, of course, it is possible that a certain amount of revenue might be lost by some of the transactions aimed at in this Clause; but in his reply the Chancellor did not seem at any time to be willing to weigh against revenue loss the damage done to our prestige and the whole future of our overseas business. Surely this is a case of give and take, but not apparently for the Government. They
§ say that whatever happens they must catch the transaction that avoids tax, no matter what damage that does to our general overseas business. It is this insensibility to the future of Britain in earning her bread and butter that makes me think there is nothing for it but to divide the House.
§ Question put, "That those words be there inserted in the Bill."
§ The House divided: Ayes, 268; Noes, 280.2059
|Division No. 163]||AYES||[10.50 p.m.|
|Aitken, W. T.||Drayson, G. B.||Kaberry, D.|
|Alport, C. J. M.||Drewe, C.||Kerr, H. W. (Cambridge)|
|Amery, Julian (Preston, N.)||Dugdale, Maj. Sir Thomas (Richmond)||Kingsmill, Lt.-Col. W. H.|
|Amory, Heathcoat (Tiverton)||Duncan, Capt. J. A. L.||Lambert, Hon. G|
|Arbuthnot, John||Dunglass, Lord||Lancaster, Col. C. G|
|Ashton, H. (Chelmsford)||Duthie, W. S.||Langford-Holt, J.|
|Assheton, Rt. Hon. R. (Blackburn, W.)||Eccles, D. M.||Law, Rt. Hon. R. K.|
|Astor, Hon. M. L.||Elliot, Rt. Hon. W. E||Leather, E. H. C.|
|Baker, P. A. D.||Erroll, F. J.||Legge-Bourke, Maj. E. A. H.|
|Baldock, Lt.-Cmdr. J. M||Fisher, Nigel||Lennox-Boyd, A. T.|
|Banks, Col. C.||Fort, R.||Lindsay, Martin|
|Beamish, Maj. Tufton||Foster, John||Linstead, H. N.|
|Bell, R. M.||Fraser, Hon. Hugh (Stone)||Llewellyn, D.|
|Bennett, Dr. Reginald (Gosport)||Fraser, Sir I. (Morecambe & Lonsdale)||Lloyd, Rt. Hn. G. (King's Norton)|
|Bennett, William (Woodside)||Fyfe, Rt. Hon. Sir David Maxwell||Lloyd, Maj. Guy (Renfrew, E.)|
|Bevins, J. R. (Liverpool, Toxteth)||Gage, C. H.||Lloyd, Selwyn (Wirral)|
|Birch, Nigel||Galbraith, Cmdr. T. D. (Pollok)||Lookwood, Lt.-Col. J. C.|
|Bishop, F. P.||Galbraith, T. G. D. (Hillhead)||Longden, Gilbert (Herts, S. W.)|
|Black, C. W.||Gammans, L. D.||Low, A. R. W.|
|Boles, Lt.-Col. D. C. (Wells)||Garner-Evans, E. H. (Denbigh)||Lucas, Sir Jocelyn (Portsmouth, S.)|
|Bossom, A. C.||Gates, Maj. E. E.||Lucas, P. B. (Brentford)|
|Boyd-Carpenter, J. A||Glyn, Sir Ralph||Lucas-Tooth, Sir Hugh|
|Boyle, Sir Edward||Gomme-Duncan, Col. A.||McAdden, S. J.|
|Bracken, Rt. Hon B||Gridley, Sir Arnold||McCorquodale, Rt. Hon. M. S.|
|Braine, B. R.||Grimond, J.||Macdonald, A. J. F. (Roxburgh)|
|Braithwaite, Sir Albert (Harrow, W.)||Grimston, Hon. John (St. Albans)||Macdonald, Sir Peter (I. of Wight)|
|Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)||Grimston, Robert (Westbury)||Mackeson, Brig. H. R.|
|Bromley-Davenport, Lt.-Col. W.||Harden, J. R. E.||McKie, J. H. (Galloway)|
|Brooke, Henry (Hampstead)||Hare, Hon. J. H (Woodbridge)||Maclay, Hon. John|
|Browne, Jack (Govan)||Harris, Frederic (Croydon, N.)||Maclean, Fitzroy|
|Buchan-Hepburn, P. G T.||Harris, Reader (Heston)||MacLeod, Iain (Enfield, W.)|
|Bullock, Capt. M.||Harvey, Air Codre. A. V. (Macclesfield)||MacLeod, John (Ross and Cromarty)|
|Bullus, Wing Commander E. E.||Harvey, Ian (Harrow, E.)||Macpherson, Major Niall (Dumfries)|
|Burden, F. A.||Harvie-Watt, Sir George||Maitland, Cmdr. J. W.|
|Butcher, H. W.||Hay, John||Manningham-Buller, R. E|
|Butler, Rt. Hn. R. A. (Saffron Walden)||Head, Brig. A. H||Marlowe, A. A. H.|
