HC Deb 04 March 1959 vol 601 cc467-87
Mr. G. R. Mitchison (Kettering)

I beg to move, in page 1, line 9, to leave out "its assets and liabilities" and to insert: the relation of its assets to its liabilities and as to its.

The Chairman

I think that this Amendment goes together with the Amendment in page 2, line 1, after "prescribe", insert: and that the society (regard being had to its record and to its financial position) will be able to carry out its obligations under subsection (1) of section two of this Act".

Mr. Mitchison

The two Amendments relate to the question of conditions which a building society has to fulfil if it becomes eligible for trustee status as regards its deposits and also becomes eligible for advances from the Government, which are meant to be related to the advances that the building society in its turn will make to borrowers on what I might call for this purpose small, oldish houses. As the Bill stands, the first condition is that the Chief Registrar has to be satisfied that the building society fulfils requirements as to its assets and liabilities, liquid funds, reserves and other matters, those being requirements prescribed by the Treasury. The second condition is that the Registrar appears to have some discretion in the matter.

In relation to the first condition, Appendix II of the White Paper on House Purchase states the conditions which will be imposed for this purpose. One of them is that the society must have minimum assets of £500,000. Others relate to the proportion between the reserves and the assets of the society and to the liquidity of the society. The two Amendments suggest that instead of the requirements relating in simple terms to its assets and liabilities, they should relate to the relation of its assets to its liabilities which would cover the question of reserves and the question of liquidity, but which would not cover the question of the mere size of the society.

On the other hand, when we come to the second matter—the exercise of the Chief Registrar's discretion—the second Amendment proposes that he should be given the responsibility of forming the opinion that the society will be able to pay back the Government's money. Clause 2 provides for the repayment of advances, and in this case those are the advances made by the Minister to the society. It is suggested in this Amendment that he should satisfy himself on that matter and that he should have regard to the record of the society and, in general terms, to its financial position.

Before I come to the merits of the proposal, I would say that, as regards the functions of the Registrar, this does not appear to be putting too much on him. Already he has the responsibility of forbidding a society to receive further deposits or payments from the public when he considers it to be insolvent or approaching solvency. Also it is part of his normal duties as Registrar to go through the accounts of the building societies and to see that they comply with the statutory conditions on mortgages where there are difficulties, large mortgages and one or two other similar matters. He is by no means a mere formalist in the sense that he has merely to look at the return, see if it is in order and then deal with it accordingly. He has actually to consider the financial position of these societies already. It is fair to say that in practice no Chief Registrar could fulfil his function in respect of the prevention of frauds, that is, the insolvent society case I have mentioned, unless he not only came to a decision at the last moment but had kept an eye on the society in question, and no doubt on others, for some time previously.

I turn shortly to the merits of the matter. In Committee we had a discussion on the question of reducing the minimum. A suggestion was made that it should be reduced to £100,000, and the difficulty of drawing any line was pointed out by one hon. Member with considerable associations with the building society movement. He said that, as is always the case, if a line is fixed at, say, £500,000—the figure in the Bill—we shall disappoint a number of people with assets of £450,000, and so on.

I suggested in the course of the discussion that what we really wanted to see was that these societies paid back the advances, and that size was relevant only in so far as that question arose. To put the matter the other way round, there might be a large society which could just comply with the conditions as regards reserves, liquid funds and so on, and be no better from the point of view of real, substantial solvency than a quite small society which had a small capital but complied, and more than complied, with the conditions as to reserves of liquidity. In other words, in effect it is possible for a man with comparatively small resources to be more solvent and more creditworthy than a millionaire with extensive commitments. I suggested, therefore, that the right plan would be to leave it, with the minimum of prescription, to the Chief Registrar.

If one has to choose as I have indicated, it seems to me that the really important matter, the consideration, to be given to the Registrar as the vital financial one, is not size but relation of assets to liabilities, and accordingly it is in that form that the Amendment is drafted. It brings in one other matter beyond the financial position of the society, which I suggest is worthy of attention—that is the record. In some cases records may not matter that much, hut these building, societies over years and generations have been doing the same kind of business, and though the conditions under which they have operated have varied with the economic growth of the country, substantially there has been a continuity which does not exist in every type of economic activity. In consequence a building society with a really good record has something that ought to be considered when we come to the question of whether it can carry out its obligations.

When we look at the societies and at the cases where there has been trouble, as a rule we notice two things. There are every year one or two of these difficult cases and I admit to the Economic Secretary that they are more apt to happen in the smaller than in the larger societies. One is that the relation of reserves to assets and the liquidity of the society is not only bad at the moment but, if we go back a little, that it has been continually bad for some time past. The other is that they are almost always societies with a rather short history. There are some with a longer history, but they tend on the whole to be that type of society. Therefore, I suggest that this Amendment is on the right lines as regards the question of security for the Government's advances.

There is another question and that is the position of a depositor in a society who will find his deposit credited with trustee status, or a prospective depositor who, because of trustee status, may put his money into a building society. The other day we were given by the hon. Gentleman an imposing list of Government and other bodies which enjoy trustee status, but there are many humbler and smaller bodies which also enjoy it.

The right hon. Gentleman the Minister of Housing and Local Government is responsible for having conferred trustee status on parish councils, for a very good reason, namely, that the parish councils will he solvent. They have a rate-levying capacity which will keep them solvent. But, again, the question was not soundness but solvency, and here too a small society, a parish council of a society in comparison with such huge governments as one of the larger societies may be said to constitute, may be just as solvent, and the same considerations would apply: the question is again one of solvency.

4.30 p.m.

