Commons Sitting of 27 March 1963

Preamble
The House met at hall-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

MEMBERS (ACCESS TO HOUSE OF COMMONS)
Mr. Emrys Hughes: On a point of order. I wish to raise a point of order about rights of access to this House and the safety of Members. I understand that yesterday there was some difficulty outside and that a very large number of police, including mounted police, were here to protect Members against a deputation which included some of my constituents. I should like to have an assurance that today we can be guaranteed some protection against the lobbying deputation from infuriated schoolteachers, and I should like to ask whether you are satisfied, Mr. Speaker, that there are sufficient police precautions, including sufficient mounted police, and, if necessary Scots Guards, to protect Members against any possibility of danger.
Mr. Speaker: I have no reason to think that there is any deficiency in the Sessional Order to the carrying of which the hon. Member was a party.

ORAL ANSWERS TO QUESTIONS
  AGRICULTURE, FISHERIES AND FOOD

    Improvement Grants (Farming Syndicates)
    Miss Quennellasked the Minister of Agriculture, Fisheries and Food if lie will make the payments of improvement grants to farming syndicates on the same basis as improvement grants to individual farmers.
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins): The Government are paying grants to farmers'
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    machinery syndicates towards the cost of buildings to be used mainly for grain drying and storage or for housing farm machinery, and the terms of grant are broadly similar to those of farm improvement scheme grants to individual farmers.
    Miss Quennell: Is my hon. Friend aware that individual farmers receive grants in one amount, whereas in the case of syndicates the moneys received are 50 per cent. of the certificated costs with the balance spread over five years, and that this is hardly encouraging to members of farming syndicates?
    Mr. Scott-Hopkins: As my hon. Friend said, 50 per cent. is paid on completion of the building and the remainder is spread over five years. It is true. We do this because the grants are given for certain uses of the building only, and this is the only way we can retain a measure of control over its use for at least the initial period of five years.
    Miss Quennell: Can my hon. Friend have another look at this to see if it is possible to iron out the anomaly as between the two systems?
    Mr. Scott-Hopkins: I am always prepared to look at anything my hon. Friend wants to raise, but I think the position remains broadly as I have stated.

    Seeds and Plants (Report)
    Mr. B. Harrisonasked the Minister of Agriculture, Fisheries and Food whether he will introduce legislation to implement the findings of the Committee on the Transaction of Seeds.
    The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames): My Department is working on proposals for legislation to implement most of the Committee's recommendations on seeds and plant breeders' rights, and there have recently been discussions on the Government's proposals with the organisations concerned. When it will be possible to introduce this legislation depends on parliamentary time being available.
    Mr. Harrison: Would my right hon. Friend bring all the pressure to bear that he can on those people who are responsible for the Parliamentary timetable to bring this important bit of legislation forward? I am fully aware of what his

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    Department is at present doing, and I think it would be a great pity if its work did not bear fruition in this Session.
    Mr. Soames: It is the Government's intention to legislate as soon as possible on this, especially in view of the fact that we have signed the International Convention for the Protection of New Varieties.
    Mr. Farr: Is my right hon. Friend aware of the possibility that some part of the report may now be out of date in view of the fact that it is nearly three years since the original Engholm Committee reported?
    Mr. Soames: No. I do not think it is out of date. Anyway, as I say, our proposals are being drawn up in collaboration with the interested parties.

    Rabbits
    Sir H. Harrisonasked the Minister of Agriculture, Fisheries and Food how many prosecutions were made under the Pests Act, 1954, during 1962 for harbouring rabbits.
    Mr. Scott-Hopkins: None, Sir. During 1962 we were able to get rabbits destroyed by issuing formal warnings to occupiers, followed, in a few cases, by default action on the part of the Ministry.
    Sir H. Harrison: Is my hon. Friend satisfied that rabbits really are being kept properly under control? Is he aware that there is an impression abroad that if an offender makes some small contribution no further proceedings will be taken against him? How long is it between the first inspection and the final destruction of the rabbits?
    Mr. Scott-Hopkins: We are never satisfied that sufficient is being done. One always wants to see more being done, but I can assure my hon. and gallant Friend that the existing system is working well. As to the last part of his supplementary question, I have not got available the exact time between the initial warning that the rabbits should be destroyed, and the taking of default action. I will let him know.

    Food Prices
    Mr. Darlingasked the Minister of Agriculture, Fisheries and Food what reply he has made, or intends to make,
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    to the representations sent to him by the British Farmers' and Smallholders' Association regarding the effects on food prices of present arrangements at fat stock auctions and at fruit and vegetable markets.
    Mr. Scott-Hopkins: No such representations have been received, although I am of course aware of the comments on these matters in the Association's recent Report.
    Mr. Darling: As the annual report makes strong criticism of the failure of the Government to introduce a proper meat marketing policy and their failure to do anything about horticultural marketing, can the hon. Gentleman tell us when we shall get some action on these two important matters and what kind of action it will be?
    Mr. Scott-Hopkins: The hon. Member will know that there is a committee studying marketing. But that is rather different from the Question that he actually asked. I must repeat that we have not received any actual representations from the association.
    Mr. W. Hamiltonasked the Minister of Agriculture, Fisheries and Food to what extent the contemplated changes in agricultural policy will result in increased food prices to the consumer; and whether he will make a statement.
    Mr. Soames: We have yet to carry through the necessary discussions before deciding on any changes, and I am not therefore in a position to make a statement or to assess what effect they may have on the level of food prices.
    Mr. Hamilton: Is the right hon. Gentleman aware that in the last year, with existing policies, food prices have gone up by not less than 10d. in the £ and that substantial increases will follow the new change of policy which the Government have indicated? Will he give an undertaking that the consumers will be given a clear indication before the next General Election of what it will involve for them?
    Mr. Soames: We shall, of course, be keeping consumers' interests very much in mind in deciding what changes are necessary. All I am saying is that I have no statement to make this afternoon.
    Mr. Stodart: Does not my right hon. Friend agree that it is highly satisfactory that the hon. Member for Fife, West (Mr. W. Hamilton) at last realises that the food support programme has benefited not only farmers but consumers?
    Mr. Hamilton: Before the right hon. Gentleman replies, is he aware that, despite the increased support, food prices are continually going up? Why should the consumer be fleeced both as a consumer and as a taxpayer?
    Mr. Soames: The hon. Gentleman will realise that our food prices would have been very much higher than they are today if we had not had the present system.
    Mr. Lipton: On a point of order, Mr. Speaker. In answering this Question, was not the Minister, in effect, also answering Question No. 31?
    Mr. Speaker: We will see when we get to No. 31.

    Potatoes
    Sir H. Butcherasked the Minister of Agriculture, Fisheries and Food whether, having regard to the outbreak of a disease similar to the North American spindle tuber, he will give an assurance that no potatoes infected or thought to be affected with this disease will be planted in the present season.
    Mr. Scott-Hopkins: In England and Wales this season all certified red skin seed potatoes, and as far as possible all uncertified seed, are being inspected before planting. Though it is impossible to guarantee that inspection will always reveal whether the disease is present, the action we have taken will reduce the risk to the minimum.
    Sir H. Butcher: While I thank my hon. Friend for his reply, may I ask him to impress on the Secretary of State for Scotland the importance of ensuring that no potatoes liable to this disease are allowed to cross the border?
    Mr. Scott-Hopkins: I am sure that my right hon. Friend is fully seized of my hon. Friend's suggestion.
    Mr. Mackieasked the Minister of Agriculture, Fisheries and Food what steps he is taking in conjunction with the
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    Potato Marketing Board to ensure an adequate supply of potatoes at reasonable prices for next year.
    Mr. Soames: As already announced, the Government have increased the guaranteed price for main crop potatoes. In addition the Potato Marketing Board have set up a Fund to support the market in years of surplus, to which the Government will make substantial contributions when needed. Both these measures are intended to encourage growers to plant an adequate acreage.
    Mr. Mackie: Is the right hon. Gentleman aware that the Potato Board is already refusing growers surplus acreages over their quota? Is he further aware that the difference in price between the guaranteed price of about £14 a ton and the surplus price of potatoes is anything up to £10 to £12 a ton and that this licks up all the Government contribution to support prices, with the result that farmers have no confidence in this system and that he will never get a further acreage of potatoes cultivated until he alters the system of guarantees for potatoes?
    Mr. Soames: I do not accept that. I think that last year and this year prices were higher than the guaranteed price. The Potato Marketing Board would like to see about 700,000 acres planted. This year we had about 660,000. It was for this reason that I increased slightly the guaranteed price for potatoes to give this further encouragement. As to the arrangements that are made with regard to the quota, the Board is concerned to get an acreage of about 700,000 acres, but we do not want much above that or we shall have a large surplus of potatoes which will have to be bought up.
    Sir H. Butcher: Will my right hon. Friend make sure that the Government and the Potato Board act early enough in the season in each year?
    Mr. Soames: Perhaps my hon. Friend would repeat that?
    Sir H. Butcher: Will my right hon. Friend check with the Potato Board to make sure that the Government and the Board come in sufficiently early in each year?
    Mr. Soames: If that be necessary, certainly, but it has not been necessary either this year or last year.
    Mr. Mackie: In the last four years out of five we have had fantastic prices for potatoes. Only one year was a surplus year. I am considering the consumer as well as the producer in this case, and unless another system is introduced there can be protection for neither the producer nor the consumer.
    Mr. Soames: It is with a view to protecting the consumer that we have been doing all we can to make sure of a greater acreage of potatoes being planted this year.

    Narcotic Baits
    Mr. Farrasked the Minister of Agriculture, Fisheries and Food if he will discontinue the experimentation with and use of narcotic baits, now that the effects on wild life of the past winter have been assessed.
    Mr. Scott-Hopkins: The current experiments which were conducted after consultation with Wild Life interests are now coming to an end. As the ground this year was covered with snow for such an exceptionally long period, we have had no opportunity to assess properly the effectiveness of this means of control, or the degree of risk to wild life and game birds. A similar series of experiments may well be needed in 1963–64.
    Mr. Farr: Is my hon. Friend aware that reliable authorities have estimated that up to 50 per cent. of our wild life was exterminated by the bad weather last winter? In view of that, would it not be better if Ministry employees were used elsewhere and on other tasks than spreading more poisons around the countryside?
    Mr. Scott-Hopkins: These experiments are a valuable addition to our methods of attacking the problem of wood pigeons. As my hon. Friend knows well, they are a very serious problem to farmers and do a very great amount of damage to crops.

    Chemicals (Notification Scheme)
    Mr. Farrasked the Minister of Agriculture, Fisheries and Food what
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    was the total number of notifications received by his Department and by the Secretary of State for Scotland under the Notification Scheme for Chemicals used in Agriculture in 1962, and the number of such notifications which failed to gain clearance by the advisory committee.
    Mr. Scott-Hopkins: 154 notifications were received. Twenty-one failed to gain clearance; 2 were withdrawn and three were cleared for extended trials only. Twenty were agreed only after modification of the manufacturers' original proposals. Fourteen were cleared provisionally for one year in order to obtain further data following commercial application, and these will be reviewed at the end of that period. Of the total of 134 notifications, only 35 related to new chemicals; the remainder were either for extension of the use of existing chemicals to other crops, or for new formulations of existing chemicals.
    Mr. Fan: While I thank my hon. Friend for that reply, might I ask whether he is aware that of some 450 notifications which have taken place since the inception of the scheme in 1957 only about 20 poisons have failed to gain clearance? In view of this, is it not time more stringent methods of control were adopted?
    Mr. Scott-Hopkins: No, Sir,. I am satisfied that the existing system, in which the Advisory Committee on Poisonous Substances receive notifications from the manufacturers, is working perfectly satisfactorily and that there is no need at this moment to do anything further.
    Mr. Darling: Is the hon. Gentleman aware that if he is satisfied he is one of the few people in the country who are satisfied with the use of chemicals on the scale now operating? Is he aware that very few of the manufacturers themselves are doing any research into the long-term effects of chemicals and that very few of his own research organisations are engaged in such research?
    Mr. Scott-Hopkins: Constant research is going on into the effects of chemicals on plant life and humans. I was saying that I was satisfied that the existing system works well within the given context.

    Fowl Pest
    Mr. Hiltonasked the Minister of Agriculture, Fisheries and Food, if he will make a statement on the progress made to date in the vaccination of poultry against fowl pest.
    Mr. Soames: On 18th February, I told the House that 32 million doses of subsidised fowl pest vaccine had been sold since 5th November last year. In the six weeks since, a further 27 million doses have been sold, making 50 million doses in all. This is sufficient to treat about 40 per cent. of the poultry which should have been vaccinated since 5th November, 1962.
    This increase in sales is welcome but there is still much farther to go if we are to reach our vaccination target of 80 per cent. or more of the national flock. The best cover has been given in areas such as East Anglia and Lancashire which have been most exposed to the disease: the worst has been in areas such as Wales and the north where the disease has rarely penetrated. With permission, I will circulate in the OFFICIAL REPORT details of sales of vaccine made through my Department.
    Outbreaks of the disease are now running at a low level and there is good evidence that when the disease strikes vaccinated flocks its effects are usually slight. In a few days' time vaccination will be the industry's only defence against fowl pest, and I do urge all poultry keepers to see that their flocks are protected no matter what part of the country they may be in.
    Mr. Hilton: While I thank the right hon. Gentleman for that long reply, may I ask whether he would not agree that the response so far is very unsatisfactory? What steps is he taking to ensure that as far as possible all the vaccine is really effective? Is he aware that there lime been cases where poultry keepers have conscientiously vaccinated their poultry but have still had fowl pest and have had to slaughter? What steps is he taking to compensate poultry keepers when the vaccine is ineffective?
    Mr. Soames: All compensation, except for the per-acute form of the disease of Fowl Plague, ends on 31st March. It has been shown that the effect of the disease on vaccinated birds is much slighter than it is on unvaccinated birds,
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    and vaccination is, thus, undoubtedly of great advantage to poultry keepers. What is wanted, of course, is that we should get a sufficient coverage of vaccinated birds throughout the country. Up to 85 per cent. is what we are aiming at, so that the flocks will not be it such risk as they are today.
    Mr. Prior: Is my right hon. Friend aware that as fast as we can get rid of one disease we get another in East Anglia, and is he aware that there I now have a disease called Beechingitis?
    Mr. Soames: I do not think that East Anglia is the only part of the country likely to be affected by that disease.
    Mr. Speaker: That does not arise on this Question anyhow.
    Following is the information:

    SUBSIDISED FOWL PEST VACCINE

    Summary for period 3th November, 1962 to 22nd March, 1963

    Region

    Number of applications for vaccine

    Total number of doses of vaccine ordered

    ('000)

    Eastern

    …

    6,201

    11,585·0

    East Midland

    …

    1,954

    2,776·6

    Northern

    …

    923

    815·7

    South Eastern

    …

    3,636

    5,504·4

    South Western

    …

    1,949

    2,572·6

    West Midland

    …

    2,580

    3,125·5

    Yorks/Lancs

    …

    5,575

    7,352·6

    Wales

    …

    665

    523·9

    *H.Q. Tolworth

    …

    503

    24,747·4

    TOTALS

    …

    23,986

    59,003·7

    * The arrangement for the supply of vaccine to large poultry organisations is being made by the Head Office of the Ministry's Animal Health Division at Tolworth. Just over 3,000 flocks are being supplied with vaccine under this arrangement, but it is not possible to apportion the vaccine issued on a geographical basis.

    Mundon Wash Drainage Scheme
    Mr. B. Harrisonasked the Minister of Agriculture, Fisheries and Food what further suggestions he has received for the Mundon Wash Drainage Scheme from the Essex River Board; and whether a grant will be forthcoming for this work.
    Mr. Scott-Hopkins: Our chief drainage engineer and the engineer to the Essex River Board have discussed draft alternative proposals for Mundon Wash and we

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    await a submission from the river board. When we receive this we will consider the question of grant.
    Mr. Harrison: Will my hon. Friend please hurry this up? It has been going on for years and years, and it is really time that we got this drainage scheme completed—or started, even.
    Mr. Scott-Hopkins: As I said, we are waiting for the river board to put a scheme before us, and then we shall do our very best to ensure that it is examined quickly. But at the moment we are waiting for the river board.

    Meat (Inspection)
    Mr. Darlingasked the Minister of Agriculture, Fisheries and Food whether he has completed his investigation of the measures needed to ensure that all meat is inspected by qualified public health inspectors before sale to the public; and if he will make a statement.
    Mr. Scott-Hopkins: My right hon. Friend hopes to make a statement shortly.
    Mr. Darling: Is not the hon. Gentleman ashamed of that reply? Does not he realise that nine years ago one of his predecessors gave an assurance that arrangements would be made as quickly as possible to ensure that all the meat slaughtered in this country would be inspected for fitness to eat? Since then, practically nothing has been done. Is he further aware that there are suggestions now—to which I hope he can give a reasonable answer—that the Minister wants the butchers to pay for the cost of inspection? I hope the hon. Gentleman does not think that his right hon. Friend can get away with that proposal.
    Mr. Scott-Hopkins: I do not agree that nothing has been done. A great deal of progress has been made. Only about 10 per cent, of meat is now uninspected. Very serious representations of substance have been made on the proposals put forward, and these will receive his attention. He hopes to come to a decision in the near future.
    Mr. Peart: Is the hon. Gentleman aware that we are always getting from him and his right hon. Friend the reply "shortly" or "soon" but that we never get any action? What does the hon. Gentleman mean by "shortly" in this
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    case? Does it mean a month, two months or six months?
    Mr. Scott-Hopkins: I mean as soon as my right hon. Friend has had time to take into account all the considerations, representations and suggestions which have been put to him. He will do this in order to arrive at the correct decision in the light of all the circumstances.
    Mr. C. Royle: What has happened to the proposed order with regard to making the trade pay for meat inspection? Is it now dead?
    Mr. Scott-Hopkins: That is part of what my right hon. Friend is considering at the moment.

    Carcase Meat Imports (Yugoslavia)
    Sir J. Langford-Holtasked the Minister of Agriculture, Fisheries and Food what has been the quantity of carcase meat imported from Yugoslavia in each of the last five years.
    Mr. Soames: Imports of carcase meat from Yugoslavia were negligible prior to 1960 when they rose to 4,000 tons, mainly of pork. In 1961 imports were 22,000 tons and in 1962, 42,000 tons, in each case consisting largely of beef. The Yugoslav Government have told us that they do not expect their exports of beef to us this year will exceed 30,000 tons.
    Sir J. Langford-Holt: Even with this reduction, this is a prodigious increase in recent years. In view of the upset it is causing the marketing system, is my right hon. Friend absolutely certain that there is no evidence of dumping?
    Mr. Soames: There is no evidence of dumping.

    Sheep (Ritual Killing)
    Mr. Doddsasked the Minister of Agriculture, Fisheries and Food (1) if he will consider introducing legislation to prohibit the export of sheep for ritual killing by processes which entail considerable suffering;
    (2) what action was taken by his officials to ensure the minimum amount of suffering to hundreds of sheep in the process of transportation recently from this country to Tunisia, details of which an known to his Department.
    Mr. Soames: One of my veterinary officers, who was present when the consignment of sheep was loaded for shipment to Tunisia, ensured that there was no overcrowding and that sufficient fodder was available, in accordance with the Animals (Sea Transport) Orders. I have no present intention of introducing legislation to prohibit the export of animals for slaughter by Moslem ritual. Moslems are forbidden to eat meat from animals which have not been ritually slaughtered, and the practice is lawful in this country for those of Moslem faith.
    Mr. Dodds: I thank the right hon. Gentleman for that statement. As he is aware, there is deep feeling amongst animal lovers over the fact that a large number of sheep were exported to Tunisia in the knowledge that their killing would entail great hardship. In view of the humane slaughtering practices in this country, is it not difficult to explain that the sheep are just unlucky if they happen to be chosen for this traffic? Is he aware that many people expect us to do more to see that these animals are treated in a way more in conformity with our practice in this country?
    Mr. Soames: We have our own rules about slaughter, but ritual slaughter for a religious faith is permitted.

    Horticultural Improvement Scheme
    Mr. Wallasked the Minister of Agriculture, Fisheries and Food if he will extend the facilities for which grants can be made under the Horticultural Improvement Scheme.
    Mr. Soames: If my hon. Friend will let me know what additional facilities he has in mind, I will gladly look at them.
    Mr. Wall: So only one-third of the sum voted by Parliament has so far been spent. Can my right hon. Friend consider extending the scheme to include modern labour-saving devices and the installation of heating apparatus? Is he aware that unless it is extended it will be increasingly difficult for British producers to be competitive with the Continental growers?
    Mr. Soames: I am considering this matter. If my hon. Friend would like to give me more specific ideas of what he has in mind, I would be grateful.
    Sir P. Agnew: Is not one of the difficulties not that the range of things for which grants can be given should be extended but that in the existing range the amount of two-thirds to be found by the producer is in many cases too large to match the one-third given by the Government? Could not that be looked at?
    Mr. Soames: Thirty-three and one-third per cent. is a very generous grant.
    Mr. Godman Irvine: Will my right hon. Friend not overlook the problem of a house which was blown down, and put, by the advice of his Department, on another site, and then found to be ineligible for grant?
    Mr. Soames: I would hate to overlook that.

    Bacon
    Sir J. Langford-Holtasked the Minister of Agriculture, Fisheries and Food by what amount the consumption of British bacon has fallen in the last 10 years; and by what amount imports have increased during the same period.
    Mr. Soames: Home production of pig-meat increased from 502,000 tons in 1953 to 720,000 tons in 1962. The quantity going for bacon, which had been purposely stimulated during control and rationing, fell in this period from 244,000 to 221,000 tons, but is still 40 per cent. higher than before the war. In the same period bacon imports have increased from 312,000 tons to 399,000 tons which is slightly above the pre-war level. Total supplies of bacon in 1953 were 556,000 tons and in 1962, 620,000, so consumption has increased.

    Home-grown Timber
    Mr. Godman Irvineasked the Minister of Agriculture, Fisheries and Food, on what evidence he bases his view that the setback in the market for homegrown timber, as borne out by the published figures for sales by the Forestry Commission, is only temporary.
    Mr. Soames: During the next few years several new enterpryses for processing timber are likely to come into operation in Britain and these should stimulate demand for home-grown softwood thinnings. As to prices, those for home-grown timber are bound to be linked closely to the level

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    of world prices, since we produce at home less than 10 per cent. of our present consumption of wood and wood products. Over the last twelve years, the average price of imported sawn softwoods, which is a good general indicator, has risen from about £54 per standard in 1950 to about £74 in 1962, an increase of about 37 per cent.
    Mr. Godman Irvine: Would not my right hon. Friend agree that the figures provided by the Forestry Commission indicate that during the last five years there has been a general tendency for prices of conifers to go down while the position of hard woods shows no great improvement? In these circumstances, will he take a look at the figures again to see whether they can be brought more into line?
    Mr. Soames: I agree that there have been some falls in prices in recent years, but—and here one tries to forecast the future—this must be seen against the background of what appears to be a rise in world prices. The prices of oar timber must be affected by world prices as we import about 90 per cent. of what we use.
    Mr. F. M. Bennett: At what annual average rate is the loss or subsidy of the Commission running? Will this loss or subsidy be allowed to continue under the E.F.T.A. arrangements?
    Mr. Soames: That is a long way from the Question on the Order Paper. I would require notice of it.

    Wetley Moor, Staffordshire
    Mr. Harold Daviesasked the Minister of Agriculture, Fisheries and Food what report he has had from the Forestry Commission on the scheme to turn Wetley Moor, Near Werrington, Staffordshire, into a public park where a number of broad-leaved trees could be planted and where, with drainage schemes, this area would serve as an amenity for the people of North Staffordshire; and whether the project will be considered for grant aid.
    Mr. Scott-Hopkins: It would be the responsibility of the local authority to formulate such a scheme and, as fax as the Ministry or the Forestry Commission is aware, it has not yet done so.
    Mr. Davies: Is the hon. Gentleman therefore implying that there has so far been no approach for any grant for such a scheme?
    Mr. Scott-Hopkins: As far as I am aware, that is the position.
    Mr. Davies: May I therefore ask the hon. Gentleman to consider it favourably, if such an approach were made to him, because of the importance of the matter?
    Mr. Speaker: The basis of that supplementary question would appear to be hypothetical.

    Wheat
    Mr. Stodartasked the Minister of Agriculture, Fisheries and Food what was the average price per ton of imported wheat in February this year and in February 1962, respectively.
    Mr. Wingfield Digbyasked the Minister of Agriculture, Fisheries and Food (1) how far the reduction in the average ex farm price for wheat from £23 14s. 4d. per ton in January 1962 to £17 3s. 4d. in January 1963 was reflected in reduced prices to the consumer;
    (2) by how much per ton the Exchequer cost of the support price of wheat rose between January 1962 and January 1963.
    Mr. Soames: The average c.i.f. value of imported wheat in February was £26 14s. a ton compared with £26 10s. in February last year. As a result of the much heavier home crop this year the cost of the Exchequer support of wheat was about £6 10s. a ton greater this February than last. The price of bread flour has been reduced by 2s. per sack.
    Mr. Stodart: In view of the very substantial difference, amounting to £10 a ton, between the price of dried home wheat and dried imported wheat, will my right hon. Friend say whether there is no opportunity of taking greater advantage of the cheaper home-grown wheat for use in the bread baked in this country, as has been done in many European countries, thereby reducing the cost of the loaf still further?
    Mr. Soames: Our loaf is of a type different from the European loaf. It requires a good deal of hard wheat, which

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    is not put into the European loaf. The proportion going into the grist is about 20 per cent. of home-grown soft wheat, and the bulk of the remainder is either hard or semi-hard wheat which are not grown in this country.
    Mr. Digby: Is it not very disappointing for our farmers who have kept their wheat for a long time in expensive bins to find that they are getting so little for the difference, and doubly disappointing in that during that time the price of grain, far from falling, has actually risen?
    Mr. Soames: Because the price of imported wheat has remained more or less steady while that of home wheat has fallen, the price of a 280 lb. sack has fallen by 2s. in the last year. As 9s. a sack represents a ½d. on a loaf of bread, 2s. represents about one-eighth of a penny. As to the position of farmers who have been hanging on to their wheat, I think that my hon. Friend will bear in mind that last harvest we had a record production of some 3½ million tons of good wheat, which was much higher than ever produced before. The amount going into the grist was more or less the same, so an increasing proportion has had to be sold for feed wheat.
    Mr. Mackie: Would not the right hon. Gentleman agree that the wheat which we grow in this country and for which we are paid at such a low price is the same as that grown in France, mostly Capelle Duprez, which produces the most beautiful bread, which I am sure the right hon. Gentleman enjoys as we all do? Why cannot we do the same in this country and save ourselves millions of £s?
    Mr. Soames: The French loaf has qualities which are different from our loaf. The hon. Member might have views about the French loaf, but on the whole the public gets the type of loaf it wants.

    Beef
    Mr. Stodartasked the Minister of Agriculture, Fisheries and Food what has been the average market price per live cwt. received by farmers for fat cattle in March, 1963, up to the most recent convenient date; and what was the equivalent figure during the same period last year.
    Mr. Morrisasked the Minister of Agriculture, Fisheries and Food what is the percentage increase in the total payments of beef subsidy in the last available four weeks compared with a similar period last year.
    Sir Richard Glynasked the Minister of Agriculture, Fisheries and Food whether he is aware that Argentine chilled hindquarters of beef fetched Is. 10d. per lb. at Smithfield Market on 2nd March, and that this was 8d. per lb. less than similar Argentine beef fetched on the corresponding date last year; by how much British consumers will benefit from this reduction in price; and what will be the resultant increased cost of farm price guarantees.
    Mr. Soames: The average market price for fat cattle in the last four weeks was 121/3d. cwt. The corresponding figure last year was 144/ 10d. Payments under the fatstock guarantee were 71 per cent. up over the same period last year, but the subsidy bill is determined over the year as a whole. The recent trend in market prices will not lead to a Supplementary Estimate for this financial year. For the financial year 1963–64 as yet I have no reason to expect that outturn is likely to exceed our forecast for fatstock.
    The extent to which consumers benefit from lower prices may vary from one shop to another, but I know at least one chain of multiple butchers which was selling chilled beef on the 2nd March this year at prices up to ls. 8d. per lb. lower than a year ago.
    Mr. Stodart: Can my right hon. Friend give any indication of the price to which fat cattle would have to fall in the open market before a Supplementary Estimate was involved? As much the same as is happening now happened two years ago, will he take the best steps he can to try to prevent the imports of beef from being concentrated haphazardly into a short time?
    Mr. Soames: I am very much aware of this problem. There are other Questions on the Order Paper dealing with that specific point.
    Mr. Morris: How long is the Minister to allow this to go on without taking any action?
    Mr. Soames: There is a Question on the Order Paper specifically dealing with that.
    Sir Richard Glyn: Has my right hon. Friend noticed the substantial reduction in the price of Argentine beef now being brought into this country compared with the same period a year ago? Is he satisfied that there is no element of subsidised dumping in the present imports? Will he agree that a greatly increased quantity of beef at so much lower prices could have a very serious effect on the British market?
    Mr. Soames: Yes, Sir. There is no evidence of the dumping of Argentine beef at these prices. The National Federation of Meat Traders tells me that its returns show that since the end of January the average reductions in the prices of home killed beef made by butchers have been as follows: rump steak and sirloin, boneless, 15 per cent.; topside, silverside, and cheek flank, 8 per cent.; fore ribs, back ribs and chuck steak, 12 per cent.; brisket and flank 20 per cent.
    Sir A. Hurdasked the Minister of Agriculture, Fisheries and Food if, in view of the recent fall in market values for beef cattle and the consequent rise in the Exchequer guarantee payments from 24s. a cwt. in mid-January to 63s. a cwt. this week, Her Majesty's Government have taken action to ensure that imports of beef, particularly from Argentina, are reduced to more normal levels with due regard to the supplies of home-killed beef available.
    Mr. Peartasked the Minister of Agriculture, Fisheries and Food whether he will make a statement about the effect of meat imports from the Argentine and Yugoslavia on the home meat market.
    Mr. Soames: The higher level of beef imports over the last three months has contributed significantly to the present weakness of our meat market. Moreover, the higher level of imported supplies has coincided with a somewhat higher level of home supplies.
    The Government called the attention of the Argentine Government and the Yugoslav Government, as our principal overseas suppliers of chilled beef, to the situation and urged them to take account of the state of the United Kingdom meat
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    market in planning their exports. Both Governments have replied recognising their interest in the stability of our market and indicating their willingness to discuss the problem with us. The Yugoslavs have indeed informed us that it is not expected that their exports this year will exceed 30,000 tons as against nearly 40,000 tons in 1962.
    We have arranged talks with the Argentine Government, the major supplier, about the future levels of their supplies. Clearly it is in everyone's interest that stability should be restored and I am confident that we shall receive the full co-operation of our overseas suppliers. But I would make it clear that the Government is determined to bring about arrangements which will ensure reasonable stability in the United Kingdom meat market.
    Sir A. Hurd: I thank my right hon. Friend for that reassuring reply, so far as it goes. Can he give us an assurance that after the present loadings and commitments of Argentine chilled beef there will be a very speedy reduction, particularly during the period up to October, when many home-killed cattle will be coming forward? Can he also say whether it is now quite clear that the Government are taking a grip on events in the meat market so as to ensure that a check is kept on the quantities of Argentine and Yugoslavian and other meat imported, to keep in line with the increasing supplies of home-produced beef which it has been the consistent policy of the Government to encourage?
    Mr. Soames: Yes, Sir. What we first have to do is to work out arrangements for the immediate future to ensure that our market is not undermined. The phase through which we are now going, of serious undermining of the market, shows the difficulties and strains which have been put upon our existing system which was conceived at a time of serious shortage of food as opposed to the present time when food is in plenty in the Western world.
    For the immediate future, we intend to have talks with our major suppliers to ensure that for the remainder of the months of the coming financial year our market is not overloaded. For the future; we are also to have talks, as we have said, with overseas suppliers to lead us

    1309
    to bring about changes which are necessary in the present system to meet existing circumstances.
    Mr. Peart: Is not the right hon. Gentleman aware that it would be far better to be much more precise? Will it be the Board of Trade which will conduct these negotiations? Is he aware that there is a feeling that the Board of Trade and not the Minister of Agriculture has been determining policy in this matter? Is he further aware that this emphasises the importance of announcing some major marketing reform so that we have a statutory authority which would have some say in imports?
    Mr. Soames: As to the Board of Trade running policy, the hon. Member knows full well that for a long time we have been pursuing the policy of guaranteed prices to farmers coupled with virtually unrestricted imports. This has brought about open-ended commitments for the Exchequer to meet the bill for our system. It is this open-ended nature of the commitments which we intend to change.
    Mr. Maxwell-Hyslop: Would my right hon. Friend draw to the special attention of his right hon. Friend the President of the Board of Trade that in the course of the last twelve years exports of Price Review commodities from Argentina to this country have increased to double the rate of the total Argentine imports of all commodities from the United Kingdom?
    Mr. Soames: I do not have those figures with me.
    Mr. Oram: While recognising that reasonable stability for the home market is important, are not there two other vitally important considerations to be weighed in the balance: first, the interests of the consumers who want cheaper meat, and, secondly, the interests of exporters? If we are to export to Yugoslavia and the Argentine, do not we also need to receive their commodities?
    Mr. Soames: Of course this is so, but it is a question of striking a proper balance.
    Mr. Bullardasked the Minister of Agriculture, Fisheries and Food what account is taken of the estimated volume
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    of overseas supplies of beef in determining the guaranteed price to be paid for home-produced fat cattle.
    Mr. Soames: All factors affecting the market supply situation are taken into account. The guaranteed price is set to ensure a fair return to producers.
    Mr. Bullard: It has been said that the increased importation of Argentine beef is approaching an amount which some people regard as being normal. Will my right hon. Friend give the House an assurance that with the great increases in home production, stimulated I am glad to say by the policy which my right hon. Friend and his predecessors have followed in British agriculture, adequate room will be left in the home market for these increases, and that the question of returning to normality, of going back to some norm of several years back, is out of the question in any agreement which is come to with the Argentine?
    Mr. Soames: What we are to discuss in the immediate talks is the level of exports to this country in the coming months. What I think my hon. Friend has in mind is the longer-term issue where we have to strike a proper balance against the background of our national interest between home production and imports.
    Mr. Darling: Would the right hon. Gentleman agree that to turn the impart tap off and on whenever he is pressed to do so will not solve this marketing problem? Would not he agree that the first essential step is to have a proper system of factory abattoirs in this country and fair prices to the farmers to deliver cattle and pigs to the abattoirs, and a commission to make sure that contracts are made with overseas suppliers at stable prices? The Liberal Party has adopted these proposals, which we have been advocating for years. Would not the right hon. Gentleman think it a good idea to fall in line so that we can have complete unanimity on this?
    Mr. Soames: The right hon. Gentleman seems to have definite ideas about what should be done to put all these troubles right. They are very complex indeed, and we shall shortly be taking the advice of a committee which was

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    set up in 1961 and which has been looking into this problem in great detail. I look forward to receiving that advice.

    Market Prices (Fatstock and Cereals)
    Mr. Bullardasked the Minister of Agriculture, Fisheries and Food whether he has made an up-to-date estimate of the probable effect of the present trend of the market prices of fat cattle, sheep and pigs, and of wheat and barley, on the cost of the farm price guarantees to the Exchequer.
    Mr. Soames: Yes. I am satisfied that the recent trend in market prices will not mean any significant excess over the estimates given in the Annual Review White Paper, 1963, of the cost of the guarantees for fatstock and cereals during the current financial year. As for the financial year 1963–64, as yet I see no reason to expect that, taking the estimates as a whole, the outturn is likely to exceed our forecast.
    Mr. Bullard: I am very grateful to my right hon. Friend for that hopeful forecast of future events, but is he satisfied that he has mechanism within his control for checking excessive imports in time to prevent their seriously affecting the estimate of the cost of the guarantees before actual harm is done to the market? As time goes very quickly and another season quickly comes round, will he take steps to see that he has adequate means at his disposal before the next season arrives?
    Mr. Soames: As my hon. Friend knows, this is obviously a major part of the discussions that we are to have in the months ahead.

    Oyster Industry
    Mr. Buckasked the Minister of Agriculture, Fisheries and Food if he will take steps to instigate a full investigation into the losses sustained by the oyster industry through the recent exceptional weather; and if he will devise a scheme to provide the industry with appropriate assistance.
    Mr. Scott-Hopkins: I have nothing to add to the replies I gave to my hon. Friend the Member for Maldon (Mr. B. Harrison) on the 20th and 25th March.
    Mr. Buck: Would my right hon. Friend say here and now that he accepts the principle that the oyster industry must receive assistance if it is to survive? Would not he agree that any delay in dealing with this matter will merely reveal whether this undoubted calamity is a total calamity? That is all that can be revealed by delay. Will my hon. Friend accept here and now the principle that assistance must be given to this industry?
    Mr. Scott-Hopkins: No, Sir.
    Mr. B. Harrison: In view of the unsatisfactory nature of that reply, I wish to give notice that I shall raise this matter on the Adjournment at the earliest possible opportunity.

    Welsh Agricultural College
    Mr. Morrisasked the Minister of Agriculture, Fisheries and Food whether he will now make a statement on the proposed Welsh Agricultural College.
    Mr. Scott-Hopkins: As my right hon. Friend the Prime Minister explained to the hon. Member on 7th March, the Ministers concerned are already in the closest consultation on this matter and there will be no avoidable delay in making a statement.
    Mr. Morris: Is not the Parliamentary Secretary stalling on this issue? Have not we been told that this decision would be made "soon", "very soon", and "imminently"? Were not we told by the Minister that a statement would be made before Christmas? Was not that promise dishonoured, and were not we told by the Parliamentary Secretary in early February that the decision would be made within the next few weeks?
    Mr. Scott-Hopkins: Indeed, we are consulting on this matter with the greatest urgency. We are fully aware of the need for an early decision, and I hope that the hon. Gentleman will not have to wait too long.
    Mr. Peart: Is the hon. Gentleman not aware that this approach is unsatisfactory? Our Welsh friends have been given promises over and over again, and all we get today is another evasion. Why does not the Minister say that he will do it now, instead of sitting there mumbling?
    Mr. Scott-Hopkins: I have nothing further to add to my previous answer.
    Mr. Morris: On a point of order. In view of the unsatisfactory nature of that reply, I intend to raise this matter on the Adjournment at the earliest possible opportunity.

    Price Review (Food Prices)
    Mr. Liptonasked the Minister of Agriculture, Fisheries and Food what he estimates the effect will be of the recent Price Review on the general level of retail food prices.
    Mr. Soames: The retail price of milk will go up by ½d. a pint for one extra month which will mean an increase of about 0·16 on the all-items index of retail prices for that one month. Apart from this the Review decisions will have no direct effect on what the consumer pays.
    Mr. Lipton: Is it not by now quite obvious that the Government have got themselves into a frightful mess over the relationship between subsidies and retail prices to the consumers, whose interests we are supposed to have regard to? Has not the right hon. Gentleman noticed that the slight fall in prices—to which he may have referred in previous answers bears no relation at all to the tremendous cost to the taxpayer, or to the value which the consumer is getting, or to the millions of £s of subsidies which the Minister is dishing out at present?
    Mr. Soames: That is unfair. They bear a considerable relationship—and there have been considerable price falls. Furthermore, the hon. Member knows perfectly well that as a result of this system the consumer in this country has been getting his food much cheaper than have consumers in European countries which follow other systems.

    Arbitration Award, County Durham
    Mr. Woofasked the Minister of Agriculture, Fisheries and Food whether he is satisfied with the arbitration procedure under the Agricultural Holdings Act; whether he is aware of the circumstances under which an award was made against Mr. Thomas Howdon of Lock-haugh Farm, Rowlands Gill, Co. Durham; and whether he will make a statement.
    Mr. Scott-Hopkins: My right hon. Friend is satisfied that the general arbitration procedure constitutes a simple, effective and comparatively inexpensive method of settling differences between landlords and tenants, and I think it is accepted as such by both sides of the industry. An arbitration award is final and binding upon the parries, and my right hon. Friend has no power to intervene. It would therefore not be appropriate for me to comment on the specific case the hon. Member has mentioned.
    Mr. Woof: Is the Parliamentary Secretary aware that the family of this tenant has farmed this farm for the past 140 years? Is he also aware that the arbitrator has refused to disclose to the farmer particulars of certain alleged breaches? Does such conduct justify a notice to quit? Does the Parliamentary Secretary not think that it is an outrageous injustice to be at the mercy of an arbitrator in such circumstances? Is there nothing that can be done to rectify this injustice? Will the hon. Gentleman consult his right hon. Friend the Minister and ask him to intervene to stop this eviction?
    Mr. Scott-Hopkins: As I said, my right hon. Friend has no power to intervene. When the arbitrator's decision has been made it is final and binding on both parties. The arbitrator in this case was agreed to by both parties before the arbitration took place. I can assure the hon. Member that there is nothing that my right hon. Friend can do in this case.

    Dutch Milk
    Mr. Peartasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the imports of Dutch milk.
    Mr. Soames: The United States authorities have invited tenders from both British and continental dairies for the supply of milk to their Service units here for the coming twelve months. I understand that the tenders are now being reviewed, and that a decision will not be reached for some little time.
    Mr. Peart: Is not the Minister aware that there is considerable feeling about this? Is it not absurd that Service stations in this country should have to rely on imports of milk from outside? Will the Minister put pressure on the Ministry of

    1315
    Defence to make additional representations in this matter? The situation is absurd.
    Mr. Soames: I can assure the hon. Member that full representations have been made, at my request. The Minister of State saw the Minister at the American Embassy on 28th February and emphasised to him the strong reason why, in our view, the American Service units should get their milk from British sources.
    Sir A. Hurd: Can we take it that the contracts for the supply of this milk are now the same for the Dutch as for ourselves? In earlier stages it seemed that the Dutch were getting easier terms than we were.
    Mr. Soames: This matter has not been dealt with through me, but, as I understand it, that is the case.

  MINISTRY OF DEFENCE

    Cyprus Base
    Mr. Frank Allaunasked the Minister of Defence when agreement was reached with the Government of Cyprus that the British base there should be used for rockets or nuclear weapons.
    The Minister of Defence (Mr. Peter Thorneycroft): No question arises of seeking agreement to the deployment of weapons in sovereign base areas.
    Mr. Allaun: Will the Minister assure the House that there are no plans for the basing of nuclear weapons, rockets or Polaris submarines on the island?
    Mr. Thorneycroft: No. The essence of a sovereign base area is that we can deploy such weapons as we think fit at such time as we think fit.
    Mr. Allaun: Surely the Cypriot people—who are very concerned about this—are entitled to know whether the Government will base these things there.
    Mr. Thorneycroft: No Government would ever give an assurance as to the types of weapon which they would deploy in the future in a sovereign base area.
    Mr. Paget: As we have no harbour we could not very well have Polaris there.
    Mr. Thorneycroft: This certainly would be a handicap.

    N.A.T.O. Exercise Fallex
    Mr. Frank Allaunasked the Minister of Defence if he will give details of the towns and targets calculated to have been destroyed and the casualties which were estimated as possible in Britain from the North Atlantic Treaty Organisation exercise Fallex of September, 1962.
    Mr. Thorneycroft: No, Sir. This information is confidential to N.A.T.O.
    Mr. Allaun: Is it not true that between 10 million and 15 million people were calculated as having been killed in this exercise?
    An Hon. Member: Who said so?
    Mr. Allaun: It was reported by Der Spiegel and other newspapers. Is it not the case that the whole exercise was called to an early halt because of the complete chaos which had resulted, which was bringing all military activity to an end?
    Mr. Thorneycroft: I am here concerned not with anybody else's calculations but with confidential information on a major exercise.