|Cart, Robert (Mitcham)||Heald, Lionel||Marples, A. E.|
|Carson, Hon. E.||Henderson, John (Cathcart)||Marshall, Douglas (Bodmin)|
|Channon, H.||Hicks-Beach, Maj. W. W.||Marshall, Sidney (Sutton)|
|Churchill, Rt. Hon. W. S.||Higgs, J. M C.||Maude, Angus (Ealing, S.)|
|Clarke, Col. Ralph (East Grinstead)||Hill, Dr. Charles (Luton)||Maude, John (Exeter)|
|Clarke, Brig. Terence (Portsmouth, W.)||Hill, Mrs. E. (Wythenshawe)||Maudling, R.|
|Conant, Maj. R. J. E.||Hinchingbrooke, Viscount||Medlicott, Brig. F.|
|Cooper, Sqn. Ldr. Albert (Iflord, S.)||Hirst, Geoffrey||Mellor, Sir John|
|Cooper-Key, E. M.||Holmes, Sir Stanley (Harwich)||Molson, A. H. E.|
|Corbett, Lt.-Col. Uvedale (Ludlow)||Hope, Lord John||Monckton, Sir Walter|
|Craddock, Beresford (Spelthorne)||Hopkinson, Henry||Morrison, John (Salisbury)|
|Cranborne, Viscount||Hornsby-Smith, Miss P.||Morrison, Rt. Hon. W. S (Cirencester)|
|Crookshank, Capt. Rt. Hon H. F. C||Horsbrugh, Rt. Hon. Florence||Mott-Radclyffe, C. E|
|Crouch, R. F.||Howard, Gerald (Cambridgeshire)||Nabarro, G.|
|Crowder, Capt John (Finchley)||Howard, Greville (St. Ives)||Nicholls, Harmar|
|Crowder, Petre (Ruislip—Northwood)||Hudson, Sir Austin (Lewisham, N.)||Nicholson, G.|
|Cundiff, F. W.||Hudson, Rt. Hon. Robert (Southport)||Noble, Cmdr. A. H. P|
|Cuthbert, W. N.||Hudson, W. R. A. (Hull, N.)||Nugent. G. R. H.|
|Darling, Sir William (Edinburgh, S.)||Hurd, A. R.||Nutting, Anthony|
|Davidson, Viscountess||Hutchinson, Geoffrey (Ilford, N.)||Oakshott, H. D.|
|Davies, Rt. Hon. C. (Montgomery)||Hutchison, Lt.-Com. Clark (E'b'rgh W.)||Odey, G. W.|
|Davies, Nigel (Epping)||Hutchison, Col. James (Glasgow)||O'Neill, Rt. Hon. Sir Hugh|
|de Chair, Somerset||Hyde, Lt.-Col. H. M.||Ormsby-Gore, Hon. W. D.|
|De la Bere, R.||Hylton-Foster, H. B.||Orr, Capt. L. P. S.|
|Deedes, W. F.||Jennings, R.||Orr-Ewing, Charles Ian (Hendon, N.)|
|Dodds-Parker, A. D.||Johnson, Howard (Kemptown)||Orr-Ewing, Ian I. (Weston-super Mare)|
|Donner, P. W.||Jones, A. (Hall Green)||Osborne, C.|
|Douglas-Hamilton, Lord Malcolm||Joynson-Hicks, Hon. L. W.||Perkins, W. R. D.|
|Peto, Brig. C. H. M||Smithers, Peter (Winchester)||Thorp, Brig. R. A. F.|
|Pickthorn, K.||Smithers, Sir Waldron (Orpington)||Tilney, John|
|Pitman, I. J.||Smyth, Brig. J. G. (Norwood)||Touche, G. C.|
|Powell, J. Enoch||Snadden, W McN||Turner, H. F. L.|
|Price, Henry (Lewisham, W.)||Soames, Capt. C.||Turton, R. H.|
|Prior-Palmer, Brig. O||Spearman, A. C. M.||Vane, W. M. F.|
|Profumo, J. D.||Spence, H. R (Aberdeenshire, W.)||Vosper, D. F.|
|Raikes, H. V.||Spens, Sir Patrick (Kensington, S.)||Wade, D. W.|
|Rayner, Brig R||Stanley, Capt. Hon. Richard (N. Fylde)||Wakefield, Edward (Derbyshire, W)|
|Redmayne, M.||Stevens, G. P.||Wakefield, Sir Wavell (Marylebone)|
|Remnant, Hon. P||Steward, W. A. (Woolwich, W.)||Walker-Smith, D. C.|
|Renton, D. L. M||Stewart, Henderson (Fife, E.)||Ward, Hon. George (Worcester)|
|Roberts, Emrys (Merioneth)||Stoddart-Scott, Col. M||Ward, Miss I. (Tynemouth)|
|Roberts, Maj. Peter (Heeley)||Storey, S.||Waterhouse, Capt. Rt. Hon. C|
|Robinson, Roland (Blackpool, S)||Strauss, Henry (Norwich, S)||Watkinson, H.|
|Robson-Brown, W.||Stuart, Rt. Hon. James (Moray)||Wheatley, Maj. M. J. (Poole)|
|Rodgers, John (Sevenoaks)||Summers, G. S.||White, Baker (Canterbury)|
|Roper, Sir Harold||Sutcliffe, H.||Williams, Charles (Torquay)|