Then we were given another instance. We were told that when it was a question of, for instance, giving trustee status to shares in limited companies, it was almost always in the terms of a limitation framed on the size of the company—it had to have a capital of so much. I am not here to discuss the merits of such a limitation. The Economic Secretary and the Treasury must well know of a number of companies with comparatively small nominal capital and very large resources, and also a number of other companies with very large nominal capital and not very large resources. The two things do not always go together.

Be that as it may, the position of a trading company is entirely different from that of a building society. There is something in the risks of trade and changes may take place in the economic life of the country affecting companies of that sort. However, the Government themselves are choosing building societies as the channel for advances in connection with the building and improvement of houses. No doubt the Government themselves are convinced, and rightly convinced, that by and large building societies are perfectly solvent bodies and not subject to the ordinary risks of commercial enterprises. When the building societies advertise their security as bricks and mortar, or something of that sort, there is something in that, considering the business which they carry on and the way in which they do so.

I now come to the last and most important point. The object of the Bill as a whole is not, we hope, to enable the Government to lend money to building societies. The main object is to get advances made on this type of house—the old, smallish house. For the purpose the Government have selected building societies as the most suitable tool. I do not say anything about the wisdom or sufficiency of that choice, but it has been made. At least they should use the tool to its best advantage.

Considering various parts of the country, especially the north, one finds that small building societies are in a better position to deal with this kind of property than are many of the larger societies. It is not an accident that the Halifax Building Society, a very large society, has dealt extensively with advances for this type of property. The hon. Member for Halifax (Mr. Maurice Macmillan) and I had a minor dispute the other day as to whether 30 per cent. or 27 per cent. of its advances were for this sort of property. It depends on whether number or value is taken, but at any rate it is a substantial proportion. It is not an accident that the Halifax Society started in Yorkshire and has a very good connection in that part of the world.

There are other societies a little further south and others yet further north which have taken a similar course. The other day we heard about the Failsworth Society in Lancashire and the hon. and learned Member for Cardigan (Mr. Bowen) referred to what he called the "small, friendly society". There is a good deal in that, and if this job is to be done, why should the Government deny themselves the advantage of using these small societies, once they are satisfied that they are solvent?

If it is a choice, is it not right to sacrifice a little administrative convenience to get the job properly done? Is it not right in a matter of this sort that the prevailing consideration should be whether the society can make a useful contribution towards the buying and improvement of these old, small houses?

On that test, there is a very strong positive case for including those societies on the lines of the Amendment and no case for saying that an Amendment of this sort, giving a wider discretion to the Registrar, would endanger the Government's advances or, at least equally important, the safety of the depositors' money.

It is particularly the case with small societies that the proportion of deposits to shares is apt to be rather small. There were the 12 merry men who were the depositors of the Failsworth Society and who with other depositors will be found in the pages of the Society's handbook. It is no accident that it works out in that way and we need not go into its causes.

In the interests of using every tool and using this good and available tool and in the belief that the Amendment will not endanger the money of the depositors or the money of the Government, I hope that the Government will accept the Amendment.

Mr. Graham Page (Crosby)

The hon. and learned Member, as I understand it, wishes to add a condition, that the societies should be able to meet the terms of Clause 2 (1) before getting trustee status or being entitled to advances. If a society is charging a low rate if interest, it will not be able to fulfil the requirements of that subsection, so that the Amendment would deprive such societies of trustee status, would it not?

Mr. Mitchison

I do not quite appreciate the hon. Member's point and that is probably my own fault. Clause 2 (1) simply provides for the repayment of advances made by the Government and for the payment of interest on those advances. I am certain that that is a financial matter to which the Registrar must primarily direct his attention. He must also consider the depositors, but the two go together.

Mr. Page

I am sorry that I did not make my question clear. If a building society is charging a low rate of interest —we have had the example of the Halifax Building Society—it will not be able to pay the rate of interest required of it under that subsection and would therefore not be able to meet the condition which the hon. and learned Member wishes to insert.

Mr. Mitchison

Subsection (1) does not lay down any rate of interest. It simply says that the rate of interest is to be payable at such rates and at such times as the Minister may, with the approval of the Treasury, direct. In the White Paper there is an intimation of what the Minister intends to do. It has not escaped my notice that there is an Amendment which would enable changes to be made in the rate of interest. Nor has it escaped my attention that Mr. Speaker suggested that I should leave out of a recent Motion for recommittal some Amendments of my own which were directed to that matter. I cannot carry it any further at present. The hon. Member can guess that I would welcome some relaxation of that matter, but it does not affect these Amendments in the least. It is obvious that the Registrar must consider the ability to repay Government advances, and my contention is that the terms of the Amendment sufficiently provide for that.

The Economic Secretary to the Treasury (Mr. F. J. Erroll)

The hon. and learned Member for Kettering (Mr. Mitchison) in submitting these two Amendments, has thoughtfully provided us with an opportunity of reviewing the conditions which, in the Bill as it stands, the House has decided should be applied to all building societies seeking to establish trustee status. In particular, the second Amendment would put a special and additional task upon the Registrar and I should like to deal with that in a moment. What the hon. and learned Member is really proposing is that we should abandon some of the conditions laid down in Clause 1 and substitute his suggestion that the designation, when granted, should have been made as the result of considering the relation of assets to the liabilities of the building societies, and not, I imagine, to the £500,000 limit, which is one of the conditions proposed in Appendix II of the White Paper.