    N.A.T.O. (Mixed-Manned Force)
    Mr. Biggs-Davisonasked the Minisster of Defence whether he will give an assurance that Her Majesty's Government will take no part in any North Atlantic Treaty Organisation Polaris fleet which is of a multinational, multilateral, mixed-manned or other polyglot nature without further reference to Parliament; and what are the rights and obligations of personnel called on to serve in a ship not being one of Her Majesty's.
    Captain Litchfieldasked the Minister of Defence what military reasons have led Her Majesty's Government to support proposals for a North Atlantic Treaty Organisation multilateral force consisting of multimanned ships; and what operational advantages multi-manned ships are expected to have over national-manned ships.
    Mr. Healeyasked the Minister of Defence what percentage of the cost of the proposed North Atlantic Treaty Organisation multilateral force will be assumed by Her Majesty's Government.
    Mr. Croninasked the Minister of Defence if he will make a statement on the strategic purpose of the proposed North Atlantic Treaty Organisation multilateral force.
    Mr. Thorneycroft: I have nothing to add to what my right hon. Friend, the Lord Privy Seal said yesterday about the proposed N.A.T.O. mixed-manned force, or to what he said on 20th March about consulting this House.
    Mr. Biggs-Davison: Did not my right hon. Friend the Lord Privy Seal give some sort of token approval to a multi-manned scheme of this kind? Have not we got enough to do and enough to pay for without going into these extraordinary enterprises? Will my right hon. Friend straight away say that no member of Her Majesty's Forces will be expected to serve in any form of ship which is not under the command of an officer holding Her Majesty's Commission?
    Mr. Thorneycroft: I would not wish to add to or subtract from what my right hon. Friend said, but I think that all he said was that this was an American proposal which was being examined by us and other European nations.
    Captain Litchfield: Is my right hon. Friend aware that on 20th March the Lord Privy Seal said:
    "The view of Her Majesty's Government is that the American proposals for a multilateral force consisting of multimanned ships is one which deserves support."—[OFFICIAL REPORT, 20th March, 1963; Val. 674, c. 380.]
    Is it not abundantly clear that whatever may be said for this scheme politically, from the military point of view it is very unlikely to be effective? Does my right hon. Friend really think that this is the best way of disposing of our already insufficient naval manpower?
    Mr. Thorneycroft: The question of what part we can play is rather a different one. I think that my right hon. Friend was referring to the proposal as being one suggestion of the way in which countries not otherwise equipped with nuclear weapons might participate.
    Mr. Healey: Is it not the case that Her Majesty's Government are already committed to three separate strategic nuclear weapon systems other than the
    1318
    proposed multilateral N.A.T.O. deterrent? The right hon. Gentleman looks puzzled, but he told us in the defence debate that we are committed to the V-bombers, a Polaris submarine force, and the Strategic T.S.R.2 force. Can he give us an idea, at any rate, of how much money Her Majesty's Government are prepared to contribute to the proposal, which the Americans have said is likely to cost, in all, £1,800 million?
    Mr. Thorneycroft: Certainly not until the military characteristics of the proposals have been examined.
    Mr. Shinwell: In view of the confusion about this matter, and as it is one of vital importance to our defence organisation, and we are not able to debate the matter by way of Question and Answer, will the Minister confirm that no final decision will be taken about any of these schemes until Parliament has been consulted?
    Mr. Thorneycroft: The right hon. Gentleman knows that the relations between the Executive and Parliament will be the same in this as in any other matter.
    Mr. Warbey: In view of the fact that statements have been made by the Lord Privy Seal that the Government support the American proposal for a multilateral force, will the Minister say whether his defence experts could think up a nuclear deterrent which was more provocative and at the same time more vulnerable than a force of vessels disguised as merchant vessels loaded with Polaris missiles floating about in the Baltic Sea?
    Mr. Thorneycroft: I realise that that is the hon. Member's own rather provocative comment on this proposal. As it is under examination he will not expect me to endorse it at this stage.
    Mr. Paget: Is the right hon. Gentleman aware that, for their safety, submarines require a particular level of mutual confidence amongst their crews and that this is the more so in these days of long submersion? Is he aware that I have discussed this matter with a number of distinguished submariners, both German and British, and that their united view is that they would rather swim?
    Mr. Thorneycroft: That would certainly be a factor to be borne in mind.

RAILWAYS BOARD (PROPOSALS)
The Minister of Transport (Mr. Ernest Marples): Mr. Speaker, with your permission and that of the House I wish to make a statement.
The Railways Board's proposals for reshaping the British railways system were published today. Copies have been available in the Vote Office since noon.
The Government are greatly indebted to Dr. Beeching and his Board for their comprehensive proposals, which flow from the most massive compilation and systematic analysis of information about our railways ever attempted. We agree that extensive reshaping on the lines now proposed is essential.
The Report offers a firm prospect of an efficient and modern railway system handling those traffics technically best suited to rail. Reductions in the present subsidy of about £150 million will release economic resources which can be better used in the national interest elsewhere. The Board's aim is, therefore, wholly consistent with our policy of modernisation and redevelopment.
The Report is a major contribution to the Government's policy of providing an efficient, economic, and well-balanced transport system for Great Britain as a whole. When the new shape and pattern of the railways are clear we shall have a foundation on which we can create such a system. It is not possible to have effective and efficient co-ordination until we have as a basis a modern twentieth century railway system.
In the meantime, steps are being taken by the Secretary of State for Scotland and myself to see that any additional demands on our roads will be met. Also, I am meeting representatives of the bus operators on 9th April and both the Railways Board and myself will consult the road haulage industry.
The changes proposed by the Board will affect many people and further careful study and consultation by the Government is necessary. The Railways Board will, of course, be following the agreed procedures for consultation with its staff. The Government, for their part, will pay special regard to the long-term requirements of particular areas, including those
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arising from planned movements of population and industry.
I should like now to deal with three main points. First, freight services. Clearly, rationalisation here is of the greatest importance, not merely to the railways' finances, but to industry and commerce. For example, by reducing rail costs and improving methods of distribution, the Railways Board believes that a substantial saving can be achieved on the carriage of some types of coal by rail. On freight generally, the Board will discuss the future possibilities with its customers. It will also discuss the implications of its proposals with other transport interests.
Secondly, passenger services. The most controversial part of the plan is the withdrawal of many passenger services. This is necessary if better railway services are to be provided to meet the real needs of the nation. But I must emphasise that, in the procedures to be followed when passenger closures are proposed, Parliament has laid down very extensive safeguards. Under the Transport Act, 1962, each proposal must be published in advance. Objections can be made to the transport users' consultative committees, which will report to me on any hardship involved.
No opposed closure may be carried out without my consent, and I shall take into account all important factors, including social and defence considerations, the pattern of industrial development and possible effects on roads and road traffic.
The Report makes it clear that in the remoter areas of the country there will be special problems. This applies not only in Scotland and Wales, but in some parts of England, and to communications with Northern Ireland. But in this country a widespread network of bus services already exists and I shall see that, where necessary, adequate alternative means of transport are available before a railway passenger closure takes place.
I recently announced the arrangements for co-operation and co-ordination made between the railways and London Transport Boards under the new Transport Act. The Government will closely consider those passages in the Report on suburban commuter services in London and elsewhere.
My third point is on staff. The effect of the Board's proposals on railway employees must be of special concern

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to the Board, the unions and the Government. Our railways will require fewer men in future. The best present estimate of the total reduction these proposals will give rise to over the next few years is of the order of 70,000. But most of this reduction will be effected by normal wastage and control of recruitment. Actual discharges are not expected to be more than a small proportion of the total staff reduction. The number will depend largely on how far it is possible to arrange for men to move to other work and different areas.
Even so, there will be problems for those displaced. The Government will do all they can to help in retraining and placing them. We specially welcome the recent agreement between the Board and the unions representing the conciliation grades. This does two things: first, it facilitates transfers from one part of the system to another; and, secondly, it provides fair compensation for those for whom work can no longer be found on the railways.
The Government will proceed speedily with their consultations and discussion, so that we can soon make a fuller statement.
Mr. Strauss: Dr. Beeching's Report has, of course, been in our hands for only a few hours and it has been quite impossible to study all its implications in that short time. We should like a debate to take place as soon as possible after we have studied the Report fully so that all hon. Members whose constituencies are affected may be able to put their points of view freely—and no doubt strongly—in the House.
But may I put this to the right hon. Gentleman in connection with the short notice which we have had? Is he aware—no doubt he must be—that others have had a copy of this Report for two days and more? Is he aware that not only the unions, but the Press and the two broadcasting authorities have had the Report for two days. Indeed, there has already been this morning a debate on the B.B.C. on the Report.
Does not the right hon. Gentleman realise that this order of priority in giving out information which is essentially of importance to Parliament, this order of priority which puts Parliament at the bottom of the list, is undermining the sovereign authority of Parlia-
1322
ment and ought not to be condoned, but should be condemned by the House?
I should like to congratulate Dr. Beeching on producing a very able Report. It is lucid, comprehensive and well-argued, and he has carried out admirably the task entrusted to him by the Government. That task was to see how best the railways could be reshaped to fit modern conditions and, above ail and particularly, what steps should be taken to make them remunerative. In doing so, Dr. Beeching has devoted a very large part of his Report to proposals for making the railways more efficient. Further—
Mr. Speaker: Order. I should be grateful if the right hon. Gentleman would remember that I am allowed to permit only a few questions on this statement.
Mr. Strauss: I apologise, Mr. Speaker.
Mr. C. Pannell: On a point of order. Will you inform the House, Mr. Speaker, how the Opposition are to deal with a long statement unless the principal Opposition spokesman is allowed reasonable latitude to answer it?
Mr. Speaker: If the House wants to change its procedure about these statements, that would be a matter not for me. I have no power to do it myself. Subject to a little latitude being allowed to the Leader of the Opposition of the day, and nobody else, to make some introductory remarks, all I can allow is a few questions.
Mr. Strauss: There are only a few further points I want to put, Mr. Speaker, but it is difficult, when we have a big Report like this and a long statement on which is essential, to put briefly our doubts and queries to the Government in a very short form.
Is the Minister aware that the recommendations for making the railways more efficient and increasing traffics have our whole-hearted support? On the other hand, is he aware that the proposals to curtail the railway services on the drastic scale suggested confirm our very worst fears? In particular, is he aware that we are surprised and distressed at the scant attention which Dr. Beeching devotes to the consequences—the congestion on the roads, the making of new roads and the general social consequences

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of the closures, which he dismisses as being practically non-existent?
As the Minister will be responsible for authorising these closures, is he aware that every proposal for closure which will come before him—and they all will—will be scrutinised and opposed by hon. Members, at least on this side of the House, unless they are accompanied by full assurances that adequate and satisfactory alternative services will be provided and that where that does not happen necessary subsidies should be paid to maintain the existing services?
Finally, may I ask the right hon. Gentleman how the Minister reconciles the frequent references and recommendations in Dr. Beeching's Report to the desirability of co-ordinating our transport services after he himself, last Session, introduced a Bill to disintegrate those services as much as possible?
Mr. Marples: I shall try to deal with some of those points. This is not a Report to Parliament, nor a Report by a Government Department. It is the Report of the Railways Board and it is published in the way which is usual with these things. There is nothing wrong with this. Normally, it is quite usual for statements to be made at the Dispatch Box at 3.30 and for the Minister to say that the Report will be available afterwards, but I went out of my way to see that it would be available at noon so that hon. Members should have an opportunity to see it before I made my statement.
I am grateful to the right hon. Member for his tribute to Dr. Beeching. I warmly support what he said. I think that this Report is the most competent analysis of a difficult industrial problem I have ever read.
All proposed passenger closures will come to me, but not freight closures. The passenger closures, if opposed, will go to the transport users' consultative committees, which will report on the adequacy of alternative services. I shall certainly take into account the adequacy of alternative services. That includes not only buses, but the state of the roads on which they run.
As to the deep concern felt on this matter, before the Government make a policy statement we would like to have
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the views of both Houses. I believe that there is to be a debate in another place on 1st May and my right hon. Friend the Leader of the House has told me that he will make arrangements through the usual channels for a debate in this House. We cannot make a fuller statement until the Railways Board has had consultation with the unions and its customers and until the Government have had a number of consultations with interested parties. Therefore, none of these proposals will be brought before the transport users' consultative committees until this House has had a chance of saying what it thinks.
Mr. G. Wilson: While congratulating my right hon. Friend and Dr. Beeching on boldly accepting the principle that the railways should concentrate on doing those things they can do best, may I ask my right hon. Friend to tell us a little more about how he proposes to get the other services to do what is best for them to do—the road services, and so on? Is he to make any use of the National Transport Advisory Council which he set up recently, and which is an extremely powerful body?
Mr. Marples: The question of co-ordinating other forms of transport with the newly reshaped railway system will he brought before the Transport Advisory Council. As long ago as 6th November I announced that we were setting up machinery to strengthen and modify roads where necessary in the event of this Report being published. The same applies to buses because, through the Transport Holding Company, we control 85 per cent. of the buses outside London and the municipal corporations. Therefore, we are able to see that there are good alternative bus services.
On the question of co-ordinating alternative services, the machinery is already there.
Mr. Holt: Is not the Minister aware that whether the Beeching Report is technically efficient or modern is quite irrelevant so long as the Government do not announce overall transport policy, particularly to deal with the problem of regional development and the stopping of the drift to the South-East? When will the Government enlighten us on what their transport policy is?
Mr. Marples: In the debate which my right hon. Friend the Leader of the House will arrange through the usual channels.
Mr. Bourne-Arton: Is my right hon. Friend aware that Darlington, the birthplace of railways, will welcome this bold and sensible plan—[HON. MEMBERS: "Oh."] Yes, hold and sensible plan—for giving the country a transport system appropriate to the needs of the age in which we live?
Mr. Marples: I am very grateful to one representing such a distinguished place for saying such nice words.
Mr. F. Noel-Baker: The Minister will be aware that this Report will have increased the anxieties of many thousands of workers in railway workshops. Will he take an early opportunity of saying what the implications of the Report are likely to be on railway workshops, and whether the Government will now permit those workshops to take work from outside to compensate for the loss of work which they will sustain as a result of this Report?
Mr. Marples: This Report does not deal directly with railway workshops. They are mentioned, but not dealt with by the Report. The plan for railway workshops was announced by Dr. Beeching some time ago. There is no power by Statute to allow the workshops to do work for outside bodies.
Sir J. Maitland: Does my right hon. Friend realise the fury of resentment which places like Lincolnshire and other scattered areas will feel that in many cases they are dealt with as second-class areas? Will my right hon. Friend tell me how soon they can appeal against these proposals and how long they have in which to do so?
Mr. Marples: If the Railways Board proposes a passenger closure it publishes the proposal twice, and six weeks after the second publication the transport users' consultative committee can consider the proposal and anyone can object and give evidence.
Mr. H. Wilson: Is the Minister aware that some of the sycophantic pronouncements which have been made to him this afternoon do not express the mood of the whole House or of the country
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about this Report? Is he aware that while hon. Members on both sides of the House will be very concerned about individual closures—the procedure for closures, safeguards, and so on—what is clear is that the responsibility for forcing Dr. Beeching to do this job is uniquely and unequivocally the responsibility of Her Majesty's Government and that the whole of the responsibility for the very grave state of affairs shown in the Report goes back to what the Tory Government have been doing ever since 1953, when they started the disintegration of the transport system?
Mr. Marples: I want to be quite clear about this. The responsibility is mine and the Government's, and I have never tried to shirk that responsibility. I hope that the right hon. Gentleman did not insinuate that that was so, because it is not. Dr. Beeching was not forced to do it. He has a job to do, but the responsibility ultimately is the Government's, and the Government accept it. There will be anxiety, of course, in some areas, but procedures and safeguards have been laid down by Parliament and they are pretty adequate.
Mr. Wolrige-Gordon: Who will decide questions of freight closures and, for the purposes of distant communities, what is meant by the phrase "alternative facilities"?
Mr. Marples: It is purely a matter for the railways. They will be consulting their customers in the next month to see what arrangements can be made if they are going to be in difficulties as a result of their proposals.
Mr. Manuel: Is the right hon. Gentleman aware that these assessments and recommendations from Dr. Beeching have been arrived at in a period of economic stagnation in the country? If the economy had been buoyant and up-thrusting possibly the changes envisaged in the Report would not be so wide-ranging.
Would the right hon. Gentleman not further agree that these closures of main lines, many branch lines and stations will inevitably turn many people on to the roads? We have already 350,000 casualties a year and about 132 deaths a week. Will not this inevitably increase the toll

1327
on the roads, because he will be forcing on to the roads more traffic than there is on them at present?
Mr. Marples: I have already said that we should look at the question of the roads and see what traffic is forced upon them, but, frankly, it is in the rural areas that we have most of the difficulties, where the railways will be closed. In these areas there is not the congestion that there is in the urban areas. In the urban areas we are trying to take people off the roads by building such lines as the Victoria-Walthamstow underground line, which will cost over £60 million, and in Glasgow providing the electrified Blue Trains. The main point is that people who want to use the railways will spend the money. If they do not, there is no point in having the railways.
Several Hon. Members rose—
Mr. Speaker: Order. We cannot discuss this any longer without a Question before the House.

GIPSY CAMPS (COMPENSATION)
3.54 p.m.
Mr. John Wells: I beg to move,
That leave be given to bring in a Bill to provide compensation for owners of property near to gipsy camps provided or controlled by local authorities.
In those areas where gypsies and similar travellers are numerous there is at last a move by local authorities to provide proper camping places for them. In Kent, this problem is particularly acute and the West Ashford Rural District Council has done some excellent pioneer work in providing a camp. Other local authorities are being urged to follow its example. My right hon. Friend the Home Secretary took an active lead in this matter when he was Minister of Housing and Local Government. Circular 6/62, dated 9th February, 1962, from the Ministry of Housing and Local Government, deals extensively with this problem and mentions the good work done by the West Ashford Rural District Council.
Local authorities have power to provide suitable camping sites under Section 24 of the Caravan Sites and Control of Development Act, 1960. Naturally, a gypsy camp, even a small one, is not popular with farmers and other country people who live nearby. Consequently, if we are to have these sites, which many hon. Members on both sides of the House desire and which are now urgently required, the local authorities will have to use compulsory purchase powers if they are to obtain suitable land on which to set up the sites. When a local authority, in the ordinary course of compulsory purchase order, buys land, the neighbouring owners of property have remedies open to them if the new use of the land is objectionable. Naturally, they do not receive any compensation directly, but they can sue the local authority or take other steps against the authority under common law.
A gypsy camp is in a somewhat different category, for the reason that the camp itself is not necessarily objectionable. It is the people who live in it who cause the nuisance. It is impossible for a neighbouring farmer or other property owner to sue a local authority for a nuisance which the local authority has

1329
not committed, and it is impossible for him to sue a number of gypsies who are men of straw.
The neighbouring farmers, therefore, have no redress against these people at present. I do not seek to base my argument on unfounded accusations from people who cannot produce firm evidence. I base my argument on the experience of my own constituents and of other people who have written to me from all parts of southern England, including as far afield as Thornyhill, in Hampshire, I also base my arguments upon the point of view of those local authorities who are anxious to establish these sites.
The sort of nuisance which is being created and which I have in mind can be summarised under five heads: breaking of hedges and fences to gain access to adjoining land for purposes such as grazing horses; the breaking down of fences for firewood; the lopping of conveniently placed trees for firewood and also for selling as log wood; intrusion on to adjoining land with damage to crops; and the frightening of sheep and other livestock by dogs, and, above all, damage to farm buildings.
My Bill would enable local authorities to pay compensation in strictly limited cases where certain neighbouring property owners are situated absolutely adjacent to local authority gypsy camps. I would limit this to camps which are either established or controlled by local authorities. I do not seek to open any floodgates of compensation. The Bill would be confined strictly to these well-defined cases.
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I believe that this would enable local authorities to proceed even more willingly and rapidly towards the establishment of these important camps. Unless gypsies are given the chance of settling down in this way, there is little prospect of their children receiving education, which we all desire that they should have; and there is little prospect of their partial integration into modern society unless there is a move to abate this nuisance.
I hope that the Bill will make it easier for local authorities, in their turn, to help gypsies and other travellers and that it will help the farming community to obtain fair treatment. I should like to pay tribute to the work of many hon. Members, and particularly of the hon. Member for Erith and Crayford (Mr. Dodds), in trying to tackle this difficult human problem with courage. I hope that the House will give me leave to introduce the Bill to further work which is supported by hon. Members on both sides of the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Wells, Sir G. Nicholson, Mr. Bullard, Mr. Longden, Mr. Hocking, Mr. More, and Mr. Kirk.

GIPSY CAMPS (COMPENSATION)
Bill to provide compensation for owners of property near to gipsy camps provided or controlled by local authorities, presented accordingly and read the First time; to be read a Second time upon Friday, 3rd May and to be printed. [Bill 87.]
ORDERS OF THE DAY
  PROTECTION OF DEPOSITORS BILL
  As amended (in the Standing Committee), considered.

New Clause.—(CIVIL LIABILITY FOR MIS-STATEMENTS IN ADVERTISEMENTS.)
Section 43 (civil liability for mis-statements in prospectus) of the Companies Act 1948, shall not apply to any advertisement which is to qualify for exemption under subsection (3) of section 2 as it applies to a prospectus.—[Mr. Mitchison.]
Brought up, and read the First time.
4.0 p.m.
Mr. G. R. Mitchison: I beg to move, That the Clause be read a Second time.
The object of the Bill is said to be to protect depositors. For that purpose there is a general prohibition on advertising for money on deposit, and there are exceptions to that general prohibition. That is the form of the Bill. The most important of the exceptions, perhaps, is that, in certain circumstances, advertisements approved by the Board of Trade, advertisements which comply with the regulations of the Board of Trade, will be exempt from the general prohibition. Other exemptions relate to classes of advertisement and classes of people. I think that there is no doubt that that particular form of exemption is the most important one in practice. The general prohibition is contained in Clause 2 (1), and in subsection (3) we find the exemption to which I have referred.
The advertisements in these circumstances are important not only as regards their form, but also their accuracy. The Bill contains provisions against fraudulent inducements or semi-fraudulent inducements, if I may so put it, contained in advertisements. Those appear in Clause 1 of the Bill, and there is a consequential adaptation later in the Bill as regards a similar prohibition under the Prevention of Fraud (Investments) Act, 1958. Those are criminal provisions relating to cases where there is fraud or something as near fraud as may be. The new Clause refers to something different, to civil liability for mis-statements in advertisements.
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For a long time, certainly since the Companies Act, 1948, the position has been this. When a prospectus is issued to invite subscriptions to shares, those who issue it—that phrase covers a good many people—are taken, if I may so put it, to warrant the truth of what is in the prospectus unless and until they can show that it was issued without their knowledge and consent. That, broadly, is the general effect of Section 43 of the Companies Act, 1948.
Like so many other provisions in the Companies Act, this has been found necessary over the course of years. One Companies Act after another has been used to tighten the precautions taken not only against fraud but, as in this case, against carelessness and against innocent misrepresentation. I think that we may take it by now that, wherever something occurs in the Companies Act, it has been found by long experience that it, or that sort of thing, is necessary for the protection of those who subscribe for shares.
The Bill is designed to give similar protection to those who do not subscribe for shares, but who are invited to put up money, and who do put it up, on loan to companies for the purpose of, on their side, getting interest and, on the other side, it being used by the companies for the purposes of their business. We were told on Second Reading that, in practice, the businesses are almost entirely in either hire purchase or dealings in land.
I suggest to the House, with some conviction—the more I have heard about the Bill the more certain have I felt that we are right about this sort of suggestion—that what is required in the case of invitations to take up shares is, in modern conditions, required also in the case of invitations to deposit money with a company. These invitations are of tolerably recent origin, at least on the present scale. No doubt, there have been some forms of invitation to lend money going on since time immemorial, but what we have now are companies which make a business of borrowing money on deposit from the public and using it for the two purposes I have mentioned which, though not new, have certainly developed enormously in recent years.
It was because of the development of the business of hire purchase and of land dealings and the consequent development

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of these companies and the giving of deposits that the Bill was introduced. The immediate occasion—I imagine that this is not disputed—was some notorious frauds some three or four years ago now—I forget exactly when—and, of course, there had in earlier times been similar fraudulent invitations in connection with company shares. What has been done in the one case falls now to be done, I suggest, in the other.
One must not assume that the Section of the Companies Act and the new Clause which we seek to introduce in this context contain very sweeping provisions. They do not. They recognise the difficulty of bringing home misstatements in the prospectus of a company or, in this case, an advertisement for deposits to the people responsible for them. The main effect of Section 43 of the Companies Act and of the new Clause is to shift the burden of proof, that is to say, to make the director or other person responsible prove that a misstatement in the prospectus or advertisement is, if I may put it broadly, not his fault. It is not a matter of bringing it home to him; once the misstatement is found to exist, he has to show that it is not his fault. I think that it will be seen that that is really the effect of Section 43.
This provision applies to a fairly wide circle of people. We are dealing here entirely with companies. The advertisements will be issued by companies. There are other provisions which may affect individuals, partnerships, and so on. At the moment, we are concerned simply with companies. Accordingly, if the new Clause were to be applied and there were a misstatement in an advertisement, every director of the company at the time of the issue of it would be liable unless, as I shall indicate in a moment, he could absolve himself, and so would people who had authorised themselves to be named as directors in the advertisement, the promoters of the company and persons who had authorised the issue of the advertisement. I am simply referring to the broad group of people who become liable in respect of a company prospectus.
Then later comes the possibility of a defence—in other words, the other side of the picture—and no person is to be liable if he proves, among other things,
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that he had reasonable ground to believe, and did up to the time of the allotment of the shares believe, that the statement was true. Therefore, although it affects the onus of proof, it does not really put much additional liability, if any, on the group of persons affected.
This Section was put in the Companies Act because of the difficulties that shareholders, or prospective shareholders, found in bringing these misstatements home to directors. The person who is putting up money on deposit to one of these companies is certainly in no better position than the person who puts up money on a subscription for shares. In at least two respects he is considerably worse off. He is likely, on the whole, or, at any rate, in some cases, to be a person who is putting up a quite small sum of money in a definite form and, perhaps, for a short period.
One does not get "stags" on deposits. One does not get gentlemen who put up enormous sums of money to secure control of a company. None of these questions arises. These are cases, on the whole, of people putting up often comparatively small sums for quite a short time simply for the purpose of earning interest on it. Therefore, from that point of view, they are less likely to know what is the position in the company, and in many cases they will receive very scant information about the position of the company.
Attempts were made in Committee—and I need not trouble the House with the details of them—to get the Government to stipulate for the inclusion of a number of things in these advertisements. Those attempts were, by and large, turned down. All that was said was that much would be covered by the regulations. But, when we were told what would be in the regulations, it appeared to me, and I think to other hon. Members, that the amount of information to be provided would be extraordinarily small. The line which the Government have taken is that, although they recognise the importance of the advertisements, they believe that the most important feature in the Bill is the mass of information which is to be furnished to the Board of Trade. The furnishing of information to the Board of Trade does not protect a depositor. It may help the Board of Trade, but it does not help the depositor, and he will have very little on which to rely.

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The possibility was distinctly foreshadowed that some of these advertisements might consist of a line or two. If that is so, it is even more necessary that this scanty information should at least be accurate. Is there any reason why it should not be accurate? Do the Government object to inaccurate information when so little of it will be forthcoming for the benefit of the depositor? I take it that the Government's answer is that they certainly object to inaccurate information. Therefore, what is the objection to putting the civil liability for it on the same shoulders as it would be put in the case of a share issue by virtue of Section 43 of the Companies Act?
What conceivable objection can there be to that? The onus of proof will be even more difficult to discharge in a case of this sort than it would be under the Companies Act. All that we ask is that the liability should, prima facie, rest where it should rest—on those who are responsible for the circulation of an inaccurate statement.
I suggest that that which experience has shown to be necessary in the Companies Act relating to a prospectus is obviously even more necessary in this case and that only a Government who foolishly seek to protect those who borrow money at all costs and not the depositors who lend it could possibly refuse to accept an Amendment of this kind. I therefore propose it with confidence.
4.15 p.m.
The Minister of State, Board of Trade (Mr. Alan Green): I said in Committee that I would consider very seriously the idea that we should apply Section 43 of the Companies Act, 1948, to the Bill. I have considered the matter very carefully, as I promised the hon. and learned Member for Kettering (Mr. Mitchison) and the Committee I would.
I agree with the hon. and learned Member on certain points. Deposit taking—and I do not suppose my description of it will be any more final, complete and accurate than the one he gave me—although it is not new in itself, can, I think, be called a new development in the financing of certain types of companies. It is done on a regular basis, and in that respect I agree with the hon. and learned Gentleman. I also agree that it is essentially a new develop-
1336
ment, and it does not necessarily follow that what is applicable in terms of civil liability to companies under the Companies Act in respect of shares or other certificates of ownership which are issued is applicable to this new development in deposit taking.
If we were to accept the Amendment, we might be in some difficulty. It is by no means certain that it would be of great assistance to a depositor. A deposit does not alter in value, and the nature of the lass or damage can only be either that it is not repaid when repayment becomes due or that interest is not paid on the deposit. This is the loss or damage which the depositor can suffer. The loss, therefore, will arise only when there is a failure to pay.
This is unlikely to happen unless and until the company has reached a state of insolvency. It will by then probably be difficult, and I should think very difficult, to show that the loss, if there is a loss, sustained by the depositor resulted from the untrue statement made in an advertisement some considerable time before and not from some other intervening circumstance. It would be difficult to establish this if we sought to apply Section 43 as it is worded to the Bill.
A shareholder is in a different position, since it is possible to ascertain the value of his shares when the prospectus was issued on the basis that the statement was true and again on the basis that the statement was untrue—the difference being the loss which he had suffered. It is therefore possible to establish a loss and rather more possible to provide a remedy.
Section 13 of the Prevention of Fraud (Investments) Act, 1958, on which Clause 1 is based, provides no specific civil remedy for a person who suffers damage as a result of an untrue statement in a circular inviting him to acquire securities, although the common law remedy of an action for fraud would be available to such a person as it would be to a depositor in similar circumstances. It is true that the Jenkins Committee recommended that there should be a remedy against those responsible unless they can prove that they had reasonable cause to believe, and did in fact believe, that the statement complained of was true. It further recommended that this course of action should apply to reckless

1337
promises and forecasts and, in so recommending, goes, I believe, beyond Section 43 as it is worded.
It is difficult satisfactorily to apply Section 43 without modification to either advertisements for deposits or circulars inviting the acquisition of securities, although the Amendment attempts to do just this. These safeguards for those who put out advertisements and circulars are essential, as I am sure the hon. and learned Member agrees. Those in Section 43 are designed for the special circumstances in which a prospectus is issued, and here we have no prospectus.
In view of the difficulty of showing that the failure to repay a deposit is due to an untrue statement in an advertisement, and even more the difficulty of showing that it is due to an untrue promise or forecast, I recommend to the House that we should wait until the Jenkins Recommendation is considered and then, if it is adopted, decide whether, with some further modification, this should be applicable to the Bill. I believe that if we seek to apply Section 43 to the Bill we shall make extremely difficult law. We shall be making law which will not add to the protection of the depositor.
I therefore ask the House to reject the new Clause, understanding, as I do, the reasons why it has been moved and not being wholly unsympathetic towards the purposes behind the new Clause but believing, as I do, that it will not make good law in those circumstances. If we could wait for Jenkins we might then perhaps have a modified version of Section 43 which would be much more applicable to the new development of financing companies by deposit taking.
Mr. Eric Fletcher: I very much hope that we shall not wait for the Jenkins Report. I hope that the House wilt accept the new Clause, which has been moved so persuasively by my hon. and learned Friend the Member for Kettering (Mr. Mitchison).
It seems to me that the Minister is entirely off the point. He gave three reasons for refusing the new Clause. First, he said that the position of the depositor was not necessarily the same as that of a shareholder and that, therefore, Section 43 of the Companies Act was not applicable. Then—which seems to be a contradictory argument—he said that even if we passed the new Clause it would not give the depositor much protection,
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an argument which I will dispute in a moment. Thirdly, he said that there were some technical objections to the new Clause. May we consider each of these three objections to what seems to me to be not only a desirable, but an essential new Clause?
Unlike some of my hon. Friends who are present, I did not have the advantage of serving on Standing Committee A which considered the Bill in detail, but I need hardly say that I am entirely in favour of the objectives and principles of the Bill and am anxious to strengthen it in every possible respect. The new Clause is an attempt to strengthen it in the interests of depositors who may be misled by untrue statements in an advertisement. As my hon. and learned Friend pointed out, the framework of the Bill is that Clause 1 deals with
"Fraudulent inducement to invest on deposit"
and Clause 2 says that
"no person shall, after the commencement of this Act, issue any advertisement inviting the public to deposit money with him."
Apart from an exception, if anybody contravenes the basic provision of Clause 2 (1), he becomes liable in respect of a criminal offence for which he can be punished in accordance with Clause 2 (5). But there is an exception. Clause 2 (3) removes from the ambit of Clause 2 any advertisement which complies with regulations of the Board of Trade. If, as I understand it, an advertisement complies with regulations of the Board of Trade, such advertisement, however untrue, does not carry with it any liability to a criminal offence.
We are in the difficulty that we do not know what regulations will be made by the Board of Trade. They may be stringent or they may be less than stringent. But whatever regulations are made hereafter under Clause 2 (3), there will nevertheless remain the likelihood that some untrue statements will be made in an advertisement which complies with the regulations of the Board of Trade.
We are concerned with the persons who make such an untrue statement, whether unknowingly or deliberately, whether carelessly or inadvertently. We are concerned with the position of someone who makes an untrue statement in an advertisement asking for deposits, notwithstanding that the advertisement complies with the regulations of the Board of Trade.

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In such circumstances there will be no criminal offence and the only remedy which such a depositor will have is a civil remedy. The objective of the new Clause is to ensure that in those circumstances the depositor so injured will have the same civil remedies as are given to a shareholder who applies for shares and finds, having done so, that he did it in reliance on certain misstatements in a prospectus.
My hon. and learned Friend did not quote the whole of Section 43 of the Companies Act, 1948, which is a very long section. As he indicated, that Section has been evolved over a series of Companies Acts from the time of Derry and Peek and has been strengthened from time to time, as events have proved necessary, in order to give this civil protection to innocent shareholders, or in this case innocent depositors, who suffer by reason of untruthful and inaccurate statements or misstatements in a public document.
I should have thought that it was a matter of elementary justice, regardless of what the Jenkins Committee may or may not hereafter report, that if anybody is induced to part with his money, either as a shareholder or as a depositor, because of some misstatement of fact in a public document, he should have the remedy of getting his money back or perhaps of getting damages, but at any rate should have a civil remedy; because, ex hypothesi, on the basis on which we are discussing the matter, he has parted with his money and has been induced to do so because of a misstatement of fact.
As the House knows, the circumstances in which civil liability at present is imposed upon directors, promoters and others for such misstatements have been very carefully evolved and circumscribed. There are plenty of safeguards in Section 43, for example, for the director who makes an untrue statement relying upon the statement of an expert. In such circumstances he is not civilly liable if he proves that
"he had reasonable ground to believe and did up to the time of the issue of the prospectus believe, that the person making the statement was competent to make it …"
Directors and promoters often have to rely on expert advice.
In such circumstances, if they act honestly and reasonably and if they can discharge the onus of proving that they
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have done so, they are exonerated from the civil liability which would attach to them if the subscriber showed that he had been misled by some deliberate misstatement or some misstatement of fact recklessly made. That is the basis on which Section 43 operates, and it has proved to have been of very great benefit to a number of shareholders and intending shareholders.
4.30 p.m.
Surely the same principles must apply to a depositor? It does not seem to me that it is a good argument for the Minister to say, "After all, the risk to a depositor may not be as great as that to a shareholder. He may stand less risk of losing his money." The fact remains that he stands some risk of losing his money. He is damnified by a misstatement, made either deliberately or recklessly, and he should therefore have a civil remedy.
I do not accept the Minister's second argument that this remedy is not much use to a depositor. That is a very weak argument, because Section 43 of the Companies Act has had a deterrent effect as well as a real effect in respect of people who have offended against it. The mere existence of the Section has been a real deterrent against people who otherwise might have been tempted to make fraudulent, wilful or careless misstatements of fact.
The mere existence of the Section has been a protection. It has no doubt operated to deter a number of people from making such misstatements who otherwise might have been induced to do so. Therefore, it is no use the Minister saying that this is not much real use. In so far as it will deter statements of this kind being made in future, and prevent them being made, that will save depositors from being induced to part with their money because of misstatements of fact. Therefore, it will have great value.
Thirdly, the Minister seemed to rely upon some purely technical objection, namely, that there are some words in Section 43 which are more applicable to a subscriber to a prospectus than to a depositor. I do not think that this argument holds water. The very skilfully drafted new Clause moved by my hon. and learned Friend says this:
"Section 43 … shall apply to any advertisement … as it applies to a prospectus"
That obviously means mutatis mutandis. If there are any words in Section 43

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which specifically apply to a prospectus, as they do, if the new Clause were written into the Bill they would apply mutatis mutandis to depositors.
For these reasons, I hope that the House will reject the Minister's totally inadequate and unsatisfactory reply and accept the new Clause.
Mr. Harold Lever: I heartily endorse the arguments which have just been advanced by my hon. Friend the Member for Islington, East (Mr. Fletcher), and, in particular, his exposure of the Minister's argument that the new Clause would be of little value. My hon. Friend pointed out that Section 43 of the Companies Act has had as its main value a deterrent effect, in that it has made people have a care about issuing false statements or reckless statements. I heartily endorse that argument.
I am strongly in favour of the Clause in some suitable form being written into the Bill. I am not prepared to accept one point in my hon. Friend's argument, when he said that the Clause as now drafted is perfect. I share the modesty of my hon. and learned Friend the Member for Kettering (Mr. Mitchison), because in Committee he was for ever reminding us of the extreme skill in professional incomprehensibility of the Parliamentary draftsman. It is obvious that to give effect to the desires of my hon. and learned Friend we shall need that gentleman if we are to get our purposes effectively enforced.
I did not hear the argument that my hon. and learned Friend made for his brain child. I only heard the argument against it by the Minister. Since the argument against the Clause made me wholly in favour of the Clause, I shudder to think with what enthusiasm and at what length I might have supported it if I had heard my hon. and learned Friend's argument in favour of it.
The Minister's arguments can be taken apart one by one and proved to have no weight whatever. The Minister said, "There are common law remedies. Let the man who is defrauded use the common law remedies". While I, as a lawyer, am touched by the Minister's affection and devotion for our lady of the common law, I must say that we in the legal profession have not ignored the necessity for statutory improvements upon it. The same sort
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of argument might have been addressed to the House on the Companies Act. There is no more reason why we should not have told the unfortunate defrauded shareholder, defrauded by reason of a misstatement in a prospectus, to go to the common law for his remedy and not to the Statute.
The fact that we have in the Companies Act this rule about the prospectus must, in the light of the Minister's reply, be attributed to the fact that there was nothing on the stocks at the time in another field. The Minister said, "Do not bother about it now. It is a splendid thing which you have in mind to do to give this additional protection. I cannot advance a single argument in logic against it, but there was a Jenkins Committee on company law reform."
However, this incompetent Government have not shown the slightest sign of implementing this vital piece of company legislation. They have found time to provide us with betting shops and casinos. They have found time to give a unique distinction to the City of London over all capital cities in the world, that it is amply populated with gambling houses and betting shops, but they do not have time to remedy the Companies Act.
We may say that we may attribute our good fortune in having this Section in the Companies Act to the fact that at the time it was enacted the Minister, for some reason or other, was not able to say, "There is something coming along on the stocks. Do not bother about it for the moment. In a few years' time we might get round to legislating on this point in a rather more skilful way".
As a Member of the House I object to this approach to legislation. Legislation should be considered on its merits. Even if we had a more confident view, first, about the Government's longevity and prospects of having their mandate renewed at the next election than we have, and, secondly, about the usefulness of their intentions, we would still say that in 1963 we are on the Report stage of the Bill and we see no reason why, if the Minister thinks it is a good thing to have this protection, we should not have it because at some future hypothetical time in some future hypothetical words we might get the same remedy applied in a wider variety of cases.

1343
That simply will not do as an argument. In a way, it is offensive to the House and to the way in which we legislate. It is as if the Minister comes patronisingly to the Dispatch Box and says to my hon. and learned Friend, "Well intentioned, but inept. It is a splendid thing you do, but you do not really appreciate the subtleties of timing and the detailed embellishments which are required". If the Minister were candid and gave us a hint as to the general state of mind of the Government on the Bill, it might be enlightening. Is the Minister really saying, "Be glad that we have given you this rushed hotchpotch of a Bill. We have not had time to go into it in any great detail. Do not add a few more botched-up, hastily concocted words to a Bill which is already besmirched by the signs of haste and lack of thought"?
I should be rather inclined to agree with him if he candidly asked the House not to add any words to the Bill, on the ground that it is disgraceful enough that so much has been done in such an ill-considered fashion that there is not time to draft adequately. If that were so, he might be entitled to great sympathy, but he cannot argue that we should not provide the remedy because we might get the remedy later.
There is little to commend the argument that there is some subtle metaphysical difference between a loss suffered as a result of a fraudulent prospectus and a loss suffered on deposit. I see the Minister fidgeting. If he wants to intervene, I shall be glad to give way to him.
Mr. Green: Merely on a point of accuracy: I did not say that there was a subtle metaphysical difference, to which the hon. Gentleman referred. I merely said that one was more easily measurable and traceable than the other.
Mr. Lever: How the Minister can allege that to be so, except on metaphysical grounds, I do not know.
The hon. Gentleman has said, in effect, that if one buys a share one can see what financial damage has been done to one's pocket merely by looking at the Financial Times the next day. Once can look at the price at which the share stands and deduct that from the amount paid and see just what the loss is. The Minister would not be quite accurate on legal
1344
grounds, although why cannot he say the same thing about the depositor? Such a person can look at exactly the same price difference and see what is the loss. In such a case the amount of default on interest is his loss.
If such a depositor cannot see that that loss is due to a mis-statement—in the prospectus regarding a share or in the advertisement regarding a deposit—he will not succeed. But why, for this reason, should the Minister deprive such a person of the chance to prove his case? The fact that the Minister's argument is based on the possibility that the person in question might not be able to prove his case is beyond me.
I would like to repeat a little story I told first in Committee, and I restate it now to a somewhat wider audience. It is the story of the Irishman who, when falling from a building, got hold of a rope, but who, for no apparent reason, let go of it and fell on his head. When a friend asked him, later, why he let go of the rope he said, "Sure, I was afraid it might break."
The Minister is virtually in the same position. He wants to let go of the rope offered by my hon. and learned Friend to the depositor because, it appears, he fears that it will break. I urge the House to reject the arguments adduced against the proposed new Clause and I hope that my hon. and learned Friend will insist that it be incorporated in the Bill or, otherwise, that he will urge my hon. Friends—and, I hope, some hon. Members opposite—to join us in pressing the Government on this matter.
4.45 p.m.
Mr. John Diamond: I thank the Minister for the consideration that he has given to this matter, as he promised to do in Committee, and I regret that I have no other pleasurable remarks to address to him across this ancient Table. I agree with everything that has been said by my hon. Friends and there is really little I can say, except to underline their remarks. They are worthy of underlining, because I wish to make it clear just what is the attitude we take on the proposed new Clause.
The first thing that the Minister said was that it did not necessarily follow that if one had a Section deemed to be necessary in the Companies Act it

1345
should be deemed to be necessary in regard to depositors. I am compelled, therefore, to explain to the Government exactly why—although it seems to the Minister that it does not necessarily follow—when one pursues the argument to its logical conclusion, one sees that if it is necessary to protect a shareholder and a debenture holder it is even more necessary to protect a depositor. I would have thought that we have been over this so many times that by now the Minister would have been convinced of the necessity for the Clause. Since it seems that he is not, I will have to go over the ground once again.
We know that a shareholder is offered the help—which my hon. Friends have wisely described as a deterrent help as well as a positive one—in the form of a Section in the Companies Act which puts a personal responsibility on to individuals who make inaccurate statements. Such a person is offered that help to protect him from losing his money when he applies for shares or debentures. If he applies for debentures he is fully secured, in the normal case, and, therefore, he is in a far better position than a depositor, who makes a loan without security.
If he applies for shares he has two benefits which you above all, Mr. Speaker, would appreciate. He is offered the benefits of a voice and a vote. It is not necessary for me to explain how advantageous it is to a person to have a vote or, especially when he is sure of catching the eye of the chairman at the annual general meeting, of having a voice. He can make his opinions and views known. A depositor, on the other hand, can do none of these things and, for these reasons, he must have more protection than either the shareholder or the debenture holder.
It is for this reason that, while I agree that it does not necessarily follow, I am bound to put it to the Minister most strongly that what follows on pursuing the argument to its conclusion is that the applicant for a deposit must have greater and not less protection than the debenture holder or shareholder. That is the first reason why we cannot accept the Minister's argument that it does not necessarily follow.
1346
The Minister went on to say something about which, with the greatest deference, I submit he was completely mistaken. He said that another reason why one could not offer the same protection was that a deposit did not alter in value. He went on to say, later, that one could not establish a loss in such circumstances. To say that it does not alter in value—unless the Minister was on the very narrow point in that it does not alter in its market value because there is not necessarily a market quotation—is a complete misconception of the position. It does alter in value and that value can be rneasured and established. If the Minister doubts me he can ask his hon. Friends behind him, just as my hon. Friends are able to seek further advice.
To ascertain the value of a share other than its market value one must merely break down the balance sheet into its constituent parts to get the answer. To ascertain the value of a deposit one can break down the balance sheet and find the answer in exactly the same way. One knows the various priorities involved in doing this and one need only refer to the company's articles to find the priorities. Once broken down, the answer is forthcoming. It is a misunderstanding of the situation to say that one cannot determine the value of a deposit; and the same is true of the argument to the effect that its value does not alter. My hon. Friend the Member for Manchester, Cheetham (Mr. H. Lever) pointed this out in a slightly different way.
The next argument of the Minister—that it did not help to have the proposed new Clause—was incorrect. It helps in a most material way. It very largely prevents inaccurate statements ever being made and it helps when the help is most needed; before the error occurs. We are not seeking to have help available only when the error has occurred. That is an important aid, but a much less satisfactory one than preventing such circumstances from arising by a director, who is seeking to borrow money by way of deposits, knowing that he has to be extra careful.
Indeed, which hon. Member does not appreciate that we would have to be extra careful if we had to pay for our mistakes out of our own pockets? How many mistakes would the Government be making if Ministers had to pay out of

1347
their own pockets every time an aircraft, for example, cost more than the original estimate?
I repeat that it is clear that if people had to pay out of their own pockets they would think twice or even thrice about what they are going to say to people considering putting up their money. It is essential, therefore, that a safeguard should exist and that a director or any other person making a statement should have to think many times to ensure that the statement being made will become accurate or that it will form the basis of an action for damage or recovery of money from him personally.
It should be remembered that we are dealing solely with companies. The Minister has, by the Bill—and quite properly—ruled out individuals; the individual cannot borrow in these circumstances, or come within the scope of the Clause. It is only a company that can borrow by issuing advertisements, and only a company with limited liability. It is because only a company with limited liability can do so that one must, to protect the depositor, have some machinery by which one can get back to individual unlimited liability—a person. That is why we are pressing this new Clause as firmly as we possibly can.
The Minister then said that he could not accept the Clause as drafted—bringing in a comparison with Section 43 of the Companies Act—without modification. There are two answers to that, The first is the very obvious one that, if he does not like our way of doing it, he can do it in his way. It is not the first time that he has been able to think about this. As he has said, he has given it very careful thought. If he had given it very careful thought and had decided that something of this nature should have been brought in, he could have produced something satisfactory to the Government. He has not done so, so we have brought it in in a way that we think is strongly arguable and thoroughly acceptable.
The second answer to that point is that he possibly misunderstands the scope of the Amendment. We are not putting on the director such a burden as may be thought. The maximum that we are seeking to do is to shift, as my
1348
hon. and learned Friend the Member for Kettering (Mr. Mitchison) made absolutely clear, the onus of proof—nothing more than that. The onus of proof would have been the other way round but for this new Clause. By the new Clause it would be shifted, and a director who wanted to say that the statement was accurate or that there was some other reason why he should not be personally liable would have the responsibility of proving it. Otherwise, the onus would be the other way round.
It is not a new law—I am sure the Minister accepts this—that we are suggesting by this new Clause, but merely a process in evidence that makes it easier for the man who has lost his money to get it back. No one can say that that is a burdensome thing to put on a director in a Bill that is alleged to be for the protection of depositors. I am no lawyer, as the House well understands, but I rely on what I think every lawyer would agree I am entitled to rely on—Palmer's Company Law, which refers to compensation under Section 43, and starts off by saying:
"As a result of the inadequacy of the law disclosed by Derry v. Peek statutory provisions have shifted The onus of proof."
It says many other things, too, but nothing to contradict that statement.
That being so, all we ask is that this onus of proof should be shifted so as to give depositors the protection that they most need; that is to say, circumstances in which they will never be called upon to put up their money and lose it through an inaccurate statement. The way to achieve that is to make the person who is thinking of making an inaccurate statement think again, and see that it is accurate before it is made. We solve all our problems in that way. We avoid actions and we even avoid, if certain of my hon. Friends will forgive my saying so, the necessity of getting legal advice and going to court. By means of a simple Clause on these lines, we stop it all at the very start.
In those circumstances, the logic of what I have said compels me, the most unaggressive person in the whole Chamber, to say that if the Minister, after this further appeal, is unable to meet our point of view, either by accepting the new Clause as it now stands or by saying that,

1349
if necessary in another place, he will bring in some modification of it that satisfies his requirements, we will be compelled to go to the extreme lengths with which the House is familiar.
Question put, That the Clause be read a Second time:—
The House divided: Ayes 183, Noes 220.