|Ropner, Col. L.||Taylor, Charles (Eastbourne)||Williams, Gerald (Tonbridge)|
|Russell, R. S.||Taylor, William (Bradford, N.)||Williams, Sir Herbert (Croydon, E)|
|Ryder, Capt. R. E. D.||Teeling, W.||Wills, G.|
|Salter, Rt. Hon. Sir Arthur||Thomas, J. P. L. (Hereford)||Wilson, Geoffrey (Truro)|
|Sandys, Rt. Hon. D.||Thompson, Kenneth Pugh (Walton)||Winterton, Rt. Hon. Earl|
|Scott, Donald||Thompson, Lt.-Cmdr. R. (Croydon, W)||Wood, Hon. R.|
|Shepherd, William||Thorneycroft, Peter (Monmouth)|
|Smiles, Lt.-Col. Sir Walter||Thornton-Kemsley, Col. C. N.||TELLERS FOR THE AYES:|
|Mr. Studholme and Mr. Digby.|
|Acland, Sir Richard||Daines, P.||Hastings, S.|
|Adams, Richard||Dalton, Rt. Hon. H.||Hayman, F. H.|
|Albu, A. H.||Darling, George (Hillsborough)||Henderson, Rt. Hon. A. (Rowley Regis)|
|Allen, Arthur (Bosworth)||Davies, A. Edward (Stoke, N.)||Hewitson, Capt. M|
|Allen, Scholefield (Crewe)||Davies, Ernest (Enfield, E.)||Hobson, C. R.|
|Anderson, Alexander (Motherwell)||Davies, Harold (Leek)||Holman, P.|
|Anderson, Frank (Whitehaven)||Davies, Stephen (Merthyr)||Holmes, Horace (Hemsworth)|
|Attlee, Rt. Hon. C. R.||de Freitas, Geoffrey||Houghton, D.|
|Awbery, S. S.||Deer, G.||Hoy, J.|
|Ayles, W. H.||Diamond, J.||Hubbard, T|
|Bacon, Miss Alice||Dodds, N. N.||Hudson, James (Ealing, N)|
|Baird, J.||Donnelly, D||Hughes, Emrys (S Ayrshire)|
|Balfour, A.||Dugdale, Rt. Hon. John (W Bromwich)||Hughes, Hector (Aberdeen, N.)|
|Barnes, Rt. Hon. A. J.||Dye, S.||Hynd, H. (Accrington)|
|Bartley, P.||Ede, Rt. Hon. J. C||Hynd, J. B. (Attercliffe)|
|Bellenger, Rt. Hon. F. J.||Edelman, M.||Irvine, A. J. (Edge Hill)|
|Benn, Wedgwood||Edwards, John (Brighouse)||Irving, W. J. (Wood Green)|
|Benson, G.||Edwards, Rt. Hon. Ness (Caerphilly)||Isaacs, Rt. Hon. G. A.|
|Beswick, F.||Edwards, W J. (Stepney)||Janner, B.|
|Bing, G. H. C.||Evans, Albert (Islington, S.W.)||Jay, D. P. T.|
|Blenkinsop, A.||Evans, Edward (Lowestoft)||Jeger, George (Goole)|
|Blyton, W. R.||Evans, Stanley (Wednesbury)||Jeger, Dr. Santo (St. Pancras, S.)|
|Boardman, H||Ewart, R.||Jenkins, R. H.|
|Booth, A.||Fernyhough, E.||Johnson, James (Rugby)|
|Bottomley, A. G||Field, Capt. W J.||Johnston. Douglas (Paisley)|
|Bowden, H. W.||Fletcher, Eric (Islington, E)||Jones, David (Hartlepool)|
|Bowles, F. G. (Nuneaton)||Follick, M.||Jones, Fredrick Elwyn (West Ham, S.)|
|Braddock, Mrs. Elizabeth||Foot, M. M||Jones, Jack (Rotherham)|
|Brook, Dryden (Halifax)||Fraser, Thomas (Hamilton)||Jones, William Elwyn (Conway)|
|Brooks, T. J. (Normanton)||Freeman, John (Watford)||Keenan, W|
|Broughton, Dr. A. D. D||Freeman, Peter (Newport)||Kenyon, C.|
|Brown, Thomas (Ince)||Gaitskell, Rt. Hon. H. T. N.||Key, Rt. Hon C. W|
|Burke, W. A.||Ganley, Mrs. C. S||King, Dr. H. M.|
|Burton, Miss E.||Gibson, C. W.||Kinghorn, Sqn. Ldr E|
|Butler, Herbert (Hackney, S.)||Gilzean, A.||Kinley, J|
|Callaghan, L. J.||Glanville, James (Consett)||Lang, Gordon|
|Carmichael, J.||Gooch, E. G.||Lee Frederick (Newton)|
|Castle, Mrs. B A.||Greenwood, Anthony (Rossendale)||Lee, Miss Jennis (Cannock)|
|Champion, A. J.||Greenwood, Rt. Hon. Arthur (Wakefield)||Lever Harold (Cheetham)|
|Chetwynd, G. R||Grenfell, Rt. Hon. D. R.||Lever, Leslie (Ardwick)|
|Clunie, J.||Grey, C. F.||Lewis, Arthur (West Ham, N)|
|Cocks, F. S.||Griffiths, David (Rother Valley)||Lewis, John (Bolton, W.)|
|Lindgren G. S.|
|Coldrick, W.||Griffiths, Rt. Hon. James (Llanelly)||Lipton, Lt.-Col. M|