I wish to remind the Committee that the size qualification is only one of a number of conditions which have to be satisfied. We should look at all the conditions which have to be satisfied and not look at one in particular and seek to remove it. In the view of the Government the conditions as laid down—they were extensively debated during the earlier stages of the Bill—are adequate and satisfactory and the right ones to impose before granting trustee status.

Mr. Mitchison

As I understand my own Amendment and the language of the Bill and the scheme, the only effect would be to remove one condition—the one about the size of the society. In return, as the hon. Gentleman indicated, it would put an additional duty on the Registrar.

Mr. Erroll

Yes. The discussion falls into two parts, whether the £500,000 limit should be retained and, if not, whether the alternative proposal contained in the Amendment would be adequate and satisfactory.

I should like to dispose of the argument as quickly as possible by saying that we believe it important to retain the size qualification. Taking it in conjunction with the other conditions proposed in Appendix II of the White Paper, we think it a more satisfactory way of testing the suitability of building societies for trustee status than the alternative proposed in the Amendment. We debated extensively whether the £500,000 limit was reasonable. I do not wish to detain the Committee by rehearsing those arguments again in detail, but I think I ought to remind hon. Members that size is of importance in order to command the necessary confidence, and that, generally speaking, trustee status securities are related to large and important bodies.

I accept the fact pointed out by the hon. and learned Gentleman that parish council loans have trustee status. But, as he also pointed out, parish councils are in a rather special position, since their solvency is guaranteed by their ability to levy rates which, in turn, can be enforced by my right hon. Friend the Minister of Housing and Local Government and Minister for Welsh Affairs. The parish councils were, in fact, given trustee status only in 1958 by the Local Government Act of that year.

The greater part of local authority revenue comes from rates which they are entitled by law to levy. That is quite a different situation from the finances of the building society. If the ratepayers do not pay up, they may go to prison, but if a borrower of money from a building society does not pay up, it is a much more involved process.

4.45 p.m.

Mr. Mitchison

It was the hon. Gentleman who introduced Governments as a matter for comparison.

Mr. Erroll

Possibly, but it puts the creditworthiness of local authorities, however large or small, in quite a different class from that of building societies.

The real point is that by fixing the limit at £500,000 we have gone as low as we can. I think we should have been entitled to fix the limit at £1 million, but we wanted to come as far down as we could. By selecting the figure of £500,000 we are taking in about 243 building societies which will qualify on grounds of size alone and that represents, roughly, 97 per cent. of all the assets of the building society movement. We think that the societies which will fulfil all the requirements, and not just that of size alone, will represent about 88 per cent. of all the assets of the building society movement. So hon. Gentlemen will see that, by coming down to the figure of £500,000, we are taking in much the greater part of the assets of the movement as a whole.

The second Amendment suggests that the Registrar, when considering the suitability of a society for trustee status under Clause 1 should at the same time satisfy himself that it would be able to carry out its obligations under Clause 2 (1). In other words, at the time trustee status is being sought the Registrar should examine the society from the point of view of its suitability for receiving loans from the Government. We have studied this matter carefully to see what should best be done and we have come to the conclusion that that would be putting the cart before the horse. The point is that there may well be a number of societies which will apply for trustee status, but will not seek to avail themselves of the obligations under Clause 2. It would be a limitation if, in applying for trustee status, the societies had at the same time to satisfy the Registrar that they were suitable for receiving Government loans. Although one might argue that virtually all societies would so be able to satisfy the Registrar, it would involve a good deal of additional work for the Registrar which otherwise might never have to be carried out. Therefore, we think that it would be better to adhere to the arrangements proposed in the Bill as drafted.

I wish to reassure the Committee—if further reassurance be needed—regarding the security of advances from the Government, that the Registrar's powers of designation under Clause 1 are discretionary even if all the conditions in Appendix II of the White Paper are carried out. Even if a society fulfils the conditions laid down in the Regulations to be tabled, the Registrar has power under the Bill to withhold designation for the purposes of Clause 1, if he considers, for example, that on the record of the society's past policies that designation is not warranted. The safeguards are there. I submit to the Committee that the arrangements already proposed in the Bill are the most satisfactory, and I hope, therefore, that these Amendments will not be pressed to a Division.

Miss Margaret Herbison (Lanarkshire, North)

I wish to ask one or two questions, and I hope that the Joint Under-Secretary of State for Scotland will be able to answer them, since this part of the Bill also applies to Scotland.

The Economic Secretary said that size is important because it will command the necessary confidence. It seems to me that the granting of trustee status gives to the societies which get it a great advantage over societies which do not get it. From the words of the Minister, it seems to me that it suggests that the societies which are under the £500,000 mark will be considered by people from the time that trustee status is given as societies in which they could not really have confidence since the Government themselves have decided that they cannot have confidence in them.

We are told that publication will be made in a number of gazettes, and one of them is the Edinburgh Gazette. Anyone who is thinking of investing will look at the Edinburgh Gazette to find how many, if any, of the Scottish societies have been able to get trustee status. It seems to me that those who in the future wish to invest will be much more ready to invest in the societies which are given trustee status than in those which are not, although many of us know and the Government know that the case made by my hon. and learned Friend the Member for Kettering (Mr. Mitchison) is a very sound one, that some of the smaller societies are most trustworthy societies in which we can have confidence.

The Under-Secretary of State must have read the Amendment. I imagine that he must have looked at the effect that it would have in Scotland and the effect which the Bill will have if it is left as it is. I want the Under-Secretary to tell me how many purely Scottish building societies will be able to satisfy the one condition with which I am now dealing. This is of the greatest importance. I want to ensure that if there are savings in Scotland they shall, if possible, go into Scottish building societies. It is of the greatest importance that the Under-Secretary should be able to give me that information.

