HC Deb 07 July 1961 vol 643 cc1948-51
The Solicitor-General

I beg to move, in page 8, line 14, at the end to insert: (3) In approving a scheme under this section, the Treasury may direct that the Prevention of Fraud (Investments) Act, 1958. or the Pre- vention of Fraud (Investments) Act (Northern Ireland), 1940, shall not apply to dealings undertaken or documents issued for the purposes of the scheme, or to such dealings or documents of such descriptions as may be specified in the direction. The effect of this provision is to empower the Treasury to direct that the Prevention of Fraud (Investments) Act, 1958, shall not apply for the purpose of local authority schemes which are dealt with in this Clause. Under the 1958 Act, the managers of schemes for the mutual investment of local authority funds have to conform to the requirements of that Act. In particular, they have to obtain either specific or general permission for the issue of circulars and a licence and exemption for dealings.

When one considers the standing of the managers of local authority schemes, there can be no doubt that a general permission would be given. The simplest way to do that is to give the Treasury power to direct that the Act shall not apply to transactions under the schemes. There are respectable precedents for this under the Church Funds Investment Measure, 1958, and the Charities Act, 1960.

Mr. Hale

I do not wish to hold up the Bill, although I cannot think that any useful purpose will be served by passing it, but does it not ever occur to anyone that this constant playing of musical chairs with Statutes is an infernal nuisance to everyone connected with the law? When a fairly unecessary Measure is introduced in 1958, is it not making life additionally intolerable to lay down a whole series of regulations for the prevention of fraud, then introduce a new Measure in 1960 to make special provisions to protect people from their own folly in not employing a solicitor to draft their will, and then to amend the Prevention of Fraud (Investments) Act by exempting certain authorities from being brought in unnecessarily, from having unnecessary provisions applied to them, and so on?

It is bad enough these days for solicitors to look at the financial columns of The Times to see what has happened to trustee investments without their having to look up a whole series of interrelated Statutes, to supply a card index of inter-related indices, and to have a managing clerk on the trust side or the Chancery side with some bibliographical experience in order to check on the Acts passed by the Government to amend the Acts passed by their predecessors of a year or two ago. This is going on all the time.

If the Government wish to say in a Clause like this, "We do not think it necessary for the general measures to apply", why do not they say so in simple language and be done with it, instead of always referring back to a reference back which amended a previous reference back? There must be a limit to the amount of complexity that it is necessary to introduce into the law to keep the musical chairs system going.

Mr. A. J. Irvine

Before an answer is given to the observations of my hon. Friend the Member for Oldham, West (Mr. Hale)—and I hope that an answer will be given—may I put this to the Government? If my recollection is right, the 1958 Act not only dealt with the matter of licensing dealers in stocks in certain respects, but contained other provisions covering in more general terms fraudulent inducements to invest. I can understand why it should be regarded as undesirable that the licensing provisions affecting dealers in stocks should not apply in this instance to local authorities. But is it not a little odd that the more general provisions of the 1958 Act dealing with fraudulent inducements to invest should be, so to speak, positively and overtly declared not to apply to local authorities?

The Solicitor-General

The Clause is of narrower scope than either the hon. Member for Oldham, West (Mr. Hale) or the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) seemed to suggest. It allows local authorities to invest in, so to speak, common good schemes. Therefore, all that we are concerned with is the organisation of those schemes by local authorities and the various documents put out by the managers of those schemes. What the Amendment says is that, in view of the high standing that one inevitably gets in the manager of a common fund in which local authorities can invest, it may be unnecessary that there should be compliance with the requirements of the 1958 Act. This merely gives power to the Treasury to exempt them from going through the requirements of that Act and, in particular, from having to seek permission for the issue of circulars and a licence and exemption for dealings, and so on.

Amendment agreed to.

3.0 p.m.

Mr. Barber

I beg to move, in page 8, line 30, at the end to insert: (d) in Northern Ireland, the council of a county, a county or other borough, or an urban or rural district, and the Northern Ireland Local Government Officers' Superannuation Committee established under the Local Government (Superannuation) Act (Northern Ireland), 1950.

Mr. Speaker

It would be convenient to discuss, at the same time, the Amendment in page 9, line 10, to leave out "Section" and to insert "Sections ten and".

Mr. Barber

This and the next Amendment, which is consequential, will enable certain authorities in Northern Ireland to participate in the local authorities' mutual investment trust which is to be set up under the Clause. This is the result of an approach made to us by local authorities in Northern Ireland. The local authority associations of England and Wales and Scotland, which are sponsoring the scheme, have been consulted and have no objections to what is proposed.

The proposal should, therefore, commend itself to everybody, and I commend it to the House.

Amendment agreed to.