HC Deb 17 July 1957 vol 573 cc1212-5
Mr. Mitchison

I beg to second the Amendment.

The Amendment relates only to overseas trade corporations. The present position is that an overseas trade corporation gets the advantages which we have been discussing for some time because it is thought that they will encourage its trade abroad and enable it to conduct its trade on competitive terms. These arrangements are intended to be an alternative to an overseas trade corporation becoming a non-resident company by transferring its business abroad.

That is the whole object of this part of this Bill. It is or is not a satisfactory alternative. We have already provided for the company itself to contract out of qualifying as an overseas trade corporation and it therefore rests, subject to the necessary qualifications, with the company itself.

We have heard from the Financial Secretary several times sound objections to hopping in and out. This is not so much hopping in and out, as first hopping in and then skipping out to such a distance that one is out of range. If a company once decides that it should be an overseas trade corporation, it ought not to be able, having so decided, to migrate afterwards.

It is true that Treasury consent is required at present, but we have asked the Government to say whether there will be any change in their present policy of allowing those consents freely, and we have been told that there will be no change-at any rate, we have not been told that there will be a change, and in the absence of any indication of a change we think it wrong that a company, having become an overseas trade corporation by its own election, or having continued as such a corporation by its own election, should at some time afterwards do the one thing to which the Bill is supposed lo present a feasible alternative, namely, to skip out of the whole picture and become a non-resident corporation actually directed and with its seat abroad.

For that reason we think that the Amendment has not only the general advantages which were argued in Committee, and which I will not repeat, but the particular advantage of meeting the real intention of the Government as we understand it to be in relation to overseas trade corporations.

Mr. Birch

Both the mover and seconder of the Amendment are right in saying that one of the objects of overseas trade corporations is to retain control in this country—but that is not their only object. Our objection to the Amendment is simply that if it were passed, and no option whatever was given to the Treasury to allow migration, it would mean that a company might be put into an impossible position owing to local legislation in another country, which might lay down that control of certain companies had to be in that and not this country. It might make it impossible, politically, for a company to carry on in a certain area.

It would also have the effect of making it impossible for a subsidiary company to issue shares or debentures. We therefore believe that the Amendment is impracticable; in fact, the question of any control of a company going overseas is most carefully looked at, and if the Revenue objects on tax grounds it goes to a panel presided over by Lord Kennet. We shall certainly continue to exercise most rigorous control in the matter.

Mr. H. Wilson

We realise that the answer given by the right hon. Gentleman on this occasion had to be fairly short, but, even so, it shows that the Government really have not the confidence they claim to have in the concept of overseas trade corporations. When the Chancellor introduced his Budget we understood that one of the main reasons for these corporations was the fear of the Government that, as things were going on, more and more British-resident companies would transfer themselves to other countries—and not only shipping companies. It was panic in regard to shipping companies which led to the insertion in the Bill of the Clause which deals with investment allowances for shipping companies and I shall not refer to that now.

We understood, however, that the Government felt that by creating this uniquely favourable position for companies trading overseas the whole question of migration would be very much limited. We discussed the subject of migration very briefly in Committee, because we were then proceeding upon a timetable, owing, again, to the unique degree of co-operation that we have given the Government at all stages of the Bill—not because we liked the Budget, and certainly not because we like the Government, but because we felt it reasonable to facilitate the Bill owing to the fact that other important Measures were to be discussed.

All the same, we would have thought that, having given the answer that they did in Committee upon the general question of migration, the Government would have been able to accept this proposal, because it should not be necessary for any overseas trade corporation, with the very special facilities given to it, to want to migrate, We have been extremely perturbed about the attitude of the Government in relation to applications for migration. I think it was in June of last year that the House debated at considerable length the most regrettable decision of the then Chancellor of the Exchequer —now the Prime Minister—to permit the sale of the Trinidad Oil Company to an American dominated concern.

Hon. Members on both sides of the House felt that that was a regrettable decision. We know that it had to be taken because, as a result of a very expensive speech of the Chancellor at Newcastle, we lost so much gold and so many dollars that we had to recover them by selling off one of our assets. It may be that after the latest speech of the Chancellor last week we shall have to sell off another of our assets. The Amendment would prevent a recurrence of that irresponsibility on the part of the Government.

We have had nothing from Government spokesmen at any stage of our proceedings to show the principles upon which they judge applications for migration, and if we do not press the matter to a Division now it is only out of consideration for the timetable that we, together with the Government, are trying to operate. I ask my hon. Friends to allow this matter to go without a Division but I should not like the Government to think that we are in any way satisfied either with their attitude upon the question of migration or upon the question of the Treasury's powers in relation to migration as provided in the Clauses relating to overseas trade corporations.

Amendment negatived.