The Joint Under-Secretary of State for Scotland (Mr. J. Nixon Browne)

The answer to the hon. Lady is that there are four such societies in Scotland. The hon. Lady will realise that many English firms have a great deal of Scottish business and some Scottish firms have a great deal of English business. We have looked at this matter with very great care and concern—we are concerned for the welfare of our Scottish building societies—and I assure the hon. Lady that the border between England and Scotland makes no difference here and that what applies in England to the smaller or larger societies will also apply in Scotland.

Miss Herbison

I know that this part of the Bill applies to the United Kingdom, so that whatever conditions apply to building societies in England will apply to those in Scotland. That refers to the conditions as they are in the Bill or as they will be when amended.

The Under-Secretary has been able to tell us that there are four societies in Scotland which would satisfy the one condition with which I have dealt. How many trustworthy Scottish societies will not? Is not the hon. Gentleman very much afraid that this will do great damage to reputable, trustworthy Scottish societies, in which we can have real confidence, which will not get trustee status? Four is a small number for Scotland. It seems to me that the Under-Secretary should know the numbers in Scotland which will be ruled out by this one condition.

Mr. James H. Hoy (Edinburgh, Leith)

My hon. Friend the Member for Lanarkshire, North (Miss Herbison) has made a very moderate request. The conditions in Scotland are somewhat different from those which obtain south of the Border. Scotland has much smaller communities. It may be that within those communities there are very good and reputable building societies meeting the needs of the localities. One would have thought—we are not for the moment arguing the merits of it—that the Joint Under-Secretary would have been able to supply the information for which my hon. Friend has asked. Surely when the list was being prepared the Scottish Office must have known how many would qualify for trustee status and how many would be debarred because they failed to reach the required level of deposits. Perhaps the Joint Under-Secretary can now add a little more information and complete the picture for Scotland. He has said that four societies will qualify. How many will be disqualified by the Bill?

Mr. J. N. Browne

I apologise to the hon. Member for Leith (Mr. Hoy) but I have not got that figure at the moment. What I can tell him is that we have looked at this matter with great care and have satisfied ourselves that the smaller Scottish societies—I agree with everything that the hon. Lady the Member for Lanarkshire, North (Miss Herbison) has said about them; I am sure that their enterprise will soon bring them up to the £500,000 status—will not suffer any more than the equivalent societies in England.

Mr. Mitchison

I think my hon. Friends have taken a very good instance. There was a very large Scottish society, with assets of well over £500,000, which got into trouble lately and had to be taken over by an English society.

When I look at these small Scottish societies, of which there seem to be a very large number—I do not wish to advertise any in particular—many of them seem to me to be quite aggressively solvent but on what is obviously a small and local scale. They are very venturesome in their names. Some of them are picturesque and beautiful. "The Dumfries and Galloway Benefit Friendly and Building Society" is an attractive name in itself. But I call it a little impertinent even for a Scottish society to call itself the "Improved Edinburgh". It is only in Glasgow that that sort of name would go down, and the society appears to be an Edinburgh one.

There are many others, and two things are clear if one looks at the list of them: first, that Scotland is very much a country where this kind of advance is being done by small local societies; secondly, that the Scots have not lost their reputation for soundness and thrift. Most of the societies—I would not say all—on a cursory examination look fully as entitled to credit as the late Scottish Amicable.

I suggest to the Government that they are taking much too narrow a view of this matter when they insist on size and prefer size to the good sense of the Registrar and his knowledge of the record of the societies, and that surely counts for something because even the "Improved Edinburgh" was established in 1847.

I believe that what is happening here is that the convenience of the Treasury and administrative simplicity is being preferred to the real interests of the man who owns or wants to own a house and that the substantial object of the Bill is being neglected for financial reasons which seem to me to be of very doubtful soundness and, anyhow, of much less importance than the real interests of the borrower and, I might add, of the stock of houses in this country. I advise my hon. Friends to support our Amendments in the Lobby when the time comes.

5.0 p.m.

Mr. E. G. Willis (Edinburgh, East)

I add my voice to the pleas which have been addressed to the Government and I do so as one who has lived in Edinburgh for a very long time and at present has the privilege of representing a constituency of Edinburgh, a city where whenever a lawyer and an accountant meet together they form a building society or an investment trust.

I cannot help feeling that the actual test or qualification which the Government have put into the Bill is quite the wrong one. I am sure that what my hon. and learned Friend has just said is very much in the mind of these Scottish people—that the building society which has probably received the greatest publicity and which I believe to be the biggest Scottish building society—the Scottish Amicable—has been the one that has got into difficulties, while many of these smaller societies which are doing a good job of work have not in fact done so.

The Joint Under-Secretary said that this is a matter in which Scotland will be treated in the same way as England, and that the same conditions will apply. What the hon. Gentleman forgets is that development in Scotland has been rather different from the development in England. That is what I feel has happened, and the growth of building societies has been rather different, too. As my hon. Friend the Member for Leith (Mr. Hoy) has said, we have quite a considerable number of very good small building societies in Scotland, all of which are performing a very good job.

I do not know whether the Government have tried to find out anything about this, but I should not be surprised if they have not because we were told in the Scottish Standing Committee on the Deer Bill only yesterday that the Government were not interested in finding out information about Scotland. I am not surprised—

Mr. J. N. Browne

indicated dissent.

Mr. Willis

If the hon. Gentleman reads the OFFICIAL REPORT of the Committee, he will find that what I have said is correct. Therefore, I am not at all surprised that the Government have not bothered to find out very much about this matter in Scotland.

