HC Deb 27 March 1963 vol 674 cc1438-57

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—

  1. (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
  2. (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 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- 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 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 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 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 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 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 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 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 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 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 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 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.

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 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 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 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 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.