|Collick, P.||Griffiths, W. (Manchester Exchange)||Logan, D. G.|
|Cook, T. F.||Gunter, R. J.||Longden Fred (small Heath)|
|Cooper, Geoffrey (Middlesbrough, W.)||Haire, John E. (Wycombe)||McAllister, G.|
|Cooper, John (Deptford)||Hale, Joseph (Rochdale)||MacColl, J. E.|
|Corbet, Mrs. Freda (Peckham)||Hale, Leslie (Oldham, W.)||McGhee, H. G|
|Cove, W. G.||Hall, Rt. Hon. Glenvil (Colne Valley)||McGovern, J|
|Craddock, George (Bradford, S.)||Hall, John (Gateshead, W.)||McInnes, J.|
|Crawley, A.||Hamilton, W. W.||Mack, J. D.|
|Crosland, C. A. R.||Hannan, W.||McKay, John (Wallsend)|
|Crossman, R. H. S.||Hardy, E. A.||Mackay, R. W. G. (Reading, N)|
|Cullen, Mrs A.||Hargreaves, A||McLeavy, F.|
|MacMillan, Malcolm (Western Isles)||Price, Joseph T. (Westhoughton)||Thomas, Ivor Owan (Wrekin)|
|McNeil, Rt. Hon. H.||Price, Philips (Gloucestershire, W)||Thorneycroft, Harry (Clayton)|
|MacPherson, Malcolm (Stirling)||Proctor, W. T.||Thurtle, Ernest|
|Mainwaring, W. H.||Pryde, D. J.||Timmons, J.|
|Mallalieu, E. L (Brigg)||Pursey, Cmdr. H.||Tomney, F.|
|Mallalieu, J. P. W (Huddersfield. E)||Rankin, J.||Turner-Samuels, M.|
|Mann, Mrs Jean||Rees, Mrs. D.||Ungoed-Thomas, Sir Lynn|
|Manuel, A. C.||Reeves, J.||Usborne, H.|
|Marquand, Rt. Hon. H. A||Reid, Thomas (Swindon)||Vernon, W. F.|
|Mathers, Rt. Hon. G||Reid, William (Camlachie)||Viant, S P.|
|Mayhew, C. P.||Richards, R.||Wallace, H. W|
|Mellish, R. J.||Robens, Rt. Hon. A.||Watkins, T. E.|
|Messer, F.||Roberts, Goronwy (Caernarvonshire)||Webb, Rt. Hon. M (Bradford, C.)|
|Middleton, Mrs. L.||Robertson, J. J. (Berwick)||Weitzman, D|
|Mikardo, Ian.||Robinson, Kenneth (St. Pancras, N.)||Wells, Percy (Faversham)|
|Mitchison, G R||Rogers, George (Kensington, N.)||Wells, William (Walsall)|
|Moeran, E. W||Royle, C.||West, D. G.|
|Monslow, W||Shinwell, Rt. Hon. E.||Wheatley Rt. Hn John (Edinb'gh, E.)|
|Moody, A S||Shurmer, P. L. E.||White, Mrs. Eirena (E. Flint)|
|Morgan, Dr. H. B.||Silverman, Julius (Erdington)||White Henry (Derbyshire N E)|
|Morley, R.||Silverman, Sydney (Nelson)||Whiteley, Rt. Hon. W|
|Morris, Percy (Swansea, W)||Simmons, C. J.||Wigg, G.|
|Mort, D. L.||Slater, J.||Wilcock, Group Capt. C A. B|
|Moyle, A.||Smith, Ellis (Stoke, S.)||Wilkins W. A.|
|Mulley, F. W.||Smith, Norman (Nottingham. S.)||Willey Frederick (Sunderland)|
|Nally, W.||Snow, J. W||Willey, Octavius (Cleveland)|
|Neal, Harold (Bolsover)||Sorensen, R. W.||Williams, David (Neath)|
|Oldfield, W. H.||Soskice, Rt. Hon. Sir Frank||Williams Rev. Llywelyn (Abertillery)|
|Oliver, G. H.||Sparks, J A||Williams, Ronald (Wigan)|
|Orbach, M.||Steele, T.||Williams, Rt. Hon. Thomas (Don V'lly)|
|Padley, W. E||Stewart, Michael (Fulham, E.)||Williams, W. T. (Hammersmith, S.)|
|Paget, R. T.||Strachey, Rt. Hon. J.||Wilson, Rt. Hon. Harold (Huyton)|
|Paling, Rt. Hon. W (Dearne Valley)||Strauss, Rt. Hon. George (Vauxhall)||Winterbottom, Ian (Nottingham, C.)|
|Panned, T. C||Stross, Dr. Barnett|
|Pargiter, G. A||Sylvester, G. O.||Winterbottom, Richard (Brightside)|
|Parker, J.||Taylor, Bernard (Mansfield)||Wyatt, W. L|
|Paton, J.||Taylor, Robert (Morpeth)||Yates, V. F.|
|Pearson, A||Thomas, David (Aberdare)||Younger, Rt. Hon. K|
|Peart, T. F.||Thomas, George (Cardiff)|
|Porter, G.||Thomas, Iorwerth (Rhondda, W.)||TELLERS FOR THE NOES:|
|Mr. Popplewell and Mr. Delargy|
§ Mr. Gaitskell
I beg to move, in page 25, line 15, to leave out "Provided that— (i)," and to insert "(2)."