A very large number of the people in Edinburgh—more than in any other town in Scotland—go in for home ownership, and I should imagine that, if the facts were known, the greatest number of these people actually borrow from these smaller building societies. I think that is true. I do not know what the evidence of the hon. Gentleman is. I happen to have been born in Norwich. It is probable that, if I take my native town of Norwich, precisely the opposite may be the case, and most of the people there may borrow from the Huddersfield, the Abbey Road and other large building societies. I think they do in Norwich.

I may be quite wrong about this, but all I am asking is what have the Government done to try to find out if this is a very widespread method of borrowing in Scotland, as I think it is. I think my hon. Friend the Member for Leith, who also has considerable knowledge of this matter, and who meets people in Edinburgh, as I do, will agree that many of them borrow from these very small reputable building societies. I should have thought, therefore, that the Government ought not simply to say that the conditions will be the same as apply in England, but should ask themselves whether in fact existing practices in Scotland are different from those in England.

Is the general pattern different from what it is in England? It may well be different, though I am not sure, but what have the Government done to try to find out if the pattern is different? I should have thought that there was some reason in Scotland to have looked at the matter rather differently. This is another case of our being strung along behind England, whether we like it or not. We are sick and tired of being strung along behind England. However, when we are, we ought at least to be satisfied that the Government are not just doing this because the Scottish Office is too weak to resist but that it has allowed Scotland to be strung along like this in the knowledge of the facts.

Mr. Frederic Harris (Croydon, North-West)

I thought the hon. Gentleman was making a point about his native town of Norwich.

Mr. Willis

I am very proud of my native town, but I happen to have been adopted by Scotland as one of its representatives, and I am one of its citizens at the present time. As the recent Cup-tie proved, the combination of Norwich and Scotland is a very good one indeed.

The point I was making is that when we are strung along behind England, or with England, on these matters, we want some assurance that it is being done in the knowledge of the facts as they exist in Scotland, and, up to the present, the Joint Under-Secretary, although I can see that he is now thirsting to give us the information, has not convinced my hon. Friends on this side of the Committee that this is in fact so. I hope the hon. Gentleman is now in a position to do this, and will give us the information.

Mr. J. N. Browne

I am grateful to the hon. Member for Edinburgh, East (Mr. Willis) for giving me the chance to reply again. I am now in a position to answer a question put to me by the hon. Member for Leith (Mr. Hoy).

It is a good thing to get the matter in proportion. There are 38 Scottish societies, of which four will qualify under all the conditions, and eight will qualify on size alone. The hon. Member also asked me whether the pattern is different. It is very hard to find out the exact pattern of the business transacted by the societies, but I am advised that there is far more borrowing in Scotland from the big United Kingdom societies than there is from the very small Scottish societies. The general pattern of borrowing is really no different as between England and Scotland, and I can assure him once more that there is no need to look at Scotland differently from the way in which we look at England.

Mr. Hoy

I do not want to prolong the discussion. My hon. Friend the Member for Edinburgh, East (Mr. Willis) said he was not certain, and wanted to know the facts. What the Joint Under-Secretary has said simply bears out what I suggested in my first contribution to the debate—that because of the geography of Scotland and the dispersal of the population we find these small societies operating in smaller areas and for a smaller number of people. That is the matter which is at stake so far as the Bill is concerned—the rendering of a local service. While it may be true that the larger societies, and the largest of them all is what was the Scottish Amicable which has now been taken over by the Co-operative Permanent Building Society, tend to serve the masses of the people because of where their offices are situated, they do not give that service in the more remote areas.

What I want to impress on the Joint Under-Secretary is that if he insists upon pressing the Bill as it stands it will make these very good small societies, which have rendered such a good social service in so many parts of Scotland, feel that they have been placed in a position inferior to that of the larger building societies. If he is doing that, let him do it with his eyes open, but I do not think it will meet with the approval of the people in a large part of Scotland who invest in these building societies.

Miss Herbison

I feel that we cannot let this matter go without a few more words. We have been able by our questions to get from the Joint Under-Secretary the relevant figures, but the hon. Gentleman will insist that this matter was very carefully examined by his Minister and by the Department. When, however, he did not know the figures, or the answers to these simple questions, it seems to me that little or no examination of what was entailed had been given to it, at least by the Scottish Office, but that the Scottish Office had accepted the advice of an English Minister that this was the kind of thing that ought to be done.

Mr. Nixon Browne

The hon. Lady brings to all our debates bitterness which is not borne out by the facts. She knows quite well that this was debated and answered on behalf of my right hon. Friend by a Treasury Minister. She insists on dragging in the Joint Under-Secretary, and I am quite prepared to answer, but I did not come to the discussion on this particular Clause with all the facts and figures in front of me. It is not wise to shoot figures at the hon. Lady. I must get the figures verified before I give them to the House.

Miss Herbison

I am very sorry indeed if the Minister considers it bitterness if one says that the Minister who has been, during the whole of the discussion on the Bill, the responsible Minister for Scotland, tells us that he did not have these figures. Now the Scottish Office have produced the figures. This is a Bill that applies to Scotland equally as to England and Wales, and it seems to me that at least one Minister, of all the Ministers we have in the Scottish Office, ought to have known these figures when consideration was being given to the matter. I throw back at the Minister the fact that he

is so thin skinned when he is found out and when he does not know the answers that he attributes it to bitterness. I am not the least bit bitter, but I am terribly anxious about the good name of Scotland and that these little building societies should have fair play. They will not be having fair play if this Amendment is not accepted.