Division No. 80.]

AYES

[4.54 p.m.

Abse, Leo

Gordon Walker, Rt. Hon. P. C.

Owen, Will

Ainsley, William

Gourlay, Harry

Padley, W. E.

Albu, Austen

Greenwood, Anthony

Paget, R. T.

Allaun, Frank (Salford, E.)

Griffiths, David (Rother Valley)

Pannell, Charles (Leeds, W.)

Allen, Scholefield (Crewe)

Griffiths, w. (Exchange)

Pargiter, G. A.

Awbery, Stan (Bristol Central)

Grimond, Rt. Hon. J.

Parker, John

Bacon, Miss Alice

Gunter, Ray

Pavitt, Laurence

Barnett, Guy

Hamilton, William (West Fife)

Pearson, Arthur (Pontypridd)

Baxter, William (Stirlingshire, W.)

Hart, Mrs. Judith

Pentland, Norman

Beaney, Alan

Hayman, F. H.

Price, J. T. (Westhoughton)

Bellenger, Rt. Hon. F, J.

Henderson, Rt. Hn. Arthur (Rwly Regis)

Probert, Arthur

Bence, Cyril

Herbison, Miss Margaret

Pursey, Cmdr. Harry

Bennett, J. (Glasgow, Bridgeton)

Hill, J. (Midlothian)

Rankin, John

Benson, Sir George

Hilton, A. V.

Redhead, E. C.

Blackburn, F.

Holman, Percy

Reid, William

Blyton, William

Holt, Arthur

Reynolds, G. W.

Boardman, H.

Houghton, Douglas

Rhodes, H.

Bowden, Rt. Hn. H. W. (Leica, S. W.)

Howell, Denis (Small Heath)

Roberts, Albert (Normanton)

Bowen, Roderic, (Cardigan)

Hoy, James H.

Roberts, Goronwy (Caernarvon)

Bowles, Frank

Hughes, Cledwyn (Anglesey)

Ross, William

Bradley, Tom

Hughes, Emrys (S. Ayrshire)

Royle, Charles (Salford, West)

Bray, Dr. Jeremy

Hunter, A. E.

Shinwell, Rt. Hon. E.

Brockway, A. Fenner

Hynd, H. (Accrington)

Short, Edward

Broughton, Dr. A. D. D.

Hynd, John (Attercliffe)

Silverman, Sydney (Nelson)

Brown, Rt. Hon. George (Belper)

Irving, Sydney (Dartford)

Slater, Mrs. Harriet (Stoke, N.)

Butler, Herbert (Hackney, C.)

Jay, Rt. Hon. Douglas

Slater, Joseph (Sedgefield)

Callaghan, James

Jeger, George

Small, William

Carmichael, Nell

Jones, Rt. Hn. A. Creech (Wakefield)

Smith, Ellis (Stoke, S.)

Chapman, Donald

Jones, Dan (Burnley)

Snow, Julian

Cliffe, Michael

Jones, J. Idwal (Wrexham)

Sorensen, R. W.

Collick, Percy

Kelley, Richard

Soskice, Rt. Hon. Sir Frank

Corbet, Mrs. Freda

Key, Rt. Hon. C. W.

Spriggs, Leslie

Craddock, George (Bradford, S.)

Lee, Frederick (Newton)

Stewart, Michael (Fulham)

Lee, Miss Jennie (Cannock)

Stones, William

Crosland, Anthony

Lever, Harold (Cheetham)

Stross, Dr. Barnett (Stoke-on-Trent, C.)

Crossman, R. H. S.

Lewis, Arthur (West Ham, N.)

Swain, Thomas

Cullen, Mrs. Alice

Lipton, Marcus

Swingler, Stephen

Dalyell, Tam

Loughlin, Charles

Symonds, J. B.

Darling, George

Lubbock, Eric

Taylor, Bernard (Mansfield)

Davies, G. Elfed (Rhonnda, E.)

Mabon, Dr. J. Dickson

Thomas, George (Cardiff, W.)

Davies, Harold (Leek)

McCann, John

Thompson, Dr. Alan (Dunfermiine)

Davies, Ifor (Gower)

MacColl, James

Thornton, Ernest

Davies, S. O. (Merthyr)

Mclnnes, James

Thorpe, Jeremy

Dempsey, James

McKay, John (Wallsend)

Wade, Donald

Diamond, John

Mackie, John (Enfield, East)

Wainwright, Edwin

Dodds, Norman

McLeavy, Frank

Warbey, William

Donnelly, Desmond

MacPherson, Malcolm (Stirling)

Watkins, Tudor

Duffy, A. E. P.

Mallalieu, E. L. (Brigg)

Weitzman, David

Ede, Rt. Hon. C.

Mallalieu, J. P. w. (Huddersfleld, E.)

Wells, Percy (Faversham)

Edwards, Rt. Hon. Ness (Caerphilly)

Manuel, Archie

White, Mrs. Eirene

Edwards, Robert (Bilston)

Mapp, Charles

Whitlock, William

Evans, Albert

Marsh, Richard

Wigg, George

Finch, Harold

Mason, Roy

Wilkins, W. A.

Fitch, Alan

Mayhew, Christopher

Willey, Frederick

Fletcher, Eric

Mendelson, J. J.

Williams, D. J. (Neath)

Foot, Dingle (Ipswich)

Millan, Bruce

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

Forman, J. C.

Mitchison, G. R.

Wilson, Rt. Hon. Harold (Huyton)

Fraser, Thomas (Hamilton)

Moody, A. S.

Woodburn, Rt. Hon. A.

Galpern, Sir Myer

Moyle, Arthur

Woof, Robert

George, Lady MeganLloyd (Crmrthn)

Noel-Baker, Francis (Swindon)

Yates, Victor (Ladywood)

Ginsburg, David

Oliver, G. H.

Gooch, E. G.

Oram, A. E.

TELLERS FOR THE AYES:

Mr. Rogers and Mr. Lawson.

NOES

Agnew, Sir Peter

Batsford, Brian

Black, Sir Cyril

Altken, W. T.

Baxter, Sir Beverley (Southgate)

Bossom, Hon. Clive

Allason, James

Bell, Ronald

Bourne-Arton, A.

Arbuthnot, John

Bennett, F. M. (Torquay)

Box, Donald

Ashton, Sir Hubert

Bidgood, John C.

Bromley-Davenport, Lt. -Col. Sir Walter

Atkins, Humphrey

Biffen, John

Brooman-White, B.

Awdry, Daniel (Chippenham)

Biggs-Davison, John

Brown, Alan (Tottenham)

Balniel, Lord

Bingham, R. M.

Bryan, Paul

Barber, Anthony

Birch, Rt. Hon. Nigel

Buck, Antony

Barlow, Sir John

Bishop, F. P.

Bullard, Denys

Burden, F. A.

Hill, J. E. B. (S. Norfolk)

Pickthorn, Sir Kenneth

Campbell, Gordon (Moray & Nairn)

Hirst, Geoffrey

Pilkington, Sir Richard

Carr, Compton (Barons Court)

Holland, Philip

Pitman, Sir James

Cary, Sir Robert

Hollingworth, John

Pott, Percivall

Channon, H. P. G.

Hopkins, Alan

Price, David (Eastleigh)

Chataway, Christopher

Hughes-Young, Michael

Prior, J. M. L.

Chichester-Clark, R.

Hulbert, Sir Norman

Profumo, Rt. Hon. John

Clark, Henry (Antrim, N.)

Hurd, Sir Anthony

Proudfoot, Wilfred

Clark, William (Nottingham, S.)

Hutchison, Michael Clark

Quennell, Miss J. M.

Clarke, Brig. Terence (Portsmth, W.)

Irvine, Bryant Godman (Rye)

Ramsden, James

Cleaver, Leonard

Jennings, J. C.

Redmayne, Rt, Hon. Martin

Cole, Norman

Johnson, Dr. Donald (Carlisle)

Ridley, Hon. Nicholas

Cooke, Robert

Johnson, Eric (Blackley)

Ridsdale, Julian

Cordeaux, Lt.-Col. J. K.

Johnson Smith, Geoffrey

Robinson, Rt. Hn. Sir R. (B'pool, S.)

Cordle, John

Jones, Arthur (Northants, S.)

Roots, William

Costain, A. P.

Kaberry, Sir Donald

Ropner, Col. Sir Leonard

Coulson, Michael

Kerans, Cdr. J. S.

Russell, Ronald

Craddock, Sir Beresford (Spelthorne)

Kerr, Sir Hamilton

St. Clair, M.

Crawley, Aidan

Kershaw, Anthony

Scott-Hopkins, James

Critchley, Julian

Kimball, Marcus

Sharples, Richard

Cunningham, Knox

Kitson, Timothy

Shaw, M.

Dalkeith, Earl of

Lambton, Viscount

Skeet, T. H. H.

d'Avigdor-Goldsmid, Sir Henry

Langford-Holt, Sir John

Smith, Dudley (Br'ntt'd & Chiswick)

Leavey, J. A.

Smithers, Peter

de Ferranti, Basil

Leburn, Gilmour

Smyth, Rt. Hon. Brig, Sir John

Donaldson, Cmdr. C. E. M.

Legge-Bourke, Sir Harry

Spearman, Sir Alexander

Doughty, Charles

Lewis, Kenneth (Rutland)

Speir, Rupert

du Cann, Edward

Lilley, F. J. P.

Stevens, Geoffrey

Duncan, Sir James

Lindsay, Sir Martin

Steward, Harold (Stockport, S.)

Duthie, Sir William

Linstead, Sir Hugh

Stodart, J. A.

Eden, John

Litchfield, Capt. John

Storey, Sir Samuel

Elliot, Capt. Walter (Carshalton)

Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)

Studholme, Sir Henry

Emmet, Hon. Mrs. Evelyn

Longbottom, Charles

Summers, Sir Spencer

Errington, Sir Eric

Lucas-Tooth, Sir Hugh

Talbot, John E.

Erroll, Rt. Hon. F. J.

McAdden, Sir Stephen

Taylor, Edwin (Bolton, E.)

Farey-Jones, F. W.

MacArthur, Ian

Taylor, Frank (M'ch'st'r, Moss Side)

Farr, John

Maclay, Rt, Hon. John

Thatcher, Mrs. Margaret

Finlay, Graeme

Macleod, Rt. Hon. Iain (Enfield, W.)

Thompson, Sir Kenneth (Walton)

Forrest, George

McMaster, Stanley R.

Thornton-Kemsley, sir Colin

Fraser, Ian (Plymouth, Sutton)

Macpherson, Rt. Hn. Niall (Dumfries)

Tiley, Arthur (Bradford, W.)

Galbraith, Hon. T. G. D.

Maginnis, John E.

Touche, Rt. Hon. Sir Gordon

Gardner, Edward

Maitland, Sir John

Turner, Colin

Gilmour, Ian (Norfolk, Central)

Marshall, Douglas

Turton, Rt. Hon. R. H.

Gilmour, Sir John (East Fife)

Marten, Neil

Tweedsmuir, Lady

Glyn, Dr. Alan (Clapham)

Matthews, Gordon (Meriden)

van Straubenzee, W. R.

Glyn, Sir Richard (Dorset, N.)

Mawby, Ray

Walder, David

Goodhart, Philip

Maxwell-Hyslop, R. J.

Walker, Peter

Gower, Raymond

Maydon, Lt.-Cmdr. S. L. C.

Walker-Smith, Rt. Hon. Sir Derek

Green, Alan

Mills, Stratton

Wall, Patrick

Gresham Cooke, R.

Miscampbell, Norman

Ward, Dame Irene

Grosvenor, Lt.-Col. R. G.

Montgomery, Fergus

Webster, David

Gurden, Harold

More, Jasper (Ludlow)

Wells, John (Maidstone)

Hall, John (Wycombe)

Morgan, William

Whitelaw, William

Harris, Frederic (Croydon, N. W.)

Morrison, John

Williams, Dudley (Exeter)

Harrison, Brian (Maldon)

Nicholls, Sir Harmar

Williams, Paul (Sunderland, S.)

Harrison, Col. Sir Harwood (Eye)

Nicholson, Sir Godfrey

Wills, Sir Gerald (Bridgwater)

Harvie Anderson, Miss

Nugent, Rt. Hon. Sir Richard

Wilson, Geoffrey (Truro)

Hastings, Stephen

Oakshott, Sir Hendrie

Wolrige-Gordon, Patrick

Hay, John

Osborne, Sir Cyril (Louth)

Wood, Rt. Hon. Richard

Heald, Rt. Hon. Sir Lionel

Page, Graham (Crosby)

Woodnutt, Mark

Henderson, John (Cathcart)

Page, John (Harrow, West)

Worsley, Marcus

Hendry, Forbes

Pannell, Norman (Kirkdale)

Hiley, Joseph

Partridge, E.

TELLERS FOR THE NOES:

Hill, Dr. Rt. Hon. Charles (Luton)

Pearson, Frank (Clitheroe)

Mr. Michael Hamilton and

Hill, Mrs. Eveline (Wythenshawe)

Peyton, John

Mr. McLaren.

Clause 2.—(GENERAL RESTRICTION OF ADVERTISEMENTS FOR DEPOSITS.)
Mr. Mitchison: Since the Government appear to have no immediate intention of resigning, I beg to move, in page 2, line 16, to leave out from "company" to "or" in line 17 and to insert:
"appearing in a list of such companies published from time to time by the Board of Trade".
We have now come to Clause 2 of the Bill which, in subsection (1), contains this general prohibition of advertisements and
1352
then proceeds to make various exceptions. The first exception is in subsection (2) and it includes the case that we are now considering—
"any advertisement with respect to deposits of any description to be made with any banking or discount company within the meaning of paragraph 23 of Schedule 8 to the Companies Act 1948".
It is those words:
"within the meaning of paragraph 23 of Schedule 8 to the Companies Act 1948"
which we seek to leave out.

1353
This is one of those cases where one thinks that one really will get a definition on looking at paragraph 23, and then finds that one gets nothing of the sort. All that this would mean is that the companies which are entitled to hide certain matters, or shall we say not to disclose them in their accounts, are banking and discount companies for this purpose. There is no secret about the existence of this statutory provision. The Jenkins Committee, in the course of its deliberations, stated the number of the companies concerned and indicated the classes into which they fall.
They are, broadly speaking, joint stock banks, foreign banks trading here, discount houses, and so on. I need not go into the detail, but there is such a list, and the list is kept up and from time to time altered one way or another. I should not think that it varied very much. But it is a list for an entirely different purpose from that for which this Clause in intended.
Subsection (1) is intended to exempt certain banking or discount companies. Whenever anybody asks, as was asked in connection with the Jenkins Committee, for a definition of "banking and discount companies" they never get it. In substance "banking" is capable of a good many different meanings. Therefore, it is necessary to have lists of this kind when dealing with some special provision relating to banking or discount companies, and one would expect the lists to vary in different cases. If, however, the Clause stands as it is, the list will be the list for the purposes of the accounts provisions of the Companies Act. It cannot be any other list.
I am now going to show that the Minister gave a clear undertaking in Committee to publish that list. I do not think that is either right or necessary. He was at once met by objections from both sides of the Committee to the publication of that list, and I must say that I see the point of the objections. I never asked him to do so. All I asked him to do was to publish a list of the companies which are to be exempted under this subsection, and that is what I am still asking him to do. That is what I hoped he would do as a result of what was said in Committee.
I must now refer the House to what was said about this, because this is a case of carrying out a ministerial under-
1354
taking, and ministerial undertakings in connection with a Bill are not carried out by saying in the House afterwards, "I am going to publish it all right, but when, how, in what form and for what purpose I publish it must rest, in the first instance, with me and, in the next instance, with my successor in office whom I expect shortly after the next General Election." That is not good enough. We want something in the Bill. It is perfectly clear what is intended: there cannot be any doubt about it.
Let us take the statements of the Minister of State—I do not suppose he will dispute them—and make quite clear exactly what he said. He started by making a curious statement:
"If the hon. and learned Gentleman will withdraw the Amendment"—
that was an Amendment about this list—
"I should like to consider the debate a little further. I was prepared instantly to give an undertaking to publish. I can see very good reasons indeed why we should. I would crave the Committee's indulgence to consider the debate a little further and return to this matter, as I promise to do, at a later stage of the Bill, if this indulgence can be conceded to me."
I note the words,
"return to this matter, as I promise to do, at a later stage of the Bill …".
That means, as I see it, putting down an Amendment or something of the sort, which would enable consideration to be given to it. I had been talking to the Committee on this matter, and I ended up in this way:
"If the Minister can see his way to saying that he will accept in principle the question of publication, while reserving the question of whether there should or should not be a difference between the lists"—
that is the list under this Bill and the list under the Companies Act—
"and reserving any other question which he likes to reserve, I will certainly agree to withdraw the Amendment if he goes as far as that. That would leave the wording of the Clause entirely to the Minister. If its main object were publication, I should be slow to quibble about the wording. I repeat what I shall probably say half a dozen times more before I finish: that I am under no illusion that I can draft as well as the Parliamentary draftsman. I know quite well that I cannot."
That will be the seventh time that I said that. The Minister replied:
"I am grateful to the hon. and learned Member. While I accept that inexperience on my part caused me to put my reply in an unfortunate way, I am grateful to the hon.

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and learned Member for taking up the real point that I wanted to put. I certainly undertake in principle to publish".
I then said:
"I thank the hon. Gentleman and beg to ask leave to withdraw the Amendment"—[OFFICIAL REPORT, Standing Committee A, 20th December, 1962; c. 80, 84 and 85.]
But it did not turn out that way, because three hon. Members felt that this was a matter for further comment. Indeed—this I think is really rather significant—there was some pressure on the Minister not to publish; pressure from one of his own hon. Friends who rose immediately and said, "I am sad about this", and so on. I think that although his hon. Friend was referring to the list under the Companies Act, and that was not necessarily the list in question, it showed that there was a little bank-bench discontent. We all know how sensitive the present Tory Government are to bank-bench discontent; it is the only thing that makes them do anything. In this instance, unfortunately, it had the opposite effect and prevented them from doing anything. Anyone who looks at the record of the proceedings and what the Minister said in the first place,
"consider the debate a little further and return to this matter, as I promise to do, at a later stage of the Bill"
and what I said afterwards, on withdrawing the Amendment, would certainly suppose that the hon. Gentleman was going to put down an Amendment.
When the Bill came out without any such Amendment, I said to myself, "What's all this? How are we to be provided the opportunity that we have been promised to consider this matter at a later stage? Does it mean that the hon. Gentleman, having failed to provide the opportunity himself as he promised to do, expects me to find it for him?" I cannot appreciate that. I made it perfectly clear to him that I expected him to put down an Amendment. I repeat the words again. I said that if he would accept in principle, while reserving this question and any other question he liked to reserve, I would certainly agree to withdraw the Amendment. The next sentence was:
"That would leave the wording of the Clause entirely to the Minister.
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I left it to him, and he knew perfectly well what I was saying. When we then find that there is no Amendment in the name of the Minister on the Order Paper and we ourselves have to put one down language is apt to become a little stronger than, perhaps, it ought to be on such a highly technical matter.
The hon. Gentleman, as I understand it, not only promised in principle to publish, but he gave me to understand that he knew that I understood that he was going to put down an Amendment to indicate the form in which he was prepared to publish.
Mr. Green indicated dissent.
Mr. Mitchison: I see the hon. Gentleman shaking his head, but I have read the words used in Committee, and if he is saying that they mean something else, he is saying that they mean something contrary to their natural and ordinary meaning. If the Ministers in charge of a Bill are going to let the Opposition withdraw Amendments, knowing perfectly well what the Opposition think they promised—and, in fact, I say, did promise—and then come here and shake their heads when reminded what they did promise, they are not treating the Committee, or the Opposition, or the House properly in this matter.
5.15 p.m.
I say, therefore, that in this case, whatever the merits of the matter, I am entitled to say to the hon. Gentleman, "Here is the Amendment you promised. If it is not in the language or form you want it, that is entirely your own fault". I am entitled to say that to him and I do say it. In these circumstances, if he is now going to refuse the Amendment and say that he is going to do something else, or publish something else, or may do something at some other time because he is too frightened to put it into the Bill, having been terrorised by his back benchers by what happened in the 1922 Committee or wherever it is that they discuss these things, then all I can say is "Have a heart and a little bit of courage and carry out the promise which I understand to have been made in Committee".
Mr. H. Lever: I am perturbed at the state we have reached on this matter. It seems to me that the Minister has in mind to implement by assurance the undertaking that he gave to the Committee that he will publish a list of these

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companies exempt from Clause 2 by reason of the fact that they are on the list kept by the Board of Trade under the Eighth Schedule of the Companies Act.
There was serious objection to that list being published by many people, including hon. Friends of the Minister who are most experienced in this sort of matter.
Mr. Green: One.
Mr. Lever: The Minister says "one". There was one hon. Friend of his, and experienced in these matters, in Committee, apart from the hon. Member, who will, I hope, forgive me saying so, had a connection with a company which was itself on the list, without doubt kept by the Board of Trade, and who has not the least objection to having it advertised that his company figures on that distinguished list. Therefore, I do not think that the Minister should ignore the points that have been made.
First, my hon. and learned Friend the Member for Kettering (Mr. Mitchison) and hon. Members on this side of the House have reasonably asked for something quite different from what the Minister has offered to give. They have asked that if a company is exempt from the provisions of Clause 2, it should go on a list, it should be an inspectable list, and the public should know which companies by reason of their status by being on this list are exempt from the obligation to seek deposits. My hon. and learned Friend did not ask for, and there are serious objections to the Minister giving, the list of companies which would be exempt if the Clause remained in an unamended form.
I have made more than one reference to the hurried, ill-considered nature of the drafting of the Bill. Instead of saying, as he should have done, that it is a reasonable principle that when restricting advertisements, certain companies could fairly be exempted from those restrictions because of their solidity and soundness and that a list of those companies will be kept and published, the Minister has for convenience seized upon a list which is already at the Board of Trade for a totally different purpose and in which totally different considerations apply. It is a list, broadly speaking, to give exemption to those companies from
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certain requirements of the Companies Act which enabled them to have secret and inner reserves. Why the Minister, except for idleness, haste and lack of proper consideration in a matter of this kind, should use that list for this purpose, I know not.
My hon. and learned Friend has asked that the Board of Trade should look at companies which want exemption and which are reasonably entitled to it because they are banks of unquestionable status and that if they want it and are granted it, they should go on the list. My hon. and learned Friend rightly says that, if there is such a list of companies which are so exempt, the public are entitled to know about it.
What the Minister has said in haste is that since he has drawn the Bill hastily, he will give a hasty undertaking to disclose the details of a list which is compiled for a totally different purpose, without realising that there may be weighty considerations against giving the names on that list. I believe that there are weighty considerations. The Minister should think again.
I do not know how the hon. Gentleman will extricate himself from his difficulty. He has given a pledge, unfortunately, to my hon. and learned Friend that he will publish the list of exempt companies. I do not see how he can get out of that. As the Bill is drafted, he can fulfil that pledge only if he makes public a list which every one of his predecessors saw good reason to keep private, namely, the list kept under the Eighth Schedule to the Companies Act.
An off-the-cuff undertaking of that kind without proper consideration looks like landing us in publication of a list for which nobody on this side has asked and of which nobody, except one hon. Member who is connected with a firm which is on the list, approves and of which weighty opinion on the Minister's side of the House seriously disapproves.
The Minister has no right to do this. By one means or another, he must fulfil his undertaking to my hon. and learned Friend in the reasonable way in which his demand has always been couched, namely, that we want a list of companies which are exempt from certain restrictive provisions of the Bill. What we do not ask for, and what certainly should not be given, is a list, which is kept for a

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totally different purpose, of banking companies which are entitled to create secret reserves and not comply with certain other provisions of the Companies Act.
If the Minister now publishes a list of such banking companies, whether he likes it or not there is not the faintest doubt that he will be creating two classes of banking companies: those who are grade I and who are approved at the Board of Trade, and those which, for one reason or another, will be thought by the public to be grade 2 because they are not on the list. That would be to give a false and misleading impression, utterly unfair to those, in many cases, perfectly reputable banking houses which are left off the list. It will give this impression by reason of a hasty reaction of the Minister which will be very damaging, to people carrying on their business lawfully and reputably.
Let me give an illustration of the kind of thing that is liable to happen. The list was started a long time ago. Long before the Companies Act, 1948, there was a similiar list at the Board of Trade and a similar exemption, not only for banks, but for shipping companies, which did not want to have to comply with all the details of disclosing reserves out of their profits as demanded by the Companies Act. For reasons which were of some importance in those days, but which have very little importance today, the Government of the day rightly thought that they should be given the right to create secret reserves.
Today, opinion is very much divided as to whether anybody should be entitled to create these secret reserves. Most people who create them like to do so, first, because of the natural secretiveness of human nature, especially that slice of it which is frequently engaged in large-scale financial transactions, and secondly, because of fear of their shareholders, which was not the original reason for this relief being granted to companies. The relief was given for totally different reasons and it is maintained by most companies either out of natural secretiveness or from a desire that their shareholders should not know too much about the profits of the company or that somebody who may want to make a take-over bid should not know too much about it.
If people who set up or bring into England a banking company hear that
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there is such a list which entitles it to conceal its secret reserves, quite a lot of reasonable, honourable, reputable and solid concerns would say, "Why should we conceal our secret reserves? Why should we want this privilege? Why waste our time going to the Board of Trade and arguing that we should be put on this celebrated list?" Anybody who has been trading in the City of London since the year dot is automatically on the list, so what might be called the City Establishment figures largely on the list. But many, if not most, of the new arrivals are not specially secretive by disposition or noticeably afraid of their shareholders. Therefore, they see no reason why they should waste time getting themselves on to this precious list. If, however, it is published, they will have every reason to regret the commonsense attitude which they have adopted.
If the list is published, the Minister will be for the first time creating two classes of banking houses: those who appear to enjoy the trust and approval of the Board of Trade, and those who are not in that enviable and distinguished category. It is very much resented, I understand, and reasonably so, by some of the merchant banking houses which are not on the list, many of which, for the reasons which I have given, did not want to bother to be on the list.
What appals me about the whole matter is the ill-considered way in which it appears so far to have been dealt with. Why does the Minister do this injury by a side-wind gratuitously to perfectly reputable firms? He points at my hon. and learned Friend. My hon. and learned Friend does not want this famous Eighth Schedule list to be published. He wants a somewhat different standard to be set. He wants such banking houses as are on the list to be exempted. He wants the Board of Trade to say which of the companies should be exempted and, having said so, to keep a list of them in case they forget it and also for the convenience of the public, who can find out who is or who is not on the list. What my hon. and learned Friend has never asked for, and does not ask for now, is publication of the list kept under the Eighth Schedule to the Companies Act.

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I do not want to do what my hon. and learned Friend, with his much greater ability, hesitated to do, but as the Minister has not done the necessary drafting himself, I must suggest clumsily what is required. If he is to implement his undertaking and to give what is asked by, and promised to, my hon. and learned Friend without doing this clumsy, unwanted and eccentric novel disclosure of the list which is kept for a different purpose, and which has been kept confidential for so long, what the Minister must do is somehow, by manuscript Amendment or otherwise, to amend the Clause to state that the banking company is a banking company on the list kept by the Minister for this purpose, in the words roughly of my hon. and learned Friend's Amendment, which the Minister must accept. If it is not exactly in the right form, he had better do some quick thinking to get it right.
If, on his own account and off the cuff, although never pressed by anybody in Committee to do it, the Minister discloses the list which is kept at the Board of Trade under the Eighth Schedule, he will be doing wrong to many firms in the City, many of whom I had never heard of before, who have written to me and said how deeply they resent any such publication. It would affect their credit, particularly with foreign banks and foreign concerns, who come to deposit money with merchant bankers in the City and have dealt with them for years. They have had no reason to doubt their honourable status and reliability. When, however, a list is published, they will find to their horror that the firm which they have been trusting with large sums of money for half a century now appears as a grade 2 firm, which does not want the public to know the full facts about it, and is not on the grade 1 list. It is a strange grade 1, but that, apparently, is the list of companies which do not want to publish the full facts about themselves. That is quite understandable, and I take no objection to it. I have not the least doubt that every company on the list is one of high honour and reputation. But they have no right to be advertised as being grade 1 outfits by the Minister. This has arisen from the Minister's failure to comprehend what it was that my hon. and learned Friend asked for.
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5.30 p.m.
I beg the Minister not to do this injustice, not to break the long-preserved confidential character of this list and not to create two classes of banking houses in the City, those who are approved of or disapproved of, or those who are grade 1 and those who appear to be of a secondary grade. The Minister will no doubt say that he particularly favours this idea of exempting certain banking companies from fulfilling the rigmarole under the Bill because it is a waste of time and does not reflect on any company which is not on the list. Of course, many companies will not have applied to go on the list, companies which have not solicited deposits from the public and therefore do not want to claim this exemption. If the Minister publishes this list he will be creating an invidious distinction between grade 1 firms and other firms.
In all these circumstances, I ask the Minister what he is going to do about his promise to my hon. and learned Friend. The Minister is a man of honour and he will keep his word, but he must do so in a way which makes sense. He must not give my hon. and learned Friend more than he has asked for or more than he asked for which will injure people affected in a way that I have explained. I am particularly perturbed at the slipshod way in which the thing has been done. If the people concerned had been the victims of an injury of this kind because the Government, the Treasury and the Board of Trade had thought the matter out and said, "We have had this list a long time. It has been created for a long time, and because we recognise the manifest injury which would result from its publication and because it is now 1963 and we are living in a different era we have thought the matter over and think that the list should be published in private", maybe there could be something to be said for it. It is no good the Minister nodding as though that is something that he had thought of. It is manifestly not so.
What will happen will be that those injured by the Minister's negligence will know it. No decision was arrived at by the Government and no thought was given to it. No one sat down, not even the present Government in their last stages of degeneration, and gave a thought to the matter and said it is high time to publish this list. It is not true; it

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did not happen that way. The people injured will know that they are the victims of the impetuosity of the Government, that when my hon. and learned Friend proposed one thing the Minister hastily promised another and that, instead of putting the matter right on Report, he has left it in a position where it is difficult to remedy it.
What the Government did not say was that they thought that the list of the companies exempted should be published now. They have never said that. The Government have used that definition wholesale and have said that companies on that list can, if they wish, solicit deposits without complying with the restrictions of the Act, and, as a side wind since they were pressed, they now say, "We will publish the secret list". No thought has been given to the merits of the matter by any Government Department or by any Minister.
All the thought that has been given to it is whether what my hon. and learned Friend demanded was justified, namely, whether the list of those seeking to borrow without complying with the provisions of the Clause shall be published. I venture to say that this list was always confidential and ought to continue to be confidential. If this breach of the confidential character of the list is contemplated, thus injuring many reputable houses for the first time after all these years, it ought to be done by a deliberate decision on the merits of the matter and not as a result of a haphazard side wind.
I register the most forceful protest either at the last being published at all or at it being published without proper consideration being given to the matter, and I urge the Minister, even at this late stage, to find some means of giving my hon. and learned Friend what he asks for, which is not the publication of the list.
Mr. F. M. Bennett: I have listened with great attention to what the hon. Member for Manchester, Cheetham (Mr. H. Lever) has been saying. I must confess that my recollection of the two major discussions which took place in Committee are wholly different from his, and I look forward to the Minister's reply in which, I hope, he will recall some of the facts of those deliberations in Committee.
It seems to me that the hon. Gentleman has been seeking in supporting his hon.
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and learned Friend's Amendment—he admitted this in his last few words—to go back to the contention which he put forward on both stages of the Committee deliberations that no list should be published at all. He let the cat out of the bag in the last few words of his speech, when he said that he wanted no list at all. I think that if he thinks the matter over he will appreciate that even if his hon. and learned Friend's Amendment is accepted it will not meet his own point of view, which is that no publication should take place at all.
Mr. H. Lever: I used no words whatever about the publication of this list, that is, the list of firms exempted from complying with these provisions. What I have always protested about is the publication of the Eighth Schedule list. I have never said anything more than that.
Mr. Bennett: I will leave it to HANSARD in the morning. The hon. Gentleman said that he was against the publication of any list at all. That is the matter to which I am referring.
Mr. Lever: I did not say that.
Mr. Bennett: We shall have to leave the matter to be resolved by HANSARD.
If the hon. Gentleman is now saying that he does not mind the list referred to by his hon. and learned Friend being published, but he does mind the Minister's list being published, I would point out to him that as the two lists will deal with precisely the same concerns we shall be back to where we started, and that, therefore, it does not carry his point of view any further.
Now as to the other aspect which has been raised for the third time by the bon. Gentleman. We had it twice in Committee, but it did not get any support from either side. It is the aspect that the publication of the list would divide people into sheep and goats. This is not really so, and if the hon. Gentleman wishes to protect the companies to which he has been referring he really will not be doing them any service by continuing to suggest that if they are not in the list they are second-rate companies. By giving publicity to what I believe to be a false analogy the hon. Gentleman is doing nothing to help those who, he says, have written to him.
It was made perfectly clear over and over again by the Minister on both

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occasions in Committee that this list did not imply sheep and goats but was simply a list of companies carrying on a particular business and which, for reasons accepted by the Jenkins Committee and others, were exempted from certain provisions of the Act.
Mr. Mitchison: Which Act?
Mr. Bennett: I did not use the word "Act".
Mr. Mitchison: The hon. Gentleman said companies which were "exempted from certain provisions of the Act". Since the Bill was brought in after the Jenkins Committee, my recollection was that the reference was to another list under the Companies Act.
Mr. Bennett: If I used the word "Act", I am sorry. I am talking about the Bill.
The suggestion was made that certain companies should be exempted for certain purposes, of which the hon. Gentleman is perfectly well aware, and this list is precisely the same list again. I repeat, to get the record straight on this matter, that I do not think he is right that because this list is published it should cast any slur at all on companies which are not on it. It is a matter of publishing a list of companies which, for particular reasons, are exempt from the provisions of the Bill. It does not cast any reflection on the reputability of companies not on the list.
We had this discussion twice in Committee and the Minister gave a perfectly firm undertaking that a list of these companies should be published. I know that there are certain difficulties about implementing his decision. Personally, I do not mind whether the hon. and learned Gentleman's Amendment is accepted or the Minister's, because I think that it should be common ground between us that there will be almost or even precisely the same number of companies and the same firms to be exempt. There cannot be any real substantial difference. Why it should be thought to be a slur to be on one sort of list and not on the other when they will be precisely the same companies, I, for one, fail to understand.
Mr. John Morris: I did not have the privilege to serve on Standing Committee A which dealt with this Bill
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and this matter, but, as I understand the position, the Minister seems to be hoist with his own petard by giving certain assurances to the Committee and not giving effect to those assurances by way of amending the Bill in the way in which my hon. Friends seek to do it at the moment.
I am concerned, first, that the Minister seems from laziness, as my hon. Friend the Member for Manchester, Cheetham (Mr. H. Lever) so ably said, to be adopting for the purposes of this Bill the list under the Companies Act, though that list is there for certain purposes. I submit that hardship may be caused by publication of that list, but further to that, hardship may be caused by publication of the list for a purpose for which it was not originally conceived. I hope the Minister has gone into this matter.
I should be quite out of order if I were to go into the merits of the Bill as a whole, but the Bill does a good deal to protect the public, and I think that, on the whole, it has been welcomed, although anything my hon. Friends seek to do to strengthen the Bill I certainly support. But fears have been expressed as to what might result from publication of the Board of Trade's secret list, if it were published in accordance with what the Minister has said.
I read with great interest the observations made in Committee by my hon. Friend the Member for Cheetham, and perhaps the House will permit me to read exactly what he said on this matter, because he said it so much better than I could ever do:
"We now come to the question of the Board of Trade list. There is a list kept, and as far as I know it is a secret list. I think it is desirable that it should remain secret for this reason, This list is kept at the Board of Trade of persons who are not obliged to make the full disclosure provided by the Companies Act of their accounts. Assuming that the practice is still to continue, whereby banks keep great reserves, then, if we publish that list, it will seriously affect the persons not on that list, perfectly reputable businesses." [OFFICIAL REPORT, Standing Committee A, 20th December, 1962; c. 71.]
That is where the doubts, fears and anxieties arise about what may happen if this list is published. I understand that there are over 100 banks and discount houses in the home field and in the foreign field which enjoy the fact of being on this list at the moment. There

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is a possibility of injustice by the off-the-cuff decision of the Minister to publish this list—that injustice will occur by the mere fact of publication; and it will occur to those who are not on that list, and who, as my hon. Friend the Member for Cheetham said, may be perfectly reputable and honourable people who for many years have traded without being on the list or trying to be on it, and who, by the mere fact of publication of the list, may find themselves being regarded as persons of the second grade or second category.
5.45 p.m.
However laudable the purposes of publishing a list of this nature may be, it would be quite wrong, and, indeed, the Minister by his decision could be rendering an injustice in this way to those people who were not to find themselves on the list. They do great work; they provide money where it is needed in the several spheres of our economic life; and they operate very delicate financial machinery. It would be quite wrong to cast doubt on these firms, and, indeed, it could be very dangerous to upset the machinery which they operate.
As I understand it, the list of 100 or so firms on the Board of Trade secret list are, in the main, the larger institutions. My hon. Friend the Member for Cheetham inferred that they belong to the Establishment. They have been there a long time, while those companies not on the list are frequently the smaller ones which have come recently into this particular business. There is a fear which is felt particularly by those who are bankers and have the common law right to call themselves bankers. As I understand it, to call oneself a bona fide common law banker one has to have a certain proportion in current accounts as compared with deposit accounts. The fear of some bankers and discount houses is that if the list is published they may have no right to call themselves bankers or to enjoy this common law right which they have, and which they partly may lose because of intervention of this Bill, and that by a side wind doubt about their status will result.
If a list is published, either in the terms of the assurances which have been made and given by the Minister to the Committee at various stages, or accord-
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ing to the terms of the Amendment, and if it is thought desirable to publish that list in all the circumstances, then I ask that it should be made perfectly clear what that list is made up of, and that by no means should there be, by way of the drafting of the list, any suggestion or inference at all that perfectly reputable businesses performing very valuable services do not enjoy the right or title to call themselves bankers.
I appreciate the difficulty in which the Minister finds himself, and how he is going to get out of his difficulty I do not know, but I ask him that when he finds himself in the position of deciding that he intends to publish the list he should make it perfectly clear that those not on the list shall not suffer in any way by the mere fact of publication and that it shall in no way cast any aspersion on their right to call themselves bankers, having regard to the extremely valuable work which they do in this field. I hope the Minister will be very careful indeed about the manner in which he considers this matter of publication of the list.
Mr. J. T. Price: With the utmost respect, from what has been said by some of my hon. Friends and an hon. Gentleman opposite, I beg to differ, because I think that this debate has got off the rails a bit.
Mr. Cyril Bence: Are there any left?
Mr. Price: "Rails" today is, perhaps, a rather unfortunate figure of speech. However, I want to keep strictly in order and I do not want to be deflected from what I want to say in the few minutes that I shall be on my feet.
I hope that I may be allowed to remind the House that this is a Bill to protect depositors—the man in the street—against the activities of unscrupulous advertisers who filch money from the public by all kinds of ruses and fraudulent devices. I put it as strongly as I can, but, I hope, not unfairly, in view of the past history of some of these firms which advertise for money at high rates of interest.
Having sat through and, occasionally, even enjoyed what were sometimes the long, tortuous and technical debates on the Bill at an earlier stage, I should have

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thought that it was sufficiently clear why the Minister is in trouble tonight. Right from the start when we had our earlier debates on the Bill, we on this side put forward the conception that, if we were to do anything to protect the public against fraudulent advertisers who use the columns of the provincial newspapers to attract the money of people who have no more sense than to put it into these concerns, the best way to do it would be to make the requirement positive, not negative.
I intended to convey—what I said is on record, though I do not like to regurgitate my words, or burn midnight oil looking them up—to the Committee and the Minister that, in my opinion, and in that of some of my hon. Friends, the right way to do this if we wanted to tidy it up properly, with a real intention to protect the public, would be to have a licensing system for financial institutions which would have to pass a rigid test to show whether they were solvent enough to advertise inviting the public to deposit money with them.
My hon. Friend the Member for Aberavon (Mr. Morris) has just expressed some doubt about the use of the word "bank". I very seriously differ from him on this. The word "bank" has been used frivolously and dangerously by many people, but I like to think that it has a connotation of reliability, integrity and ability to meet liabilities. The use of the word in its very loose modern form has meant admitting to the world of high and lesser finance all kinds of people who are not really bankers at all. I would not give any support in this matter to those "bankers" who have no real title to that label. Perhaps we can talk about labels on some other occasion.
If the Minister and those who advise him had taken their courage in their hands and said. "We will have a thorough-going licensing system, and only those who pass a test shall be allowed to advertise for people's money", it would have been a different tale that the Minister had to answer today. But he did not do that. Why was that? It was because he thought that, once having set up such a system, it would be invidious to leave certain people out.
Now the Minister takes refuge in the secret list. Even if no one else in the House says it, I intend to say that I
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strongly object to secret lists of any kind. I hope that I am not being unnecessarily pernickety about this, but I object to secret lists which may be of high commercial value to those whose names are on them. If we are enacting legislation which imposes very heavy penalties on those who transgress its provisions, but are excluding from the Bill's sanctions those who are on the secret list, we are not doing justice to the generality of the British people. This may be a theoretical question on which I could talk for a long time. If I wanted to block the Bill I could make a long speech on it, and I would hope that I should talk sense most of the time.
However, the Minister has given an undertaking. I have always regarded him—I am sure he will not be embarrassed by what I say—as a man of the highest integrity. We have believed that his word could be relied upon even if we disagreed with his policy and outlook on all sorts of things. If he gave a promise, we always thought that he would carry it out. He has given an undertaking to have a list and to publish it. I am all in favour of publication—"Publish and be damned", as Fleet Street used to say. That was before the Vassall Tribunal. However, I do not want to get into trouble with the Chair. If we start talking about Dr. Beeching and Vassall together tonight, it will mean a long debate, and it would not be fair to the Minister.
I want to expedite the passage of the Bill, for what it is worth; it is a very poor Bill. The Clause has no teeth in it, and the Bill has none, either. If we are legislating as serious men, trying to put before the public that we are doing our job properly and saying that we will protect the public against frauds and swindlers advertising for their money, we should do it thoroughly and not in the half-hearted, mealy-mouthed fashion of the Bill.
It will be gathered that I am supporting what my hon. and learned Friend the Member for Kettering (Mr. Mitchison) said in his opening remarks. Listening to some of the other speeches, I wondered who was supporting and who was opposing the proposal. I am in favour of a list and having the brightest lights of publicity in the dark corners of high finance. If we get that, we can