This, and the following Amendment, are both consequential on later Amendments.
§ Amendment agreed to.
|(3) Nothing in the said paragraph (c) shall apply to the giving by the body corporate not resident in the United Kingdom to an insurance company of any security for the payment of any sum due or to become due from that body corporate to that company by reason of any transaction entered into with that body corporate by that company in the ordinary course of that company's business by way of investment of its funds.|
|(4) Any consent granted by the Treasury under this section—|
|(a) may be given either specially (that is to say, so as to apply only to specified transactions of or relating to a specified body corporate) or generally (that is to say, so as not only to apply as aforesaid); and|
|(b) may, if given generally, be revoked by the Treasury; and|
|(c) may in any case be absolute or conditional; and|
|(d) shall be published in such a way as, in the opinion of the Treasury, to give any person entitled to the benefit of it an adequate opportunity of getting to know of it unless in their opinion publication is not necessary for that purpose.|
§ 11.0 p.m.
§ This is the Amendment to which I referred when we were discussing the Opposition Amendment a moment or two ago. It fulfils the undertaking I gave in Committee to provide that the Treasury may give consent, either specially or generally, for certain transactions or classes of transactions to take place. We have also taken the opportunity, in the2060
§ Further Amendment made:
§ In line 16, leave out "this subsection," and insert "subsection (1) of this section." —[Mr. Gaitskell.]
§ Mr. Gaitskell
I beg to move, in page 25, line 22, to leave out from "bankers," to the end of line 26, and to insert:
§ new subsection (3), of excluding from the Clause altogether the issue of security to insurance companies in the same way as we have already excluded the issue of security to banks in the ordinary course of their business. I do not think that I need add anything more, except to point out that we attach considerable importance to the general consents which can be given and which means that once a 2061 general class of transaction has been covered by the consents, it will not be necessary to come to the Treasury for permission.
§ Mr. H. Strauss
I wish to ask the Chancellor, or whoever is going to answer, for a little more information on what the right hon. Gentleman considers he will be at liberty to do under the power of "giving a consent generally." On the Committee stage of the Bill, he himself referred to the powers that he is now taking as "a dispensing power "—a rather ominous phrase in our constitutional history. He seeks the right to exercise these dispensing powers by a consent granted generally.
Now, the question which I wish to put is this; is it his intention that he shall be absolutely unfettered in the exercise of that general power of dispensing, and that he shall be under no obligation of any kind to secure equity as between one class of company and another? That is to say, that he will be perfectly free, under his general dispensing power, to give advantages to bodies corporate not already resident in this country without giving any corresponding advantages to bodies corporate which are already resident in this country?
The matter is of considerable importance, for I would remind him of what he said of this power as recently as 12th June. Replying to my right hon. Friend the Member for Aldershot (Mr. Lyttelton), the Chancellor said:The right hon. Gentleman made a good deal of play with the deterrent effect the Clause would have on companies coming here. I think that is a fair point, and I do not see why we should not say, as we do in the case of some foreign investment today, If you come here from abroad to set up a business with substantial foreign capital, we are prepared to exempt such companies'."—[OFFICIAL REPORT, 12th June, 1951; Vol. 488, c. 2203–4.]The question which I put is this: would the Government be able, under this Amendment which the Chancellor now moves, to exempt such companies as are not yet resident in the United Kingdom without giving the same powers and advantages to companies already resident in the United Kingdom? If that is the power which he is taking, and this the way in which he is going to exercise it, he will do an even greater injury to British credit than he has already done by this Clause.
§ Mr. C. Williams
May we have an answer to the point made by my hon. and learned Friend? Furthermore, could we be told what is meant by,may, if given generally, be revoked by the Treasuryand also be given some information on paragraph (c), which says,may in any case be absolute or conditional.I have no doubt that one could find these words in some other Acts, but that is no reason they should be inserted in the Finance Bill this year. I definitely object to the transfer which is being represented here, and I very much regret the Treasury having control. I resent that they can give and take away in this sort of way and that they may revoke orders. The Chancellor of the Exchequer should tell us clearly under what conditions they are likely to revoke and to use paragraph (c). That will lead to a very great abuse which is hardly likely to be good for international trade.