From the figures which the hon. Gentleman has now given we find that at least 26 out of 38 of these small building societies will not be able to get trustee status. I am informed that that is a much bigger propertion than there will be for England and Wales taken together. In other words, the points made by my hon. Friend the Member for Leith (Mr. Hoy) are borne out by these figures and show that because of our perhaps isolated places these little building societies, trustworthy organisations, which have been doing a very good job are to be put at a disadvantage.

Finally, I say to the Joint Under-Secretary of State that if he is deputed by the Secretary of State for Scotland to pilot through a Bill then it behoves him to get the information that is relevant to the Bill and not to complain when hon. Members on this side of the Committee, either from the Front Bench or from the back benches, ask for that information. We are most dissatisfied with the answers that we have been given and we mean to divide on these Amendments.

Question put, That "its assets and liabilities" stand part of the Clause:—

The Committee divided: Ayes 251, Noes 207.

Division No. 54.] AYES [5.14 p.m.
Agnew, Sir Peter Birch, Rt. Hon. Nigel Cooke, Robert
Aitken, W. T. Bishop, F. P. Cooper, A. E.
Allan, R. A. (Paddington, S.) Bowen, E. R. (Cardigan) Cooper-Key, E. M.
Anstruther-Gray, Major sir William Boyd-Carpenter, Rt. Hon. J. A. Cordeaux, Lt.-Col. J. K.
Arbuthnot, John Braine, B, R. Corfield, F. V.
Armstrong, C. W. Bromley-Davenport, Lt.-Col. W. H. Craddock, Beresford (Spelthorne)
Ashton, H. Brooke, Rt. Hon. Henry Crosthwaite-Eyre, Col. O. E.
Astor, Hon. J. J. Brooman-White, R. C. Crowder, Sir John (Finchley)
Baldock, Lt.-Cmdr, J. M. Browne, J. Nixon (Graigton) Crowder, petre (Ruislip—Northwood)
Baldwin, Sir Archer Bryan, P. Cunningham, Knox
Balniel, Lord Bullus, Wing Commander E. E. Currie, G. B. H.
Barber, Anthony Burden, F. F. A. Dance, J. C. G.
Barlow, Sir John Butcher, Sir Herbert D'Avigdor-Goldsmid, Sir Henry
Barter, John Butler, Rt. Hn. R. A. (Saffron Walden) de Ferranti, Basil
Batsford, Brian Campbell, Sir David Digby, Simon Wingfield
Baxter, Sir Beverley Carr, Robert Dodds-Parker, A. D.
Beamish, Col, Tufton Cary, Sir Robert Donaldson, Cmdr. C. E. McA.
Bell, Ronald (Bucks, S.) Channon, H. P. C. Doughty, C. J. A.
Bennett, Dr. Reginald Chichester-Clark, R. du Cann, E. D. L.
Bevins, J. R. (Toxteth) Clarke, Brig. Terence (Portsmth, W.) Dugdale, Rt. Hn. Sir T. (Richmond)
Biggs-Davison, J. A. Cole, Norman Duncan, Sir James
Bingham, R. M. Conant, Maj. Sir Roger Eccles, Rt. Hon. Sir David
Elliott, R. W. (Nc'castle upon Tyne, N. Joseph, Sir Keith Pott, H. P.
Emmet, Hon. Mrs. Evelyn Kerr, Sir Hamilton Powell, J. Enoch
Errington, Sir Eric Kershaw, J. A. Price, David (Eastleigh)
Erroll, F. J. Kimball, M. Price, Henry (Lewisham, w.)
Farey-Jones, F. W. Lagden, G. W. Prior-Palmer, Brig. O. L.
Fell, A. Lambton, Viscount Profumo, J. D.
Fisher, Nigel Lancaster, Col. C. G. Redmayne, M.
Fletcher-Cooke, C. Langford-Holt, J. A. Rees-Davies, W, R.
Forrest, G. Leather, E. H. C. Remnant, Hon. P.
Fort, R. Leavey, J. A. Renton, D. L. M.
Fraser, Hon. Hugh (Stone) Leburn, W. G. Ridsdale, J. E.
Freeth, Denzil Legge-Bourke, Maj. E. A. H. Roberts, Sir Peter (Hecley)
Galbraith, Hon. T. G. D. Legh, Hon. Peter (Petersfield) Robertson, Sir David
Gammans, Lady Lindsay, Hon. James (Devon, N.) Robinson, Sir Roland (Blackpool, S.)
Garner-Evans, E. H. Longden, Gilbert Ropner, Col. Sir Leonard
Gibson-Watt, D. Loveys, Walter H. Russell, R. S.
Glover, D. Lucas, Sir Joselyn (Portsmouth, S.) Scott-Miller, Cmdr. R.
Godber, J. B. Lucas-Tooth, Sir Hugh Sharpies, R. C.
Goodhart, Philip McAdden, S. J. Simon, J. E. S. (Middlesbrough, w.)
Gough, C. F. H. Macdonald, Sir Peter Smithers, Peter (Winchester)