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proceed in a happier frame of mind with the next Clause and assist the Minister to get the Bill. If not, we shall want a more definite assurance than we have had so far, and I hope that the Minister is now prepared to give it.
Mr. Bence: Like my hon. Friends the Members for Aberavon (Mr. Morris) and Westhoughton (Mr. J. T. Price), I was not a member of the Standing Committee, but when Bills come to the House after their proceedings in Standing Committee I consider it my duty to attend on Report to see what has been going on upstairs.
We have heard this afternoon from my hon. and learned Friend the Member for Kettering (Mr. Mitchison) what went on upstairs. A number of promises were made, not for the first time. From what I have heard of the debate on this Amendment, the Minister gave certain pledges. Apparently—I gather this from the way he shook his head on various occasions and from what was said by his hon. Friend the Member for Torquay (Mr. F. M. Bennett)—the promises have not been kept and he has no intention of keeping them. I do not know; I am just assuming—
Mr. F. M. Bennett: I certainly did not say that the Minister was not keeping his pledges. What I said was the contrary, that he has kept them as a result of his Amendment. I said that I hoped he would not be deterred from keeping his pledges by other speeches.
Mr. Gordon Walker: Which Amendment?
Mr. Bennett: They both do the same thing.
Mr. Green: Perhaps I might help. It does not require an Amendment to the Bill for me to keep the pledge which I gave, which I shall certainly honour.
Mr. Bence: That is why I rose. I wanted to question this and get right on Report the impressions I gained arising from the proceedings in Committee.
We have heard a great deal about the Board of Trade list. I represent a Scottish constituency, and in Scotland we have some of the most notable banking institutions in the world. It
1372
was a Scotsman who founded the Bank of England—Patterson—and it was another Scotsman—Richard Law—who went to France in the Napoleonic period and tried to establish a central bank in France—
Mr. Gordon Walker: It cost a great deal of money.
Mr. Bence:—but failed. This modern system of banking which came into being after the revolution of 1668 was a Scottish conception. I want to be assured that all Scottish commercial and banking institutions will be at the head of the Board of Trade list because the conception of central banking started with Patterson in Scotland.
May I have an assurance from the Parliamentary Secretary that our Scottish institutions will be well in the forefront of the list? It has been suggested that if one is not on the list one is a second-class institution. I hope that it will not go from this House tonight that the Government, who have been in power for eleven years, have a list at the Board of Trade and the connotation is that if Scottish commercial and financial institutions are not on it they must be looked upon as second-rate. That would be an insult to Scotland which I am sure Scottish hon. Members in particular and Scottish people generally would resist as vigorously as they possibly could.
I therefore trust that I can have from the Parliamentary Secretary an assurance that Scottish banks and commercial houses are in the forefront of the list.
6.0 p.m.
Mr. Green: I very much regret that the hon. and learned Member for Kettering (Mr. Mitchison) presented his Amendment in such a confused and confusing fashion that he confused many hon. Members on his side of the House. He very nearly confused me at one time. I say that in no spirit of harsh jeering, but it is the kindliest thing that I can say about the introduction of his Amendment. He has referred to the pledge about publication which I gave in Committee after considerable hesitation.
As hon. Members who sat on the Committee will remember, at the moment of hesitation I was complimented—for the first time, I believe, in

1373
public—by the hon. Member for Manchester, Cheetham (Mr. H. Lever), because, it seemed, I showed him that by my hesitation I was really trying to think about the arguments advanced. However, the hon. Member has assailed me vigorously this afternoon. But his accusation of hasty and ill-considered judgment, after his praise of me for thinking on my feet, is a charge that should not really stick.
The hon. and learned Member for Kettering asserted, I understand, that I bad given him an undertaking to publish a list different in kind from that contained in the Eighth Schedule of the Companies Act, 1948.
Mr. Mitchison indicated dissent.
Mr. Green: If the hon. and learned Member did not say that, then I fail to follow a great deal of his original reasoning in moving the Amendment. I remind him of his own words when we discussed this matter of publication in Committee. He said:
"To put the matter shortly, the whole object of the Amendment is not to interfere with the use of existing lists in the way proposed"—
the only list existing is in the Eighth Schedule of the Companies Act—
"but to ensure that the lists are published.… All I want is a Statutory Instrument containing the lists of the Companies which are treated as banks or discount houses for the purposes of the Companies Act, 1948…'—[OFFICIAL REPORT, Standing Committee A, 20th December, 1962; c. 59.]
I think that this establishes beyond doubt that what we were talking about were the words in the Bill, the list under the Eighth Schedule of the Companies Act.
Mr. Mitchison: It is perfectly correct that the Amendment as put down in Committee referred to what I will call the Companies Act list. But there was a good deal of discussion in Committee and, like the hon. Member, I pay attention to what is said. I made it clear as we went on with the discussion that I did not mind which list it was. I have quoted this passage, and I am going to quote it again and refer to another thing in column 86. I said:
"It is for that sort of reason that I expressly left the door open to the Government on the question of whether the two lists should be identical. My hon. Friend"—
1374
that was my hon. Friend the Member for Manchester, Cheetham (Mr. H. Lever)—
"will, no doubt, recollect that the language of the Bill provides for identical lists, but it may well be that if the effective list has to be published it will be for up to, say, 100 bodies, identical, but for the remainder not identical. That was not my point. I am on the question of whether the list of exempted people should be published. Surely, it ought to be."—[OFFICIAL REPORT, Standing Committee A, 20th December, 1962; c. 86.]
I will not repeat all that I read out earlier. I want it to be clear that I left it to the Minister of State to decide whether it should be the Companies Act list or—as I personally favoured—a list of people exempted under this Clause. This Amendment is perfectly clear. It relates to the list of people exempted under this Clause. If the Bill is left as it is, the only thing the hon. Gentleman will be able to publish will be another list—the list under the Companies Act. I do not know whether he wants me to do it now., but at some time, if the House will allow me, I should like to deal with the suggestion—if he makes it—that he never undertook to put anything in the Bill. He did.
Mr. Green: The hon. and learned Member is, I think, agreeing with me that at the stage we were talking about he said that all he wanted was the Companies Act list. I think that it will be within the recollection of all hon. Members who were on the Committee that that was what we were talking about.
Mr. Mitchison: I am very sorry—
Mr. Green: I am taking this stage by stage, if the hon. and learned Member will permit me. I am trying to establish the first point.
Mr. Mitchison: I am sorry to interrupt the hon. Gentleman again, but this is more than a matter of recollection. It is perfectly clear what happened.
Mr. Deputy-Speaker (Sir William Anstruther-Gray): Order. The hon. and learned Member should remember that we are not in Committee but on the Report stage. I hope that further interventions by the hon. and learned Gentleman, who has already exhausted his right to speak, will be short.
Mr. Mitchison: I hope that this one will be, Mr. Deputy-Speaker. The point is that I left this matter entirely to the hon. Gentleman's discretion. I quoted the relevant passage once and I will not do so again.
Mr. Green: I accept that. At a later stage in our discussions, my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) was amongst those who strongly objected to the publication of this list. I listened to his argument with great attention. My hon. Friend referred to this again later in more specific terms and to the Eighth Schedule list in the Companies Act. I replied:
"… I undertook to publish the list of these companies. I must keep that undertaking."—[OFFICIAL REPORT, Standing Committee A, 26th February, 1963; c. 552.]
It is exactly that undertaking that I propose to keep and I shall publish that list. It seems to me to be appropriate to publish it in the Companies Report annually. As I have told the hon. Member for Dunbartonshire, East (Mr. Bence), there is no need to have an Amendment for me to keep my pledge. I believe that that view will be accepted by all hon. Members who served on the Committee. I hope that the point is now well established.
Now I turn to the Amendment. My objection to having a second list—which is what I would be committed to by the Amendment—is that I should merely be adding an element of confusion to the financial world. I should certainly be subscribing to the thought that perhaps there were all sorts of grades of companies, and I do not wish to do that. The objection which the hon. Member for Cheetham had in principle to the publication of the Eighth Schedule list is in principle also applicable to his suggestion for another kind of list to be published picking out certain people who can apparently be trusted to behave themselves properly when it comes to financing companies by taking deposits.
I do not want another list. We should be treating the two lists quite differently under different forms of legislation. As my hon. Friend the Member for Torquay (Mr. F. M. Bennett) has rightly said, we should find that if the lists were not identical they would be nearly so. We should also be in the curious position of having certain companies treated in
1376
one way for one purpose under the Companies Act and treated in another way for another purpose under this Bill. That would not be a desirable situation.
Mr. H. Lever: As one purpose is to exempt the company from the need to publish its secret reserves, which may involve one kind of consideration, and the other is to exempt it from the need to comply with certain restrictions on advertising, which depends on its solvency and general status, different considerations apply, and hence different lists might well be kept.
Mr. Green: I know that argument. We had it in Committee, but I am not convinced by it. I should find myself in the very invidious position of adding to the list day by day, week by week or year by year, and the Board of Trade would be in the position of constantly having to make value judgments of different companies. This would put me in a position of giving some weight to the charge made by the hon. Member for Cheetham that I was proposing a list of first and second-class companies. As I sought to make perfectly plain in Committee—26th February, col. 558 of the OFFICIAL. REPORT—if I published the Eighth Schedule list, I would not make this invidious distinction between first and second-class companies. I said that I was glad of the discussion which we had had because I hoped that it would clear away the thought that there were companies of two different classes in the same character of business. If, as I am now asked, I produce a second list, I shall revive that thought and be unable in subsequent discussion to clear it away. For that reason, I hope that the House will reject the Amendment.
Mr. Morris: Will the hon. Member meet my point about the affairs of those companies not on the list and the innuendo which might arise from the fact that they would have no right to call themselves bankers in the common law understanding of the term?
Mr. Green: I do not think that I could stay within the rules of order and give a definition of "banker" for these purposes.
Mr. Diamond: This is a matter of some little difficulty and I am, therefore,

1377
bound to detain the House for a short time, with regret, so that full justice may be done to everybody's point of view.
The first thing I want to make absolutely clear—indeed, nobody has ever bad it in doubt—is that nobody, certainly not on this side of the House, has any doubts but that the Minister knew that he had given a pledge and would carry it out. There could have been some measure of doubt as to the way in which the Minister might interpret that pledge, having regard to the simple fact that it is clearly established in the record that we started off with a certain kind of consideration and, as the argument developed, moved to a slightly different consideration.
This is something for which no hon. Member has the slightest need to apologise. The purpose of giving consideration to a matter in Committee is that, as the arguments emerge and become clearer, we are enabled to move more precisely to the point at issue. It was nothing but useful that a discussion, which started, as, inevitably, it had to start, on the basis of a given Amendment in certain words, moved to the precise point in which the Committee was interested. Committee stages of Bills are deliberately designed to allow that to happen. I therefore start with the Companies Act list, the list which formed the basis of the Amendment as it was originally worded, but which was not the list upon which we were insisting at the end of the debate.
There are two views about this list. My hon. Friend the Member for Westhoughton (Mr. J. T. Price) has perhaps the clearest view of all. It is that the Companies Act list of bankers should be published. The hon. Member for Torquay (Mr. F. M. Bennett) has a strong view that it ought to be published. I am told that he is on it, but as it is a secret list, I have no means of knowing.
Other hon. Members have the strong view that it ought not to be published because it would, or might, do some damage to people whom one has no desire to damage and because it would do no particular good for the purposes of the Bill. As that is the list, may I do what I generally prefer to do and rely not only on my own unaided opinion about the list, but on the opinion of people who have given
1378
the matter a very great deal of consideration and who have listened to the evidence of others concerned with the list?
I refer, of course, to the Jenkins Committee. The Jenkins Committee produced a lengthy Report, but only in two respects are there minority dissents. The Report covers a vast number of recommendations, and only two are dissented to by a minority. There is a dissent about this matter, and it is therefore a matter upon which there could well be two opinions.
6.15 p.m.
The view of the majority of the Jenkins Committee is quite clear. It is contained in paragraph 407 and is:
"We recommend that—the existing exemption of banks and discount companies should continue"
The view of the minority, not a small minority but consisting of five distinguished members of the Committee, was:
"We dissent from the recommendation in paragraph 407 (a) that the existing exemption of banks and discount houses should continue. We agree with our colleagues that it is essential that confidence in the banking system should be maintained but we are not convinced that it is necessary for this purpose for banks to withhold information about their operations from their shareholders and from the public generally …"
In paragraph 13, on page 214 of the Report, the minority said:
"We can see nothing in the evidence to justify the continued concealment of the true level of profits."
In short, we have first-rate authority for the view that the list should be published and first-rate authority for the view that it should not be published.
Mr. H. Lever: What my hon. Friend has quoted from the Jenkins Report is surely a first-rate opinion that there should be a list and a first-rate opinion to the opposite view. There is no opinion by the Jenkins Committee that the list should be published. Nobody, either the majority or the minority, ventured to support the Minister's view that it should be published.
Mr. Diamond: I appreciate what my hon. Friend has said. It is a matter of continuing exemption. The main purpose of my quoting the extracts was to make it clear that this was obviously a difficult matter.

1379
The members of the Jenkins Committee were not the only people who had considerable difficulty. The Minister himself had considerable difficulty about reaching a conclusion as to whether the list should be published, and the record bears testimony to that fact and to the fact that, having difficulty about it, he wanted to give the matter further consideration. That is something that we always appreciate.
Having made the position about that list clear, I now turn to the Amendment, which is not concerned with that list. The Amendment is concerned with a different list. I want to make it absolutely clear that we on this side of the House see no connection between the two lists. It may well be that they are certain considerations, not the whole of the considerations, and certain criteria, as a result of which a firm qualifying under one list would qualify under the second list. That is incidental.
The list with which we are concerned is a list which we must have, because under the Bill we are saying that certain people do not have to advertise. How will the depositor know the people with whom he is dealing unless those people who do not have to advertise are known to be the people who do not have to comply with the regulations? One has to be aware of that situation so that this Bill can function properly. That is the point which we want to make.
I can see arguments of value in publishing a list under the Companies Act, as the minority indicated. It has been represented, and I accept it completely, that in certain cases damage might be done. The damage that might be done rests on the fact that banks which had been thought to be in the list would now be known not to be in it, and, therefore, banks which had been riding on a status to which they were not entitled would now be known not to be entitled to that recognition.
Therefore, I am not sure whether one ought not to take that into account. However, bearing in mind all the difficulties which the Committee and the Government had with regard to the Companies Act list, why should we get involved, on a Bill which does not deal with those matters, in making a decision, almost tangentially, about a matter which
1380
is clearly of importance and vast difficulty, in this irrelevant way? If we have to deal with that, I would much prefer the Minister to bring forward a document on which a proper question could be based, and we could debate whether or not the arguments in favour were greater than the arguments against.
Just because the Government have dealt with this by, as it were, legislation by reference, without thinking carefully whether the matter referred to was really the matter they had in mind, why should we decide it by reference? Let us decide it either positively, or not at all. I therefore say to the Minister that we would prefer not to come to any decision whatsoever as to whether the list under the Companies Act should continue, as it is at the moment, to be a private list, or should be turned into a public list.
We do not want to reach a decision on that without full and careful consideration. This is entirely consistent with the conclusion we reached towards the end of the discussion in Committee. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) made it clear that this was not a decision which we were pressing. It was for the Government to decide. My hon. and learned Friend said time and again that he wanted to leave it absolutely open for the Government to make a decision. He said:
"That would leave the wording of the Clause entirely to the Minister."—[OFFICIAL REPORT, Standing Committee A, 20tb December, 1962; c. 84.]
The reason why I want to clear out of the way this Companies Act list, and the responsibility for a decision on that list, is that my hon. Friends and I have the clearest view about whether the list under this Bill should be published. Of course, it must be published so that people desiring to deposit with exempt companies know which companies are exempt. If, therefore, we reach the view that the list under this Bill should be published, we cannot accept as an argument against publishing this list the fact that the Minister says, "I have already decided to publish another list and I shall not publish two because it would be confusing".
I reject any idea that there would be confusion. I reject that they would be similar lists, and that the criteria would be so similar that people would be led into confusion, but what I affirm

1381
positively is that we must have the list in relation to this Bill, and we cannot accept as an argument against it that there would be a second list.
I am sorry that I have kept the House some little time, but I hope that I have made the position clear, and I am sure that I have the support of my hon. Friends in what I said. I can only repeat, with all the courtesy due to the Minister for having implemented, as we knew he would, the pledge he gave, that nevertheless, having regard to the discussion which took place in the Committee upstairs, and to everything that has been said today, we must invite the Government to agree that there should be a list referable to this Bill, and the way to do that is to accept the Amendment, and we must, therefore, press the Amendment to its conclusion.
Sir Henry d'Ayigdor-Goldsmid: This is an extraordinarily involved discussion on a point of some obscurity, because the fine metaphysical line which the hon. and learned Member for Kettering (Mr. Mitchison) and the hon. Member for Gloucester (Mr. Diamond) have drawn between the first and second lists did not clearly emerge in our Committee discussions.
I sat through those discussions and took part in them. Perhaps I took more, part in them than I should have. I listened attentively to what was said and I do not want to start a textual exegesis as to where the changed decision was taken. When I read the Amendment I thought that the hon. and learned Member for Kettering was referring to what I called the Schedule 8 list. We spent a lot of time on this list in Committee, but I do not think that it is really the stuff of the Bill. I rally to the support of my hon. Friend.
Nevertheless I am sure that it is right that a list of the companies which are exempt from the advertising restrictions of the Bill should go with the Bill and be published with it. I differ from my hon. Friend the Member for Torquay (Mr. F. M. Bennett). I do not think that the list is identical to the Schedule Eight list. I do not think that the Schedule Eight list is relevant to this because I believe that there must be a number of companies who would by the judgment of the Board of Trade be exempted from the advertising provisions if we were to exempt any companies.
There is still great obscurity on the point. If there is a Division my hon. Friend the Parliamentary Secretary will get his majority, but this is a decision which, for one reason and another, and for obvious reasons, too, a large proportion of hon. Members have had no means of investigating. We had a number of speeches repeating speeches made in Committee. A number of hon. Members now present were not members of the Committee and if we are called on to decide the point now most hon. Members will take a decision on it in complete ignorance. There must be grounds for second thoughts about this idea of a list of companies exempt for the purpose of this Bill, and that is the list which should be published.
I should like my hon. Friend to say that he will look at this again. Perhaps, when the Bill goes to another place, he may have the possibility of tying down the companies to which the Bill refers. That is the point f wanted to make, and I do it in this way so that it is on the record.
Question put, That the words proposed to be left out stand part of the Bill:—
The House divided: Ayes 195. Noes 156.

Division No. 81.]

AYES

[6.29 p.m.

Agnew, Sir Peter

Black, Sir Cyril

Clark, Henry (Antrim, N.)

Aitken, W. T.

Bossom, Hon. Clive

Clarke, Brig. Terence (Portsmth, W.)

Allason, James

Bourne-Arton, A.

Cleaver, Leonard

Ashton, Sir Hubert

Box, Donald

Cole, Norman

Atkins, Humphrey

Boyd-Carpenter, Rt. Hon. John

Cooke, Robert

Awdry, Daniel (Chippenham)

Braine, Bernard

Cooper-Key, Sir Neill

Balniel, Lord

Brooman-White, R.

Cordeaux, Lt.-Col. J. K-

Barber, Anthony

Bryan, Paul

Corfield, F. V.

Bell, Ronald

Buck, Antony

Costain, A. P.

Bennett, F. M. (Torquay)

Burden, F. A.

Coulson, Michael

Bevins, Rt. Hon. Reginald

Butcher, Sir Herbert

Craddock, Sir Beresford (Spelthorne)

Bidgood, John C.

Campbell, Gordon (Moray & Nairn)

Critchley, Julian

Biffen, John

Carr, Compton (Barons Court)

Cunningham, Knox

Biggs-Davison, John

Cary, Sir Robert

Curran, Charles

Bingham, R. M.

Channon, H. P. G.

d'Avigdor-Goldsmid, Sir Henry

Bishop, F. P.

Chichester-Clark, R.

de Ferranti, Basil

Donaldson, Cmdr. C. E. M.

Kimball, Marcus

Quennell, Miss J. M.

Doughty, Charles

Kitson, Timothy

Rawlinson, Sir Peter

du Cann, Edward

Langford-Holt, Sir John

Rees-Davies, W. R.

Eden, John

Leavey, J, A.

Renton, Rt. Hon. David

Elliot, Capt. Walter (Carshalton)

Leburn, Gilmour

Ridley, Hon. Nicholas

Emmet, Hon. Mrs. Evelyn

Legge-Bourke, Sir Harry

Ridsdale, Julian

Errington, Sir Eric

Lilley, F. J. P.

Roots, William

Erroll, Rt. Hon. F. J.

Lindsay, Sir Martin

Ropner, Col. Sir Leonard

Farey-Jones, F. W.

Linstead, Sir Hugh

Russell, Ronald

Farr, John

Litchfield, Capt. John

St. Clair, M.

Finlay, Graeme

Longbottom, Charles

Scott-Hopkins, James

Forrest, George

Lucas-Tooth, Sir Hugh

Sharples, Richard

Fraser, Ian (Plymouth, Sutton)

McLaren, Martin

Shaw, M.

Gammans, Lady

Maclay, Rt. Hon. John

Skeet, T. H. H.

Gardner, Edward

McMaster, Stanley R.

Smith, Dudley (Br'ntf'd & Chiswick)

Gilmour, Ian (Norfolk, Central)

Macpherson, Rt. Hn. Niall(Dumfries)

Smithers, Peter

Gilmour, Sir John (East Fife)

Maddan, Martin

Smyth, Rt. Hon. Brig. Sir John

Goodhart, Philip

Maginnis, John E.

Spearman, Sir Alexander

Gower, Raymond

Maitland, Sir John

Speir, Rupert

Green, Alan

Marten, Neil

Stevens, Geoffrey

Gresham Cooke, R.

Matthews, Gordon (Meriden)

Steward, Harold (Stockport, S.)

Grosvenor, Lt.-Col. R. G.

Mawby, Ray

Stodart, J. A.

Hall, John (Wycombe)

Maxwell-Hyslop, R.J.

Storey, Sir Samuel

Hamilton, Michael (Wellingborough)

Maydon, Lt.-Cmdr. S. L. C.

Studholme, Sir Henry

Harvey, John (Walthamstow, E.)

Mills, Stratton

Summers, Sir Spencer

Hastings, Stephen

Miscampbell, Norman

Talbot, John E.

Hay, John

Montgomery, Fergus

Thatcher, Mrs. Margaret

Henderson, John (Cathcart)

More, Jasper (Ludlow)

Thomas, Sir Leslie (Canterbury)

Hendry, Forbes

Morgan, William

Thornton-Kemsley, Sir Colin

Hiley, Joseph

Morrison, John

Tiley, Arthur (Bradford, W.)

Hill, Dr. Rt. Hon. Charles (Luton)

Neave, Alrey

Touche, Rt. Hon. Sir Gordon

Hill, Mrs, Eveline (Wythenshawe)

Nicholls, Sir Harmar

Turner, Colin

Hill, J. E. B. (S. Norfolk)

Nicholson, Sir Godfrey

Turton, Rt. Hon. R. H.

Hirst, Geoffrey

Noble, Rt. Hon. Michael

Tweedsmuir, Lady

Holland, Philip

Nugent, Rt. Hon. Sir Richard

van Straubenzee, W. R.

Hollingworth, John

Oakshott, Sir Hendrie

Walder, David

Hopkins, Alan

Orr-Ewing, C. Ian

Walker, Peter

Hornsby-Smith, Rt. Hon. Dame P.

Osborne, Sir Cyril (Louth)

Wall, Patrick

Howard, John (Southampton, Test)

Page, Graham (Crosby)

Ward, Dame Irene

Hughes-Young, Michael

Pannell, Norman (Kirkdale)

Webster, David

Hurd, Sir Anthony

Partridge, E.

Wells, John (Maidstone)

Irvine, Bryant Godman (Rye)

Pearson, Frank (Clitheroe)

Whitelaw, William

Jennings, J. C.

Peel, John

Williams, Dudley (Exeter)

Johnson, Dr. Donald (Carlisle)

Percival, Ian

Williams, Paul (Sunderland, S.)

Johnson, Eric (Blackley

Pickthorn, Sir Kenneth

Wills, Sir Gerald (Bridgwater)

Johnson Smith, Geoffrey

Pott, Percivall

Wilson, Geoffrey (Truro)

Jones, Arthur (Northants, S.)

Price, David (Eastleigh)

Worsley, Marcus

Kerans, Cdr. J. S.

Price, H. A. (Lewisham, W.)

Kerr, Sir Hamilton

Prior, J. M. L.

TELLERS FOR THE AYES:

Kershaw, Anthony

Profumo, Rt. Hon. John

Mr. Batsford and Mr. MacArthur.

NOES

Abse, Leo

Davies, S. O. (Merthyr)

Hoy, James H.

Ainsley, William

Delargy, Hugh

Hughes, Cledwyn (Anglesey)

Albu, Austen

Dempsey, James

Hunter, A. E.

Allaun, Frank (Salford, E.)

Diamond, John

Hynd, H. (Accrington)

Allen, Scholefield (Crewe)

Dodds, Norman

Hynd, John (Attercliffe)

Awbery, Stan (Bristol Central)

Duffy, A. E. P.

Irving, Sydney (Dartford)

Bacon, Miss Alice

Ede, Rt. Hon. C.

Jay, Rt. Hon. Douglas

Barnett, Guy

Edwards, Rt. Hon. Ness (Caerphilly)

Jones, Rt. Hn. A. Creech (Wakefield)

Baxter, William (Stirlingshire, W.)

Edwards, Robert (Bilston)

Jones, Dan (Burnley)

Beaney, Alan

Evans, Albert

Jones, Elwyn (West Ham, S.)

Bellenger, Rt, Hon. F. J.

Finch, Harold

Jones, J. Idwal (Wrexham)

Bence, Cyril

Fitch, Alan

Key, Rt. Hon. C. W.

Bennett, J. (Glasgow, Bridgeton)

Forman, J. C.

King, Dr. Horace

Blackburn, F.

Fraser, Thomas (Hamilton)

Lawson, George

Blyton, William

Galpern, Sir Myer

Lee, Frederick (Newton)

Boardman, H.

Gordon Walker, Rt. Hon. P. C.

Lee, Miss Jennie (Cannock)

Bray, Dr. Jeremy

Gourlay, Harry

Lever, Harold (Cheetham)

Brockway, A. Fenner

Greenwood, Anthony

Lewis, Arthur (West Ham, N.)

Brown, Rt. Hon. George (Belper)

Griffiths, W. (Exchange)

Lipton, Marcus

Butler, Herbert (Hackney, C.)

Grimond, Rt. Hon. J.

Lubbock, Eric

Callaghan, James

Hamilton, William (West Fife)

Mabon, Dr. J. Dickson

Carmichael, Neil

Hannan, William

MacColl, James

Cliffe, Michael

Hayman, F. H.

MacDermot, Niall

Collick, Percy

Henderson, Rt. Hn. Arthur(Rwly Regis)

McInnes, James

Corbet, Mrs. Freda

Herbison, Miss Margaret

McKay, John (Wallsend)

Craddock, George (Bradford, S.)

Hill, J. (Midlothian)

Mackie, John (Enfield, East)

Crosland, Anthony

Hilton, A. V.

McLeavy, Frank

Dalyell, Tam

Holman, Percy

Mallalieu, J.P.W. (Huddersfleld, E.)

Davies, G. Elfed (Rhondda, E.)

Holt, Arthur

Manuel, Archie

Davies, Harold (Leek)

Houghton, Douglas

Mapp, Charles

Davies, Ifor (Gower)

Howell, Denis (Small Heath)

Marsh, Richard

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1385

Mayhew, Christopher

Pursey, Cmdr. Harry

Thomas, George (Cardiff, W.)

Mendelson, J. J.

Reynolds, G. W.

Thompson, Dr. Alan (Dunfermline)

Millan, Bruce

Rhodes, H.

Thornton, tiniest

Milne, Edward

Roberts, Albert (Normanton)

Wade, Donald

Mitchlson, G. R.

Roberts, Goronwy (Caernarvon)

Wainwright, Edwin

Moody, A. S.

Rogers, G. H. R. (Kensington, N.)

Warbey, William

Morris, John

Ross, William

Watkins, Tudor

Mulley, Frederick

Shinwell, Rt. Hon. E.

Weitzman, David

Noel-Baker, Francis (Swindon)

Short, Edward

Wells, Percy (Faversham)

Oliver, G. H.

Silverman, Sydney (Nelson)

White, Mrs. Eireno

Oram, A. E.

Skefrington, Arthur

Whitlock, William

Owen, Will

Slater, Joseph (Sedgefield)

Wigg, George

Paget, R. T.

Small, William

Wilkins, W. A.

Panned, Charles (Leeds, W.)

Smith, Ellis (Stoke, S.)

Willey, Frederick

Pargiter, G. A.

Sorensen, R. W.

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

Parker, John

Sosklce, Rt. Hon. Sir Frank

Woodburn, Rt. Hon. A.

Pavitt, Laurence

Sprigga, Leslie

Woof, Robert

Pearson, Arthur (Pontypridd)

Stewart, Michael (Futham)

Yates, Victor (Ladywood)

Peart, Frederick

Stross, Dr. Barnett (Stoke-on-Trent, C)

Zilliacus, K.

Pentland, Norman

Swain, Thomas

Price, J. T. (Westhoughton)

Symonds, J. B.

TELLERS FOR THE NOES:

Probert, Arthur

Taylor, Bernard (Mansfield)

Mr. Redhead and Dr. Broughton

Mr. Green: I beg to move, in page 2, line 23, to leave out "of the Board of Trade" and to insert:
"made by the Board of Trade under section 3 (1) (a)".
Mr. Speaker: I think that it would be for the convenience of the House to discuss with this Amendment the following Amendments: In line 27, after "apply", insert" (a)".
In line 29, leave out from "regulationsto" to and insert:
"made by the Board of Trade under section 3 (1) (b); or
(b)".
In line 33, leave out "this subsection" and insert "paragraph (b)".
Mr. Green: I am sure the House is grateful to you, Mr. Speaker, for permitting discussion on these Amendments.
I think that the discussion will be very brief. The Amendments are in pursuance of an undertaking which I gave during the Committee stage to clarify, by redrafting, the relationship between Clauses 2 and 3. They are, therefore, essentially drafting Amendments.
Mr. Mitchison: I wish to thank the hon. Gentleman for carrying out the undertaking which he gave and to tell him that I think the Amendments make the Bill clearer.
Amendment agreed to.
Mr. Mitchison: I beg to move, in page 2, line 26, at the end to insert:
Provided that no such advertisement shall be issued if, on consideration of the said accounts and of any further information prescribed by regulations for the purpose, the Board of Trade is satisfied that the company is in an unsound financial position.
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(4) For the purpose of the last foregoing subsection the Board of Trade may from time to time make regulations in the form of statutory instruments (which shall be subject to annulment in pursuance of a resolution of either House of Parliament) prescribing information to be furnished (whether generally or by any group or class of companies) and the form in which any such information shall be furnished or verified; and (without prejudice to the generality of the foregoing) such information may include particulars of the company's membership, if any, of an Association and of any financial conditions compliance with which is required for such membership
From our point of view this is the most important Amendment with which we have to deal today and it has a certain history. The scheme of the Bill as a whole is to protect depositors by furnishing the Board of Trade with a great deal of information which it will not then communicate to the depositor. How that helps is, no doubt, clear to the Board of Trade, but it is far from clear to us. We have tried to improve on the one document which certainly will reach the depositor, that is the advertisement, long or short, and the Board of Trade has in mind advertisements which will inform him where to put his money.
The Government have assured us more than once that they do not mind so much about the advertisements. After all, they are only documents which will reach the man who is to pay the money. What do they matter in the eyes of the Government? The Government are concerned with the documents which reach the Board of Trade. We have had a great deal of detailed argument about accounts and regulations and so on, all of it about the relations between the Board of Trade and the lending company, the depositing company.

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This matter was raised at a quite early stage, and in the course of winding up the Second Reading debate the Economic Secretary referred again at some length, and with some pride, to the information which would be given to the Board of Trade. He was asked—I asked him in fact—what the Board of Trade would do with the information and how it would protect the depositor. The answer from the hon. Gentleman was a very curious one. He assured us, in effect, that on receiving the information the Board of Trade would read, mark and inwardly digest it and form an opinion on the status of the company. He said, when asked what the Board of Trade would do with the information to protect the depositor:
"I would say that they would do as follows: they would examine it with care and attention, and would attempt to evaluate it and use it as an indication—which would be very easy to, the trained mind "—
that is the Board of Trade mind—
"of the substance and stability of the company concerned, and then keep the situation constantly under review—to coin a phrase".
My right hon. Friend the Member for Battersea, North (Mr. Jay) then said:
"Surely, if they had been doing that for the last five years just as many depositors would have lost just as much money as they have in fact lost."
The reply of the Economic Secretary was:
"That is not an appropriate point"—[OFFICIAL REPORT, 4th December, 1962; Vol. 668, c. 1225.]
6.45 p.m.
What my right hon. Friend had in mind is perfectly clear. It is all very well to come to these conclusions in the fastnesses of the Board of Trade. What really matters is, what gets round to the depositor at the end of it? During the Committee stage discussions we had the extraordinary position that the Government appeared unwilling to let out the result of their cogitations.
The matter arose on an Amendment which would have limited the issue of advertisements to companies which the Board of Trade, on the information available to it under the Bill—I repeat, on the information available under the Bill—considered to be sound. There was, of course, bound to be a limited amount of information—a qualified judgment to that
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extent—but it was quite sufficient, apparently, for the Board of Trade to use as an indication—I quote the words again—
"substance and stability of the company concerned ".
What the Board of Trade wanted were the accounts and its trained minds would find it easy to do it. But having done it the Board of Trade was not prepared to limit the issue of advertisements to companies which it then considered to be sound.
I think that this was Ministerial fright—Departmental fright, shall I say? The Board of Trade felt that if it had to decide that a company was sound, that would give it a seal of authenticity, a "crown" of some sort, which it was not prepared to confer on anybody, for fear that it might not confer it on the right person or that it might omit somebody who would be entitled to it. And it ran away. It refused to let us know the result of that which, to the Department's trained mind, was so easy. This Amendment was voted down.
Now we have tried to make it easy for the Government. I wish to see whether they are going to refuse what is put on them by the Amendment. If we look at page 2, line 26, we find that we have just ended a subsection which exempts from the general prohibition in the Bill against advertisements the advertisement which
"complies with regulations of the Board of Trade"
and also the similar requirement, that the "accounts … to be delivered … are duly delivered." If that is done, all is well, and the advertisement is then released from the general prohibition.
All we wish to add is that, notwithstanding that, no such advertisement should be issued if
"on consideration of the said accounts"
—that is what the Economic Secretary said he required, but we should be willing to give him a little more—
"and of any further information prescribed by regulations for the purpose, the Board of Trade is satisfied that the company is in an unsound financial position."
There then follows a subsection giving the Board of Trade power by regulations—and prescribing some negative procedure about those regulations—to get the necessary information in the form in which it is required, including among the

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things in that information membership of an association. The Radcliffe Committee, when considering this sort of matter, had evidence from two associations—no doubt highly respectable associations—of the companies with which this Bill is concerned—companies which take deposits. One association was called the Association of Finance Houses and the other the Association of Industrial Bankers.
It is true that they were asked why they called themselves that. I do not think that the Radcliffe Committee quite discovered the answer, but that does not matter. It is clear that they were reputable bodies and the object of their existence was to make provisions about liquidity and so on. That would ensure the stability of their members so that the membership of an association of that sort and the character of these conditions are things about which the Board of Trade might properly get information.
There seems to be no doubt that if the Economic Secretary was prepared to make up his mind in these unqualified terms on the accounts, he should have even less difficulty in this regard. What is the difficulty with this Amendment? It requires him to make up his mind simply about whether he is satisfied, not that a company is in an unsound position but that it is in a sound position. The consequences would be that, provided the requisite hoops are gone through, that is to say, that the advertisements of the company comply with Board of Trade regulations and the accounts are duly delivered in the appropriate form—the Board of Trade has to evaluate them anyhow, we were told about that—and there is reason to do so, the Board of Trade will come to the conclusion that the company is in an unsound financial position.
Nevertheless, it will not be able to restrain the company from issuing advertisements except in one way, I shall come to that one way in a moment. So far as the whole of Clause 2 is concerned, the company in question thought by the Board of Trade to be in an unsound financial position by virtue of provisions in the Bill—the object of which is supposed to be the protection of depositors—will be able to issue advertisements and collect money from depositors and the Board of Trade can do nothing whatever about it, subject to one point. The one
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point is that there is always the last resort. The Board of Trade may go to the courts and petition for the winding-up of the company.
I do not know what the hon. Gentleman will say in reply to the Amendment. Is he going to say that in every case where he is satisfied that the company is in an unsound position he undertakes to petition for its winding up? I have no particular interest in these companies, but I think that might be a rather harsh application of the provisions of the Bill. I think so for this reason. A company might perfectly well at the time be in a position when it ought not to ask for any more deposits, but equally, after a lapse of time, it may be perfectly solvent. This is a very drastic step.
I am interested in this matter fat another reason. There is one fairly obvious parallel which I think occurs to many of us, and which was mentioned by my hon. Friend the Member for Glasgow. Craigton (Mr. Millan) in our discussions in Committee. That is the position of building societies. Building societies invite deposits from the public. In many ways what they do is very like what companies will do under the Bill, although I agree at once that the purposes of the two kinds of bodies are rather different and there are same distinctions. I think this is the closest parallel which one can find. The position of building societies seems to be that they can be wound up as companies.
They are regarded as companies fat the purpose of winding up in the ordinary way and they can also be wound up by an award of the Registrar. The award of the Registrar does not come in here because there is no provision for a Register of the companies accepting these deposits. Therefore, there is no registrar, but in the case of building societies the Registrar, an administrative official, has power to order the winding up of a society. He does it in the form of an award, which is the phrase used.
If there were a parallel in this case it would be not only that the Board of Trade under the Bill has power to petition far a winding up, as it has now, but also power by an award to wind up the company in question. These are rather more extensive provisions for

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winding up in the case of building societies than exist in the case of these companies. When one turns to the building societies legislation in respect of these more extensive provisions about winding up, and in cases where I should have thought there was on the whole certainly no more, and probably less, reason for it than in connection with these companies, the Registrar has two other powers.
They occur in Sections 6 and 7 of the Building Societies Act, 1960. I need not go into them in detail. The first is power to suspend the raising of money by a building society. That is in Section 6. The second, in Section 7, is power to control advertising by a building society. Section 7 is, I think, the less drastic power while Section 6 is the more drastic, but neither of them amounts to winding-up. They exist side by side with provisions for winding-up which, as I have already shown, go rather beyond the provisions in this Bill.
As regards building societies, Parliament has found it necessary to have no fewer than four provisions of a controlling character. The first is power to control advertising and that is not merely provision as to the form of the advertisement. It includes that, but also includes power to prohibit the issue by the building society of advertisements of all descriptions. It is a complete prohibition, or something which may fall short of that. The second power is suspension of raising of money by a building society. That is so general and so drastic that there has to be a special exception allowing the building society to borrow from a banking or finance company or from one of its own directors. It covers a great deal more than mere advertisements. Then there is the third provision about winding-up by the award of the Registrar and there is the fourth set of provisions about winding up in the ordinary way in a court.
In this Bill, the only power the Board of Trade is taking is power to petition for winding up by the court. I suggest very strongly that the hon. Gentleman ought not to refuse the power which is now being offered to him to prohibit the issue of advertisements, which may comply in form and may follow accounts complying in form with the provisions of
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the Bill, but which are advertisements of a company which, in the judgment of the Board of Trade—formed in the manner which was admitted and stated by the Economic Secretary—is in an unsound financial position.
If he will not do this, there will be the most fantastic position. The Board of Trade will be compelled to choose between winding up a company altogether and allowing the advertisements to go through. The point behind all this is the position of the depositor. In many ways he resembles the person who puts money into a building society for the time being. From a social point of view those two classes are not far apart.
7.0 p.m.
In addition to that type of depositor, there are far more substantial depositors, sometimes corporate, sometimes not. In Committee we found ourselves talking about the sophisticated depositor and the unsophisticated depositor. There is no sharp line in these matters, but clearly the unsophisticated depositors in these borrowing companies exist, and they exist in very large numbers. That opinion is confirmed by such particulars as are available about deposits. They are the people whom the Bill is intended to protect. The sophisticated depositor can usually look after himself. He can go and look at the accounts, which will no doubt be available for inspection, which are given to the Board of Trade, and he can form his judgment upon them. The unsophisticated depositor will not be very much wiser if he is allowed to see the accounts. To take the words of the Economic Secretary again, it is the trained mind which is required to evaluate these accounts.
This was pressed on the Government on Second Reading. Their answer was very curious. They said, "You cannot expect the Board of Trade to do it. We rely on the financial journalists". That is an improbable answer, but it is what the Government said. It was the President of the Board of Trade who said that the financial newspapers could do it. Then I suppose the financial newspapers were relied on to publish an account or a description or criticism—whatever it may be—about every company inviting deposits in this way. I should have thought that they were most unlikely to do it.

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There is a further difficulty. A great many of these depositors do not even get as far as reading the financial newspapers. There is yet a further difficulty. Financial journalists are not infallible. I should think that they make more mistakes than any other group of journalists put together. At any rate, they make a substantial number. Not only are they not infallible. There is another trouble about them. They are like scientists and lawyers. They do not always agree. The Government did not clearly indicate which financial journalists were reliable and which were not. If the Government hesitate to discriminate between one company and another, how much more reluctant they must find themselves to discriminate between one financial journalist and another. I assure them that that way leads to destruction—destruction in terms of public opinion—for the financial newspapers might go on to criticise the Government.
The unsophisticated depositor cannot be expected to get the information he ought to get in this way. He knows, and we know, that the Board of Trade not only has the information but uses it to form a value judgment about these companies. I have given up trying to get the Government to say that in every case in some form or another that value judgment ought to be published. I have given up trying to get the Government to say, as I think they should, that the company is in this or that case apparently—it is no more than apparently—in a sound financial position. We have now come to the real bare bones, the last step, the one thing that the Government may not be too barefaced to refuse to do; that is, when they know the company is unsound, to tell the public that that is so by preventing the advertisements. Indeed, they do not even really tell the public. All that happens is, not that there is any published comment on the company, but simply that its advertisements do not appear.
However reluctant a Government Department may be, surely it can go that far, unless it is prepared to undertake that, whenever it comes to that opinion, for however short the period of unsoundness may appear to it to be, it will wind the the company up or take steps to get it done by the court.
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The Government cannot mean it. It is too close a parallel with the building societies. I therefore hope that on this occasion the Government will accept the Amendment, which is the very minimum of protection, the smallest little tooth put into the Bill, the purpose of which after all is said to be the protection of depositors.
What is the alternative to this? I have suggested questions of soundness Another alternative, I suppose, would be licensing. I myself do not think that licensing is necessary if the Board of Trade is prepared, even to this limited extent, to communicate the judgment it has formed in some form or other and stop advertisements by unsound companies or, better still, if it would allow advertisements only by sound ones. Whichever way it is put, that should be enough, but that is the bare minimum.
If the Government are going to refuse to do this kind of thing in the Bill—from the way we have conducted our discussions this afternoon it looks as if they are going to refuse everything we propose—they are simply putting off the evil day, not only for themselves but for their friends in the City of London, because sooner or later the alternative to this will have to be some complicated licensing system which will be far worse for the Board of Trade, no more effectual as regards control and far more troublesome to the companies concerned. Is it not better to take what is suggested now, this bare minimum? It may have to be enlarged later. It very likely will have to be. For the moment it is surely indefensible to refuse it?
Mr. Green: The Amendment does indeed differ in emphasis from that moved by the hon. and Learned Gentleman in Committee. I agree with him that it is in emphasis a different matter. The Amendment moved in Committee would have imposed on the Board of Trade a positive duty to declare its own satisfaction about a company's financial soundness before the company advertised. I agree with the hon. and learned Gentleman that this Amendment puts the emphasis in a negative sense. In other words, we are asked to prohibit advertising when we feel that a company is in an unsound state. In that sense this Amendment is different from the Amendment moved in Committee.