§ Mr. Gaitskell
I think there is no doubt at all that we would have the power under this Clause to do what the hon. and learned Member suggested. Whether we should do it and in what form, I cannot say now. We have in mind precisely the same conception, the same idea, as the hon. and learned Member himself has in another Amendment which I think is not being selected. We should try and take care of the problem that is created in this way through the Amendment that I have just moved. As to the powers of revocation and why they would be required, they would be required if a general consent were given and then it were found that it involved a great deal of tax avoidance we might necessarily have to revoke it and replace it by something more narrowly drawn.
§ Mr. H. Strauss
May I ask the right hon. Gentleman just this question, so as to make certain that I understood him correctly? He says he will not exercise the power of giving a general licence in such a way as to differentiate between bodies corporate nor already resident in this country and other bodies corporate?
§ Mr. Gaitskell
No, I did not intend to give that impression at all. I said we did not wish to use it in any way unfairly. I think it is perfectly reasonable to use it in a way to encourage or avoid deterring foreign capital from coming into this country.
2063 Question, "That the words proposed to be left out stand part of the Bill," put, and negatived.
Question proposed, "That the proposed words be there inserted in the Bill."
§ Mr. H. Strauss
I beg to move, as an Amendment to the proposed Amendment, in line 12, to leave out, "in the opinion of the Treasury."
It would be convenient to discuss this Amendment and the next Amendment to leave out line 14 together. Subsection (4) (d), of the Chancellor's Amendment, deals with publication, and states that any consent granted by the Treasury under this sectionshall be published in such a way as, in the opinion of the Treasury, to give any person entitled to the benefit of it an adequate opportunity of getting to know of it, unless in their opinion publication is not necessary for that purpose.I propose to leave out the words, "in the opinion of the Treasury," and the words, "unless in their opinion publication is not necessary for that purpose." The effect of my two amendments taken together is that publication would be obligatory in such a way as to give persons entitled to the benefit an adequate opportunity of getting to know of it. That seems reasonable. I cannot see that the matter should be left wholly to the discretion and opinion of the Treasury.
§ Mr. Boyd-Carpenter
I beg to second the Amendment to the proposed Amendment.
The Chancellor has made very clear his view of the importance attached to these consents. It surely does follow that it is very important that everybody concerned should have a real opportunity to know of them, and that that should not be dependent upon the Treasury's opinion.
§ Mr. Hylton-Foster (York)
The more you go on conferring discretion on the Executive, the less you get a proper rule of law. The truth is that either this publication is adequate for the purpose that the House wants or it is not. If it is not, you do not make the Treasury goose into a public swan by putting in "in the opinion of the Treasury."
§ The Attorney-General
I should be quite prepared to accept the first of the 2064 two Amendments, but there is a very serious danger in accepting the second for the following reason. The Amendment that my right hon. Friend has just moved referred both to general and special consents. It would be really most undesirable if a consent which affects a particular company had to be published. It is essential to retain a discretion as to whether a particular consent, at any rate, is published.
I would propose that the House should certainly accept the first of the two Amendments: that is to say, to leave out the words, "in the opinion of the Treasury." That removes any discretion from that part of the Clause. But the second Amendment should be rejected, although it would be necessary, if the first Amendment is accepted, for a manuscript change to be made in line 14. I suggest that paragraph (d) should read:shall be entitled in such a way as to give any person entitled to the benefit of it an adequate opportunity to know of it, unless, in the opinion of the Treasury, publication is not necessary for the purpose.The effect of that would be that all consents of a general character must be published in an adequate form, and that the Treasury's opinion does not enter into that part of the publication. So far as any special consents are concerned, the Treasury would have the discretion not to publish at all, but simply to communicate it to the particular persons affected. I would recommend the House to accept the first Amendment, and if you, Mr. Deputy-Speaker, would allow me to move a manuscript Amendment, I should like to do so. It would be in line 14—
§ Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew)
Perhaps this Amendment could be moved after we have got rid of the first one.
§ Mr. J. Foster
Is there not the same objection to the Attorney-General's suggestion that the Treasury should be left with discretion about publication where special consents are concerned? The same objection applies to each Amendment. Surely the Attorney-General can see that there is no reason to give the Treasury a discretion about the publication of special consents, any more than about the other consents.
§ Mr. Pickthorn
I should like to ask two small points. First, I think that in the Attorney-General's last paragraph but one, when he said "entitled", he meant "published". Perhaps we had better get that right. Secondly—I apologise, here, if I am just being stupid—am I right in thinking that "general" really means a consent to any more than one company?—Because it seems to me that the argument about paragraph (d) is rather a different one, according as one is quite clear about that. Is it right to assume that any consent for more than one company is general within the purpose of this subsection?
§ 11.15 p.m.
§ The Attorney-General
I speak again by leave of the House. If the hon. Gentleman will look at subsection (4), he will see that the consents are so defined. With regard to the point made by the hon. and learned Member for Norwich, South (Mr. H. Strauss), it seems to us that it is really going too far to take away any element of discretion. It seems to us that it is sensible to say that it should be for the Treasury to say whether they think in any particular case it should be published or not.