Gower, H. R. McLaughlin, Mrs. P. Smyth, Brig. Sir John (Norwood)
Graham, Sir Fergus Maclay, Rt. Hon. John Soames, Rt. Hon. Christopher
Grant, Rt. Hon. W. (Woodside) Maclean, Sir Fitzroy (Lancaster) Spearman, Sir Alexander
Grant-Ferris, Wg Cdr. R. (Nantwich) McLean, Neil (Inverness) Speir, R. M.
Green, A. Macleod, Rt. Hn. Iain (Enfield, W.) Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Gresham Cooke, R. Macmillan, Maurice (Halifax) Stanley, Capt. Hon. Richard
Grimond, J. Macpherson, Niall (Dumfries) Stevens, Geoffrey
Grimston, Sir Robert (Westbury) Maddan, Martin Steward, Sir William (Woolwich, W.)
Grosvenor, Lt.-Col. R. G. Maitland, Hon. Patrick (Lanark) Stoddart-Scott, Col. Sir Malcolm
Gurden, Harold Manningham-Buller, Rt. Hn. Sir R. Storey, S.
Hall, John (Wycombe) Markham, Major Sir Frank Stuart, Rt. Hon. James (Moray)
Hare, Rt. Hon. J, H. Marlowe, A. A. H. Studholme, Sir Henry
Harris, Frederic (Croydon, N. W.) Marples, Rt. Hon. A. E. Taylor, Sir Charles (Eastbourne)
Harvey, Sir Arthur Vere (Macclesf'd) Marshall, Douglas Taylor, William (Bradford, N.)
Hay, John Mathew, R. Temple, John M.
Heald, Rt. Hon. Sir Lionel Mawby, R. L. Thomas, Leslie (Canterbury)
Heath, Rt. Hon. E. R. G. Maydon, Lt.-Comdr, S. L. C. Thompson, R. (Croydon, S.)
Henderson, John (Cathcart) Medlicott, Sir Frank Thorneycroft, Rt. Hon. P.
Henderson-Stewart, Sir James Milligan, Rt. Hon. W. H. Thornton-Kemsley, Sir Colin
Hicks-Beach, Maj. W. W. Moore, Sir Thomas Tiley, A. (Bradford, W.)
Hill, Mrs. E. (Wythenshawe) Mott-Radclyffe, Sir Charles Tilney, John (Wavertree)
Hill, John (S. Norfolk) Nabarro, G. D. N. Vane, W. M. F.
Hobson, John Warwick & Leam'gt'n) Nairn, D. L. S. Vaughan-Morgan, J. K.
Holt, A. F. Neave, Airey Vickers, Miss Joan
Hope, Lord John Nicholls, Harmar Vosper, Rt. Hon. D. F.
Hornsby-Smith, Miss M. P. Nicholson, Sir Godfrey (Farnham) Wakefield, Edward (Derbyshire, W.)
Horobin, Sir Ian Nicolson, N. (B'n'm'th, E. & Chr'ch) Wall, Patrick
Horsbrugh, Rt. Hon. Dame Florence Noble, Comdr. Rt. Hon. Allan Ward, Rt. Hon. G. R. (Worcester)
Howard, Gerald (Cambridgeshire) Noble, Michael (Argyll) Ward, Dame Irene (Tynemouth)
Howard, Hon. Greville (St. Ives) Nugent, G. R. H. Watkinson, Rt. Hon. Harold
Howard, John (Test) Oakshott, H. D. Webster, David
Hughes-Young, M. H. C. O'Neill, Hn. Phelim (Co. Antrim, N.) Whitelaw, W. S. I.
Hurd, Sir Anthony Ormsby-Gore, Rt. Hon. W. D. Williams, R. Dudley (Exeter)
Hutchison, Michael Clark (E'b'gh, S.) Orr-Ewing, C. Ian (Hendon, N.) Wills, Sir Gerald (Bridgwater)
Hutchison, Sir Ian Clark (E'b'gh, W.) Osborne, C. Wilson, Geoffrey (Truro)
Hutchison, Sir James (Scotstoun) Page, R. C. Wolrige-Gordon, Patrick
Hylton-Foster, Rt. Hon. Sir Harry Pannell, N. A. (Kirkdale) Wood, Hon. R.
Iremonger, T. L. Partridge, E. Woollam, John Victor
Irvine, Bryant Godman (Rye) Peel, W. J. Yates, William (The Wrekin)
Jenkins, Robert (Dulwich) Pickthorn, Sir Kenneth
Johnson, Dr. Donald (Carlisle) Pike, Miss Mervyn TELLERS FOR THE AYES:
Johnson, Eric (Blackley) Pitman, I. J. Colonel J. H. Harrison and
Jones, Rt. Hon. Aubrey (Hall Green) Pitt, Miss E. M. Mr. Finlay.
Abse, Leo Braddook, Mrs. Elizabeth Cronin, J. D.
Ainsley, J. W. Brookway, A. F. Crossman, R. H. S.
Albu, A. H. Broughton, Dr. A. D. D. Cullen, Mrs. A.
Allaun, Frank (Salford, E.) Brown, Rt. Hon. George (Belper) Dalton, Rt. Hon. H.
Allen, Arthur (Bosworth) Brown, Thomas (Ince) Darling, George (Hillsborough)
Awbery, S. S. Burke, W. A. Davies, Ernest (Enfield, E.)
Bacon, Miss Alice Burton, Miss F. E. Deer, G.
Balfour, A. Butler, Herbert (Hackney, C.) do Freitas, Geoffrey
Bence, C. R. (Dunbartonshire, E.) Callaghan, L. J. Delargy, H. J.
Benn, Hn. Wedgwood (Bristol, S. E.) Castle, Mrs. B. A. Diamond, John
Benson, Sir George Champion, A. J. Dodds, N. N.