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I am not, in one sense, going to disappoint the hon. and learned Gentleman, because I cannot recommend the House to accept the Amendment. My reasons are these. This is a matter of judgment. I cannot prove with absolute certainty that my judgment is right, nor can the hon. and learned Gentleman prove that his is absolutely right. The expectation would be, if we accepted the Amendment, that the Board of Trade would act if in its opinion the company might be heading towards insolvency. No doubt if the Amendment became law the public would expect the Board of Trade to act.
If the company is in an unsound position, it may, as the hon. and learned Gentleman said, be temporarily in a state of delicate health. This is quite possible. It might subsequently recover. Indeed, it might recover quickly and grow sturdy and strong again. But a prohibition of this sort on its advertisements would be a very public act. It would have to be. A company would be actually advertising and it would be told to withdraw its advertisements. Is it really suggested that nobody would notice that withdrawal and that inquiries would not arise? That would surely be done, for when a company is putting out advertisements in public—perhaps having posters and other advertisements of a permanent character on a site—inquiries would be bound to arise if they were suddenly withdrawn.
It passes the bounds of real credibility if it is suggested that it would not be a public act, for it would have to be. Someone, some commentator on the scene perhaps, would notice that a company which had been advertising had suddenly ceased to do so without any explanation. Only one explanation could be drawn—that the Board of Trade had come to the conclusion that the company was unsound, but not so unsound as to require a petition for winding up. I can think of few actions which would make it more certain that the company's position would deteriorate. I cannot imagine how such a company would recover that confidence which the hon. and learned Member for Kettering (Mr. Mitchison) thought, or hoped, would be the case.
I do not see how such a company could recover from the jolt of such an action. I cannot prove that what I am saying is right because, after all, we are
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dealing with something that is hypothetical and not something that has happened. I put forward these views as a very real consideration. Let us consider what it might mean. Is it expected that a company will account to the Board of Trade, for example, if it is unable to pay the sums due and payable to its depositors? We are concerned with accounts which may record, perhaps, a period of indifferent trading and which may show that a company's solvency position is dependent on the correctness of the value assigned to some questionable assets. The Board of Trade notices this and, under the powers conferred on it by Clause 17, may seek further information.
At this point this is all known to the company, but is not known to someone else. I should have thought that at this stage the company would be given its chance either to change its method of trading and pull its horns in, so to speak, and so grow strong and sturdy again, as we hope it would, without necessarily having to proceed to a winding-up petition. But if the Board of Trade goes further under Clause 17 and seeks the necessary information—as it is entitled to do by using the powers under that Clause—and is convinced that there is radical unsoundness in the company, it does not have much option but to proceed to ask for a winding-up petition: Naturally, I am not too sure of this because the courts may not grant the order.
I believe that it would be equivalent if we accepted the Amendment—to placing on the Board a responsibility for ensuring that the public may, with complete safety, deposit its money with any company which is permitted to advertise for deposits. The hon. and learned Member for Kettering may say that it does not go as far as that because it only expects the Board to act if the company is unsound. I am afraid that the conclusions to be drawn—and I am sure that this is quite inescapable if an Amendment such as this was incorporated in the Bill and operated for even a short period—would always be that if the Board of Trade did not act under the Amendment it would be because it was satisfied that the company was sound. We should be back to "square one" at which I had to discard the Amendment in Committee for the reasons I gave then.
Mr. Mitchison: Will the Minister deal with the question of why these powers exist, and what effect they have, on building societies?
Mr. Green: Building society legislation is its own legislation. It is quite separate from the matter we are discussing. The hon. and learned Member is quite entitled to put that point, but it is hardly a parallel analogy to deposit-seeking companies to quote building societies. Such societies have a great many other bounds or barriers around them. They are a separate class of company and have their own legislation, I do not think that such an analogy is complete and I am afraid that I cannot accept it as a true parallel.
Perhaps the hon. and learned Member for Kettering—and I do not expect him to be convinced by this—will recall the words of my right hon. Friend the President of the Board of Trade when he said on Second Reading:
"No legislation"—
however it is framed—
"can stop companies running into difficulties,"—
That is clear and obvious, for we cannot stop them running into difficulties—
"nor is it for the Board of Trade to prescribe that a particular form of commercial operation is risky and unsound, or, on the other hand, bold and enterprising and likely to be successful."
Thus it is not for the Board of Trade to make this kind of judgment.
"What the Government must do is to ensure that the information which a depositor ought to have is available, and available early enough to be of use in assessing the prospects or progress of a company. That is what the Bill sets out to do"—[OFFICIAL REPORT, 4th December, 1962; Vol. 668, c. 1150.]
We went through this in Committee. It was pointed out that the Board of Trade should have certain powers to ensure its own safety. We went into the question of the Board of Trade's own sanction and need, and it is a sanction regarding the winding up of companies. It is adequate for the Board of Trade to proceed with that sanction if it needs to do so. To go further and to make the Board make value judgments is a totally different matter.
Mr. Mitchison: But if there were an express admission that the Board of Trade made those value judgments? That is exactly what he said.
Mr. Green: But the value judgments it is making—and I accept what the hon. and learned Member said about that—is a form of judgment as to whether it is justified to proceed with the further sanction which the Bill empowers it to do. What I cannot accept is that it should become the bar of public judgment, publicly uttered and publicly made. I am afraid that if I accepted the Amendment the Board of Trade would be in that position. It is for that reason that I ask the House to reject the Amendment.
7.15 p.m.
Mr. Diamond: We are having a disappointing afternoon. We have put forward one Amendment after another, each one more moderate than the last, but we do not seem to be able to reach such a low stage of moderation as to obtain the approval of the Minister. On this occasion, we find ourselves in the same position of being completely disappointed with his reply.
As has happened previously, it is not necessary for me to underline the case for the Amendment, because that has been done adequately and lucidly by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). It is my duty to consider the arguments adduced by the Minister in rejecting the Amendment and to attempt to demonstrate, as I have on previous occasions, why we cannot accept them as sufficient arguments.
As my hon. and learned Friend the Member for Kettering made perfectly clear, the Amendment refers to the Clause which is of the essence of the Bill and gets to the guts of it, to use a rather inelegant term. I must remind the Government that the Bill is not only called the "Protection of Depositors Bill", but that its Long Title refers to
"… the supervision of companies which issue such advertisements …"
Indeed, if this Amendment were incorporated, it would be virtually the only provision in the Bill giving real supervision.
We have made the point time and time again that the Bill is miscalled—and, therefore, misleading—the Protection of Depositors Bill, and I add that it is misleading to describe this as a Measure to supervise companies that issue advertisements when, on the only occasion on which we seek by a very modest Amendment to

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achieve that purpose we are unable to persuade the Minister of its acceptability.
There is an enormous gap between a company being, as the Amendment says in an "unsound financial position" and its being in such a position as to merit the action of the Board of Trade in starting winding-up proceedings—an enormous gap. As the Minister said, and in this we support him completely, the last thing anyone wants is for such action to be taken as so to tilt the scales that a company which is in a difficult position but might otherwise succeed is compelled to go into liquidation. But we have also a responsibility to protect depositors, and every Government speech is empty of thought for depositors. The Government's attitude is that the depositor must look after himself. As lawyers say, in a slightly different sense, "Caveat depositor" is the whole Government attitude in this Bill.
We thought that we were dealing with a Bill to protect depositors, and that, therefore, at some point of time, consideration would be given to the rights of the depositor even if the exercise of those rights might in some way and to some slight extent inconvenience those running a company seeking deposits. This is the minimum level at which we insist that the rights of the depositor should be considered. How else shall we avoid the utterly premature action of the Board of Trade in taking steps to wind up a company when the Board is satisfied that the interests of the depositor require it? We can only avoid that kind of premature action being taken by having some intermediate stage, by taking slightly less harsh action of the kind provided in the Amendment.
I should have thought that the Government would have been absolutely satisfied as to the parallel of the building societies, where the legislation provides for precisely the kind of thing my hon. and learned Friend seeks. The Minister turned that down as a parallel, but we did not say that a building society is the same thing as a company which seeks deposits. We said something quite different. We said that the method by which the Registrar of Building Societies protects those who would invest in a building society is an exact parallel with the methods suggested here.
1400
The Minister alleged against that method that it might have damaging results through publicity, and that, therefore, any method that publicised what was being done might have a more deleterious effect than one wanted, but that is the precise position of the building society. The Registrar of Building Societies is anxious to protect the deposits of the public in the building society, and he does it at times by refusing a building society permission to accept further deposits.
There are times when the Registrar is satisfied that such action is in the interests of depositors with the building society, notwithstanding that those same depositors have no doubt already deposited vast sums that must be protected. He is satisfied that there is an appropriate time when one can take action of this kind which brings fully into the daylight what is happening with regard to the building society yet protects the depositors who have already put money into the building society.
The Registrar is so satisfied, and the Government are satisfied that the Registrar needs those powers. What we are completely unable to understand is why the Government are not satisfied that the President of the Board of Trade needs identical powers with regard to depositors in companies of this kind. It is only the method we are concerned with, and we deny that in every single case if these powers were granted more damage would be done than benefit gained.
The Minister's argument is that we would do more damage to the existing depositors than there would be benefit in protecting would-be depositors. I recognise the argument, and I think that I understand it correctly. We say that there are times when one would do more benefit in protecting would-be depositors than one would do damage to the company, or to those depositing with it, or to its shareholders.
Those occasions provide an opportunity to use powers of this kind, and the Minister lacks those powers at the moment. There would be no compulsion on him to use them; he would have discretion to use them where he thought it appropriate. It is completely to be regretted that the hon. Gentleman has not seen fit to accept this very modest

1401
and moderate Amendment. I am sure that my hon. and learned Friend is right in saying that a situation can arise in relation to finance companies such as there has been with building societies.
I need not give detail or name, but there was a nasty situation which gave rise to special legislation. I am quite sure that were a similar situation to arise in connection with a finance company—and there is nothing in this Bill that could prevent it arising—the Government would immediately want to ask for additional powers. We ask, "Why not take the powers while you have the opportunity—while we are considering this particular aspect?"
I am sorry that I always have to finish my remarks in the same way. We try very hard to persuade the Government that, moderate as our Amendments are, they are worthy of consideration and would improve the Bill. No one could possibly suggest that either in Com-
mittee or now any party issue of the slightest kind has been involved. The approach is completely non-partisan. Al: of us, on which ever side we may sit, are trying to do the same thing, which is to improve the Bill.
We bring such limited knowledge of the facts as we have to the attention of the Government, yet we meet this situation in which the Government are not prepared to accept any Amendment, however much limited in scope, or however much following a precedent laid down by the Government themselves, or however much needed in what is supposed to be the Protection of Depositors Bill. If the Government are not prepared to change their minds now, we must once again insist on dividing the House.
Question put, That those words be there inserted in the Bill:—
The House divided: Ayes 125, Noes 164.

Division No. 82.]

AYES

[7.28 p.m.

Abse, Leo

Hamilton, William (West Fife)

Parker, John

Ainsley, William

Hannan, William

Pavitt, Laurence

Allaun, Frank (Salford, E.)

Hayman, F. H.

Pearson, Arthur (Pontypridd)

Allen, Scholefield (Crewe)

Harbison, Miss Margaret

Pentland, Norman

Awbery, Stan (Bristol Central)

Hill, J. (Midlothian)

Price, J. T. (Westhoughton)

Bacon, Miss Alice

Hilton, A. V.

Probert, Arthur

Baxter, William (Stirlingshire, W.)

Holman, Percy

Pursey, Cmdr Harry

Beaney, Alan

Holt, Arthur

Rhodes, H.

Bennett, J. (Glasgow, Bridgeton)

Houghton, Douglas

Roberts, Albert (Normanton)

Blackburn, F.

Howell, Denis (Small Heath)

Rose, William

Boardman, H.

Hughes, Cledwyn (Anglesey)

Short, Edward

Bowden, Rt. Hn. H. W. (Lelcs, s. w.)

Hunter, A. E.

Silverman, Sydney (Nelson)

Bray, Dr. Jeremy

Hynd, H. (Acorington)

Skeffington, Arthur

Brockway, A. Fenner

Hynd, John (Attercliffe)

Slater, Joseph (Sedgefleld)

Broughton, Dr. A. D. D.

Irving, Sydney (Dartford)

Small, William

Butler, Herbert (Hackney, C.)

Jones, Rt. Hn. A. Creech (Wakefield)

Smith, Ellis (Stoke, S.)

Carmichael, Neil

Jones, Dan (Burnley)

Sorensen, R. W.

Castle, Mrs. Barbara

Jones, S. Idwal (Wrexham)

Spriggs, Leslie

Cliffe, Michael

Key, Rt. Hon. C. W.

Stewart, Michael (Fulham)

Colllck, Percy

King, Dr. Horace

Stonehouse, John

Corbet, Mrs. Freda

Lawson, George

Stross, Dr. Barnett(Stoke-on-Trent, C.)

Craddock, George (Bradford, 8.)

Ledger, Ron

Symonds, J. B.

Dalyell Tam

Lee, Miss Jennie (Cannock)

Taylor, Bernard (Mansfield)

Davles, G. Elfed (Rhondda, E.)

Lever, Harold (Cheatham)

Thompson, Dr. Alan (Dunfermllne)

Davies, S. o. (Merthyr)

Lewls, Arthur (West Ham, N.)

Thornton, Ernest

Delargy, Hugh

Lubbock, Eric

Thorpe, Jeremy

Dempsey, James

Mabon, Dr. J. Dickson

Wade, Donald

Diamond, John

MacColl, James

Wainwrlght, Edwin

MacDermot, Niall

Warbey, William

Duffy, A. E. P.

Mclnnes, James

Watkina, Tudor

Ede, Rt. Hon. C.

McKay, John (Wallsend)

Weitzman, David

Edwards, Rt. Hon. Ness (Caerphilly)

Mackle, John (Enfield, East)

Wells, Percy (Faversham)

Edwards, Robert (Bilston)

Mallalieu, J.P.w. (Huddersfield, E.)

Whitlock, William

Fitch, Alan

Manuel, Achie

Wigg, George

Fletcher, Erie

Mapp, Charles

Wilkins, W. A.

Forman, J. C.

Mendelson, J. J.

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

Fraser, Thomas (Hamilton)

Mlllan, Bruce

Woodburn, Rt. Hon. A.

Galpern, Sir Myer

Milne, Edward

Woof, Robert

George, Lady MeganLloyd (Crmrthn)

Mitchlson, G. R.

Yates, Victor (Ladywood)

Gooch, E. G.

Morris, John

Zllllacus, K.

Gourlay, Harry

Oliver, G. H.

Griffiths, w. (Exchange)

Oram, A. E.

TELLERS FOR THE AYES;

Grimond, Rt. Hon. J.

Parglter, G. A,

Mr. Redhead and Mr. Ifor Davies.

NOES

Agnew, Sir Peter

Gilmour, Sir John

Nicholson, Sir Godfrey

Aitken, W. T.

Goodhart, Philip

Noble, Rt. Hon. Michael

Allason, James

Gower, Raymond

Oakshott, Sir Hendrie

Ashton, Sir Hubert

Green, Alan

Orr-Ewing, C. Ian

Atkins, Humphrey

Grosvenor, Lt. Col. R. G.

Osborne, Sir Cyril (Louth)

Awdry, Daniel (Chippenham)

Gurden, Harold

Page, Graham (Crosby)

Balniel, Lord

Hall, John (Wycombe)

Pannell, Norman (Kirkdale)

Barber, Anthony

Hamilton, Michael (Wellingborough)

Partridge, E.

Batsford, Brian

Harvey, John (walthamstow, E.)

Peel, John

Baxter, Sir Beverley (Southgate)

Hastings, Stephen

Percival, Ian

Bell, Ronald

Hay, John

Pickthorn, Sir Kenneth

Berkeley, Humphry

Henderson, John (Cathcart)

Pott, Percivall

Bevins, Rt. Hon. Reginald

Hendry, Forbes

Price, H. A. (Lewisham, w.)

Bidgood, John c.

Hiley, Joseph

Prior, J. M. L.

Biff en, John

Hill, Mrs. Evelline (Wythenshawe)

Proudfoot, Wilfred

Biggs-Davison, John

Hill, J. E. B. (S. Norfolk)

Ramsden, James

Bingham, R. M.

Hirst, Geoffrey

Rawlinson, Sir Peter

Bishop, F. P,

Holland, Philip

Redmayne, Rt. Hon. Martin

Black, Sir Cyril

Hollingworth, John

Renton, Rt. Hon, David

Bourne-Arton, A.

Hopkins, Alan

Ridley, Hon. Nicholas

Box, Donald

Hornsby-Smith, Rt. Hon. Dame P.

Ridsdale, Julian

Braine, Bernard

Howard, John (Southampton, Test)

Ropner, Col. Sir Leonard

Brown, Alan (Tottenham)

Hughes-Young, Michael

St. Clair, M.

Buck, Antony

Hurd, Sir Anthony

Shaw, M.

Bullard, Denys

Irvine, Bryant Godman (Rye)

Skeet, T. H. H.

Butcher, Sir Herbert

Johnson, Dr. Donald (Carlisle)

Smith, Dudley (Br'ntf'd & Chiswick)

Campbell, Gordon (Moray & Nairn)

Johnson, Eric (Blackley)

Smithers, Peter

Carr, Compton (Barons Court)

Jones, Arthur (Northants, S.)

Speir, Rupert

Cary, Sir Robert

Kerans, Cdr. J. S.

Steward, Harold (Stockport, S.)

Channon, H. P. G.

Kerr, Sir Hamilton

Stodart, J. A.

Chataway, Christopher

Kershaw, Anthony

Studholme, Sir Henry

Clark, William (Nottingham, S.)

Kimball, Marcus

Summers, Sir Spencer

Clarke, Brig. Terence (Portsmth, W.)

Langford-Holt, Sir John

Taylor, Sir Charles (Eastbourne)

Cleaver, Leonard

Lehurn, Gilmour

Thomas, Sir Leslie (Canterbury)

Cooper, A. E.

Legge-Bourke, Sir Harry

Thornton-Kemsley, Sir Colin

Cooper-Key, Sir Neill

Lewis, Kenneth (Rutland)

Tiley, Arthur (Bradford, W.)

Cordeaux, Lt. Col. J. K.

Lilley, F. J. P.

Touche, Rt. Hon, Sir Gordon

Corfield, F. V.

Linstead, Sir Hugh

Turner, Colin

Coulson, Michael

Litchfield, Capt. John

Turton, Rt. Hon. R. H.

Craddock, sir Beresford (Spelthorne)

Lucas-Tooth, Sir Hugh

Tweed smut r, Lady

Critchley, Julian

MacArthur, Ian

van Straubenzee, W. R.

Cunningham, Knox

McLaren, Martin

Walder, David

Curran, Charles

McMaster, Stanley R.

walker, Peter

d'Avigdor-Goldsmid, Sir Henry

Macpherson, Rt. Hn. Niall (Dumfries)

Wall, Patrick

Deedes, Rt. Hon. W. F.

Maddan, Martin

Ward, Dame Irene

Donaldson, Cmdr. C. E. M.

Marten, Nell

Webster, David

Doughty, Charles

Matthews, Gordon (Meriden)

Wells, John (Maidstone)

du Cann, Edward

Mawby, Ray

Whitelaw, William

Eden, John

Maxwell-Hyslop, R. J.

Wills, Sir Gerald (Bridgwater)

Emmett, Hon. Mrs. Evelyn

Maydon, Lt. Cmdr. S. L. C.

Wilson, Geoffrey (Truro)

Erroll, Rt. Hon. F. J.

Mills, Stratton

Woodnutt, Mark

Farey-Jones, F. W.

Miscampbell, Norman

Worsley, Marcus

Farr, John

Montgomery, Fergus

Finlay, Graeme

More, Jasper (Ludlow)

TELLERS FOR THE NOES:

Fraser, Ian (Plymouth, Sutton)

Neave, Airey

Mr. Chichester-Clark and

Gammans, Lady

Nicholls, Sir Harmar

Mr. Frank Pearson.

Amendments made: In page 2, line 27 after "apply", insert"(a)".
In line 29, leave out from "regulations" to "to" and insert:
"made by the Board of Trade under section 3 (1) (b); or
(b)".
In line 33, leave out "this subsection" and insert "paragraph (b)".—[Mr. Green.]
Mr. Green: I beg to move, in page 2, line 35, after "class", to insert:
"issued by a particular person".
In Standing Committee I referred to the fact that the Board of Trade would give a person permission to issue a single
1404
advertisement or a specified class of advertisement, which might be all the advertisements which the person issued. I went on to say that it was not thought that the Board's power would extend to giving a single permission relating to a class of advertisement put out by a number of people. It is certainly not intended that the Board of Trade should have this power.
The Amendment, by limiting the power to classes of advertisement issued by a particular person, makes the position clear. When it is necessary to allow the issue of a class of advertisement by a number of people, it can be done by making a regulation uder Clause 3 (1, b)

1405
which would be subject to Parliamentary procedure. I was hoping in Committee to be able to clarify my intentions in this way, and it is for this reason that I am moving the Amendment.
Mr. Mitchison: It would be almost, but not quite, as unreasonable to divide against this Amendment as it was to divide against our last one.
Amendment agreed to.

Clause 3.—(REGULATIONS OF BOARD OF TRADE AS TO ADVERTISEMENTS.)
Mr. Green: I beg to move, in page 3, line 19, to leave out from "descriptions" to the end of line 23.
Mr. Speaker: It would be convenient, I think, to discuss with this Amendment the Amendment to Clause 25. in page 19, line 15. at end insert:
(3) Regulations made under paragraph (b) of subsection (1) of section 3 may direct that all or any of the provisions of this Act which apply to a company in respect of or in consequence of the issue of an advertisement for deposits shall not apply to any company in respect of or in consequence of the issue of an advertisement (whether issued before or after the regulations come into force) of any class exempted by the regulations from section 2; and such regulations may include provision—

(a) for requiring any company which, by virtue of the regulations, is exempt from the requirement to deliver accounts under this Act, to deliver a notice to that effect to the Registrar and to the Board of Trade; and

(b) for applying subsection (4) of section 7 in relation to any such company which thereafter ceases to be so exempt.

Mr. Green: Yes, Mr. Speaker.
Clause 3 (I, b) provides for the exemption by regulations of those advertisements specified in the regulations from the general prohibition on the issue of advertisements contained in Clause 2. Clause 3 (2) gives the Board of Trade power to direct that certain provisions—the most important being those requiring the delivery of accounts—shall not apply in relation to the exempted advertisements; with the result that if a company issues such an advertisment it need not deliver accounts as a consequence of the issue of such advertisements.
It is, however, by no means certain on the present drafting of the Bill that the directions which may be given under Clause 3 (2) can be given in relation to
1406
advertisements issued before the regulations are made. The result may be that although the advertisements issued after the regulations were made may not attract delivery of accounts, those issued before may do so, notwithstanding the direction.
This is of particular importance when the Bill first becomes law, since there are a number of companies—for example, charitable companies—which are now issuing advertisements for deposits but which we do not want to be required to deliver accounts. Without these Amendments these companies might be required to deliver accounts as a consequence of their past advertisements, until they can terminate their liability to do so by giving necessary notices under Clause 7 (2) and by waiting at least three years. This would largely nullify the point of giving directions. The problem could also arise at any time when it was decided as a matter of policy that the issue of a particular kind of advertisement need no longer attract the accounting provisions of the Bill.
The main purpose of these Amendments is to make it clear that if a direction is given, advertisements falling within the exempted class, whether issued before or after the regulations are made, will not attract the provisions of the Bill requiring the delivery of the accounts. It is, therefore, essentially a drafting Amendment to make clear the intention which I. expressed in Committee.
Mr. Mitchison: This Amendment gives very wide powers to the Board of Trade. I understand the hon. Gentleman's reasons for it. I can only say to him that if I had rather more confidence either in the discretion or in the good intentions of the Board of Trade I should accept it with less reluctance than I do.
Amendment agreed to.

Clause 7.—(TERMINATION OF REQUIREMENTS AS TO PERIODICAL ACCOUNTS.)
Mr. Green: I beg to move, in page 7, line 1, to leave out from "given" to end of line 2 and to insert:
"to any person under subsection (3) shall be deemed to have been given to that person if sent to him by post at his last known address".
Mr. Speaker: I think that it might be convenient to consider with this Amendment the Amendment in page 11, line 6, to leave out "may be served by post" and to insert:
"shall be deemed to have been given to a person if sent to him by post at his last known address.".
The Economic Secretary to the Treasury (Mr. Edward du Cann): I am most grateful to you, Mr. Speaker, for that suggestion. This is very largely a technical matter, and I hope that the House will feel that both Amendments make very good sense.
The first refers to the notice that a company is required to give to its existing depositors and to new depositors if it has informed the registrar and the Board of Trade it has ceased to advertise for deposits in order to be free, in due course, from the obligation to deliver periodic accounts. Clause 7 is what I think was called in Committee the exit Clause. The second of the Amendments refers to the notices that a company is required to give or may elect to give to its depositors when it changes or intends to change the nature of its business.
I think that the purpose of Clause 12 will also be remembered by those on the Committee. Its insertion was very largely due to the expressed wish of hon. Members on both sides of the Committee that we should take account of that particular circumstance. As drafted, the Bill provides that the notices under Clause 7 may be given and served by post. The effect of these provisions—this really is the point—when read with Section 26 of the Interpretation Act, 1889, is, I am advised, that notices would prima facie fall to be treated as having arrived in the normal course of post, and if in fact a notice failed to reach a depositor because, for instance, he was no longer living at the address to which it had been sent, the company might be held to have failed to discharge its statutory duty imposed on the company by the Bill, and therefore to have committed a criminal offence.
I am sure that it will be the agreement of the House that this matter should be dealt with reasonably and sensibly. The drafting as it at present stands does not seem to give the kind of result which, I think, would be regarded in the view
1408
of the House as being fair. Therefore, I suggest that it is necessary for us to look at the matter in a practical fashion and endeavour to put it right. I should like to say a few words on that point.
Notices of the kind that I have described may have to be sent to a large number of persons, some of whom may not have been in touch with the company for some months. In these circumstances, the company would do all that would reasonably be required of it, the House may think, if it were required to send notices by post to the addresses last known to it. This will be the position if these two Amendments are accepted. I hope very much that they will have the approval of the House.
Amendment agreed to.

Clause 10.—(SPECIAL PROVISIONS AS TO NEWLY INCORPORATED COMPANIES.)
7.45 p.m.
Mr. Diamond: I beg to move, in page 8, line 40, at the end, to insert:
Provided that any advertisement, to which by virtue of this subsection section 5 (1) does not apply, shall require deposits offered in response to the advertisement to be accompanied by a statement that they are so offered and shall include an undertaking by the company that no deposit so offered will be accepted after the expiration of a specified period not exceeding one year after the date of issue of the advertisement.
Mr. Deputy-Speaker (Sir Robert Grimston): I think that it might be convenient to discuss this Amendment with the Amendment in page 12, line 5, after "notice", insert:
"or with an undertaking required under section 10 (1)".
Mr. Diamond: I hope that we shall get the reciprocity which we naturally expect, having given the Government all their Amendments in such record succession, and that they will feel disposed to give us this small Amendment.
Clause 10 deals with what I might call the most sensitive part of the Bill. It deals with the problem of protecting proposed investors and proposed depositors at the point of time when a company, because it is a new company, has not had an opportunity of demonstrating its ability to carry on its business satisfactorily. By satisfactorily, I mean from the point of view of securing depositors. It is, therefore, right to concentrate on protecting depositors at that point of time.

1409
The Amendment is an attempt to protect depositors as best one can. The form in which the Bill is drawn provides protection inasmuch as a company seeking a deposit which cannot by virtue of its newness produce accounts, produces instead a prospectus, or statement in lieu of prospectus, thereby giving an indication to the public of the kind of thing that it is going to do and of its make-up, capital structure and its financial soundness.
Time moves on, however, and although a company might at the point of time at which it issues its prospectus coincide, as I am sure it would do, precisely with the details in that prospectus, and although, therefore, anybody putting up money on the basis of a prospectus at that time would have an opportunity of knowing exactly what he was doing, this would not apply to somebody who was putting up money at a later date, by which time the circumstances may have altered but not sufficient time may have elapsed to necessitate the production of accounts. It is, therefore, this interim period in particular with which one is anxious to deal.
This is not a new problem—indeed few problems are new. This is a problem which was examined in a similar situation by the Jenkins Committee at paragraph 240. The conclusion reached by the Committee in paragraph 252 (c) is that
"no allotment of securities offered to the public should be permitted after the expiry of three months from the date on which the prospectus is first issued."
The Committee was talking about shareholders and debenture holders, people who, as I have attempted to explain earlier, are not needing as much protection as a depositor.
The reasons given by the Committee appear in paragraph 240, the end of which states:
"we have been informed of cases in which securities for which such a quotation has not been sought have been offered to the public generally and have remained 'on tap' for an indefinite period in reliance on a prospectus containing information which may well have become obsolete or misleading. We think this is unsatisfactory and suggest that a general time limit of, say, three months, should be imposed."
1410
The circumstances in which the Committee was giving that advice were those of a company which does not have a quotation far the shares or debentures which are being subscribed.
As far as I am aware, no company has a quotation for its deposits. There is no market quotation for them. Therefore, we are in exactly parallel circumstances of a company, not having a market quotation, having issued a prospectus and people being invited to put up money on the basis of a prospectus which is correct at the time at which it speaks but which may cease to be correct for a later period.
The Jenkins Committee in its wisdom had no doubt whatever in advising on the length of period beyond which no subscriptions by way of shares or debentures should be accepted. The Committee's view was that the length of period should be three months. It took the view that one could not reliably allow a greater period than three months to elapse before checking the information to see that it was sufficiently accurate to justify a subscription by way of deposit.
My Amendment is more flexible than that. We say that the deposits so offered should not be accepted after the expiration of a specified period. We do not specify the period except to say that it should not exceed one year after the date of issue of the advertisement. That is a very flexible way of dealing with the matter.
We could have put down an Amendment suggesting three months, as the Jenkins Committee advised. I recognise that the advice of that Committee is not statute law. It is good advice, but the House has not yet had an opportunity of debating it nor the Government of letting us know their views about it. Nevertheless, it is clear from the evidence adduced to the Jenkins Committee that this is a difficult point. It is clear to anybody who is aware of the circumstances of the Bill and its provisions, and particularly to those of us who served in the Standing Committee, that this is the most difficult point at which to protect the depositor.
The Bill proceeds on the basis of supplying accounts. It supplies accounts so that a depositor will know, or be capable of finding out from those accounts, the strength of the company

1411
in which he proposes to deposit money. It is impossible to have such accounts for a new company. Therefore, one has to rely on something quite different—an honest bona fide estimate. Even an honest bona fide estimate, however, can be shown to be inaccurate after the passage of time in relation to subsequent circumstances.
Therefore, there must be a time limit to make the estimate a reliable guide to investment. I hope, therefore, that in these circumstances the Government will at long last accept an Amendment which is put forward, again from no partisan spirit but purely to strengthen the Bill.
Mr. du Cann: The hon. Member for Gloucester (Mr. Diamond) quite rightly described the position in relation to Clause 10, which permits a newly incorporated company, in the period of nine months following its incorporation, to advertise for deposits if, instead of delivering accounts, it delivers a prospectus or similar document. The reason for this provision is simply that the company would not be able to deliver accounts as it could not comprise a profit and loss account covering a period of six months.
We had substantial discussion of this situation during the Committee stage and it was refreshing to me, for various reasons which I need not go into now, to find that there was entire acceptance, on both sides of the Committee, of the point that it would be unreasonable to prohibit newly incorporated companies from engaging in business provided that they gave the appropriate information. We agreed also that the likelihood was that new companies would probably wish to give slightly more information than that which they might feel ordinarily obliged to provide had they been in business for some time. I am sure that all that is right and appropriate.
In Committee, the hon. Member for Gloucester made some of the points which he is now making, although his Amendment tonight raises a new point. The hon. Member has referred in particular to the Report of the Jenkins Committee and has made the point that the danger against which we wish to seek to protect depositors is that they should not make deposits on the basis of information which is out of date.
1412
I should like particularly to refer to the paragraph of the Jenkins Report to which the hon. Member alluded. He quoted the words of the fourth line from the end of paragraph 240:
"and have remained 'on tap' for an indefinite period".
Perhaps the House will be good enough to remember those words for a moment. The hon. Member then quoted the last two lines:
"We think this is unsatisfactory and suggest that a general time limit of, say, three months, should be imposed."
The hon. Member was good enough to say—indeed, he and I have mutually discussed and complained, if that is the right word, about this previously—that the House has not yet had an opportunity to discuss the Jenkins Report and express a view upon it, even if many of us in various ways accept different portions of the Report.
There are, however, two aspects of paragraph 240 of the Report to which I should like particularly to draw the hon. Member's attention. The first is that the Jenkins Committee's suggestion of a three-month period is in the nature of a suggestion—"of, say, three months". The Committee could, presumably, although I agree that it did not do so, equally as well have said "say, nine months". The Committee was not suggesting any fixed and definite period. It was drawing attention to the real evil here, and that is that securities—and I would ask the House to be good enough to remember these words—
"have remained 'on tap' for an indefinite period".
8.0 p.m.
That is not the situation here. We have, I suppose, to judge, first, whether or not three months is an appropriate length of time. Second, we must recognise, and recognise at once, that the situation which we are discussing in relation to Clause 10 is not on all-fours with that paragraph, because securities in the sense of deposits could not remain open to the public for an indefinite period, for there must be accounts within the period of nine months. I agree that it is a matter of judgment whether one chooses six or whether one chooses nine or whether one chooses three months. We have thought it right—and the Board of Trade does have, I think it is fair to

1413
say, great experience in these matters—to take this period of nine months, and regard it as being the most practicable period one can arrive at. But I hasten to reassure the hon. Gentleman that there is no question of securities being available for an indefinite period. I hope that he will feel that goes some way towards answering his point.
The hon. Gentleman has fully described the effect of his Amendment and I shall not go over it again in detail, but I should like to say that, the object of the Amendment being, as I understand it, to try to ensure that a person does not make a deposit on the basis of information contained in a prospectus which is out of date, I have every sympathy with that object. I think it important. On the other hand, one cannot help feeling that perhaps it is true to say that cases where this is likely to apply would on the whole be exceptional. I want him to understand that I take his point seriously and that I am endeavouring to establish the fact that this would be the remarkable rather than the usual case.
Having said that I express sympathy, I suppose that the hon. Gentleman will quite rightly want to know what I am prepared to do about it, to what extent I am prepared to give practical expression to my sympathy. He will recall that during the discussions we had in Committee I promised to look into the three months point which was raised then. That we have done, and, as I have already indicated, we came to the conclusion that the way the Bill was drafted was just about right. I hope the hon. Gentleman will accept that that was the result of a substantial amount of thought. I want to go on to say to him what it is we are endeavouring to do to achieve his objective in the Bill.
I come back to what I was talking about earlier. Clause 10 (3, a) requires any newly incorporated company which has issued an advertisement on the basis of a prospectus to deliver audited accounts within nine months after the date of its incorporation. In other words, we are saying accounts will be available at the earliest possible moment. So, therefore, we are ensuring that this information will be on the file and will he available—I will say more about it—as soon as it is practicable to do that.
1414
We are shortly to discuss Amendments standing in the name of my hon. Friend the Minister of State to Clause 11. I do not wish to make reference to those in detail at this moment, but the House may remember that in Committee we had substantial discussion at the option of my hon. Friend the Member for Torquay (Mr. F. M. Bennett), whose intervention on this point was so valuable, and at the option of the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison), and it was suggested that it was just not good enough to provide that the accounts should be made available to those who actually made deposits, but they should be made available to all those proposing to make deposits with the company. It is not practicable for everyone to come to London and go to the Board of Trade to see the registrations and so on.
I suggest that the situation is completely altered by these Amendments, for the prospective depositor—if I may use that phrase, although we are not using that wording, as my hon. Friend may have noticed, and for good reason—now can get up-to-date information which he was not in a position to do before.
It is perfectly true that that leaves us with the position—I make a joke of it but I want the hon. Gentleman to understand that I follow his point—of, say, a chap who goes into a fish and chip shop and finds his fish wrapped up in a very old newspaper, a year old, let us say—I think this is the kind of case the hon. Gentleman had in mind—with a coupon in it, and he fills it in and makes his deposit on the basis of information given in that way. Does the hon. Gentleman wish to make a point?
Mr. H. Lever: I was merely saying that to have that experience one would not necessarily have to have a cutting from a newspaper in a fish and chip shop. One can get it from the current issues in the Members' Tea Room.
Mr. du Cann: I really cannot accept that from the hon. Gentleman the Member for Manchester, Cheetham (Mr. H. Lever) because I go into the Tea Room—indeed, I was there not very long ago for a quick moment—and I found the newspapers there very up to date. Indeed, they were what I may call "railroading" along in the sense of being up to date.

1415
However, that is another subject and I had better not go into that now.
The point I was making particularly is that this, of course, could happen, not only in relation to newly incorporated companies but in relation to advertisements put in by companies which have been established for a very long time. The logic, therefore, is that if one wants to try to do something about this in one case one has to do something about it in the other case also. This was not suggested by the hon. Gentleman. I understood that his interest was peculiarly directed towards newly incorporated companies. I agree that they are especially important, but I cannot help feeling that in general it is thoroughly unlikely that one would fill up a coupon in the way which is suggested without making some positive attempt to get up-to-date information. One cannot force that now. There is nothing in the Bill which does that and there is nothing which could be in the Bill to do that.
During the whole of these debates, on Second Reading, in Committee, and now—though not to the same extent now—we have made the point that investors must protect their own interests by endeavouring not only to get advice, which was one point we talked on particularly, but to get the latest information, and we should do our very utmost to see that that information is available for them. I hope, therefore, that the hon. Gentleman may feel that we are endeavouring to meet his point to the best of our ability.
Mr. Diamond: Perhaps I misunderstood the position, but is it not that accounts to be rendered are to be rendered within nine months of incorporation of the company? It will take, therefore, some little time for those accounts to circulate, shall I say, before they get to everybody who may want to see them. Perhaps there will be another short period. The Amendment I propose refers to a maximum of 12 months. What the hon. Gentleman has referred to is accounts available some time after nine months. We need not argue about the difference between nine months plus and 12 months, but we are still left with the new company about which no information is available till its first statement the new company about which no information available for nine months plus.
Mr. du Cann: Yes, that is perfectly true, but the accounts of any company might necessarily be a little out of date. One cannot get them as hot off the presses as all that.
Mr. Diamond: Why not?
Mr. du Cann: I would suggest that in the case of a newly incorporated company it is unlikely to have transacted any great volume of business and the accounts will be available after the nine months' period and perhaps before that. Perhaps therefore, the difficulty is not as great as imagined. What is abundantly clear, I think—that is why I made the point at the beginning of my remarks on the Amendment—is that the newly incorporated company would be anxious to get its accounts out as early as possible in order to indicate to the public its creditworthiness and general stature.
Another difficulty about this Amendment, I feel, is that it is probably impossible to police. That I find somewhat unsatisfactory. I do not think that it would be possible to check exactly what was happening in the way desired by the hon. Gentleman.
Mr. J. T. Price: The Treasury could do it.
Mr. du Calm: I hope that the hon. Gentleman the Member for Westhoughton (Mr. J. T. Price), who, I know, has a great regard for the Treasury, has an equal regard for the Board of Trade, and he will appreciate that policing this is a Board of Trade matter, not a Treasury matter. If we were to let the Inland Revenue and the Customs and Excise loose on the whole problem perhaps they might be successful, but I doubt it very much.
I see the point which the hon. Gentleman is making. It has relevance even though it is a little exceptional. I do not think that the Jenkins Report is quite a parallel, for the reasons which I have endeavoured to explain. I hope that if the House agrees that it would be appropriate to accept the Amendments to Clause 11 the hon. Gentleman and others interested in this point will feel that we have done our best to meet them in another way. I am certainly willing to say that we will consider very carefully everything that the hon. Gentleman

1417
has said, but my first feeling is that we are dealing with the situation, and dealing with it satisfactorily.
8.15 p.m.
Mr. J. T. Price: The Economic Secretary has just made an interesting and good-natured statement, after his usual fashion, but he has not quite lived up to his reputation for either lucidity or logicality in the arguments that he has put to us.
It has been briefly and fairly argued by my hon. Friend the Member for Gloucester (Mr. Diamond), without unduly punishing the question, that this period of grace ought to be admitted now in the Bill and that deposits should not be accepted after the expiration of a reasonable period, the period being left in doubt and to be defined later.
The difference in principle as between the Minister's attitude and ours is as follows. Companies registered under the Companies Act which are seeking to raise new equity capitals, debentures, or some other form of capital are under a statutory obligation to provide a prospectus in great detail about their prospective operations, the amount of capital and the people concerned with the company, so that those who are asked to entrust money to them shall have the fullest information before doing so.
We are not dealing with the same proposition here. I have to keep returning to the point—not, I hope, with any tedious repetition—that this is a Bill to protect depositors who are being invited to deposit money on loan with companies which advertise for money on loan, whether merchant bankers, hire-purchase companies, or all the other categories which are seeking to get their hands into the pockets of the public for their own purposes. I am not saying that these are illegitimate purposes. Many are perfectly reputable and legitimate. Nevertheless, many companies are competing in the market for the money of people who have surplus funds to lend.
In dealing with this, we are seeking to put restraint upon the types of blandishment and advertisement by which the public are being induced to part with money to companies which are not worthy of their confidence. This is a further sanction that we suggest to deal specific-
1418
ally with new companies, by which I mean companies which have not so far established themselves as to comply with the requirement in another part of the Bill that they should deposit their accounts with the Board of Trade in the usual way.
Demonstrably, a person who is prepared to lend substantial sums of money to a new company when he sees an advertisement in a newspaper is not in the same position of security as one who is lending a similar sum of money to an old-established company whose accounts are well known and whose operations are secure. Therefore, it is inadmissible for the Economic Secretary to argue that the provision in relation to the advertisements provides also that accounts shall be produced and that at some time in the future, after perhaps six or nine months, the accounts of the new company will be available for inspection by the person who has lent money. What good is that information after the person has made his investment? All the restrictive provisions and sanctions in our present legislation are designed to protect people so that they may have full information before they lend money to public companies which are seeking to raise equity and other forms of capital.
The raising of loans is not in the same category. If the case was strong for requiring under the Companies Act that the fullest information should be provided by new companies, the case is even stronger for greater safeguards to be provided where people are lending money on deposit and are not covered by the safeguards of the Companies Act. This is a serious, valid and major point which my hon. Friend, not wishing to weary the House, perhaps did not labour as much as he could have done.
Where a company is starting in business with purely nominal capital to satisfy the requirements of the Companies Act, but it is seeking to raise a major portion of its future resources by loans from a credulous public very often too ready to pour money into all kinds of dubious concerns which are capable of drafting seductive advertisements, and where the Bill gives no adequate protection, I seriously submit to hon. Members opposite that we are entitled to argue that the paragraphs in the Jenkins Report which have been quoted by my hon. Friend

1419
the Member for Gloucester in support of the Amendment are particularly valid when they are tied to the special conditions of depositors who have not the protection of the Companies Act, in another sense.
The Minister, whom I followed with the closest attention, conveyed the impression that the advertisements of hire-purchase and merchant banking concerns to the public are published prospectuses in the same way as advertisements for raising equity capital under the Companies Act. That is not the case. Consequently, I believe that we have made the case that there should be some added safeguards in this legislation so that advertisements are not allowed to run for an indefinite period with the money rolling in until accounts are produced in six, nine or twelve months' or two years' time.
I reinforce what I have said in general principle by a recital of what occurred in the case of the MIAS group of companies in Manchester, which defrauded the public of what is known to be about £750,000 and was probably a great deal more. In operations over nearly four years it never published a single account of any kind.
The group was in breach of the Companies Act. It published no accounts and I see no sanction in the Bill which would improve the situation with regard to the publishing of accounts. The intention of the Bill is proclaimed to be that of protecting investors against exploitation by crooked people. If investors are to lend money in response to advertisements, they should have the fullest information and there should be a time limit to the period of advertisement.
Mr. du Cann: I apologise if my explanation was not as lucid as it should have been. I drew the attention of the House to Clause 10 (3, a), which indicates that a balance sheet must be provided. The hon. Gentleman has quoted the case of the MIAS Group. Had this Bill been in operation, that group would have been obliged to lodge the accounts. I only answer that particular point. It is clear that if this Bill had been in operation then there might not have been the same trouble.
Mr. Price: I quite agree, and I am obliged to the hon. Gentleman for bringing my attention to the point. I had my thumb on that Clause. I agree that in future there will be this safeguard as far as established companies are concerned, but there will be none for those lending money to new companies unless we amend the Bill. If I spoke much longer I do not think that I could make the point clearer. It is a matter of judgment. We want additional safeguards.
Nevertheless, I have a little doubt in my mind even about the form of words used in this Amendment. It says:
"… shall require deposits offered in response to the advertisement to be accompanied by a statement that they are so offered and shall include an undertaking by the company that no deposit so offered will be accepted after the expiration of a specified period not exceeding one year after the date of issue of the advertisement."
What may be legitimately criticised in that form of words is that new companies seeking to get a footing in the money market by raising public deposits on a large scale often enter into lengthy periods of extensive advertising in tile provincial press. A company may have advertisements published weekly in a newspaper for six months or more. One may ask how long the period of advertisement should run. Will this cover a series of advertisements? One cannot assume that there will only be one advertisement. There may be a whole series of them.
We are on a very fair point here. We spent much time upstairs arguing the technicalities of the Bill and we have had few concessions from the Government. There are times when one feels that the diligence of hon. Members who have applied themselves to this Bill in a non-party manner should be more adequately recognised. This is a fair proposal, which would strengthen the Bill, and I hope that the Government will yet see fit to accept the Amendment.
Mr. H. Lever: The Economic Secretary has been exceedingly lucid and courteous throughout, running in harness with the Minister of State, whom we also respect for his consideration. I understand that if a new company solicits deposits, for a period of at least nine months it is not obliged to deliver its accounts. During that period it can go on soliciting deposits from the

1421
public. I absolutely agree with the general tenor of what was said by my hon. Friend the Member for Westhoughton (Mr. J. T. Price).
The most devastating criticism of the whole Bill is that it is based upon what we believe to be the naïve view that, if we give would-be depositors proper information, that constitutes a safeguard. Indeed, the total safeguard offered by the Bill is that depositors have balance sheet information available. Whether they use it or not is a matter for discussion on Third Reading. The value of it can be disputed.
The whole core of the Government's case is that they are protecting depositors by ensuring that they get adequate information. That is certainly the case, so long as it is not a new company. If a new company is involved, the Bill will not apply practically for nine months and the depositors in that period will be unprotected. The Government are relying on information, claiming that information is the only real protection that we can give. How can they allow companies to solicit deposits from the public before they are in a position to give that information?
When the Minister says that it is a new company, a child, as it were, in these matters, and cannot have a balance sheet until it has traded for a year and hence cannot give the information which the older companies are forced by the Bill to give, the answer is that if the Government's view is right and has any substance—that the public can be protected by enforcing this flow of balance sheet information—no company should be allowed to solicit deposits from the public until it is in a position to give the public the kind of assurance upon which the Government rely for the protection of the public.
It is not I who say that the balance sheet is an adequate protection. For reasons which I hope to elaborate on Third Reading, I do not think that it is. It is the Government who have said that this is the great protection for the public and the only way in which depositors can be protected. In those circumstances, the Government dare not hold the view they hold and allow companies to go before the public and take
1422
its money without being in a position to give this protection of balance sheet information.
What my hon. and learned Friend the Member for Kettering (Mr. Mitchison) wants to do is to tighten that a little. If there is any criticism of my hon. and learned Friend's proposals it is that they are too modest. He should have demanded that the new company not yet in a position to provide the safeguard of a balance sheet information ought not to solicit deposits from the public. Having made my point that the Government, having relied on information as the great weapon for the protection of the public, are the last people who should defend the position which allows new corn panics, because they are not in a position to give this information, to trade in this way—
Mr. Diamond: In support of what my hon. Friend is saying, may I say that it is my recollection—and I go only on my recollection—that the Finance Houses Association accepts this limitation and does not allow its members to seek deposits, no matter how substantial their capital, until they have been trading for a substantial period.
Mr. Lever: I am greatly obliged for what, as is usual from my hon. Friend, is a helpful intervention. I would have said that the minimum period of probation, as it were, before companies should be allowed to solicit deposits from the public would be one which enabled them to show a year's trading without having so solicited.
It would not be out of point to say a sentence or two about the dominant neurosis affecting the Board of Trade and, alas, by affection, the Treasury, and which has made the Bill as bad as it is. I will come to the other neurosis, the neurotic obsessions about appearing to be the endorser of companies seeking deposits from the public, later. The second obsession of the Treasury is that of bogus democracy, that any company, big or small, old-established or new-established, should be entitled freely to enter up soliciting deposits from the public.
I have often been chastised by my democratic hon. Friend the Member for Westhoughton for saying that this is not a business for small companies if we value the rights of the public and want

1423
the public to be able to avoid having deposits at risk. It is not a lack of democratic sympathy with my hon. Friend's views that makes me insist that they should be substantial companies which are taking or soliciting deposits from the public. The reason is not that I love rich companies and hate poor ones, but that rich companies are better receptacles for deposits from the public and more appropriate persons to canvas for deposits than are small, insubstantial companies. If we yield to spurious democracy and say that small companies should be allowed to compete with large companies for deposits from the public, the unsophisticated depositor runs the risk of being robbed because of the insolvency of the small company.
For these reasons, apart from the personal ones, I hope that my hon. and learned Friend will press this matter to a Division. I hope that he will not yield to the blandishments of the Minister. The Minister was exceedingly lucid, but he took up an untenable position.
8.30 p.m.
Mr. Mitchison: The hon. Gentleman began by assuring us that he would think this matter over, that he would give it careful consideration and that we could rely on him giving special attention to it. I would have found that a little more convincing if I had not happened to look at what occurred in Committee. This point, which is very short and limited, was made quite clearly by my hon. Friend the Member for Gloucester (Mr. Diamond) in Committee. I have no fault to find with the hon. Gentleman's courtesy, which is impeccable, but in reply to my hon. Friend he said:
"I have listened with very great interest to what has been said both by the hon. and learned Member for Kettering (Mr. Mitchison) and the hon. Member for Gloucester (Mr. Diamond). I understood that they both asked me to pay attention to these points and to have a very good look at them. I am certainly most willing to do that, especially at the latter point which, I am bound to say, had not occurred to me. Certainly I can give the Committee that assurance, and I do so willingly."—[OFFICIAL REPORT, Standing Committee A, 14th February, 1963; c. 409.]
The point in question which had not occurred to the hon. Gentleman, and to which he was going to devote particular attention, is the point that we are now considering.
Mr. du Cann: With respect to the hon. and learned Member, I think that he missed the part of my speech this evening in which I dealt with this point. I said that I remembered very well this earlier Committee discussion. The point in this Amendment is slightly different from the point we discussed in Committee. The point we discussed then was whether we should narrow the period from six months to three. We had considered that and thought that we had the matter right.
Mr. Mitchison: The hon. Gentleman's recollection may be very clear, but I have the Committee proceedings before me, and what my hon. Friend was referring to was the recommendation of the Jenkins Committee, which he quoted again today, under paragraph 252 (c). The question was the stale advertisement or the stale prospectus. This is the point that was under discussion there, and is the point raised by this Amendment. Though it is possible that the discussion has gone on to other matters—all, of course, within the rules of order—this is the substantial point, and, with respect to the hon. Gentleman, is exactly the point that my hon. Friend raised, in exactly the same way and on exactly the same grounds, in Committee, and we are not content with the further consideration which the matter ought to have received, and no doubt did receive, by the hon. Gentleman at the time.
I go from that to the merits of this matter, and this is a very narrow point. It relates to a small minority of cases. It may well be that the Amendment is, or is not, properly drafted, and that it ought to cover rather more or rather less. I am not concerned about that. What I am concerned about is the obvious intention of the Amendment, which is to carry out in this respect the kind of matter which the Jenkins Committee recommended in a slightly different context.
If the hon. Gentleman said that a year was too long, or that there ought to be a further definition of what is meant in this context by the issue of an advertisement, or anything of that sort, I should not have quarrelled with him, provided he had accepted the matter in principle. But when we came to the principle of the matter, all he said was, in effect, that there was no need to bother

1425
too much about the advertisements because the information would be available in the form of accounts.
I do not know how often that has been said by the Government. I do not know why they put in a Clause about advertisements. That appears to be the foundation of the Bill, and yet whenever they are asked to do anything about advertisements they hop rapidly from one foot to the other and say that the advertisement may not be much good but that it will be all right by reason of the accounts. How many times have we had to say that the unsophisticated depositor cannot be expected to see the faults of advertisements—which are what he acts on—by looking at accounts which he may not have asked for and will not understand when he sees them? This is such a silly excuse that I have become sick of hearing it again and again.
The Government must know that all this business about the protection of depositors is pretty illusory, and that at the end of the day what will be done by the Bill is very small beer. But when we make small suggestions as to what should be done, the only answer the Government have is the one which
they have put forward time after time. People can say what they like. They can say, "This Amendment is reasonable," and "That Amendment is not reasonable", but I have never yet met a Government that turned down every Amendment with such insignificant and wholly irrelevant arguments as those which have been put forward from time to time today.
It makes one wonder what they think discussions in Committee and on Report are for. What purpose do they think a legitimate and hard-working Opposition serves in matters of this kind? We could have been abusive about the Bill and criticised it much more than we have done, but at a very early stage we said that we would do our best to help the Government put some teeth into the thing. This is a very small tooth. It will apply in very few cases. It has been turned down on grounds which appear to me to be hopelessly inadequate. Therefore, we shall divide the Committee.
Question put, That those words be there inserted in the Bill:—
The House divided: Ayes 119. Noes 155.