As the consent affects only a particular company they might do a great deal of harm by disclosing confidential information supplied by the company, and they should in a case like that exercise their discretion. Bona fide discretion would have to be exercised as to whether they published it at all. I agree that in a sense it is a matter of wording, and that if you say "in the opinion of the Treassury", it does not add very much except to make it clear that it is for the Treasury, but I hope the House will decide that the words should be left in so that they can decide whether it should be made public.
§ Mr. H. Strauss
With the leave of the House, I should like to say that, since the main object has been achieved, and in order to facilitate progress, I do not intend to move the second Amendment.
§ Amendment to the proposed Amendment agreed to.
§ The Attorney-General
I beg to move, as an Amendment to the proposed Amendment in line 14, to leave out "their opinion," and to insert:the opinion of the Treasury.
§ Amendment to the proposed Amendment agreed to.
§ Proposed words, as amended, there inserted in the Bill.
§ Colonel J. R. H. Hutchison
I beg to move, in page 25, line 22, at the end, to insert:(ii) Nothing in this section shall apply to any action undertaken to comply with any requirement of an overseas government or authority.This Amendment does not need much argument. As a good wine needs no bush, so a good Amendment is self-evident. The Chancellor laid great stress on the power to grant general consent under subsection (4) of his Amendment, and it seems to us that this is a class of transaction to which general assent can and should be safely given in advance. It is hard to see how consent can be objected to; otherwise what a desperate dilemma some unfortunate concerns will be in.
Here certain action is required by the laws of the country in which its subsidiary operates which may result in a loss of tax in this country. But if the Treasury consent is not granted, then it would offend against the laws of the country, or even against the laws of this country. It is truly between the devil of the Treasury and the deep blue sea of the foreign country's legislation. This is not imaginary. There are certain circumstances which may crop up, and action taken by some Governments in certain countries points a finger to the sort of thing I have in mind.
§ Mr. Gaitskell
I can understand the motives of the hon. and gallant Gentleman in moving this Amendment. I say at once that where pressure of this kind occurs on a company we should certainly bear that in mind, and I have no doubt Treasury consent would be forthcoming. But the Amendment as it stands is open, as I think, to two fatal objections. In the first place, it is extremely widely drawn and will allow any company to claim to be excluded from the Clause simply by saying it was the wish of the Government in such-and-such a territory that they should do this. It would be practically impossible to refuse an excuse of this kind.
2067 Secondly, I think it would be an open invitation to overseas Governments to make all sorts of provisions which might be by no means welcome to a number of companies. Although we appreciate this problem, which, indeed, was one of the main considerations we had in mind when we decided to introduce the special arrangements for consents, I am afraid I cannot accept the Amendment.
§ Colonel Hutchison
I suppose we shall have to be satisfied with a somewhat unsatisfactory assurance. I am dissatisfied to have to rely on the Treasury granting consent along the lines the right hon. Gentleman has indicated.
§ Mr. Eccles
The Chancellor's answer just shows what an impossible Clause this is. I am inclined to agree with him that if the Amendment were inserted it would be an invitation to directors and foreign Governments to bring forward all kinds of unwelcome proposals. But that leaves us in the position that there are bound to be clashes between His Majesty's Government and overseas Governments.
The Chancellor dare not put the Amendment in for fear that that would tempt foreign Governments to make conditions that would not be in our interest. On the other hand, if he does not accept the Amendment, then it means that only after the foreign Governments have made such conditions can it be known whether His Majesty's Government are going to object to them. The Clause is a breeder of diplomatic trouble. I should have thought that the very difficulty posed by the Amendment shows that the whole Clause ought to be taken away.
§ Mr. John Foster (Northwich)
One of the arguments used by the Chancellor was that this Amendment was an invitation to foreign Governments and authorities to require English companies to do things which might prove awkward. Surely he can see this Amendment is not such an invitation. If the governments are going to do anything, they will do it 2068 anyway. They will do it without the Amendment and without the Clause being there. It cannot be said that an Amendment which exempts companies from the requirements of Clause 33 is an invitation to other Governments and authorities to make these requirements. I ask the right hon. Gentleman to reconsider his attitude about this, because it is going to be awkward if a Government or authority abroad makes a requirement, which they could have made irrespective of the existence of Clause 33, and then, as my hon. Friend has said, it is found that the company is between the requirements of Clause 33 and the requirements of the foreign Government.
§ Sir J. Mellor
I think the Chancellor of the Exchequer's attitude in this matter is characteristic of his attitude to the whole question. He does not seem to care a bit what embarrassing and awkward position he puts a company into provided he can stop up all the gaps. He seems to have lost all sense of proportion. He is so horrified that by some ingenious device some company may sneak through the fence that he is, so far as I can see, willing to sacrifice British trade.