Bevan, Rt. Hon. A. (Ebbw Vale) Chapman, W. D. Donnelly, D. L.
Blackburn, F. Chetwynd, G. R. Ede, Rt. Hon. J. C.
Blyton, W. R. Cliffe, Michael Edwards, Rt. Hon. John (Brighouse)
Boardman, H. Clunie, J. Edwards, Rt. Hon. Ness (Caerphilly)
Bottomley, Rt. Hon. A. G. Coldrick, W. Edwards, Robert (Bilston)
Bowden, H. W. (Leicester, S. W.) Collick, P. H. (Birkenhead) Edwards, W. J. (Stepney)
Bowies, F. G. Corbet, Mrs. Freda Evans, Albert (Islington, S. W.)
Boyd, T. C. Craddock, George (Bradford, S.) Evans, Edward (Lowestoft)
Fernyhough, E. Mabon, Dr. J. Dickson Robens, Rt. Hon. A.
Finch, H. J. (Bedwellty) McAlister, Mrs. Mary Roberts, Albert (Normanton)
Fitch, A. E. (Wigan) McCann, J. Roberts, Goronwy (Caernarvon)
Fletcher, Eric MacColl, J. E. Robinson, Kenneth (St. Pancras, N.)
Foot, D. M. MacDermot, Niall Ross, William
Fraser, Thomas (Hamilton) McKay, John (Wallsend) Royle, C.
Gaitskell, Rt. Hon. H. T. N. McLeavy, Frank Shinwell, Rt. Hon. E.
Gibson, C. W. MacMillan, M. K. (Western Isles) Silverman, Julius (Aston)
Gordon Walker, Rt. Hon. P. C. MacPherson, Malcolm (Stirling) Silverman, Sydney (Nelson)
Greenwood, Anthony Mallalieu, E. L. (Brigg) Simmons, C. J. (Brierley Hill)
Grenfell, Rt. Hon. D. R. Mallalieu J. P. W. (Huddersfd, E.) Skeffington, A. M.
Grey, C. F. Mann, Mrs. Jean Slater, Mrs. H. (Stoke, N.)
Griffiths, Rt. Hon. dames (Llanelly) Marquand, Rt. Hon. H. A. Slater, J. (Sedgefield)
Hall, Rt. Hn. Glenvil (Colne Valley) Mayhew, C. P. Smith, Ellis (Stoke, S.)
Hamilton, W. W. Mellish, R. J. Snow, J. W.
Hannan, W. Messer, Sir F. Soskice, Rt. Hon. Sir Frank
Harrison, J. (Nottingham, N.) Mitchison, G. R. Sparks, J. A.
Hastings, S. Monslow, W. Steele, T.
Hayman, F. H. Moody, A. S. Stewart, Michael (Fulham)
Henderson, Rt. Hn. A. (Rwly Regis) Morrison, Rt. Hn. Herbert (Lewis'm, S.) Summerskill, Rt. Hon. E.
Herbison, Miss M. Moss, R. Swingler, S. T.
Hewitson, Capt. M. Moyle, A. Sylvester, G. O.
Hobson, C. R. (Keighley) Mulley, F. W. Taylor, Bernard (Mansfield)
Holman, P. Neal, Harold (Bolsover) Thornton, E.
Houghton, Douglas Noel-Baker, Francis (Swindon) Timmons, J.
Howell, Denis (All Saints) Noel-Baker, Rt. Hon. P. (Derby, S.) Ungoed-Thomas, Sir Lynn
Hoy, J. H. Oram, A. E. Usborne, H. C.
Hughes, Cledwyn (Anglesey) Oswald, T. Viant, S. P.
Hughes, Hector (Aberdeen, N.) Padley, W. E. Warbey, W. N.
Hunter, A. E. Paling, Rt. Hon. W. (Dearne Valley) Watkins, T. E.
Hynd, H. (Accrington) Paling, Will T, (Dewsbury) Weitzman, D.
Hynd, J. B. (Attercliffe) Palmer, A. M. F. Wells, Percy (Faversham)
Irvine, A. J. (Edge Hill) Pannell, Charles (Leeds, W.) Wells, William (Walsall, N.)
Irving, Sydney (Dartford) Pargiter, G. A. Wheeldon, W. E.
Isaacs, Rt. Hon. G. A. Parker, J. White, Mrs. Eirene (E. Flint)
Jay, Rt. Hon. D. P. T. Parkin, B. T. White, Henry (Derbyshire, N. E.)
Jeger, George (Goole) Pearson, A. Wilkins, W. A.
Jeger, Mrs. Lena (Holbn & St.Pncs. S.) Pentland, N. Willey, Frederick
Jenkins, Roy (Stechford) Plummer, Sir Leslie Williams, Rt. Hon. T. (Don Valley)
Johnson, James (Rugby) Popplewell, E. Williams, W. R. (Openshaw)
Jones, Rt. Hon. A. Creech (Wakefield) Prentice, R. E. Willis, Eustace (Edinburgh, E.)
Jones, David (The Hartlepools) Price, J. T. (Westhoughton) Wilson, Rt. Hon. Harold (Huyton)
Jones, Elwyn (W. Ham, s.) Price, Philips (Gloucestershire, W.) Winterbottom, Richard
Jones, J. Idwal (Wrexham) Probert, A. R. Woodburn, Rt. Hon. A.
Jones, T. W. (Merioneth) Pursey, Cmdr. H. Woof, R. E.
Kenyon, C. Randall, H. E. Yates, V. (Ladywood)
Key, Rt. Hon. C. W. Rankin, John Younger, Rt. Hon. K.
Ledger, R. J. Redhead, E. C. Zilliacus, K.
Lee, Frederick (Newton) Reeves, J.
Lee, Miss Jennie (Cannock) Reid, William TELLERS FOR THE NOES:
Lindgren, G. S. Rhodes, H. Mr. John Taylor and Mr. Rogers.

Clause ordered to stand part of the Bill.