Division No. 83.]

AYES

[8.37 p.m.

Abse, Leo

Fraser, Thomas (Hamilton)

McKay, John (Wallsend)

Ainsley, William

Galpern, Sir Myer

Mackie, John (Enfield, East)

Allaun, Frank (Salford, E.)

George, Lady MeganLloyd (Crmrthn)

Mallalieu, J.P.w. (Huddersfield, E.)

Allen, Scholefield (Crewe)

Gourlay, Harry

Manuel, Archie

Awbery, Stan (Bristol Central)

Griffiths, David (Rother Valley)

Mapp, Charles

Baxter, William (Stirlingshire, w.)

Grimond, Rt. Hon. J.

Mason, Roy

Beaney, Alan

Hamilton, William (West Fife)

Millan, Bruce

Bennett, J. (Glasgow, Bridgeton)

Hannan, William

Milne, Edward

Blackburn, F.

Hayman, F. H.

Mitchtson, G. R.

Blyton, William

Herbison, Miss Margaret

Morris, John

Boardman, H.

Hill, J. (Midlothian)

Oliver, G. H.

Bowden, Rt. Hit. H. W. (Leics, S.w.)

Hilton, A. V.

Parker, John

Bray, Dr. Jeremy

Holman, Percy

Pavitt, Laurence

Brockway, A. Fenner

Holt, Arthur

Pearson, Arthur (Pontypridd)

Broughton, Dr. A. D. D.

Houghton, Douglas

Pentland, Norman

Butler, Herbert (Hackney, C.)

Hoy, James H.

Price, J. T. (Westhoughton)

Carmichael, Neil

Hughes, Cledwyn (Anglesey)

Probert, Arthur

Castle, Mrs. Barbara

Hunter, A. E.

Redhead, E. C.

Cliffe, Michael

Hynd, H. (Accrington)

Rhodes, H.

Collick, Percy

Hynd, John (Attercliffe)

Ross, William

Corbet, Mrs. Freda

Irving, Sydney (Dartford)

Short, Edward

Craddock, George (Bradford, S.)

Johnson, Carol (Lewisham, S.)

Skeffington, Arthur

Dalyell, Tam

Jones, Rt.Hn. A. Creech (Wakefield)

Slater, Joseph (Sedgefield)

Davies, S. O. (Merthyr)

Jones, Dan (Burnley)

Small, William

Jones, J. Idwal (Wrexham)

Smith, Ellis (Stoke, S.)

Delargy, Hugh

Kelley, Richard

Sorensen, R. W.

Dempsey, James

Key, Rt. Hon. C. W.

Soskice, Rt. Hon. Sir Frank

Diamond, John

Lawson, George

Spriggs, Leslie

Dodds, Norman

Ledger, Ron

Stewart, Michael (Fulham)

Duffy, A. E. P.

Lever, Harold (Cheatham)

Stonehouse, John

Ede, Bt. Hon. C.

Lewis, Arthur (West Ham, N.)

Stones, William

Edwards, Rt. Hon. Ness (Caerphilly)

Lubbock, Eric

Stross, Dr. Barnett (Stoke-on-Trent, C.)

Edwards, Robert (Bilston)

Mabon, Dr. J. Dickson

Symonds, J. B,

Finch, Harold

McCann, John

Taylor, Bernard (Mansfield)

Fitch, Alan

MacColl, James

Thompson, Dr. Alan (Dunfermllne)

Fletcher, Erie

MacDermot, Niall

Thornton, Ernest

Foot, Dingle (Ipswich)

McInnes, James

Wade, Donald

Wainwright, Edwin

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

Zilliacus, K.

Watkins, Tudor

Woodburn, Rt. Hon. A.

Wilkins, W. A.

Woof, Robert

TELLERS FOR THE AYES:

Williams, W. R. (Openshaw)

Yates, Victor (Ladywood)

Mr. Ifor Davies and Mr. Whitlock.

NOES

Agnew, Sir Peter

Gower, Raymond

Noble, Rt. Hon. Michael

Aitken, W. T.

Green, Alan

Oakshott, Sir Hendrie

Allason, James

Gresham Cooke, R.

Osborne, Sir Cyril (Louth)

Ashton, Sir Hubert

Grosvenor, Lt.-Col. R. G.

Page, Graham (Crosby)

Atkins, Humphrey

Gurden, Harold

Pannell, Norman (Kirkdale)

Awdry, Daniel (Chippenham)

Hall, John (Wycombe)

Partridge, E.

Balniel, Lord

Hamilton, Michael (Wellingborough)

Pearson, Frank (Clitheroe)

Barber, Anthony

Harrison, Col. Sir Harwood (Eye)

Peel, John

Barter, John

Harvey, John (Walthamstow, E.)

Perclval, Ian

Batsford, Brian

Hastings, Stephen

Pickthorn, Sir Kenneth

Barter, Sir Beverley (Southgate)

Hay, John

Pott, Perclvall

Bell, Ronald

Heald, Rt. Hon. Sir Lionel

Prior, J. M. L.

Berkeley, Humphry

Henderson, John (Cathcart)

Proudfoot, Wilfred

Biffen, John

Hendry, Forbes

Ramsden, James

Bingham, R. M.

Hiley, Joseph

Rawlinson, Sir Peter

Bishop, F. P.

Hill, Mrs. Eveline (Wythenshawe)

Redmayne, Rt. Hon. Martin

Black, Sir Cyril

Hill, J. E. B. (S. Norfolk)

Renton, Rt. Hon. David

Bourne-Arton, A.

Hirst, Geoffrey

Ridley, Hon. Nicholas

Box, Donald

Holland, Philip

Ropner, Col. Sir Leonard

Boyd-Carpenter, Rt. Hon. John

Hornsby-Smith, Rt. Hon. Dame P.

Russell, Ronald

Braine, Bernard

Howard, John (Southampton, Test)

Sharples, Richard

Brown, Alan (Tottenham)

Hughes-Young, Michael

Shaw, M.

Buck, Antony

Irvine, Bryant Godman (Rye)

Sheet, T. H. H.

Bullard, Denys

Jennings, J. C.

Smith, Dudley (Br'ntf'd & Chiswick)

Campbell, Gordon (Moray & Nairn)

Johnson, Dr. Donald (Carlisle)

smithers, Peter

Channon, H. P. G.

Johnson, Eric (Blackley)

Speir, Rupert

Chataway, Christopher

Johnson Smith, Geoffrey

Steward, Harold (Stockport, S.)

Chichester-Clark, R.

Jones, Arthur (Northants, S.)

Stodart, J. A.

Clark William (Nottingham, S.)

Kerans, Cdr. J. S.

Studholme, Sir Henry

Clarke, Brig. Terence (Portsmth, W.)

Langford-Holt, Sir John

Summers, Sir Spencer

Cleaver, Leonard

Leburn, Gilmour

Taylor, Sir Charles (Eastbourne)

Legge-Bourke, Sir Harry

Taylor, Frank (M'ch'st'r, Moss Side)

Cooper, A E.

Lewis, Kenneth (Rutland)

Teeling, Sir William

cordeaux, Lt.-col. J. K.

Lilley, F. J. P.

Thomas, Sir Leslie (Canterbury)

Corfield, F. V.

Linstead, Sir Hugh

Touche, Rt. Hon. Sir Gordon

Craddock, Sir Berestord (Spelthorne)

Litchfield, Capt. John

Turner, Colin

Crawley, Aidan

Lucas-Tooth, Sir Hugh

Turton, Rt. Hon. R. H.

Critchley, Julian

McLaren, Martin

Tweedsmuir, Lady

Cunningham, Knox

Maclay, Rt. Hon. John

van Straubenzee, W. R.

Curran, Charles

McMaster, Stanley R.

Walder, David

d'Avigdor-Goldsmid, Sir Henry

Macpherson, Rt. Hn. Niall (Dumfries)

Walker-Smith, Rt. Hon. Sir Derek

Deedes, Rt. Hon. w. F.

Maddan, Martin

Wall, Patrick

Donaldson, Cmdr. G. E. M.

Marten Neil

Ward, Dame Irene

du Cann, Edward

Matthews, Gordon (Meriden)

Webster, David

Emmet, Hon. Mrs. Evelyn

Mawby, Ray

Wells, John (Maidstone)

Erroll, Rt. Hon. F. J.

Maxwell-Hyslop, R. J.

Whitelaw, William

Farey-Jones, F. W.

Maydon, Lt. Cmdr. S. L. C.

Wills, Sir Gerald (Bridgwater)

Farr, John

Mills, Stratton

Wilson, Geoffrey (Truro)

Finlay, Graeme

Miscampbell, Norman

Woodnutt, Mark

Fletcher-Cooke, Charles

Montgomery, Fergus

Worsley, Marcus

Gammans, Lady

More, Jasper (Ludlow)

Gilmour, Sir John (East Fife)

Neave, Airey

TELLERS FOR THE NOES:

Goodhart, Philip

Nicholson, Sir Godfrey

Mr. Ian Fraser and Mr. MacArthur.

Clause 11.—(accounts to be supplied to depositors.)
Mr. Deputy-Speaker: With this Amendment can be discussed the following three Government Amendments.
Mr. du Cann: I think that would be most convenient, Mr. Deputy-Speaker. In spite of the battering I received in our last discussion, I hope the House will
1428
feel that we are doing what we can to meet some of the views which were expressed in Committee both by my hon. Friend the Member for Torquay (Mr. F. M. Bennett)—who is temporarily absent from his place—and the hon. and learned Member for Kettering (Mr. Mitchison), because these Amendments

1429
are tabled very largely in order to meet points which they raised at that stage.
Clause 11 as drafted requires a company which has advertised for deposits to furnish without charge a copy of its latest accounts to any person on receiving a deposit from him and to any existing depositor who asks for a copy. It was suggested by my hon. Friend the Member for Torquay and by the hon. and learned Member that we should broaden this provision and enable accounts to go to any prospective depositor who asked for them. We have considered this matter and these Amendments are tabled largely as a result of that consideration and to meet the Committee's wishes.
Their purpose, which involves a great deal of re-drafting of Clause 11, is principally to enable a "prospective depositor"—if I may use those words—to obtain a copy of the company's accounts subject—and this is most important—to the company being given protection against frivolous demands. There is, however, an additional purpose. Clause 11 as at present drafted provides that a person who becomes a depositor shall be furnished with a copy of the Company's accounts unless he has had a copy within 21 days. On consideration it was felt unreasonable to require a company to furnish a copy of its accounts to anyone who had at any time been furnished with a copy of the same accounts. The Amendments deal with that point. I ought to explain to my hon. Friend in particular why the words "prospective depositor" are not used. We were advised that they were insufficiently exact.
The first of the four Amendments extends the requirement to the furnishing of a copy of the latest accounts without charge to any person
"who signifies to the company that he requires a copy of the accounts or document with a view to becoming a depositor with the company."
I do not know whether it would be convenient to the House for me to say a word about the Amendment to the Amendment which is in the names of the hon. and learned Member for Kettering and the hon. Member for Gloucester (Mr. Diamond). If that is of assistance, I certainly will do so. I have made the point that we feel it important to protect the company against frivolous demands. I acknowledge at once that there is a plain limit to what one can do in practice. I dare say that the hon.
1430
and learned Member and his hon. Friend, and perhaps other hon. Members, might feel that their Amendment recognises the reality of the situation. All this would be logical and completely true, but on the other hand I hope that the hon. Members will not press that Amendment because we feel that there is some advantage in putting in the Bill specific words to indicate what we have in mind. If the House feels that we should give protection against frivolous demands, we should make that clear. That is why I have some doubts about the Amendment to the Amendment.
On the other hand—I hope that I can say this without getting out of order—I observed that a few days ago there was another Amendment on the Notice Paper which was very largely a drafting point. It contained a form of wards which perhaps might be acceptable if the hon. and learned Gentleman and his hon. Friend the Member for Gloucester care to bear that in mind for the future.
The effect of the Amendments in page 9, line 44, and in page 10, line 1, is to ensure that a company is not required to furnish more than one copy of any one set of accounts to any one person, no matter whether he is a person who has just made a deposit or is an existing depositor, or a prospective depositor. Again, I hope that the House will think this is sound.
The Amendment in page 10, line 4, permits a company to refuse to furnish a copy of the accounts to a person from whom it is not willing to receive a deposit. This sounds rather standoffish. It may be for the convenience of the House if I explain it. It will be recalled that in our earlier discussions we noticed in particular Clause 7, which is the exit Clause for any company which wishes not to go on taking deposits any longer and not to be bound by the Bill. The point here is to take account of that situation. I may be asked what is to happen if the company changes its mind. In the first instance, it must be reasonable that it should say, "No, we are not sending out accounts to any new depositors in the future, because we are not seeking any additional deposits".
Similarly, if the company were seeking deposits in the future, under the terms of the Bill it would be obliged to acknowledge the request of prospective depositors to send out accounts again. So there

1431
would be no possibility of any company using this provision to avoid the real provisions of the Bill.
With this explanation I hope that the House will think that these Amendments are reasonable and make good sense. I hope, too, that the House will think that they certainly comply with the undertaking that I gave to my hon. Friend the Member for Torquay and the hon. and learned Member for Kettering.
Mr. F. M. Bennett: As direct reference was made to the Amendment I moved in Committee containing the words "prospective purchaser", and as my hon. Friend the Economic Secretary has virtually asked whether these Amendments meet the undertaking given in Committee I should like to say at once that in my opinion they do.
I was rather amused to hear my hon. Friend, during his remarks, several times, both consciously and unconsciously, in seeking to give an explanation, use the words "prospective depositor", as he did in Committee and as he has done on at least five occasions since he began to speak this afternoon. If he thinks that, on the whole, his form of words is a better one, I am willing to accept it, although I, like him, am doubtful as to their validity, because I do not myself see how it can be proved whether or not a man has it in mind to become a depositor. Therefore, I do not think that this carries it any further than "prospective purchaser". Having said that, I think that the matter might be left where it is.
Mr. Mitchison: I must thank the hon. Gentleman for trying to give effect to what was said in Committee, but the Amendment standing in my name and that of my hon. Friend the Member for Gloucester (Mr. Diamond) to line 3, to leave out from "any" to the end of line 5 and to insert "person" would, I think, have shortened this considerably and I doubt if it would have made any difference. The Minister's Amendment, on the other hand, states that a
"… company … shall furnish a copy of the accounts or other document mentioned … to any depositor with the company and to any other person who signifies"—
Mr. Deputy-Speaker: Order. I am sorry to interrupt the hon. and learned Member, but if he is proposing to move
1432
his Amendment now I do not think that that could be done because it would arise at a later stage. I would have to dispose of the present Question first and then call the words to be added, when the hon. and learned Member could deal with his Amendment. I am merely trying to get the order clear.
Mr. Mitchison: I do not think that I quite appreciate that, Mr. Deputy-Speaker, for I merely want to point out why I find the Ministerial Amendment insufficient and why I would have preferred the amended version. I did not attempt to move my Amendment.
Mr. Deputy-Speaker: The point is that the hon. and learned Member cannot move his Amendment now. If he wishes to discuss it now and move it later formally, I would then put the Question. It is really a matter for the convenience of the House because I am sure that hon. Members would not wish to discuss the matter twice over.
Mr. Mitchison: I had not intended to move it and I do not think that I said that I was moving it. I was referring to it and I did not propose to do any more. I was saying that if our Amendment had been inserted it would have removed the words after "any" and the words about
"… any other person who signifies to the company that he requires a copy of the accounts or document with a view to becoming a depositor with the company."
It would simply have meant, those words having been removed, that it would be made obligatory to hand them over to anybody; any member of the public. I cannot see any real difference between "anybody" and "any member of the public". I must remind the Government about what was said in Committee. The Economic Secretary said:
"I cannot accept the wording of this Amendment"—
that was the Amendment in the name of his hon. Friend the Member for Torquay (Mr. F. M. Bennett)—
"because 'prospective depositor' is extraordinarily difficult to define, as I know my hon. Friends will understand."
I quite see the hon. Gentleman's point, but I am not quite certain that he has succeeded in defining it. After the Economic Secretary made those remarks I

1433
said "It means nothing", and the Minister went on to justify what we had said by saying:
"One never knows where money comes from if one is at the receiving end in these matters."
That is a rather nice picture.
"For that reason it is not possible to accept the Amendment as it stands.
My answer to the question, however, is a clear and unqualified. 'Yes'."
The Economic Secretary went on to say something in comment to my hon. Friend the Member for Cardiff, West (Mr. G. Thomas), who was the Chairman of the Committee, following which I said:
"I entirely agree with what was said about a 'prospective depositor'. What it comes down to is that any member of the public should be entitled to these accounts, and no less than that. Perhaps I may take the Economic Secretary's nod as indicating his assent on this occasion."
This was followed by the Economic Secretary saying:
"The answer is most certainly, 'Yes'."—[OFFICIAL REPORT, Standing Committee A, 14th February. 1963; c. 435.]
As I understood it, what the Economic Secretary was assenting to was the proposition that any member of the public should be entitled to these accounts, and no less than that. That is why the Amendment in question has been tabled. With very great respect to the Government—who have not accepted any Amendment yet and who have obviously made up their minds that however meritorious an Amendment might be and whatever clear undertaking was given in pursuance of it, they will not accept anything—it is perfectly clear what was said in Committee on that occasion.
It is perfectly clear that the Economic Secretary assented to the proposition that any member of the public should be entitled to these accounts. And it is perfectly clear that there is no difference, in this context, between any member of the public and "any person" and I am surprised that the Amendment has not been accepted. When I say that I am surprised, I am not really certain that I am. I am, to be frank, shocked that it has not been accepted.
This is really too bad. The Amendment to which I am referring has been on the Notice Paper for some time and
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that is the reason why another Amendment was withdrawn and this one put in its place. I thought that by so doing I would meet exactly what was said in Committee. As I say, there is no distinction between "any member of the public" and "any person" and I must ask the Government to carry out the undertaking they gave in Committee.
Mr. du Cann: I can see the hon. and learned Member's point and I think, frankly, that there is a genuine misunderstanding. I see the words to which he has drawn my attention. I have not looked at them again in the sense in which he has now described them. What the hon. and learned Member says is absolutely true and I apologise if I have misled hint. I had in mind any member of the public intending to make a deposit and I thought that we were talking in this sense all the time.
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.
9.0 p.m.
Mr. Mitchison: If it was a misunderstanding one can say no more, but I call the Economic Secretary's attention to this once more.
I entirely agree with what was said about a prospective depositor. What it comes to is that any member of the public should be entitled to these accounts, and no less than that. The hon. Gentleman will at least agree that I gave those words their ordinary meaning. Those were the words to which he assented, and I am, surprised that the Amendment cannot be accepted. I do not think that this is a point of great importance. I do not propose to divide the House on it, but I protest about it, while accepting that there may have been a misunderstanding and that the Economic Secretary did not exactly mean what he said on that occasion. But what he said was pretty clear, and I think that it should be carried out.
I want to explain why I tabled my Amendment. To start with, the phrase is rather long and not at all clear. A person who requires a copy
"… with a view to becoming a depositor …"

1435
may, and really does, require a copy for a rather different reason—with a view to deciding whether he shall become a depositor. That was in my original Amendment, which I took away in order to substitute this, and the Government's form of words is unsatisfactory from that point of view.
There is the more important point of the position of the financial journalists. There is no doubt that the accounts to which all this refers will be available in London, but there are financial journalists in places other than London. The financial journalists are the people upon whom the Government rely to get over to the public the contents of the accounts, but a financial journalist who wrote from, say, Edinburgh or Liverpool asking for a copy of the accounts would be told, "You cannot have a copy because you are not a person who signifies to the company that you require a copy of the accounts or document with a view to becoming a depositor with the company. You are only a financial journalist, not a depositor. You must get Tom, Dick or Harry to write to us." That is a very strange position when the Government rely on these journalists to do the job of telling the public what the accounts are all about.
I find the Government's form of words quite mysterious. There is only one explanation, and it is that an hon. Member opposite put forward the phrase "prospective depositor". The Government seized on that, and tried to put it into what they thought was clearer language, and it was only a member of the poor, miserable Opposition who suggested that exactly the same result would be achieved—and a more advantageous result, I think—if "person" was used. The Government's Amendment is obscure, insufficient and muddled. I think that the Government would still be wise to accept my Amendment—which I have not yet moved—when it is reached.
Amendment proposed to the proposed Amendment: In line 3, leave out from "any" to end of line 5 and insert "person".—[Mr. Mitchison.]
Question, That the words proposed to be left out stand part of the proposed Amendment, put and agreed to.
Proposed words there inserted in the Bill.
Mr. Deputy-Speaker: I propose for the convenience of the House to put the next three Government Amendments together.
Mr. Diamond: On a point of order, Mr. Deputy Speaker. Am I right in assuming that I have lost my right to speak to the Government Amendment in page 10, line 4?
Mr. Deputy-Speaker: No. I will put the Question on that Amendment separately if the hon. Gentleman so desires.
Amendments made: In page 9, line 44, after "document", insert:
"under this section to any person to whom a copy of the accounts or document in question has already been furnished by the company and, without prejudice to the foregoing provision, a company shall not be required to furnish a copy of any accounts or other document".
In page 10, line 1, leave out from beginning to "or" in line 3.—[Mr. Green.]
Amendment proposed: In page 10, line 4, leave out from "person" to end of line 6 and insert:
"(not being a depositor with the company) to whom the company gives notice that it is unwilling to receive a deposit.".—[Mr. Green.]
Mr. Diamond: Although I listened carefully to what the Economic Secretary said, I was not absolutely happy with the situation. This is not a major point, it is only a question of interpretation upon which I should like some confirmation. I recognise that if these words referred exclusively to circumstances arising out of Clause 7, the exit Clause, there would be no problem, but I am not absolutely satisfied that they could refer only to those circumstances.
For example, I am not absolutely satisfied that a company could not give notice that it was unwilling to receive a deposit and then proceed to receive one—the same day or the following day, to make the point absolutely clear. This Amendment does not say that it shall not receive a deposit; it merely says that it shall give notice.
If I may start from the beginning. Clause 11 as amended would read:
"A company shall not be required to furnish a copy of any accounts or other documents … under subsection (2) to any person (not being

1437
a depositor with the company) to whom the company gives notice that it is unwilling to receive a deposit."
It does not say that it shall not have to supply accounts to any person from whom it does not accept a deposit.
I hope I am making the point clear. I am drawing attention to the fact that the only requirement apparently is to give notice, to write a letter saying, I am unwilling to receive a deposit."
The second question is, how long does that notice last? If one writes to a person saying, "You cannot have accounts because I am unwilling to accept a deposit", how long does that notice last? Can one say three months later, "I have given you notice, but you can give me a deposit and I accept it without giving you accounts"?
This is not a very substantial question. It is a question of interpreting the words as they have been used. If I have given the Economic Secretary time to consider the matter, I shall leave it at that and ask him to explain it and confirm that there is no need for the present anxiety which I feel about these words.
Mr. du Cann: In courtesy, the hon. Gentleman must have an answer, and I am sorry to tell him that I am not in a position to give him as full as answer as I would like to do. I agree that the point is not one of fundamental importance. I do not believe that it necessarily carries any serious connotations of the sort which might exist by inference in the suggestions that he made.
I hope the hon. Gentleman will find it acceptable if I say that, in order to give him a considered answer, I should like to consider the matter further. I will certainly get in touch with him and let him have that full and considered answer. I can only apologise for not giving it now, but I would rather give a proper answer at a later stage than a botched answer now.
Amendment agreed to.

Clause 12.—(CHANGE OF BUSINESS.)
Amendments made: In page 10, line 24, leave out subsection (3).—[Mr. Green.]
In page 11, line 6, leave out "may be served by post and insert:
"shall be deemed to have been given to a person if sent to him by post at his last known ac dress".—[Mr. Green.]

Clause 14.—(DEFAULT IN RESPECT OF ACCOUNTING OBLIGATIONS.)
Amendment made: In page 12, line 7, at end insert "or section 12 (2)".—[Mr. Green.]

Clause 16.—(WINDING-UP ON PETITION OF BOARD OF TRADE.)
Amendment made: In page 12, line 42, leave out from beginning to "if" in line 45 and insert:
"The court may, on a petition presented by the Board of Trade by virtue of this section, wind up under the Companies Act, 1948, any company to which section 6 applies, or to which that section has applied at any time during the six months preceding the presentation of the petition".—[Mr. Green.]

Clause 18.—(POWER OF BOARD TO REQUIRE PRODUCTION OF DOCUMENTS.)
Amendment made: In page 14, line 27, at end insert:
"or to which that section has applied at any time during the previous six months".—[Mr. Green.]

Clause 25.—(COMPANIES SUBJECT TO THIS ACT.)
Amendment made: In page 19, line 15, at end insert:
(3) Regulations made under paragraph (b) of subsection (1) of section 3 may direct that all or any of the provisions of this Act which apply to a company in respect of or in consequence of the issue of an advertisement for deposits shall not apply to any company in respect of or in consequence of the issue of an advertisement (whether issued before or after the regulations come into force) of any class exempted by the regulations from section 2; and such regulations may include provision—

(a) for requiring any company which, by virtue of the regulations, is exempt from the requirement to deliver accounts under this Act, to deliver a notice to that effect to the Registrar and to the Board of Trade; and

(b) for applying subsection (4) of section 7 in relation to any such company which thereafter ceases to be so exempt.—[Mr. Green.]

Motion made, and Question proposed, That the Bill be now read the Third time.
9.12 p.m.
Mr. Mitchison: I do not propose to take up more than a very few minutes of the time of the House. I think that

1439
I ought to explain why we find this Bill hopelessly insufficient, but why, on the other hand, we do not propose to divide against it on Third Reading.
The reason that we find it insufficient is substantially the one that was raised on one of the Amendments today. The scheme of the Bill is that there should be a very limited control of advertisements, which are the only things which go to the depositor and which are the instruments which invite him to make his deposit, and the Government place their reliance upon a number of documents, accounts and so forth which go to the Board of Trade, and to the Board of Trade only. I hope that we have made it perfectly clear in the course of discussions on the Bill—and, at least, I want to make it perfectly clear now—that we consider that wholly unsatisfactory.
A very great many depositors for whose protection the Bill is said to be brought forward will be people who cannot understand these complicated accounts without some interpretation, and the Government, in a passage that I have quoted already from the Economic Secretary's speech on Second Reading, made it perfectly clear that they appreciated the fact that they knew the need for expert evaluation of the papers that were sent to the Board of Trade and, in fact, that the Board of Trade made such an evaluation and, on it, decided on the financial soundness of the company concerned in issuing the advertisements.
With that admission before them, it is really extraordinary that the Government, having persistently declined to take any public responsibility whatever for a judgment which it was their public duty to make, should say, in effect, "We will make a judgment; we have to make it; we have to go on making it all the time as the position of the company is question changes, but on no account in a Bill for protecting depositors will we let the depositors know the result."
Indeed, this evening the Government rejected an Amendment which would have compelled them to do no more than this—prevent the issue of advertisements in cases where they were satisfied that a company was unsound financially. I say no more than that. If that is the kind of protection that is to be given to deposi-
1440
tors under the Bill, then I say that it is a wholly illusory protection and that the only object of the Bill must be to try to persuade depositors that they have effective protection when, in fact, the great majority of them have nothing of the sort.
I must admit that the Bill gives the Board of Trade a better insight into what these companies are doing, and that is a positive advantage. It is not a protection for depositors. This is an Information for the Board of Trade Bill. It is certainly nothing of the sort as regards depositors. It does so singularly little for them that it would not be worth having from their point of view, but it puts the Board of Trade in a position to see what is going on. Given the character of this business, that in itself is a good thing.
Moreover, it is clear what is happening in this field. It is exactly the same as happened in the history of the Companies Acts and, to take another quite different instance, in dealing with the duties and functions of trustees. Insufficient Bills are brought in one after another. Circumstances change and the provisions required become stiffer and more complicated. The statutes required become stiffer and more complicated and they are always a little behind the requirements of the time.
The Bill is a glaring instance. The type of company with which we are principally concerned is a comparatively new development, at least on this scale. It ought to have been given a great deal more attention and a great deal more protection for depositors than is given in the Bill. It is, therefore, quite unsatisfactory. It is, I suppose, a step in the right direction, but this step in particular reminds me of the centipede which never succeeded in getting far, because it could never decide which foot to put first. When there are a hundred of them, it is difficult. I do not know how many there are in this case, but this is a very small foot indeed.
I am certain that in future this kind of business will need a great deal more control and protection for those who put up deposits under it than a Tory Government will ever be willing to give. They are so desperately frightened of interfering with any financial business

1441
that they always err on the side of doing much too little or nothing at all. They might offend a big businessman, they might even offend a small businessman. What Tory Government would ever do that to protect a depositor?
9.18 p.m.
Sir H. d'Avigdor-Goldsmid: The hon. and learned Member for Kettering (Mr. Mitchison) said that the object of the Bill was not to protect depositors, but to give them the illusion of being protected. I hope that I do not misquote the hon. and learned Member, with whom I must take issue. Although he has taken an active part in our debates, it would seem that he has not altogether taken in what we have been discussing in one day on Second Reading, 12 days in Committee and, now, a whole day on Report.
Throughout the Committee stage we had infinite discussions, and one would have thought that all the borrowers on deposit were standing in the dock. When it came to the point, there was one group in the dock—the MIAS Group. The name of those people was repeated countless times. The hon. Member for West-houghton (Mr. J. T. Price) was chiefly interested. The fact was, however, that although we were making this exhaustive inquiry, that was the only example of major fraud on depositors that was brought up.
There is no point in my going into that, but I should like to draw attention to what my hon. Friend the Economic Secretary has just said—that that group would have been caught by the Bill, because it would not have been able to get away with not producing the accounts. Therefore, this protection for depositors given by this Bill is, in fact, a very real one. It is so real that I wonder very much indeed whether there would be any depositors at all if the hon. and learned Gentleman the Member for Kettering and his hon. Friends really got their way and introduced the number of teeth to which the hon. and learned Gentleman has so frequently referred.
After all, what is the essence of the business we are discussing? The loans made by the hire purchase and finance companies are not really suitable for banks because they are made for longer term than, and they are not as liquid as, normal bank loans are, and in order to
1442
find funds for this intensely useful business, this financing of small businesses and of hire purchase contracts of all sorts which appeal to the public, they offer them rates of interest higher than those which are charged by clearing banks. Let us honestly and sensibly think of this and realise that there is no doubt whatsoever that the public have gained infinitely more from the higher rates of interest, the rates they have received from responsible finance houses, than they have ever lost on the one or two scandals which there have been in the past.
I wonder very much indeed whether, in the light of the regulations we are introducing, those houses will be able to offer the same rates of interest in the future and the same advantages to their depositors as they have done up to now. This is not the time of night to make a long speech, but I must stand quite firm against what the hon. and learned Gentleman said. So far from depositors not being protected, it is really the deposit takers who now find themselves under very great pressure, very great and genuine pressure, as to the demands being made on them.
When I last addressed the Committee on the Bill, I said:
"This is a Bill for the protection of depositors. It is designed not only to protect their investments but to help them secure facilities for the favourable investment of their funds."—[OFFICIAL REPORT, Standing Committee A, 26th February, 1963; c. 565.]
I stand by those words, and I beg my hon. Friends who have conducted this Bill through the House with great tact, great politeness and a great deal of skill, to bear them well in mind.
If we cannot give lenders facilities, then there is no question that we have erected a cage which will be empty, because deposit takers will not be willing to take deposits, because of the onerous terms we are inflicting on them. I do not think that will arise, but I think that if we were to follow the advice which is so generously tendered to us by the hon. and learned Gentleman and his hon. Friends this Bill would become unnecessary, because deposits would cease.
9.24 p.m.
Mr. H. Lever: Certainly, there is more joy in heaven over one repentant sinner even on Third Reading than there is over ten righteous men. I must observe that

1443
so far as the hon. Baronet the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) is concerned, his view of Government legislation, which has hardly altered throughout its progress, is noticeably more optimistic as the Bill proceeds. He started in very dismal strain on Second Reading. He drew attention, very rightly, to large-scale fraud in his own constituency precisely of the kind which aggravates and agitates hon. Members on this side of the House, and then he asked a simple question, would this Bill prevent it? He answered it in the negative.
The hon. Gentleman then proceeded to say that it would not do so because the fundamental defect in the Bill was its insisting on accounts, which are not by themselves a shield for the unsophisticated depositor. We now learn that he disagrees with my hon. and learned Friend the Member for Kettering (Mr. Mitchison) on Third Reading and takes a much more optimistic view of the Bill. The Bill has not changed, but the hon. Baronet has changed.
I want to be fair because the hon. Baronet is a valued and respected Member of this House, but I think we can find a clue to this in his asides as to the damage done by the Bill to legitimate business and the people who take these deposits. He rightly said that for the most part they honour their obligations, and that there is only a tiny minority who do not.
The hon. Baronet is confusing two things. Assuredly, the Bill does a considerable amount of unnecessary harm to legitimate business. But that is not the same as saying that it protects depositors. The Government have proceeded with ever-increasing recklessness to hinder legitimate interests in the Bill as if that were triumphant evidence that they were protecting the victims of fraud. That is the reason why we can truthfully say that the Bill is at best a hindrance to the honest man and a mild inconvenience to crooks.
The Government, having seen that the Bill was inadequate when brought in, felt that it would be strengthened the more howls of indignation they were able to arouse by their indifference to normal processes of commerce and finance which minor Amendments to the Bill produced. Having pointed out how
1444
much inconvenience they were rendering the honest members of this community, they felt that we should be satisfied that that thereby did damage to the crooks, an inconsistency which seems to have escaped the hon. Member for Walsall, South, who appears now to be satisfied with a Bill which aroused so much discontent on Second Reading.
In the competition for suggestions for a new name for this misbegotten Bill, I should like to suggest the "Protection of the President of the Board of Trade Bill." What happened was that the President of the Board of Trade had to be protected from indignant back benchers on his own side of the House, and the Government had to produce some sort of charade of protecting depositors in a hurry. The result was the Bill. I am very anxious to say some very severe things about the Bill and what is in it. I am relieved that the rules of order prevent me from saying severe things about what might have been in it.
It should be said that the Minister of State, who has been in charge of the Bill, has behaved, as we would have expected, with the greatest courtesy. Nobody on this side would wish to complain of the consideration that we received in his personal conduct of the Bill. That applies also to his colleague from the irritated rival Department, the Treasury, which was occasionally allowed to put its nose into the affairs of the Bill, much to the discontent of the Board of Trade, which does not like to see the Treasury interfering, and much to the discontent of the Treasury, which hates to interfere in a matter in which it does not have the dominant and final say.
The result is, however, that to get the Bill, which, as I said, should be renamed the "Protection of the President of the Board of Trade Bill", it looks as though the Leader of the House or the Prime Minister—taking time off from disciplining the Press and such other occupations as beset him at the moment—has said, "We have to get something which looks like a Depositors Protection Bill, and get it quickly."
The evidence is in the Bill itself. A great many of the provisions are dependent on regulations which the Minister will issue—delegated legislation. The

1445
view that I have taken throughout the proceedings on the Bill is that it is a mischievous one, a demagogic Bill, with no serious intent to protect depositors; a Bill with nothing but political reasons for protecting the President of the Board of Trade and the Government from criticism from their own more enlightened and active back benchers, like the hon. Member for Torquay (Mr. F. M. Bennett), who has been toiling in this arid vineyard on behalf of the Conservative Party to get some reasonable social legislation on this subject for some years, but failing.
Since it was a bad Bill, I sought throughout the Committee stage—I have often irritated my hon. Friends in doing so—to provide for maximum discretion and more mature reflection on the part of the President of the Board of Trade in the course of exercising his regulatory powers under the Bill. The most astonishing thing about the Bill, which depends very much on regulations, is that even on Third Reading the House has not been treated to a sight of the draft regulations. Every so often the Minister of State has been running a sort of striptease for us. He would occasionally draw the curtain aside and let us have a little daring peep at some of the regulations to which we are to be treated when the Minister has had time to reflect on the protection which the public requires. I am forced to ask why we were not shown the regulations and why we have still not seen in any reliable and concise form what the Government propose to do with the powers that they will obviously get under this Measure.
Other matters in the Bill do not meet with my approval. In their window dressing, the Government have brought in some change in the criminal law. It has been strengthened, as it were, to punish people who solicit deposits in a fraudulent manner. If the chief failure of the law protecting depositors had been that they were able to be defrauded without the frauds being liable to a criminal penalty, there would be something to be said for this new provision. But the Government know well enough that in every one of these spectacular failures the criminal law was applicable and that the people concerned could be brought to book if the evidence was available. If the evidence
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is not available we shall not be able to bring them to book under this new law, which is largely repetitive of the old law. This provision is a piece of irrelevant window dressing.
Again, the idea of other provisions is that drastic powers should be given to the President of the Board of Trade to raid people's premises, seize books and demand accounts. But, from the tiny budget provided to finance this magnificent piece of protection, it seems that the chances of any of these elegant pieces of machinery being operated are very small. I must regard those provisions, also, as largely window dressing.
In his anxiety to placate critics in relation to advertising, the Minister of State made a promise in Committee that he would publish the list of companies exempted under the Eighth Schedule of the Companies Act and which will be exempt under this Bill. Here again, I hope that the hon. Member for Walsall, South will not mind my reminding him that, in Committee, he took a far less hopeful view of the Government's attitude.
Today, however, the hon. Gentleman decided—to use his own phrase—to rally to the side of the Government. I do not know why, because they are doing exactly the opposite of what he firmly advised them to do in Committee. Then, he said, "I am sad about this". During the intervening period his natural good spirits have got the upper hand again and have overcome the melancholia expressed in Committee. But then, in Committee, the hon. Gentleman went on to say exactly what I had said earlier and which I will not repeat to the House, except in a sentence or two.
Sir H. d'Avigdor-Goldsmid: The hon. Gentleman is overlooking the important metaphysical distinction which his Front Bench drew between the list of companies affected by the Bill and those given special exemption of quite a different sort under the Companies Act.
Mr. Lever: No. The hon. Gentleman is mistaken. The metaphysical distinction, whether it be real or not, drawn by my hon. and learned Friend the Member for Kettering today, applied to the Amendment that he moved and which was rejected by the Government. The Minister of State said, in effect, "As soon as we summon up the courage we