This sort of thing is going to have the most embarrassing effect. The Chancellor refuses the reasonable proposal which has been put forward, but he is not prepared to criticise it or to say that it can be improved, or to say that he thinks he can make it a reasonable proposition. He does not do that; but says that it cannot be accepted because it may possibly open a gap. If he is going to deal with the matter like that, then I can foresee, whatever may be done by way of consent, that British trade is going to be greatly embarrassed by what is contemplated by this Amendment. If some foreign government takes action a company will be in difficulty: any consent will be delayed and the company will be penalised. I do not think that the Chancellor is being reasonable, and therefore I should like to see this Amendment pressed to a Division.
§ Amendment negatived.
§ 11.30 p.m.
§ Mr. Gaitskell
I beg to move, in page 26, to leave out lines 29 to 35, and to insert:(6) Notwithstanding anything in the preceding provisions of this section, in no event shall a mere transfer of assets by a body corporate not resulting in a substantial change in the character or extent of the trade or business 2069 of that body corporate be treated for the purpose of this section as a transfer of part of the trade or business thereof.This Amendment has been put down to fulfil an undertaking given during the Committee stage in dealing with an Amendment moved, I think, by the hon. Member for Chippenham (Mr. Eccles). It makes plain that the Clause is not intended, and ought not, of course, to affect cases where there is a mere transfer of assets. Mining leases was the principal illustration given by the hon. Member. Cases of that kind are not affected. So that there shall be no doubt, we have put these words into the Bill.
§ Mr. Eccles
I should like to thank the Chancellor for meeting us to this extent. I have only one observation to make on the Amendment. That is, that we still do not quite know where we are, because no one can be quite clear about what is meant by "a substantial change in the character or extent of the trade or business." I thought, from the Committee stage debate, that the Chancellor of the Exchequer would be willing to say that any transfer of assets which did not result in changing the residence of the company would be a definition of a substantial change. I should like to ask the Government whether that is not really what they mean. Can they really think of any transfers which fall short of altering the place where the company is controlled to which they would object?
§ Mr. Gaitskell
I should have thought it was perfectly possible that one could have a major part of the assets overseas without involving a transfer of the business and without the residence itself being transferred.
§ Amendment agreed to.
§ The Attorney-General
I beg to move, in page 26, line 42, to leave out from "control," to the end of line 44, and to insert:means, in relation to a body corporate, the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person.This is purely a drafting Amendment. It is in order to avoid referential legislation, 2070 and it embodies a description of control by a body corporate.
§ Mr. Manningham-Buller
I thank the Attorney-General for moving this Amendment. We moved an Amendment in almost precisely the same terms during the Committee stage. Comparing the two Amendments, the only difference is the insertion in the present Amendment of the words, "in relation to a body corporate". I am grateful to the Attorney-General for accepting our suggestions, which will lead to yet further improvement of the Bill.
§ Amendment agreed to.
§ The Attorney-General
I beg to move, in page 26, line 46, at the end, to insert:'insurance company' means a body corporate lawfully carrying on business as an insurer, whether in the United Kingdom or elsewhere, and 'funds' in relation to an insurance company means the funds held by it in connection with that business,and a body corporate shall not he deemed for the purposes of this section to cease to he resident in the United Kingdom by reason only that it ceases to exist.This is purely consequential on what has gone before in defining an insurance company, and it is also designed to remove doubt about whether a company, by going into liquidation and being finally wound up and struck off the roll of companies, could be said to be ceasing to be resident here. It provides that it should not.
§ Mr. Manningham-Buller
I should again like to say "Thank you" to the Attorney-General for this Amendment.
§ Amendment agreed to.
§ The Attorney-General
I beg to move, in page 26, line 46, at the end, to insert:No proceedings for an offence under this section shall be instituted, in England or Wales, except by or with the consent of the Attorney-General or, in Northern Ireland, except by or with the consent of the Attorney-General for Northern Ireland:Provided that this subsection shall not prevent the issue or execution of a warrant for the arrest of any person in respect of such an offence, or the remanding in custody or on bail of any person charged with such an offence.This Amendment provides that prosecutions under the Clause shall not take place except with the consent of the Attorney-General. A similar Amendment appears on the Order Paper in the name of the hon. and learned Member for 2071 Northants, South (Mr. Manningham-Buller)—in page 26, line 46, at the end, to insert:(7) A prosecution for an offence under this section shall not be instituted except by or with the consent of the Attorney-General:Provided that a person charged with such an offence may be arrested, or a warrant for his arrest may be issued and executed, and any such person may be remanded in custody or on trial, notwithstanding that the consent of the Attorney-General to the institution of a prosecution for the offence has not been obtained but no further or other proceedings shall he taken until that consent has been obtained.We have adopted the thought behind that Amendment, which has certain drafting difficulties that I do not think the House will want me to go into now.
§ Mr. Manningham-Buller
For the third time I should like to say, "Thank you." I am sorry the Attorney-General should have been so critical of our attempt at drafting this provision. We had a good precedent from an earlier Act, but I think his drafting is entirely satisfactory and fully carries out our intention.
§ The Attorney-General
The hon. and learned Member adopted the precedent, but unfortunately he adopted only half of it. He did not also adopt the definition Clause.
§ Colonel Gomme-Duncan (Perth and East Perthshire)
Does this provision mean that anybody can institute proceedings in Scotland?
§ Amendment agreed to.