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will reveal in the next convenient publication of the Board of Trade what has hitherto been kept secret for many years, namely, the list of companies enjoying privileges under the Eighth Schedule of the Companies Act."
It was the threat to reveal this list which produced from the hon. Member for Walsall, South the protest in Committee in which I joined. If the hon. Gentleman thinks that I do him an in-justice, I am prepared to treat the House to extracts from what we heard in Committee. In unmistakable terms, the hon. Gentleman agreed that the publication of this list would cast an unwarranted slur on those not in it and bestow an unwarranted accolade to those in it.
What has happened to the hon. Member for Walsall, South? In Committee he gallantly defended the people who were not on the list and who would be aspersed by the action of the Minister, and yet we were reassured today that he was rallying to the Minister in this evil work and would support him fully in this injustice. I thought that we were to have a Third Reading repentance. However, he showed shrewd tactics because, although he rallied to the Minister, he wanted him to look at the matter again. I think that the hon. Member's heart is in the right place, but he is seated on the wrong side of the House, and in the end that must inevitably have a deleterious consequence on his thinking, as I have shown on other occasions.
Without repeating myself, for I have had ample opportunity to make my point this afternoon, I most earnestly urge the Minister to think again about this matter. He has an opportunity in another place to put it right and I hope that he will see that he takes heed of what was rightly said by the hon. Member for Walsall, South and by myself and supported by my hon. Friends—that he must not publish the list under the Eighth Schedule because that will asperse those who are not it. There is nobody whose words carry any weight or who has any experience of this matter who does not agree with me.
The hon. Member for Torquay, whose attitude in this matter has been consistent throughout, said that it was very nice to be on the list and almost hinted that he
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knew of a firm that was on the list and which did not mind having its name published with a Board of Trade certificate to say that it was a grade one merchant banking house. I say at once that every firm which is on the list is first class and I am not seeking to challenge that, but there are many first-class people who are not on the list.
When the Minister says that he is not aspersing anybody or damaging anybody in his banking business by publishing the list of people who are not on the list, as it were, he forgets that the views of the hon. Member for Walsall, South, as they were expressed before the process of his inevitable good temper and perhaps some guidance from various quarters were brought to bear, are in reality the same as those of the hon. Member for Torquay. The hon. Member for Torquay repeats the Minister's words and says that nobody will be aspersed by not being named on the list, which will only say that they are not bankers. That is all very well, but people who, like the hon. Member, think that they are carrying on a banking business might regard it as a professional and trade aspersion of the most grave and harmful character to be told that they are not bankers.
I beg the Minister of State to bear in mind that when he gets support from a Member who knows about these matters, like the hon. Member for Torquay, it is very dubious support and does not really support the Minister's position. What the Minister is saying is, "When I publish this list, I not only do not asperse anybody by saying that anybody is a rogue, but I am not reflecting on those bankers who are not on the list"; but both his hon. Friends who know anything about the matter share my views, although in a different way.
The true view of the hon. Member for Walsall, South, as expressed in Committee and even, one might say, by implication in his speech this afternoon, is that the list ought not to be published because to publish it would be unfair and wrong. The view of the hon. Member for Torquay is that it should be published because it will be so nice for the firms on the list, including those he knows to be most respectable and delightful people, as I readily agree they are. He said that publication would not asperse anybody, but would merely say that they were not

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bankers. However, as there are many banking firms some with millions of pounds of capital who are not on the list, it is difficult to see how graver injury could be done to them than the hon. Member for Torquay wants to be done in this manner.
I am sure that the hon. Member puts forward his argument with great sincerity, but it cannot be said with any intellectual honesty that the list will not separate the sheep from the goats. That is the very purpose of having a list. The sheep, presumably, are those who could be trusted not to be held in the corset of regulations, and the people who would have to be led very firmly about what accounts they must publish and what information they must give, and so on, are presumably the goats. I therefore hope that the Minister will reflect again and will not equate the doing of injury to legitimate business with the protection of depositors.
The whole concept of the Bill is misguided. The person most in need of protection is the unsophisticated investor. The fact that the Government ensure that he can have complicated accounts, if necessary with his fish and chips, will be of little use in protecting him. It seems to follow logically thus: most of the pledges in the past have been accompanied by no accounts being given to the depositor. The victims have lent money on inadequate or no accounts. The man who lends his money without adequate accounts will hardly be protected because there are to be voluminous and complicated accounts. He does not trouble to see that the company to which he is lending his money has complied with the existing law with regard to accounts. What makes the Minister think he will go to the trouble of getting the statutory complicated accounts which the Bill says that he should have?
The result will be that the companies honestly engaging in business will comply with the law. They will have to spend a great deal of money on doing so, and the hon. Member for Walsall, South may be right in saying that this may be so costly as to reduce the rates of interest which honest companies will pay. On the other hand, the rogue will be little deterred by this. He will provide accounts like those provided in the case in the Walsall constituency. He will provide regular, good-looking accounts
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and defraud many innocent people of large sums of money. That is what the hon. Member for Walsall, South said on Second Reading. Why these accounts should protect the public I know not.
I repeat what I said this afternoon. If the Government really believed that accounts were a shield, they would not allow companies which have no accounts to operate in this field. The Government have agreed that no companies can operate without providing accounts, so that the only shield on which they rely will not apply, because if a rogue wants to set up a new company he will have nine months' run and then he can start another company with £100 before he comes within the ambit of the regulations regarding the accounts which he has to keep.
For those reasons it seems that the Bill, in so far as it is effective, and in so far as it has teeth, bites the wrong people. It interferes with the legitimate people and does nothing to protect the public adequately against the rogue. It seems that its most Draconian provisions are largely window-dressing, and the whole business is unsatisfactory. The reason we do not vote against it is that we have exposed sufficiently the illusion of protection which the Bill gives, and we are content that for the time being its main function shall be to richly endow the Board of Trade's archives with information which it has expressly assured us it has not the slightest intention of using for the protection of depositors.
9.44 p.m.
Mr. F. M. Bennett: I thought that it was too good to be true. The hon. Member for Manchester, Cheetham (Mr. H. Lever) began by paying me an unsolicited compliment, and I was very touched by the picture of my toiling in an arid vineyard. I never thought that that adjective applied. He remedied that by attacking me again on the question of the list. Although I do not think that at this hour we want a fourth discussion on this matter, I feel bound to clarify the reasons why the Minister and I have adopted a certain line. The hon. Gentleman spent a lot of time telling me why I did it and I am sure that he will forgive me checking it for myself.
One of my hon. Friends who is not here and I have been completely consistent in this matter. I know that the hon. Gentleman did not mean to be unfair, but

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I think that he has been unfair in saying that we have been inconsistent.
I have said from the beginning that there is a business of banking to be carried on. I have not said that this list should be a closed one. I do not care whether a firm is a big one or a small one: my concern is that it should be a banking business. Both in the Second Reading debate and in Committee I pointed out that in every other advanced country a distinction is drawn between legitimate banking businesses and other forms of financial activity. I gave the example of Canada. Many things can be done there by the kind of concern to which the hon. Member has referred. Such a firm may be perfectly reputable, but it would not be allowed to operate under the title of bankers, because it would not be running a banking business. That is the classification that I have sought to have inserted in the Bill by way of Amendment.
The hon. Member referred to sheep and goats. He knows that I used another parallel. I said that I did not want to discriminate against the grocer by saying that only a man who sells meat shall describe himself as a butcher. Throughout these proceedings my line has been that a banking business is a separate matter. I do not mind how long the list is. I have no wish to restrict it to a privileged group of the top people in the banking world. All that I am concerned about is to see that they carry on a banking business—a distinction that is recognised in almost every other country.
I again plead that we should get away from a description which I believe will do unjustified harm to companies of great repute which are not running banking businesses—which the hon. Member refers to as goats. I assure him yet again that I have no such idea, and I do not think the Government have. It is simply a question of their not carrying on a banking business according to what some of us believe a banking business should be.
Mr. H. Lever: Is the hon. Member saying, therefore, that those firms who are not on the list are not carrying on bankers' businesses? If so, is not the publication of this list going to injure many firms who are going to be bankers but who will necessarily have to wait for some months before they can get on the list?
Mr. Bennett: I am merely saying that the list should comprise everyone who is carrying on a legitimate banking business. If it is said that this will harm firms which think that they are carrying on a banking business but are not, then I must say that I put the public good first, and such firms must accept that they cannot fairly expect to go on calling themselves bankers. I am sure that the hon. Gentleman appreciates my point of view in this matter.
As always, it is impossible not to smile when one is under fire from the hon. Member, because of his amusing way. In those circumstances, I hope that he will not mind this one slight riposte. Throughout the Committee stage, one of the most amusing aspects was that one never knew which way he would jump next. I know that some of his hon. Friends felt the same way. In fact, I was tempted to run a book and take wagers as to which attitude he would take up on each successive Amendment.
The hon. and learned Member for Kettering (Mr. Mitchison) was much mare harsh and curt in his criticism than the occasion warranted. In Committee many of us were tempted to react forcibly to some of his distinctly unfriendly criticisms of my hon. and right hon. Friends the Ministers, and the Government in general. The only reason we held back was that we did not wish to delay or obstruct the passage of the Bill. But tonight, as there is no longer any risk of delay, I can say that I consider his criticisms to be wholly unwarranted. The Bill goes a great way towards meeting the need for a constructive Measure to deal with what is an admitted evil, as I propose to shown in the next few minutes.
So far during this Third Reading debate no mention has been made of the power and scope of advertisements. Up to now, long before any question of accounts could arise individuals have been misled by the form and content of advertisements into thinking that they are investing money in a company of repute, and in a certain sort of enterprise when, in fact, the company has been investing money in quite different enterprises. Further, titles and descriptions have been used—which we are now told will be forbidden under the regulations—which gave a wholly false idea of the soundness of the promises held out.

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The term "guaranteed", which has been made use of freely, means absolutely nothing, as all hon, Members will know. But to the unsophisticated, the appearance of the statement "13 per cent.", followed by the word "guaranteed" in large type, looks impressive even though it is meaningless both in law and in fact. So the Government have taken a decisive step towards the prevention of this abuse by controlling the form of advertisement and its content, and limiting, if not preventing altogether, the possibility of a person being misled.
The second point of importance which is covered by the Bill is the purpose for which a company is formed and the purpose to which the money available should be devoted. As the hon. Member for Cheetham will know, there have been grave cases where people have lost their money because a borrowing company has put the money it secured to a purpose wholly different from that which the investors thought would be the purpose for which their money would be used. That has been the case in respect of banks or finance houses or anything else. Now in the first document to be submitted there will have to be shown the purpose for which the money is to be invested, and it will be a criminal offence to mislead a potential investor. If the purpose is subsequently changed, the depositor must be informed of that change and given a chance to get his money back.
It is true that we cannot guard completely against the inability of individuals to understand accounts. As I said during the Second Reading debate, however hard one may try, one cannot always prevent a fool and his money from being parted. I gave on that occasion, as an example, the number of times that Nelson's Column has been "sold". In such a case that could not have been stopped whether the accounts submitted with the proposal were good or bad. No Government can prevent some people from being wholly duped by a proposal which an individual with common sense could not possibly imagine would provide a good bet for the investment of his money. I do not pretend, and I am sure that the Minister does not pretend, that we can guard against actions of the sort I have described. But from now on depositors and prospective depositors will be able to obtain a copy
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of the accounts referring to companies in which they are being invited to invest, and it is open even to the unsophisticated, if they cannot understand the accounts, to get advice on the subject.
The hon. and learned Member for Kettering attempted to get Amendments accepted listing the sort of individuals who would have to give advice, failing which an opportunity would be provided for the investor to withdraw his money. The Amendments were not accepted for a good reason. But it was revealed by the discussion that there are plenty of people who are ready to give advice if accounts prove to be beyond the comprehension of prospective depositors.
It has been said that discussion during the Committee stage and today has suffered from the absence of the regulations, and I wholeheartedly agree with the hon. Member for Cheetham that it is difficult to know how far we should press the Government when we are not aware of the nature of the regulations to be made. I am sure that great interest will be taken in the regulations when they do come into force in order to discover whether they are adequate to fill the gaps in the Bill. After the delays which have occurred I should have preferred the Report stage of the Bill to have been delayed a little longer until the regulations were available, and hon. Members had been given a chance to take part in a more useful debate than it has been possible to have under the circumstances. But we shall have, as it were, to save our powder until we see what form the regulations take.
I am not happy about the power which is included for winding up petitions and powers which may be used against those guilty of certain forms of misconduct under the provisions in this Measure. I confess that I was caught out during the passing of the last series of Amendments and I did not realise that the discussion upon them provided me with an opportunity to comment on this matter during the Report stage. The sanction is there in the Bill, but I do not think it goes nearly wide enough. It ought to cover far more aspects than this limited one. I hope that my hon. Friend will look at this before the Bill goes on to the Statute Book. I am sure that if I could have raised that matter on Report I

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should have had the support of the hon. Member for Cheetham.
With that one limited criticism, as one who has toiled in the vineyard for quite a while I am delighted with the Bill. There are obvious gaps to be filled, but the Government have gone a long way with a very useful Measure which, if it is properly carried out, will stop a great many abuses. As one who has taken an active part in this matter throughout all its stages, I wish to pay tribute to two hon. Members who are not present tonight, one because of serious illness, my hon. Friend the Member for Torrington (Mr. P. Browne). He first launched a Measure like this two years ago. He withdrew it on the basis that the Government were to bring in a Measure to do it themselves. I am sure that he will be comforted in his absence from the House by the thought that after two years at last the pledge he received from the Government has finally come to fruition. It will be generally accepted that my hon. Friend did a lot of work on this matter. The same applies to my hon. Friend the Member for Somerset, North (Sir E. Leather), who also put in much toil to achieve this result.
I am grateful to all hon. Members, on both sides of the House, who have helped to make this a good Measure. I am particularly grateful to the Ministers concerned, who have reacted very fairly to suggestions from both sides of the Committee and who have not warranted the criticism that they have not taken notice of objections. They have done very good work and I wish the Measure well.
9.57 p.m.
Mr. Green: Despite some of the verbal shafts which have been loosed at my head, I take the opportunity of paying my tribute to the thought, the care and attention which the Committee, in its sittings and the House today, have given to the principles and details of this Bill.
The hon. Member for Manchester, Cheetham (Mr. H. Lever), whom I know and like, will not mind my saying that every now and again that hyperbole which so amuses his audience tends to weaken the sense of his remarks. I have the feeling sometimes that he hears rather less well than he speaks. That is
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just a feeling I have and I shall say no more than that about him.
This Bill has been so thoroughly discussed that I wish to avoid tedious repetition, but, despite some of the remarks which have been made, I should like to say that it is an important Bill. Of that I have no doubt at all. In this particular field of company financing it is a new venture. That has been one of the difficulties which confronted the Committee. I accept that certain principles of operation would have been preferred by certain hon. Members opposite. I cannot say "by all hon. Members opposite" when I bear in mind the Committee proceedings. It would not be honourable or honest to say so, but for certain hon. Members opposite a different principle would have been preferred from the one we have chosen.
This is a matter of judgment. It is not necessarily a matter for violent rebuke of one or of the other. The experience of operation of the Bill, on whatever principle it had been erected, is now obviously required. I believe that we have chosen a method within the Bill whereby we can most benefit from its operation. This has proved to be the value of power of regulation both of the advertisements and accounts.
I do not wish to be provocative in any way, but I suggest to the House that we may be in some danger of being a little patronising when we speak about the distinction between the sophisticated and the unsophisticated depositor. The sense in which the words were used may not bear the same construction as would be put upon them by people outside. What we have been thinking of as the unsophisticated depositor is, in nine cases out of ten, an extremely shrewd chap. He will now, under the Bill—
It being Ten o'clock, the debate stood adjourned.
Proceedings on Government Business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Boyd-Carpenter.]
Question again proposed, That the Bill be now read the Third time.
Mr. Green: I venture to give that small warning, because the business of providing information is not only valuable

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to the experienced person operating in this field, but I believe that it is valuable to the generality of the public as well. I believe that as the Bill is operated it will become increasingly valuable.
I have tried, as my hon. Friend the Economic Secretary and, indeed, the whole of the Government side, have tried, to keep a balance in the Bill, not putting too much burden on the company. This is what we seek to do. We shall seek to use our powers of regulation in that way, but at the same time to secure that full information is available to the depositor. I was told by the hon. Member for Gloucester (Mr. Diamond) that perhaps this was a case of caveat depositor. I see what he means. I think that depositors should be wary. They should exercise their individual judgment and should have the information on which to do this. Let us not overlook either the element of caveat vendor, which is also in the Bill; and one or two hon. Members have complained that we perhaps have too much of it.
I have sought to keep the balance between those two concepts of caveat vendor and caveat depositor. If that balance has been properly kept—and experience of the Bill will help us to correct the balance a little here and there, because we have these regulatory powers—I believe that we shall have taken a real step forward in this new field of general finance. It is on those grounds that I leave the Bill to the House.
Question put and agreed to.
Bill accordingly read the Third time and passed.

BRITISH MUSEUM [MONEY] (No. 2)
Resolution reported,
That, for the purposes of any Act of the present Session to alter the composition of the Trustees of the British Museum, to provide for the separation from the British Museum of the British Museum (Natural History), to make new provision with respect to the regulation of the two Museums and their collections in place of that made by the British Museum Act 1753 and enactments amending or supplementing that Act, and for purposes connected with the matters aforesaid, it is expedient to authorise the making of any payment out of moneys provided by Parliament or out of the Consolidated Fund which falls to be so
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made in consequence of any provisions of the said Act of the present Session relating to the staff of the British Museum or the British Museum (Natural History).
Resolution agreed to.

BRITISH MUSEUM BILL
Order for consideration, as amended (in the Standing Committee), read.
Bill recommitted to a Committee of the whole House in respect of the Amendments to Clause 6, page 3, line 34, and Clause 12, page 5, line 28, standing on the Notice Paper in the name of Mr. Boyd-Carpenter.—[Mr. Boyd-Carpenter.]
Bill immediately considered in Committee.
[Sir ROBERT GRIMSTON in the Chair]

Clause 6.—(STAFF.)
10.3 p.m.
The Chief Secretary to the Treasury and Paymaster-General (Mr. John Boyd-Carpenter): I beg to move, in page 3, line 34, at the end to add:
(3) For the purposes of pensions and other superannuation benefits—

(a) service in an established capacity in the employment of the Trustees shall, where the person in question has been admitted into that employment with a certificate from the Civil Service Commissioners, be treated as service in the permanent civil service of the State within the meaning of section 17 of the Superannuation Act 1859; and

(b) service in the employment of the Trustees in any other case should be treated as service in the civil service of the State not falling within the said section 17.

I hope that I shall not incur your displeasure, Sir Robert, or cause the hon. Member for Sowerby (Mr. Houghton) any inconvenience, if, in the course of moving this Amendment, I also refer to the Amendment in Clause 12, page 5, line 28, at end insert:
(4) As respects service in the employment of the Trustees of the British Museum before the commencement of this Act, section 6 (3) of this Act shall be deemed always to have had effect.
which relates to a similar topic.
The purpose of this Amendment, as, indeed, of the Amendment in page 5, line 28, is to put beyond doubt the fact that the staff of the Museum are civil servants for the purposes of the Superannuation Acts. When the Bill was in

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Standing Committee, the hon. Member for Sowerby and one or two other hon. Members raised the wider question whether the staff of the Museum were or should be civil servants in the full sense. That was, if I may be allowed to say so without transgressing the rules of order on this Amendment, an important question, but which was perhaps limited in its practical significance by the fact that, in any event, these are staff to which Estacode is applied. My hon. Friend the Economic Secretary undertook to consider this wider question and to discuss it with the Standing Committee of the Museum. I have taken steps in that direction and have also made certain preliminary soundings of the staff concerned.
That Standing Committee has indicated considerable doubts as to the desirability of proceeding on the wider front of making the staff civil servants for all purposes. Preliminary inquiries indicate that there is a wide division of opinion on the merits of this among the staff. I hope that hon. Members will feel, as I do, that under these circumstances it would be wrong at this stage to propose a change of this character. Fortunately, the timetable of the Bill—that is, the timetable in the physical sense of how we hope to run it—permits these consultations to be carried further, with the possibility that if a change on the wider front were thought right—and I express no opinion now on that matter—any necessary Amendment could be introduced in another place.
It has emerged in the course of our discussions and consideration of the matter that, as the hon. Member for Sowerby originally suggested, there is at any rate some doubt as to whether the members of this staff are civil servants for the purposes of the Superannuation Acts. They receive, and have for a long time received, pensions on the same basis as under the Superannuation Acts and it is our intention, as I am sure it would be the wish of the Committee, that that should continue.
But the doubt having arisen, I am sure that it is right to lay it to rest; and the purpose of the first Amendment is to provide for the future that for the purposes of the Superannuation Acts the staff shall continue to be treated as civil servants. The second Amendment makes
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quite certain that there is no doubt in respect of past service.
Mr. Douglas Houghton: All this seems to have arisen out of quite a guileless question asked in Committee upstairs. At the time we were debating an Amendment proposed by my hon. Friend the Member for Islington, East (Mr. Fletcher), the purpose of which was to put beyond any doubt the fact that the staff of the British Museum were civil servants.
I have always been bewitched by the phrase "employed by and under the Crown". We thought, in moving the Amendment, that by saying that the staff should be deemed to be employed by and under the Crown we would legitimise them and make them civil servants. However, we were told that the Amendment would not achieve the purpose we had in mind. Indeed, I think that the Minister went so far as to say that he had been advised that it was meaningless. So up I got and said, in effect "Well, let us apply another test. Are these people covered by the Superannuation Acts?" The Economic Secretary replied that he did not know but that he would find out. And here we are.
I am sorry for Her Majesty's Government. Everything they touch comes to pieces in their hands. They really should see a psychiatrist and go into a nursing home for a while. Because I asked a simple question—about whether or not these people were covered by the Superannuation Acts—all this has arisen. The Government have discovered that they are not, and that they are not covered by any Acts. The Government have found, therefore, that they have been paying pensions to the British Museum staff for years and years without any statutory authority. What has the Public Accounts Committee been doing?
Apart from that it is obvious, from the second Amendment to which the right hon. Gentleman made a passing reference, that there is to be an indemnity to cover Ministers who have been paying these pensions without any statutory authority. A little later we have to pass something that will save them being clapped into gaol. Of course, the pensioners concerned will know nothing whatever about this. It will make no difference to them. They have had their pensions all along and will continue to get them,

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but this is an important question of whether expenditure has the authority of the House.
We clearly welcome what the right hon. Gentleman has proposed, though it goes only part of the way. He is now trying to clear up the money side of the matter, but still to be cleared up is the status side, because the right hon. Gentleman chose his words most carefully. He said that this Amendment would put beyond any doubt that the British Museum staffs were civil servants for the purposes of the Superannuation Acts—that, and that alone. As he pointed out, however, it does not deal with whether those staffs are civil servants in the full sense.
The right hon. Gentleman told us that there were some differences of opinion between the staffs concerned—that some did and some did not want to be civil servants in the full sense—and that there was an opportunity for the matter to be discussed further, quite properly, with those concerned and with the trustees, so that anything that it might be necessary or desirable to add to the Bill could be attended to later in another place.
I quite understand that. I am sure that some members of the British Museum staff prefer to be known as members of the staff of the British Museum, and consider that it gives them a kind of passport amongst antiquarians throughout the world. Others are probably prouder of being members of Her Majesty's Civil Service than of being employees of the Trustees of the British Museum, and feel that full status is more desirable. Perhaps some want both—I do not know—but these things are important to many people.
In the Standing Committee, I pointed out that this question can really decide some important things though, admittedly, this Amendment is probably more decisive in its consequences than anything else that might be added to the Bill to make them civil servants in the full sense. This Amendment deals with where the money is, and the other Amendment deals with where the status is as distinct from money—because we are sure that members of the staff will continue to receive the full conditions and remuneration of the corresponding grades in the Civil Service.
That being so, this little storm in a teacup ends quite happily. Everybody
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is to be satisfied, the Ministers are to be freed from this particular blame, the Public Accounts Committee can sleep at nights—and so can we, I hope, when we finish with this Bill—and we have, at least, made a clean job of this particular doubt. The moral is: "Don't ask simple questions in case you get complicated answers."
10.15 p.m.
Dr. Barnett Stress: Everyone who knows him will appreciate that when my hon. Friend the Member for Sowerby (Mr. Houghton) hears the word "pensions" or the word "superannuation" he immediately reaches for the Order Paper, if not for something more. It was fascinating to hear him, the day before he asked this simple question, declaring that the best thing that he could do was to keep his mouth shut. However, he found how very useful it was to open his mouth, seize on the simple word "pensions" that fell from the lips of the Economic Secretary, ask his question, and bring about this excellent result.
My right hon. Friend the Member for South Shields (Mr. Ede) is not now here, and offers his apologies to us all. He particularly asked me to tell the Chief Secretary that he and the Trustees are deeply grateful for the steps the right hon. Gentleman has already taken. We have been told by my hon. Friend that there are two aspects of this matter. There are money and status—or name. Money is a reality. I have the impression—I may be wrong—that probably the staff will be content with things as they are if we pass these two Amendments. If I were a member of the staff I would much rather be under the overall management of a body of trustees such as those who are to be appointed, than under any particular Minister of the Crown who changes from time to time. They come and they go; whereas trustees seem to be a much more permanent body.
The denial that we have heard from my hon. Friend the Member for Sowerby that he had no intellectual capacity, that this Bill had been pitch-forked into his lap without any notice, and that therefore he could not help us in any way, has been belied by the fact that he is in some matters a very great expert.
Mr. Boyd-Carpenter: First, I should like to thank the hon. Member for Stoke-on-Trent, Central (Dr. Stross) and, through him, his right hon. Friend the Member for South Shields (Mr. Ede) for the kindly and agreeable things the hon. Gentleman said on his right hon. Friend's behalf. For our part, we naturally regret the absence of the right hon. Gentleman who is and has been for many years a trustee of the British Museum to which he has given good and very distinguished service.
Coming to the hon. Member for Sowerby (Mr. Houghton), he began with a remark that I am quite unable to accept from him. I refer to his statement that in Committee he asked a guileless question. No one who knows the hon. Member would believe that for one moment.
The hon. Gentleman's other point, whether or not under the existing law these people are covered as civil servants by the Superannuation Acts, is, I am advised, a very difficult question. But I think the Committee will agree that the payment of public money to these very devoted and admirable people should not be on a basis that admits of any doubt at all.
The purpose of this Amendment is not to clear up, as the hon. Gentleman
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rather lightheartedly suggested, some situation in which public funds had been paid without authority. It is to clear up a doubt which, on examination of the relevant Statute, appeared to be a possible doubt, and we wanted to put it right. Therefore, there is no question of any such thing as an Act of indemnity. I am sure the hon. Gentleman will be glad of that, because if anybody had to be indemnified, as this is a state of affairs which has gone on for a very long time, it would not only be Her Majesty's present advisers.
Amendment agreed to.
Clause, as amended, ordered to stand part of the Bill.

Clause 12.—(SHORT TITLE, COMMENCEMENT, TRANSITIONAL PROVISIONS AND REPEALS.)
Amendment made: In page 5, line 28, at end insert:
(4) As respects service in the employment of the Trustees of the British Museum before the commencement of this Act, section 6 (3) of this Act shall be deemed always to have had effect—[Mr. Boyd-Carpenter.]
Clause, as amended, ordered to stand part of the Bill.
Bill reported, with Amendments; as amended (in the Standing Committee and on recommittal), considered.

New Clause.—(TRANSFER OF CERTAIN MANUSCRIPTS, &C., TO PUBLIC RECORD OFFICE.)
Notwithstanding anything in this Act the Trustees may with the consent of the Lord Chancellor transfer to the Public Record Office any historical manuscripts or other documents that formerly formed part of the public records, or which form part of a series of documents the bulk of which are in the possession of the Public Record Office, or which in the interests of historical research it is convenient so to transfer.—[Mr. Fletcher.]
Brought up, and read the First time.
10.20 p.m.
Mr. Eric Fletcher: I beg to move, That the Clause be read a Second time.
I ought to begin by declaring an interest in this matter in that I am, under appointment by the Lord Chancellor, a member of the Advisory Committee of the Public Record Office, as, indeed, was the Economic Secretary to the Treasury, until his promotion to the Front Bench, who discussed this matter with me and with my hon. Friends in Committee. We revert to it again today because, at the conclusion of the Committee stage, the Economic Secretary indicated that this was one of the matters that he would wish, in the interval between then and the Report stage, to consider with the Trustees. May I, therefore, try to make to the House the case for this new Clause.
The position is this. It has recently come to the knowledge of some of my hon. Friends that a certain number of public records which have strayed from official custody have come into the British Museum. How they got there is not quite known. They seem to have disappeared from the public records of the day, at a time before the Public Record Office was established. Some of them, apparently, passed into private hands and were subsequently acquired by the British Museum. In some cases, these documents have been in the British Museum so long and are so well known that it may well be in the general public interest that they should remain where they are. But there are other cases of documents which form part of a series, for example, annual accounts, where the separation of one
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document from its fellows is not only very inconvenient but an obstacle to historical research.
Odd though it may seem—here my informant is Mr. H. M. Colvin, Fellow and Tutor of St. John's College, Oxford—there is one case, and he does not think that it is a unique case, where an important medieval document has been torn into two halves of which one half remains in the Public Record Office and the other fragment is in the British Museum. That, of course, is obviously undesirable; but when on some recent occasion it was suggested that the two halves of this document should be brought together, the objection was made that under the law as it then stood the Trustees of the British Museum had no power to part with any document in their possession.
Fortunately, this Bill gives us the opportunity of possibly rectifying that position and giving the Trustees of the British Museum the power to transfer to the Public Record Office those documents, where obviously it is most convenient in the interests of historical research that a whole series of documents should be; or, if it is one document of which there are two halves—one in one place and one in another—it should be transferred to the Public Record Office.
I give two illustrations. There is one which I think will be of particular interest to hon. Members. There is what is known as the counter-roll of one of the accounts for the reconstruction of Westminster Hall by Richard II. That document is in the British Museum, but all the other surviving rolls and counter-rolls are in the Public Record Office.
Again, there is the text of an account connected with the war of St. Sardos in Gascony in the reign of Edward The document itself is in the British Museum, but the cover remains in the Public Record Office. A third illustration is the Wardrobe Account of the thirteenth year of the reign of Edward II, a book which at some time has come to pieces. Two-thirds of the leaves are in the British Museum and one-third are in the Public Record Office, the latter portion coming in the middle. Obviously, this is a most inconvenient situation for students and for those who wish to search and study these medieval documents.

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It has been said that to some extent this inconvenience can be overcome by the fact that photostat and microfilm copies nowadays can be made available, as, indeed, they are, both by the Trustees of the British Museum and by the Public Record Office; but that is not always possible, particularly when documents are fragile, and it is often necessary in the case of medieval records for a student to make a physical comparison of one manuscript with another. That is something which cannot be done merely by the use of a microfilm or a photostat copy.
Therefore, the case for the new Clause is that alt long last the Trustees of the British Museum should have the power, where documents are separated, to restore them to the Public Record Office and where there is one or more of a series of documents, the bulk of which is in the Public Record Office, to send them there.
There is nothing compulsive about the provisions of the new Clause. It merely gives the Trustees permission to make this transfer with the consent of the Lord Chancellor in circumstances in which it is in the interest of historical research so to do. With that safeguard that the consent of the Lord Chancellor is required, I hope that the Chief Secretary and the Government will feel that there is ample protection against any rash decision being made by the Trustees of the Museum. It seems to be desirable that they should have this power and I hope that the Government will be able to accept the new Clause.
Dr. Alan Thompson: I rise to support my hon. Friend the Member for Islington, East (Mr. Fletcher) on the new Clause. It is for the convenience of scholars, and particularly of medieval historians, who often travel long distances to London from, say, universities in Scotland or in the North. Frequently, they spend only a day or so in London working on these records and it would be a considerable convenience far them to have the records together in one place.
I notice that when this matter was discussed in Committee, the Economic Secretary to the Treasury said that the First Schedule to the Public Records
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Act, 1958, specifically excluded from the definition of "public records" any records which formed part of the permanent collection of a national museum or gallery. I regard this as a mere quibble when set against the convenience of the scholars concerned. I know that there are not a great number of them. I know that the medieval historian vote will not be a crucial one at the next election. Few marginal seats are likely to be swayed by the indignation of medieval scholars. Nevertheless, this is a matter to which we should pay attention.
As has been pointed out, the new Clause states:
"Notwithstanding anything in this Act the Trustees may with the consent of the Lord Chancellor transfer to the Public Record Office any historical manuscripts or other documents that formerly formed part of the public records …"
Clearly, the Trustees would still remain very much in charge of the situation. I suspect that behind the objection originally raised was the thought, not that the Trustees themselves were unreliable, but that their successors might be. We all have that slight kind of feeling towards our successors. Whether we are in the Army and hand over our platoon to a new man or in civilian life we hand over our job to someone, we never feel that our successors will discharge the task with quite the same care and attention as we discharged these duties. I can only think that if the Trustees are themselves objecting to this proposal they are thinking, as I say, of some time when public records may be disposed of with less care than they, the existing Trustees, would themselves give. I think that this again is an invalid objection. This new Clause is a very moderate one and permissive only and I hope that the Government, for the convenience of the small number of scholars concerned, will accept it.
10.30 p.m.
Mr. Robert Cooke: I am afraid that I cannot agree with what the hon. Member for Dunfermline Burghs (Dr. A. Thompson) has just said, and I cannot because of my own personal experience, because it so happens that the British Museum and the Public Record Office hold documents and drawings which have relation to the historic house in which I have the privilege to live, my own home, and I have

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always found that both those great bodies have been most prompt and courteous in the way in which they have made their documents available. If that was not so I could well see that there would be some point in the new Clause, but I have always found that they have been very ready to look for what one has wanted to find and to provide documents for one's inspection, and also to provide photographic or photostatic copies.
I would not want to introduce a note of discord into this discussion, but I would make one point, that in both the British Museum and the Public Record Office the charges for providing photostatic copies are high. I think that perhaps at a later stage we might look at that, but I feel that they provide ample opportunities for scholars, and even amateurs like myself, and I could not support the Amendment.
Dr. Stross: We discussed this matter in Committee, and the Economic Secretary was very courteous in his response to me at that time, as, indeed, he was to everybody. He said that he would consider this matter. I also would point out that this is a very permissive new Clause. Indeed, I rather think it is so permissive a Clause that no real change will be made by it in the powers of the Trustees. However, I am influenced by what I heard a few moments ago, that all Trustees tend to suspect that those who follow after them will not be as able as themselves to care for the treasures they are caring for, and this may well be true at the present time. The Trustees may feel that even this permissive form of words is something they do not wish to be embarrassed by. Yet the facts as I read them are that even if we do not put this new Clause into the Bill the Trustees surely will have this very power by the time the Bill is on the Statute Book. They will have power to lend to another institution if they wish. I should like to hear what the Chief Secretary has to say at this point.
Mr. Boyd-Carpenter: As the hon. Member for Islington, East (Mr. Fletcher) and the hon. Member for Stoke-on-Trent, Central (Dr. Stross) have both said, this point arose in Standing Committee and my hon. Friend the Economic Secretary gave an undertaking to con-
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sider it, and in particular to discuss it with the Trustees. That undertaking has, of course, been implemented, and I have myself had a discussion with the members of the Trustees' Standing Committee. We all agree that this is an interesting point and certainly one well worth both raising and considering. The view, however, of the Trustees is that they would not, for reasons I should like to give to the House, wish to be entrusted with this power.
The House will be aware that it has been the policy of the Trustees for a very long time to follow a line of what I may call non-alienation; in other words—apart from the kind of matters which the Bill deals with, of articles unfit to be preserved in the collection, duplicates, and so on—not to part, even to other distinguished institutions, with objects with which they have been entrusted, partly as a matter of policy, partly because many things have been bequeathed to them on the basis that they should remain in their possession.
They feel that this power, if it were given to them, would be an embarrassment. The hon. Member is right. What is proposed in the Amendment, not unreasonably, is a permissive power. But I think it is our experience in this House that permissive powers, though in form permissive, can sometimes be something of an embarrassment. There can be pressures exercised upon one to exercise the power from which pressures one is free if one has not got the power to exercise.
Representatives of the Trustees with whom I discussed the subject felt, after very careful consideration, that it would be wrong to introduce for this purpose and in this limited sphere a breach in the general policy of non-alienation even on a permissive basis. That is not to say that the Government and the House are not free to form their own views when a Bill is before Parliament. On the other hand, I am sure that the House will feel that the views of the present Trustees, a very distinguished body of men, are entitled to very considerable weight, and I think that the reasons which they gave are also entitled to a great deal of respect.
Nobody would seek for one moment, of course, to brush aside the case which the hon. Member for Islington, East made,

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most persuasively, in respect of scholarship and research, and I have also seen the letter from Dr. Colvin, a letter from a fellow of a college which carries particular weight with the Economic Secretary. On the other hand, the development to which my hon. Friend the Member for Bristol, West (Mr. Robert Cooke) referred, of photo-copying, means that it is possible to meet the practical needs of those who desire to see a complete collection of documents in order to work on them far more easily than has ever previously been the case.
Both the Public Record Office, to whose excellent administration I would like to pay tribute, and the Museum are, I understand, in very good relationship and exchange copies of photographs of documents that they have which relate to each other. The hon. Member for Islington, East referred to one example. Let me give another. The very interesting report of the Commissioners into the state of the Navy in 1608, perhaps the precursor of some of our defence debates, is held between the two institutions. They have exchanged photo-copies as a result of which for all the practical purposes of research and study there now exist two complete sets of the relevant documents, one at each institution.
There is another practical point which weighs with the Trustees, and it made some impression on me. The catalogues of the British Museum are very serious and solid documents, with, generally, a long life. They record the documents that the Museum possesses. If the Museum were to transfer them, then we should have the fact that the catalogues would no longer be accurate, that when scholars came to see them it would certainly be found, although there might well be a photo-copy, that the documents referred to were no longer there. That is perhaps an indication of how even a small breach in the principle of non-alienation might very well induce very considerable practical difficulties in due course.
The proposed Clause refers to documents formerly in the public records. I have had some inquiries made of the Museum as to what this might cover. The Museum tell me that there is only one example of which it is aware, although it may be that further research
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would show others. It is rather an amusing one, of what is called "The Lord Chamberlain's Plays"; that is, scripts of plays which had been submitted to the Lord Chamberlain for his wise guidance or censorship.
These were originally at the Public Record Office, but in 1923, apparently feeling that it had no particular use for them, it returned them to the Lord Chamberlain's office, which subsequently deposited them with the British Museum. That is the only example I know of where documents which have formerly been part of the Public Record Office are now in the possession of the Museum, although I am the last person to say—and the Trustees take the same view—that they are the only ones. They do not, however, constitute a very strong case for this proposal.
But the basic point is that I do not think it would be wise for Parliament to seek to force on the Trustees power which, on reflection, they do not want, particularly if the conferring of those powers would inevitably involve some breach, however small and however well intentioned, in a principle to which the Trustees quite rightly attach very considerable importance.
I would go with the hon. Member for Islington, East a long way against that view if there were really some powerful, practical objection from the point of view of research and scholarship. I do not exclude the possibility of cases where there is real reason for seeing the original documents and not relying upon photographic copies, but in the vast majority of cases there can be got together a complete set of the documents by means of photographic copies, and the practical point is, in large measure, met.
Of course, one gets the odd and extreme case, such as the one quoted by the hon. Member—of which I was not aware—of a document torn in half by some kind of Solomon's judgment, but I do not think that case provides sufficient foundation for this proposal. Although I could not, of course, commit the Trustees, whether the Museum's half should go to the Public Record Office or the Public Record Office's half should go to the Museum, this Amendment inevitably, because of the nature of the Bill, would be unilateral in its effect. But for such

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extreme cases the lending powers in Clause 4 would be sufficient without the conferment of considerable additional powers, and I understand that there is no duration laid down as to the length of a loan.
I realise that this new Clause has been put forward with great reasonableness and with perfect good sense, but because of the predominant considerations against it I must advise the House that it would be unwise and against the wishes of the Trustees to add it to the Bill.
Mr. Fletcher: I do not want to pursue the matter at great length but we cannot leave it exactly there. I am disappointed by the right hon. Gentleman's response. The reasons he has given for rejecting the Clause are rather pedantic. In the first place, this is not really a matter for the Trustees but for the Government to decide. Fundamentally it seems rather ridiculous that where there are documents of the same series and of the same kind, partly in the Museum and partly in the Public Record Office—both of which are basically under Government control—there should not be power to collate them either in one place or the other.
The right hon. Gentleman said that in a sense this Clause would operate in only one way because of the nature of the Bill. But the Public Record Office already has power to move some of its documents to other depositories. After all, the proposal is put forward fundamentally if not entirely in the interests of scholars and researchers. These are the people who are the interested parties. This question has been raised by them because they have, from experience, found it inconvenient, if they want to study a particular series of medieval documents, to find half of them in the Museum and half of them in the Public Record Office. It is even more absurd where we have a document which is torn in two, one part of which is in the British Museum and the other part in the Public Record Office. Therefore, I am not impressed by the argument that the Trustees do not particularly want this power.
10.45 p.m.
In so far as the Minister has consulted the Trustees, I think one is entitled to remind him that the existing
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body of Trustees is about to retire. The main object of the Bill is to nominate and constitute an entirely new body of Trustees who, presumably, will have new and perhaps more progressive ideas than the existing Trustees. But, after all, what is proposed is merely permissive and it cannot possibly do any harm to the Trustees to have this power.
The objection put forward that pre-sure might be brought to bear on the Trustees really will not hold water when they have the protection that they can only do this with the consent of the Lord Chancellor. This is not a matter of very great moment or compass. It can apply only in a relatively small field, but where it has been found inconvenient and may be found inconvenient to scholars and students in the future, I should have thought, in view of the representations made by them and on their behalf, that it was a sensible thing for the House to see that the inconvenience to which they have drawn attention is removed.
It can be removed quite simply and, I should have thought, without inconvenience. I have no doubt that if in the past the Trustees had had power to do this they would have done it without any question or difficulty arising, but merely because, for technical reasons, they are operating under an Act of the eighteenth century they have been unable to do it. Therefore, I should have thought that had this question arisen de novo there would have been no doubt at all about the sensible line that the House would take.
I hope very much that, whatever the House decides, before Parliament finishes with the Bill the Government will have second thought on the matter.
Question put and negatived.

Clause 5.—(DISPOSAL OF OBJECTS.)
The Economic Secretary to the Treasury (Mr. Edward du Cann): I beg to move, in page 3, line 6, to leave out from beginning to end of line 7 and to insert:
(c) in the opinion of the Trustees the object is unfit to be retained in the collections of the Museum and can be disposed of without detriment to the interests of students.
This Amendment covers a minor but none the less, the House may think, an

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important point. It has been tabled by my right hon. Friend the Chief Secretary in satisfaction of an undertaking which I gave during the Committee stage and which, I think, will be remembered particularly by the hon. Member for Islington, East (Mr. Fletcher).
During the discussion on Clause 5 the Committee discussed an Amendment which the hon. Gentleman tabled to delete the word "unfit" and certain other words and to substitute the words
"of any interest or value to students."
I do not think I need at this time of the night rehearse the discussions which we then had except to say that I pointed out at the time, inter alia, that the wording which we were using in the Bill followed closely that of the Act of 1807 which has stood the test of time to a substantial extent, the House may think. I promised to look again more closely at the wording of the Bill and, in particular, at the wording of this subsection, and in view of that assurance the hon. Member for Islington, East was good enough to withdraw his Amendment.
To sum up, this Amendment has been tabled to meet the point of the hon. Member for Islington, East and I hope he will think, as I do, that perhaps it gets the best of both worlds. It retains the old wording while at the same time putting in the additional safeguard for which the hon. Gentleman asked. I should say, finally, that this is a matter which we also discussed with the Trustees, as I said we would and they are happy with the proposed wording.
Mr. Fletcher: As the Amendment follows almost precisely what I suggested in Committee upstairs, I naturally cannot take any objection to it. On the contrary. I am grateful to the Minister for having used the interval to satisfy himself of the desirability of accepting the principle we urged on him then. The words that are now suggested meet to the fullest extent the improvement we desired in the Bill, and we are very glad the Amendment has been proposed.
Amendment agreed to.

Clause 7.—(SEPARATION OF NATURAL HISTORY MUSEUM.)
Mr. Houghton: I beg to move, in page 3, line 35, to leave out Clause 7.
I feel that I must move the Amendment, especially as my right hon. Friend the Member for South Shields (Mr. Ede), in whose name the Amendment stands, is not able to stay with us to complete the Bill tonight.
This matter was quite fully debated during the Committee proceedings and there were divisions of opinion on both sides. The Amendment to delete this Clause from the Bill was rejected by a narrow majority. I understand that since then there have been further discussions with the Trustees, and that they are not unanimous on the matter either. It therefore remains a contentious point, and the purpose of moving the Amendment is not to have a long debate, or to press the House to divide on it, but to keep this matter sufficiently alive to encourage further discussion on it in another place.
If there are further arguments to be adduced, or fresh opinions to be expressed before the Bill is finally disposed of, it may be as well for them to be fully deployed in the remaining stages of the Bill elsewhere. There are, I believe, some weighty opinions to be expressed in another place by Trustees who have deep knowledge of the problems of the Museum, and who may be against the separation of the Natural History Museum from the British Museum and the appointment of separate Trustees.
In the Standing Committee we had a very interesting debate in which I played a very minor and undistinguished part, because we got to marrying the arts and a kind of transcental—
Mr. Robert Cooke: Transcendental.
Mr. Houghton: That shows that I was ill-equipped to take part in this erudite discussion on this Amendment in Committee, so I beg to withdraw from it now.
Dr. Stross: too, will not speak at length. A number of hon. Members raised this matter on Second Reading, and the longest discussion in Committee was on this point. The Committee divided, and we were defeated, although we had the assistance of one hon. Gentleman

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from the other side. Generally, though, I agree that we should leave the matter to be discussed in another place.
The Chief Secretary used an interesting argument as to why we should avoid alienation of the Trustees when we discussed manuscripts. He spoke of the value of the Trustees, and said that if they think strongly about a matter we should think carefully before we oppose them. When my right hon. Friend the Member for South Shields (Mr. Ede) spoke on this matter in Committee upstairs he referred to a letter from the Trustees, one paragraph of which read as follows:
"The Trustees expressed a hope that their views might be placed on record when the Bill was debated in Parliament, and that it should be stated that it was not at the wish of the Trustees that the total separation of the two Museums should take place."—[OFFICIAL REPORT, Standing Committee A. 12th March, 1963, c. 102.]
I naturally quote those words to remind the Chief Secretary that one cannot have it both ways on two Amendments—that is to say, if we are to consider the views of the Trustees on one Amendment we should as closely consider them on the next. I hope that he will bear in mind the fact that the Trustees feel strongly on this issue, and that the Economic Secretary gave us some hope when he said that there would at least be some common Trustees in the two institutions. If there is anything we can be told tonight that will give us a little comfort we shall be very glad of it.
Sir Richard Thompson: We had a very interesting discussion on this Clause in Committee. At this hour I will not seek to reopen it, but I hope that my hon. Friend the Economic Secretary will hesitate before thinking of amending the Bill simply by dropping the Clause. I agree absolutely that considerable disquiet has been expressed by many of the Trustees that there should be a total separation between the two bodies responsible for governing the two Museums in future. I understand that argument, but we do not put the matter right by pulling out this Clause, because we are then driven back to Clause I, in which we have a body of 25 Trustees, most of whom will presumably be chosen because of their supposed suitability for running the affairs of the British Museum in Bloomsbury. By no stretch of the
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imagination could that body be stretched to include the administration of two quite different types of institution.
That is my real objection to deleting the Clause, although I go a good way with the hon. Members who have spoken in believing that we have not necessarily heard the last word on how we might achieve, in the final structure of the Bill, some sort of connecting link between the two bodies of Trustees. Whether it is best to leave the matter to the two bodies, with an expression of hope from this House that they will form a coordinating body of the two sets of Trustees, or to write something into the Bill to provide for this, I cannot say. Perhaps there will be some further reference to this matter in another place. But it would be a great pity if the homogeneity of the Museum up to now should be entirely shattered.
I do not think that: getting rid of this Clause would be an acceptable solution; it would drive us into an altogether worse situation. I hope that my hon. Friend will tell us whether he has had any further thoughts on the way in which these difficulties might be resolved.
11.0 p.m.
Mr. du Cann: The hon. Member for Sowerby (Mr. Houghton), the hon. Member for Stoke-on-Trent, Central (Dr. Stross) and my hon. Friend the Member for Croydon, South (Sir R. Thompson) has reminded us of the discussion we had in Committee about this matter. I find no paradox in that we should be discussing it again tonight, if only shortly, for it is indeed a most important matter. I entirely agree with my hon. Friend the Member for Croydon, South that we cannot solve the constructive problems we want to solve for the future simply by dropping Clause 7.
I flatly disagree with the hon. Member for Sowerby when he so modestly said that he made virtually no contribution to our discussions on this point in Committee. That was very far from being the case, as hon. Members on both sides will remember well. One of the sentences in his intervention was followed by the word, in square brackets, "Laughter". It takes a great deal to achieve that in HANSARD, as we are all aware. My right hon. Friend the Chief Secretary says, "Try to get it in now". That is a challenge I willingly accept and I shall do my best in a moment.

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There are a number of points I have been asked to discuss and I hope that I shall give some reassurance to hon. Members here tonight. The first point is one which again was made by the hon. Member for Stoke-on-Trent, Central in Committee with all the feeling of which he is capable when he quoted the Act of 1753. He made the point that all arts and sciences have connection with one another. I can assure him that it is not the wish of the Government in any sense to dispute that. Nothing could be more important. On the other hand, we do not believe that the proposal in the Bill will in any way drive a wedge between the two cultures or the two Museums. All that is proposed is that these two great and growing institutions—which are still growing and, we hope, will continue to grow—in future will have the opportunity further to develop. That, we believe, can best be achieved by a separation of some sort. I said something about the logic of this proposal and something about precedent during Committee. I will not go into those matters again, but I hope the hon. Member will feel that I can give him the most sincere reassurance on his point.
The hon. Member for Sowerby—here I hope I give the direct contradiction of his most modest statement—made the point in his short intervention in Committee that perhaps the separation of the two Museums to some extent would strengthen the hands of the Treasury. He went on to say, by inference, that the greater the fragmentation the more possible it would be for the wicked Treasury—I presume he had that adjective in mind—to divide and rule. I assure him that the arrangement in our opinion and experience is far more likely to work the other way and that two separate bodies of Trustees putting pressure on the Treasury for more money might well succeed in getting more in the aggregate. This is by no means a promise and I would not wish it to be construed as such, but I do not believe that the suggestion he made would be likely to apply; indeed I believe the reverse would be the case. In spite of that demerit, we think it right to persevere with this idea.
A little earlier I used the word "constructive". We were particularly fortunate in Committee in having a number of constructive and helpful proposals and
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among them were some made by my hon, Friend the Member for Croydon, South with his great experience as one of the Trustee body. I was asked particularly about the common membership of these Trustee bodies and gave the Committee some definite assurances on that point. I can now be even more definite and say that my right hon. Friend the Prime Minister has been consulted on the matter and has intimated that it will certainly be his intention to try to find some persons willing to serve on both bodies. Not only was that point noted and remarked on, but action is proposed on it. I hope that will be reassuring and satisfactory to the House.
My hon. Friend the Member for Croydon, South made a further constructive suggestion, which was supported by hon. Members on both sides of the Committee, that there should be consultative machinery. We agree that this proposal is valuable and important. We have, of course, taken advantage of the opporunity to discuss it with the Trustees. They are entirely in sympathy with the proposal and we are certainly prepared to commend it to the two new boards of Trustees when they are set up. The creation of such machinery should be one of their first tasks. I therefore reassure the House in regard to this particular matter.
Something has been said, particularly by the hon. Member for Sowerby, about the position of the Trustees, and the hon. Member for Stoke-on-Trent referred especially to that. As the hon. Member for Sowerby said, there are mixed opinions among the Trustees. We do not have the position in which the Trustees are unanimously opposed to this proposal. It would be quite wrong to suggest that. I am grateful to see the hon. Member for Stoke-on-Trent, Central nodding in agreement. I think that it is typical of that distinguished body of people, who truly have the future, the development, and the ideals of the British Museum so closely at heart, that they should be anxious and concerned about the future. I am sure the House would think very much less of them if they were not considering the matter with great care and caution. We are certain that this change will prove to be in the eventual interest of both Museums.
To say again something I said in Committee, I do not believe—nor does my

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right hon. Friend—in change for change's sake. But we do believe in change where there is opportunity for improvement and for progress. We believe that this development, the establishment of the two separate Boards of Trustees, will mark a new stage in the history of the British Museum and will give both Museums the opportunity to move forward and to develop to their fullest extent, which is, I am certain, whatever views may be held on this point, the common aim of every hon. Member and certainly every hon. Member who pays particular attention to the needs and future of the Museums.
I hope that what I have said will reassure hon. Members who have spoken and convince them that we are most concerned for the future to see great success made of this proposal.
Mr. Houghton: In order to leave this matter unprejudiced in another place, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, signified].
11.7 p.m.
Mr. du Cann: I beg to move, That the Bill be now read the Third time.
As has already been indicated, we had a most useful and interesting discussion of the Bill in Standing Committee. It produced some valuable Amendments and some equally valuable suggestions, which, though they were not all suitable to be written into the Bill, are certainly well worth while having on record so that they can be kept in mind and acted upon by those responsible, whether it be the Government or the Trustees to be appointed in future under the Bill. It seemed to me that the Committee's approach to the whole matter contained in the Bill was that of a working party whose sole object was to co-operate in producing the best possible Bill. Perhaps I may be allowed to say how deeply grateful I was for all the courtesy and understanding I received while in charge of the Bill in Committee. I particularly appreciated the bipartisan approach which is typical of the approach of the House to the arts in general.
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A number of questions arose on which I promised to think further in consultation with my right hon. Friend the Chief Secretary to the Treasury and to have discussions with the Trustees. Some of those have been covered in the short debates we have already had this evening. Perhaps I may now mention the others briefly. Arising out of the discussion in Standing Committee on Clause 3, we promised to consider whether it might be wise or expedient to define the Trustees' responsibilities for management a little more closely. We have discussed this with the Trustees and they agreed with our feeling and with the view expressed by the right hon. Member for South Shields (Mr. Ede) in Committee that the Bill already gives as much guidance as is desirable, for example in regard to the use of lending powers, and that for the rest it is probably best to leave the Trustees the maximum discretion. The whole keynote of the Bill is streamlining and flexibility. In some fields it may be desirable to be more specific than in others. However, we believe that we have the balance about right.
I particularly remember the right hon. Gentleman saying that we must not tie the hands of the Trustees. I think that if it is the wish of the House that we should appoint as Trustees the most distinguished and most important men we can find with a true sense of responsibility and dedication, it surely must be right to put our trust to the fullest possible extent in them.
An Amendment was accepted earlier to meet the point made by the hon. Member for Islington, East (Mr. Fletcher) on Clause 5 (1, c). This undoubtedly improves the Bill and I was grateful for what he said in this regard.
We have also promised to look again at the whole construction of Clause 5 in the light of the suggestion made by my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies)—who has advised me that he cannot be here tonight—to the effect that the Trustees should have powers to dispose of objects which are adequately represented by other objects in the collection. There are difficulties about doing this, without giving wider powers than anyone would think desirable. The Trustees have told us that they would not wish to have such powers and that they would be most

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reluctant to make use of them. In these circumstances, we believe that hon. Members would agree that the best thing would be not to pursue the idea further.
Part of the idea which my hon. Friend the Member for the Isle of Thanet had in mind was that of encouraging the Trustees to make surplus objects from the collection available to other museums. The Trustees will be able to do this by using the fashionable lending powers—I say "fashionable" because lending is properly becoming more fashionable these days—contained in Clause 4.
The hon. Member for Derby, North (Mr. MacDermot) raised a point of considerable importance in Committee when he suggested that rather than build a new library in Bloomsbury it would be more sensible to design the proposed new building for exhibition purposes and use the library in the existing building. It is an interesting idea which we considered with care. It is clear that plans are very well ahead, and a good deal of detailed preparatory work of a complicated character has had to be done. The hon. Member for Derby, North will be aware that if we accepted his idea the whole project might be set back substantially, perhaps for some years. We think, therefore, that the balance of advantage lies in carrying through the proposal as we have constructed it at present. However, we will look into his suggestion and we are grateful to him for making it.
The hon. Lady the Member for Flint, East (Mrs. White) made the plea that when the Museum is disposing of duplicates they should be offered to other national collections. This is an important point and I can assure her that it is in the minds of many people. We are assured that the Museum is always ready to bear in mind the needs of other national collections.
The subject of display has been raised in many of our discussions and has been a thread, so to speak, running through the speeches of many hon. Members. We are all agreed about the uniqueness and world importance of the collections in the British Museum, not only in the Department of Oriental Antiquities and the Department of Ethnography, but also in other departments. The Museum is
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well aware of this. There is a great deal of scope for improvement in the display of these treasures in certain instances. As I say, the Museum is conscious of this and gives much thought to it. Progress is being made in this direction.
A ten-year plan of reconstruction and rehabilitation, worked out between the Museum, the Ministry of Public Building and Works and the Treasury, is being put into operation. I hope that the House is as pleased to receive this news as I am to give it. This programme includes a scheme of modernisation of the ethnography rooms; and a post of Display Officer has been approved. It is hoped that a person with special qualifications will soon be appointed.
When a great deal has to be done, it cannot all be done at once. We are endeavouring to make a constructive start on matters which are obviously urgent. The House can rest assured that the Government do not under-rate the importance of this work. We hope and expect that the Museum will be assisted in making progress as a result of the provisions of this Bill and what has been said in our discussions on it. That applies especially to the subject of display.
It is fair to say that there has been a wide measure of agreement over the Bill—with one exception which we discussed earlier—and such disagreement as we have had has been, I think, on matters of detail rather than principle, though some of them have been of some importance. I hope that hon. Members will agree that we can congratulate ourselves on having produced a constructive and workmanlike Measure. As my right hon. Friend the Chief Secretary said on Second Reading, we have made very nearly a clean sweep of the complicated structure of British Museum legislation which has been built up over 200 years. I hope that the House will feel that we have preserved the best of the past while introducing forms and powers which look very much into the future.
I remember the hon. Member for Stoke-on-Trent, Central saying especially that he hoped that this legislation would last for another 200 years. Well, that is a long time ahead, but the point is valid. Let us hope that this legislation does as much as the other did, and proves a solid foundation on

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which progress can be built. The British Museum is a great national institution. It is the wish of the Government, it is the intention of the Government, and of this House, that it shall continue to flourish, to grow and to improve for the delight and instruction of our people.
11.16 p.m.
Mr. Fletcher: The Economic Secretary was kind enough to pay tribute to the assistance that he had received from my hon. and right hon. Friends and, while appreciating what he has said, I should also say that we on this side acknowledge the sympathetic way in which, since the Bill was introduced, the hon. Gentleman and his colleagues have responded to the numerous suggestions we have made on Second Reading, in Committee and tonight to improve the Bill—and not only that, but to make detailed suggestions in regard to the organisation of the British Museum generally. If I may say so, the Minister has just made a valuable and important statement about the functions of the Museum, and has given us information about some of the projects immediately in hand.
There is only one of his remarks with which I might, perhaps, quarrel. He hoped that this Measure would last for another 200 years. I think that one of the values in the fact that the Government have had to introduce this Bill this Session has been that it has enabled hon. Members—and, through them, public opinion—to focus attention on the problems of the British Museum, which would not have been the case had the Bill not been necessary. Since I think that the ventilation in Parliament of some of the Museum's problems is very desirable, and proves valuable to the Trustees, I hope that we shall not have to wait for another two hundred years before the British Museum can be discussed again.
Whatever else the Bill has done it has, as the Minister himself recognised, enabled not only the Trustees but the Government to learn of the great concern felt in all parts of the House that the British Museum should fulfil the great traditions expected of it by the public, and to maintain the place it is entitled to hold in the affection and esteem, not only of the people of this country but of scholars and visitors from abroad.
As was pointed out from both sides on Second Reading, it is, unfortunately, not
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true that all has been well with the British Museum in recent years. The Economic Secretary has himself recognised that, and I think that we should stress on Third Reading that, apart from the other matters to which the Minister referred, perhaps the most important new feature in the new constitution is that there will be a new set of Trustees, smaller in number, and the majority to be appointed by the Prime Minister. We were assured by the Economic Secretary that they will be men of standing, scholarship, eminence, stature and integrity.
Those were the hon. Gentleman's words, but he assented when I suggested that those five qualifications were not enough, and that the Trustees should also be men of independent judgment, able to stir up the Treasury to make the necessary financial contribution to enable them to make good some of the deficiencies of the British Museum in the past few years, and to fulfill the objectives we all have in mind.
The debates in this House have done something, at least, to convince the Government that so far as there have been defects in the administration, the running, staffing, improvement, display and reorganisation of the British Museum in recent years, it has been not so much the fault, if at all, of the Trustees, but rather because of a lack of adequate funds from time to time from various Treasury Ministers.
We are entitled to derive the hope, from the speech which we have heard tonight and from other speeches on the Bill, that the present Ministers realise this and that the House may be assured that in the months ahead the Treasury will be forthcoming to enable the trustees of the British Museum to put in hand without delay this important project of reorganisation which is planned and also to enable the Trustees to have adequate funds to remove the existing staffing deficiences and to extend the possibilities, which undoubtedly exist, for greater and better display.
11.21 p.m.
Mr. Robert Cooke: I rise briefly to support the Third Reading of the Bill, but I hope that it will not be another 200 years before the hon. Member for Bristol, West has the fortune to catch your eye, Mr. Speaker.

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The Bill will make a living and lively institution out of the British Museum and I welcome it for that reason. Indeed, it is to make the Museum available to the plain man, to men far plainer than the hon. Member for Sowerby (Mr. Houghton), however self-effacing he may be.
I do not share the worries of some hon. Members about the separation of the Natural History Museum. There seem to be quite adequate safeguards for more or less dual control, or, at least, the interchange of ideas between the two institutions. When two members of a family grow to adulthood, surely they want to go their own independent ways, even if they still retain connections of one sort or another.
I hope that the work and ideas of the family trustees whose benefactions and services over many years to the British Museum are notable, will not be altogether lost and that, perhaps, in some informal way, these people could be kept together and their connection with the Museum maintained, even if they cannot all be reappointed as trustees.
I am delighted to think that hon. Members opposite, even if they are not satisfied with the Bill as it leaves this House, at least feel that another place still has a function to perform in this modern age. Perhaps, when tomorrow comes, they will not be quite so stringent in their strictures on that other place, which, like the British Museum, can live in a new age.
11.23 p.m.
Mr. Niall MacDermot: I wish to develop a little further a point which I touched on in Committee and to which the Economic Secretary has been courteous enough to refer. I thank him for his courtesy. I do not thank him for his remarks, which were unwelcome to my ears, and I only hope that my few remarks tonight may extract an undertaking from the Chief Secretary that the matter will be considered further.
What I should like is that the matter should specifically be referred to the new Trustees when they are appointed for them to consider afresh. The point is this. One of the principal reasons for the Bill is to enable part of what is now housed in the British Museum to be
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moved elsewhere. There is not enough accommodation in the building to house the Library and the various Departments of Antiquities. They both need to expand, they both need new and better premises. The question is: which should be moved, the Library or the Departments of Antiquities? The provisional decision which has been taken so far is to move the Library, and it is this decision which I wish briefly to question.
I think that it is clear that, whichever is moved, it is unlikely they can all be moved to one new building. That in itself seems to me to be an argument for moving the Departments of Antiquities and not the Library. There are obvious advantages in keeping the Library together in one place if it can be done. There is much greater need for the Library to be complete, cohesive and in one place, than for the Departments of Antiquities.
There is no reason whatever why we should not move them out to galleries spread around London—indeed, they need not all be in London—housing different branches of the antiquities. There is no reason why African art, the Egyptian art, the classical Greco-Roman art should be displayed or housed in the same building at all. There is no need for them to have the same kind of buildings. The kind of building which is required, for example, to house ancient Egyptian statues is obviously not the same kind of building as is required to house the unrivalled collection of coins such as the British Museum possesses. These seem to me at the outset strong arguments for considering moving the Departments of Antiquities rather than the Library.
The other question is this: are we really to make better use of the existing premises? I can quite understand that if the library department—I know that that is not its correct official title, but it is a convenient way of referring to it—is given the choice, "Would you like to stay where you are, or would you like to move your main part to a brand new, modern, specially designed building?" it would naturally favour a modern building. So, of course, would the Departments of Antiquities, but surely the point is this.
The present building's structure, broadly speaking, consists of a square

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in the centre of which is the world-renowned and historic Reading Room under the central dome, and between that Reading Room and the outer square in which for the most part are housed the galleries—between these two—there is an intricate labyrinth, I understand, of corridors and storage space used for the storage of books. If the Library is moved out the accommodation which is at present being used for the Library will really be useless, I understand, for the purposes of the Departments of Antiquities. They cannot satisfactorily be converted or used for those purposes.
The Departments of Antiquities are not in need of greater storage space. The crying scandal is that so many of our antiquities are housed in storage, and are not on display. What is needed is greater facilities for display. On the contrary, what the Library needs is greater storage space, and greater storage space central and near to the building where the books will be required—the Reading Room. There are also needed additional facilities for specialised reading rooms. Scholars have need of additional reading rooms. If the antiquities were moved from the present building surely this outer square could be developed both for storage of books and, more probably on the first floor, for the construction of specialised reading rooms. In this way it would be possible to keep all the Library together.
If the present proposal goes through, what shall we have? We shall have the main Library across the road, on the south side of Great Russell Street, I understand. We should then have new the Science Library, constructed somewhere on the South Bank. We should then have the storage spaces at various places—somewhere out near Stanmore, I understand, for one collection; another lot being moved to Woolwich Arsenal.
Is this really the best way in which to house this unique and incomparable library collection—scattered in that way? Would it not be better to use the present building for housing the Library? Then we could look forward to an improvement in the Library and also at last to the construction of proper galleries for displaying the antiquities. If the present proposal goes through, I feel most pessimistic about the prospect of hon. Mem-
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bers seeing in their lifetime proper display facilities for the antiquities of the Museum.
The present galleries were designed, unfortunately, at a time when people had somewhat grandiose ideas about what constituted a suitable place to display objects of art. One knows the difficulties with which museums struggle when they have eighteenth and nineteenth century buildings in which to display their objects. I understand that none of the present galleries can be converted to have, for example, air conditioning installed, and that is a necessary feature for the proper display of many works of art.
If we made the decision the other way round we could have a piecemeal progression with advantage accruing to both sides, for the Departments of Antiquities and for the Library, and steady progress could be made on both fronts. If we continue the present arrangement, it will be highly expensive, we shall get some initial advantage for the Library, but still not a really satisfactory solution for it, and it seems to me that a satisfactory solution for the Departments of Antiquities will be hopelessly delayed.
No doubt there are many other arguments the other way. I have put forward one side of the case. The only argument the other way that we have so far heard this evening is "Well, our plans are so far advanced now that if we were to change the decision it might delay the matter even for some years." Surely the House will agree that on a matter of such importance, if the decision which has been taken is wrong it would be better to delay for a few years in order to get the right decision, because whatever decision is taken now will determine the future of the Museum for 100, if not 200, years, and it is vitally important to get the right decision.
All I ask is that the Government will agree that this is a matter which should be referred to the new Trustees to investigate fairly and dispassionately. If they confirm the view that the right decision has been taken, so be it and I for one will be content. But it would be a great tragedy if we were merely to persist in a decision which may be the wrong one without giving the new Trustees the opportunity to look at it again.
11.34 p.m.
Sir R. Thompson: Although the family Trustees are exterminated by the provisions in the Bill, I must honestly say that I think it is a very great improvement on the present arrangements, and of all the many British Museum Acts that we have had since 1753, this Measure is by far the most important since the original Act.
Two things emerge from it which will enormously enhance the reputation and public standing of the Museum. The first is the reformation of the Trustee body. Although I have reservations about that which I have expressed in Committee and on the Floor of the House, I am sure that in the end the whole administration of the Museum will be sharpened and made more effective by being more closely focused half of it on the Bloomsbury portion and the other on the natural history portion.
I am certain that the substitution of a more up-to-date Trustee body will have an immediate effect. After all, well though the Trustees have done in the past, it is not really sensible that a body deemed appropriate for the days of Dr. Johnson should necessarily be quite the right one to tackle the enormous complexities of this business today. This new body has a tremendous chance, if it is wisely chosen, to raise the public esteem of the Museum and make the people feel, as scholars have always felt, that this is a tremendous and priceless national institution unequalled anywhere else in the world.
The second feature of the Bill which will be of enormous value to the public is the wise use of the power to lend. I am sure that, if it is used wisely, the provincial museums and collections which will presumably qualify for the display of certain things from the main collection will benefit enormously by having this rich reservoir of treasure to draw on. As the hon. Member for Derby, North (Mr. MacDermot) said, so many of these things, through sheer lack of space, cannot be shown, or be adequately shown. Let them go round the provinces so that some of our less well-endowed and humbler institutions far from London can share in the great national glory that has reposed so far solely in Bloomsbury.
Again, the knowledge that this greatest of all museums will be able, in certain
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instances, to lend its treasures overseas on appropriate occasions will inspire a reciprocal reaction in other collections abroad. One good turn deserves another. We may see as a result the most splendid things in this country which would otherwise never be sent here on the grounds that, as the British Museum did not lend its treasures, other people should not lend their treasures to us. We may see things that our people have never had a chance to see before.
For these two main reasons, I believe that we are doing a good job with the Bill. I welcome what my hon. Friend the Member for Bristol, West (Mr. Robert Cooke) said about the contribution in the past of the family Trustees. I urge the Economic Secretary to consider the suggestion I put earlier, that in some way these family Trustees may be associated, if they wish, with the continuing affairs of the Museum. I am not saying that they should have a hand in its government, or that a penny of public money should be spent that has not been spent before.
The fact remains, however, that the great glories of the Museum were founded on these collections given to it, and it seems rather hard and churlish that because these gifts were given so long ago—my own family's contribution antedated the original Act by many years—we should say, "We have the stuff, now get out." That attitude is not necessary and, I am sure, is not intended. It should be possible in some way, and at no public expense, to continue to recognise the very great treasures with which we have been endowed as a result of what these families did in the past.
I would like to pay tribute not only to the Economic Secretary on his handling of the Bill, but also to the staff of the Museum, of which I know a great deal. I speak of the Director down to the humblest employee. They are a quite remarkable and devoted body of people of whom we should be very proud. They have not had an easy task. They have been desperately short of money. They have suffered greatly from long unrepaired ravages by enemy action. They have had great difficulties of display and have been undermanned and overcrowded.
They have not always had a fair crack of the whip from the public and the

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newspapers, who have been very quick to describe them as "stuffy" or out-of-date or unimaginative—all the easy adjectives which come so readily when one does not really know all the facts. But they have "worn" all that and I am quite certain that the effect of the Bill will be a great stimulus to morale.
May I just say, remembering what the hon. Member for Sowerby (Mr. Houghton) said When we were having a little discussion on whether they would like to be called civil servants or not, and without quarrelling with the hon. Gentleman in any way, that there is an enormous status symbol in calling oneself an officer or a servant of the British Museum? When one asks them what they would rather be called, they say, "Well, we belong to the British Museum and we want to be known as officers of the Museum."
My own experience when abroad, and when I have visited a foreign museum, has been that the fact that I was a Member of this House carried great weight, but when I have said that I was a Trustee of the British Museum that was the moment when the curator came rushing to the door to greet me. So one can see how proud these people are of being associated with this great institution.
Now that we are changing the administration of the Museum, I think that our final word should be one of gratitude for all that these people have done.
11.42 p.m.
Mr. Boyd-Carpenter: Before the House finally parts with the Bill I should like to add a very brief word to this debate and, first, as my hon. Friend the Member for Croydon, South (Sir R. Thompson) did, to thank hon. Members on both sides for the helpful, co-operative and constructive way in which our discussions have been carried out throughout.
I should like to go further than my hon. Friend and to thank many people outside for the very hard work and the very valuable work which they have contributed to the Bill. I should like to thank the members of the Standing Committee of the Trustees who have given us their advice and counsel and, in particular, not only the right hon.
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Member for South Shields (Mr. Ede), to whom I have already referred, but his colleagues, particularly the noble Lords, Lord Radcliffe and Lord Hurcomb.
I should like to add my thanks to the staffs and officers of the two museums who have been enormously helpful with advice and guidance. I should like, too, to thank those Trustees whose position is affected or changed by the Bill for their forbearance and kindliness in this matter. You, Mr. Speaker, are of course one of the ex officio Trustees, indeed a Principal Trustee, whose position with that of your colleagues as ex officio Trustees has been affected by the Bill and who have shown great understanding, kindliness and help to us in a matter inevitably, in the circumstances, of some delicacy.
Then there is my hon. Friend the Member for Croydon, South, who is, as he reminded us, one of the family Trustees. I will confess to the House that when we were considering the drafting of the Bill I felt it went very much against the grain to end the 200-year association of the family Trustees with the Museum. It is a very long and honourable connection beginning with splendid gifts by the six families to the Museum in its very early days. I, for one, felt, as I told my hon. Friend, very considerable regret and reluctance that the hard logic of the thing in deciding a new constitution for the Museum in the second half of the twentieth century forced us to the conclusion that the family Trustees as such should not continue.
I should like to take this opportunity, if I may do so without impertinence, not only on my own behalf, but on behalf of many British Governments over a very long period, of extending gratitude to the family Trustees for the personal service which they have given to the Museum and, through it, to the community, and also, long ago though it is, to thank them for the splendid gifts which were the very base and foundation of what is now one of the greatest national collections in the world.
I would refer, if I may, to the observations of the hon. Member for Derby, North (Mr. MacDermot), who, I know, has taken a great interest in the future plans for the development of the Museum.

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As he said, the plans for the new Library on the new site, to which I referred at greater length on Second Reading, have been long prepared. Much thought and consideration has been given to them, and it is true that to change them at this time would undoubtedly impose very serious delay in coping with the problem of the Library under immense pressure of space. None the less, the hon. Gentleman is right. In a matter of this importance that could not be a decisive consideration if the merits of the matter went plainly otherwise.
I am bound to say that I pay great attention to the fact that those associated with the Museum in recent years, after profound thought and study and consultation with many people outside, have evolved a plan of this kind. I would not like anything that I said tonight to indicate that the necessary processes which must go forward, the acquisition of the land, and so on, were likely in any degree to be checked.
I think that it is a good plan, and I have very little doubt that it will be carried out, but in reply to what the hon. Gentleman said, not only on that issue, but on the wider question of the general layout of the Museum—his suggestion of decentralising the antiquities in some measure—it is the fact that the provisions in the Bill—I think that it is Clause 9—in respect of various repositories gives a wide power, by Treasury order, with the consent of the trustees, to designate future places in which some of the treasures may be held and displayed. We are looking to a long-term future, and I think that that gives a proper flexibility, foreseeing that at any rate some of the hon. Gentleman's ideas may become more attractive and perhaps more inescapable in the years ahead.
As to the Library project, the Government feel that this is the greatest major contribution which we of our generation can make to the British Museum, and I should be deeply disappointed were there to be any check or delay in going forward with it.
That brings me to the remarks of the hon. Member for Islington, East (Mr. Fletcher), about finance. The capital cost of the new Library building will be
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about £10 million, and the Natural Science Reference Library on the South Bank will cost over £1 million. The regular grants on the British Museum Vote have risen very sharply in recent years. As recently as 1952–53 the net Vote was £350,000. For the current year it is £1,122,000, and I think that this is an indication of our acceptance of a great deal of what the hon. Gentleman said as to the necessity to provide well and generously for the proper development of the facilities and display arrangements of this great institution. I very much hope that this process will continue.
I think that we are all agreed on the great historic importance of this Measure to the Museum and all that the Museum stands for. Had that not been our view, it would, as the House will recognise, have been impossible to obtain time for it in the programme of a very busy Session. But we took the view, which I think the House accepts, that it is of major importance to give to the British Museum the legal foundations for the expansion of the Library and the use of its new premises, to give it an up-to-date, and, as my hon. Friend said, streamlined constitution, to modernise its lending power and power to make arrangements of one kind and another, and thereby to enable this institution—which I described in the Second Reading debate as perhaps the greatest of our national institutions—to have very considerable support, such as Parliament can give, for the great developments that I am quite certain lie ahead of it.
The Museum has been served for two and a half centuries by Trustees and officers of the greatest devotion, skill and ability. It is so served today, and with the service of those who serve it now and those who will serve it in the future I believe that it can become an even greater part of the cultural life of this nation than it has been in the past. If, in some small measure, this Bill helps it in this task, I do not think that the House will have spent its time in vain.
Question put and agreed to.
Bill accordingly read the Third time and passed.

CALDON CANAL, STAFFORDSHIRE (CLOSURE)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]
10.51 p.m.
Mr. Harold Davies: After the interesting and valuable discussion we have just bad on the British Museum I must take the House to a matter of local importance, although it is linked in a way with the general problem of transport.
In many ways as well as being a historic day for the British Museum today will be a historic day for British transport. Apparently the British Museum is short of space. If it wants some repositories in which to place its priceless possessions I suggest that it might be able to make use of some of the 2,000 railway stations which will not be used any more if Government policy goes through.
I am grateful to the Parliamentary Secretary for waiting so long for this Adjournment debate. At least, he has been able to hear a very interesting debate on the British Museum. I wish to raise with him a matter of vital local importance, concerning the closure of our canals.
Our canal and railway systems are in danger. Their accumulated value today—they having been built in the old days, when only pick, shovel and muscle power were available—must be thousands of millions of pounds. Not long ago we introduced a Bill which brought the control of the canals under the British Waterways Board, and we are still waiting to know what the exact policy will be.
Before considering the case of the Caldon Canal, in North Staffordshire—and especially the most beautiful part of it, which is in my constituency—I want to consider the general position. We have about 1,600 miles of canals, about 1,100 miles of which are narrow gauge. This means that the locks through which the barges have to pass can take only narrow-gauge boats—perhaps 70 ft. long, and only about 7 ft. wide, carrying a load of about 30 tons.
Every mile of canal that is closed will cost the Government £10,000.
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The canal in which I want to interest the House this evening is about 17½ miles long, and it links up with the Trent and Mersey systems. The nation must not sacrifice everything to the god of Mammon. I hope that I shall not be departing from Parliamentary language when I say that it is no good bitching about Beeching if we expect a system to work merely on a profit margin.
Although I do not agree with what is being done about the railways, whatever Government are in power must have the courage to co-ordinate railways, canals, roads, shipping, all kinds of transport. We must realise that these canals are not only of material value. There are 400 or 500 miles of canals which are earning money and of material value, but there are 1,000 or 1,100 miles of canal which are of immeasurable aesthetic value because of their peace and quiet They make long ribbons of green park which are natural reserves for fauna and flora. In some parts of Britain the only bit of greenery is along the towpath of the canal.
About 3 million fishermen fish from the banks of inland waterways. This is of immeasurable value to people who can rest at week-ends after working arduously on tasks demanding speed and amid a cacophony of noise. Are we to sacrifice all this in the name of profit? A famous and beautiful canal at Llangollen has been closed to cargo, but now it is a marvellous stretch of water used by pleasure craft for the enjoyment of large numbers of people. The canal I am speaking about tonight is a stretch which is as beautiful. I know Europe and many other parts of the world. I believe this is one of the most beautiful stretches of canal in Britain and, may be, in Europe. If it is to be closed, is it to be made a great ribbon of concrete? If we want only efficiency, why not run all transport on broad stretches of black asphalt?
In the general principle of the closing of the Caldon Canal and of the canals throughout the Trent and Mersey system, compensation is a vital issue. There are three categories of compensation which the Waterways Board will have to consider. The first is the compensation of common law. The next is the interests protected under the original canal Acts. I have spent some time in research in the Library going through many of those Acts, but in this short debate I cannot

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go into that in detail. There are also the rights of people using land on the banks, farmers and others, and their interest in maintenance of culverts, bridges and drainage systems. All this has to be taken into consideration and it makes up the cost of £10,000 a mile in the closing of a canal.
As the Parliamentary Secretary will know, there is a new tendency in agriculture, strange as it may seem considering the rainfall, to have a system of irrigation. Irrigation for agriculture is growing and canals are of great value for this purpose. We beg the Minister to make sure before these canals are closed that he is not acting illegally. At present, the Caldon Canal is not closed to navigation. The Leek section was closed by legislation which was pushed through this House in 1944, in the midst of war. At present, there is not commercial transport on the canal, but not long ago five commercial boats were using it. They had to stop, because nobody now accepts the responsibility, despite the Act under which they are liable, to maintain the canal in a navigable state. In law the Caldon Canal is not closed to navigation. It cannot be closed, unless an Act of Parliament is passed.
I feel sure that the Parliamentary Secretary will agree that it would be a tragedy to close all these beautiful stretches of canal, despite the fact that they may not have commercial cargo. Will he explore the possibility, together with other bodies, one of whom I will mention later, of keeping canals open in some areas, especially canals near great industrial areas, for fishermen, pleasure craft, farmers, for drainage purposes, and for others?
There is, first, the original purpose of the canals—to carry commercial transport. There is, secondly, the supply of millions of gallons of water daily to industry, some of which, as I shall show later, could be of vital consequence to local employment. There is, thirdly, the fact that canals are needed to dispose of effluent from some factories. Canals are of great value for fire-fighting services. There is also the possibility in the future of canal towpaths being used for pipeline development.
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The aesthetic use—namely, use by anglers—is well known. Anybody going to the Midlands and other parts of Britain at certain times of the year can see in progress the great angling competitions which are carried on on the canal banks. There is also the use to which canals are put by pleasure craft. Today, 30 firms deal in the hiring of cruisers and pleasure craft.
This week I have looked at the programme of the Stoke-on-Trent Boat Club. I have had no time to study it properly. It is a magnificent and expansive programme, offering to such an industrial area pleasurable activities in the fresh air and in some of the most peaceful areas which can be found in that country.
Close these canals, and for the young and the old this wonderful amenity will disappear. We must not measure these matters all the time in terms of pounds, shillings and pence. Sometimes—as in my area when we had a drought—the canal is an excellent emergency supply of water for farmers. It is a magnificent means of land drainage, which in this valley is essential. If this canal is blocked or ribboned with concrete, the entire drainage system of the valley will create a problem for engineers and local authorities, and there will be danger of flooding.
I have been talking of historic monuments. This canal was the last job of James Brindley. If the House wishes to preserve a historic monument to Brindley, let it preserve this one. This was the area in which he worked. He lived in the main town of Leek, in my constituency. He worked on this canal and died whilst building this famous section of it. It was built originally for the limestone from the Caldon quarries and to connect with the Trent and Mersey Canals. It went up to the mills at Froghall.
I wanted to make sure that I knew my facts. I wrote to the famous copper firm of Thomas Bolton and Sons Ltd. They replied, saying:
"The River Churnet feeds the Caulden Canal at Consall, some two miles above our Froghall Works. The water we use therefore emanates from the river and, of course, from any seepage from the hills direct into the Canal. We take water from four points on the Canal for steam raising to heat our factory and for process work, including water for cooling purposes on plant. Recently a landslide has necessitated

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the British Waterways to dam off a 100-yard section of the Canal some 400 yards from our Works, but in order to keep us supplied with water they inserted a length of 18"dia, pipe. If the Canal is closed and emptied, then no water would feed through the above pipe and this would close down the Boiler House, and the closure of the factory would result in unemployment for 1,600 people."
This proves that there is a vital economic reason for keeping this canal in this glorious valley. This famous copper works, developed in the last century, needs the canal to maintain the output of its products and to keep its staff in employment. The Minister may be interested to know that this firm deals with English Electric Ltd. and the Standard Telephone Company.
Unfortunately, time does not allow me to develop this part of my argument at length. I hope that the Ministry will seriously consider this matter and that the Parliamentary Secretary will tonight be able to assure the House and the people in this area—and he has received a petition from 12,000 of them—that no action will be taken without discussions having been held, particularly with bodies such as the National Trust and others, which realise that while this canal cannot be kept open in isolation, it should be included in the list of British waterways which need not be abandoned.
If a loan—of £10 million or even less—were made to the National Trust the canal could be kept open and that money could be returned at the rate of about £2½ million, perhaps, for sixty years. I hope that the House and the people of North Staffordshire will receive an answer tonight which will give them hope that this lovely stretch of inland waterway will be kept open for the use of our people.
12.8 a.m.
The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett): The hon. Member for Leek (Mr. Harold Davies) pointed out that he has had to wait for some time for this Adjournment debate. I was comforted by the thought while he was speaking that, wherever the Library of the British Museum may be, his words in introducing the subject, and mine in reply, will be recorded there for ever.
I would like to begin by assuring the House that we recognise that transport
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is by no means the only purpose for which canals can be used. We agree that they are of value for many other purposes, such as for water supply, drainage, recreation and fishing. But they do not necessarily have to be kept open for commercial navigation to enable those uses to continue. The hon. Member for Leek will recall that in the 1959 White Paper on Inland Waterways the Government endorsed the views of the Bowes Committee on the need for a positive approach towards the redevelopment of canals. This lay behind the setting up of the Inland Waterways Redevelopment Committee, which did much useful work from 1959 until last year, and it is now the statutory duty of the new British Waterways Board to review canals and prepare proposals for putting them to the best use.
As the 1959 White Paper indicated, the Government consider that those who benefit from such use of canals should pay a fair price for what they receive. The hon. Member said that it would be retrograde to dismiss the Caldon Canal as "uneconomic" and I would agree that it could be said to be a thing of beauty and a historic monument. But so are many other parts of our canal system. It is the maintenance of hundreds of miles of derelict canals that have carried no traffic for years that largely accounts for the present operating deficits on the nationalised inland waterways.
It is quite true that statutory obligations to maintain canals and statutory rights of navigation can be extinguished only by a further Act of Parliament or by a Warrant and Order of Abandonment from my right hon. Friend the Minister. However, the Transport Act, 1962, has suspended for five years the liability of the British Waterways Board to maintain any of its inland waterways in a better condition as regards navigation than it was in the six months ended 2nd November, 1961. This was done to give the Board time to formulate and carry out its policies.
I am not quite sure whether the hon. Member has raised this matter on the assumption that the Caldon Canal was threatened with immediate closure to navigation, but I can assure him that that is not the case. I am aware that various local bodies interested in canal preservation have organised a campaign to save the canal from closure. This campaign

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is, I believe, based on an alleged public announcement that the Waterways Board intended to restrict the use of part of the canal and to close the remainder. No such announcement has been made, and there is no foundation for any belief that the canal is under immediate threat of closure to navigation. As I have said, the statutory rights can be extinguished only by Act of Parliament or by an application to my right hon. Friend. No application for closure has been made either by the British Transport Commission or, subsequently, by the Waterways Board.
On the legal issue, the hon. Member may have felt that the exclusion of this canal from the scope of pleasure-boating licences is an attempt to deny the existence of statutory rights of navigation. It is not for me to interpret the law, but the view of the Board is that there is no public right of pleasure boating on most of its artificial canals, including this one. The Board considers itself entitled to say that certain canals, which it does not regard as suitable for pleasure craft, are excluded from the terms of its pleasure-boat licences, and that this is quite a different thing from closing a canal to navigation. It considers that, apart from special rights of riparian owners, it is only commercial traffic which, generally speaking, enjoys statutory rights of navigation—and then only subject to the five-year moratorium to which I have referred.
The hon. Member has mentioned the importance of the water supplies from the canal to agriculture and industry, particularly the supply to Bolton's copper works. The importance of water supplies to all the consumers involved is fully recognised and, indeed, the water supplies to consumers in the Milton area provide by far the greater part of the remaining income on this canal. The supply to Bolton's works is not particularly remunerative to British Waterways, but its usefulness to the firm is well known to the Board, and it has recently discussed with the company how to ensure the continued availability of the supply. I do not therefore think that the hon. Member has much to worry about on this score.
The hon. Member suggested that there was a firm in the Consall area that tried to continue use of five boats from Etruria, but was unsuccessful because the
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canal was not maintained to statutory obligations. I think that he has been misled about the facts in this case. Since 1953, there has been no commercial traffic beyond the first half-mile. Such traffic as there was, left the canal for the roads. In 1955, however, on the assurance that an independent carrier would convey 100 tons of pottery material a week from Runcorn, via Etruria, to Consall, British Waterways carried out improvements at a cost of £5,000, so that barges drawing 3 feet of water and carrying 18 tons could navigate to Consall. After this had been done, the traffic never materialised.
There also seems to be same misconception about the value of the assets in the canal. The hon. Gentleman did not himself refer to this, but it was mentioned in a letter circulated by the Caldon Canal Committee on 6th March, a copy of which was kindly sent to the Minister, and which said that the Committee had been
"… given to understand that the canal has been valued at £20,000,000 in the national assets …"
The Committee went on to argue that it was
"foolish to let this go if the waterway can be restored for a figure between £10,000 and £20,000."
So it would be. Those figures, however, are not correct. We have no knowledge of the original construction cost of the canal, but I can say that the present book value of the whole 1,800 miles of the nationalised inland waterways system is only about £20 million.
If restoration were to be carried out to full commercial standards it would cost about £160,000. Restoration to slightly lower standards for pleasure traffic would cost about £140,000. Either course would involve an increase of several thousand pounds a year in the maintenance bill, without taking into account the interest charges.
Mr. Harold Davies: I should like to know whether the Ministry is negotiating with the National Trust.
Vice-Admiral Hughes Hallett: I was giving the cost of restoring the canal as a navigable waterway. I will come to the hon. Gentleman's point in a moment.
Those estimates of the cost of restoration are much greater than the estimated

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cost of possible alternative methods of redevelopment. To give one example, it is estimated that by spending £78,000 the canal could be partly restored as a water channel and partly eliminated and that a modest working surplus could probably be maintained from the sale of water. I mention these figures only so that the House will be under no illusion that it would be cheaper to restore the canal for navigation than to redevelop in some other way.
The hon. Member has referred to the information about the canal which the Waterways Division submitted to the former Inland Waterways Redevelopment Committee. It is true that this dealt with a number of possibilities for redevelopment. It referred to closure to navigation, the retention of part of the canal as a water channel and the disposal of the remainder. This was mentioned as a possibility. The Committee ended its existence, however, on 31st July last year, before reaching the stage of making any formal report.
Moreover, one of the prospects which the Committee tentatively considered was the possibility of transfer to the National Trust. Preliminary discussions had already taken place between the Trust
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and the Committee, but they had not been pursued because the Trust understood that there was no immediate prospect of closure.
The new Board will certainly have to consider the future of the Caldon Canal and will, no doubt, produce its proposals. What these proposals will be can at present only be a matter for speculation. The hon. Member may be sure, however, that the Board will bear very much in mind the points which he has raised tonight and the views which the local bodies have expressed to my right hon. Friend.
Mr. Harold Davies: And the National Trust?
Vice-Admiral Hughes Hallett: The Board is also willing to consider any proposals that the National Trust may wish to make for the leasing or purchasing of the canal. I hope that in what I have said, I may have gone some way to allaying the hon. Gentleman's misgivings.
Mr. Davies: Yes, certainly. I am obliged.
Question put and agreed to.
Adjourned accordingly at nineteen minutes past Twelve o'clock.