Schedule 17.—(SUPPLEMENTARY PROVISIONS ABOUT CLOSE COMPANIES.) (Hansard, 12 July 1965)

§ Mr. Diamond
I beg to move Amendment No. 219, Schedule 17, in page 214, line 33, at the end to insert: or (bb) to a company controlled by or on behalf of the Crown and not otherwise a close company; or". If convenient, Mr. Speaker, I suggest that the House might also discuss at the same time Amendment No. 220, Schedule 17, in page 215, line 9, at the end to insert: (4) For the purposes of this paragraph a company is to be treated as controlled by or on behalf of the Crown if, but only if, it is under the control of the Crown or of persons acting on behalf of the Crown, independently of any other 224 person; and where a company is so controlled, it shall not be treated as being otherwise a close company, unless it can be treated as a close company as being under the control of persons acting independently of the Crown.

§ Mr. Speaker
If the House so pleases, and I suggest that we ought to discuss also at the same time Amendment No. 140, Schedule 17, in page 215, line 14, at the end to insert: 3. For purposes of the provisions of this Act relating to close companies, the Crown and any department of the Crown and any person holding shares on behalf of the Crown or any department of the Crown shall not be treated as a participator.

§ Mr. Diamond
The two Government Amendments, Nos. 219 and 220, remove companies controlled by the Crown from the category of close companies. I promised to consider this point when the hon. Member for Yeovil (Mr. Peyton) moved an Amendment on the subject in Committee. The first Amendment excludes a company which is controlled by the Crown from being a close company unless it is a close company apart from Crown control. The second Amendment defines in more detail what is meant by control by the Crown. I do not know whether the hon. Member for Yeovil proposes to speak to his Amendment No. 140. I take it that, as that Amendment has broadly the same objects as the Amendments which we are proposing, he will be satisfied not to pursue his own.

§ Mr. Speaker
The next Amendment selected is Government Amendment No. 338, and I propose that we discuss with it the following two Amendments: Amendment No. 264, Schedule 17, in page 215, line 14, at the end to insert: 3. A company is not to be treated as a close company if the public are substantially interested in it and the public shall be deemed to be substantially interested in a company if shares of the company (not being shares entitled to a fixed rate of dividend, whether with or without a further right to participate in profits) carrying not less than 25 per cent. of the voting power have been allotted unconditionally to, or acquired unconditionally by, and are at the end of the relevant accounting period beneficially held by the public and any such shares have in the course of such year or other period been the subject of dealings on a stock exchange in the United Kingdom and the shares have been quoted in the official list of such a stock exchange. 225 Amendment No. 336, Schedule 17, in page 216, line 5, at the end to insert: (4) A Company is not to be treated as a close company if the public are substantially interested in it and the public shall be deemed to be substantially interested in a company if shares of the company (not being shares entitled to a fixed rate of dividend and without a further right to participate in profits) which:

(a) carry not less than 30 per cent. of the voting power of the Company, and

(b) would, if the whole income of the company were in fact distributed to the members, entitle the holders thereof to receive not less than 30 per cent. of the amount so distributed, and

(c) would, on a winding up entitle the holders thereof to receive not less than 30 per cent. of the assets of the company

are at the end of the accounting period mentioned in Part II of this Schedule beneficially held by the public and each class of such shares have in the course of such accounting period been quoted in an official list of a Stock Exchange in the United Kingdom and been the subject of dealings thereon. Provided that the expression "the public" for this purpose shall not include any associated company nor the directors of the Company or the five participators (other than companies which are not close companies) whose respective holdings, together with the holdings of their respective associates, represent the five largest interests in the capital or income of the Company computed as provided in paragraph 3 hereof, or any associates of such participators.

§ Mr. John Diamond
I beg to move Amendment No. 338, Schedule 17, in page, 214, line 42, at the end to insert: (2A) A company is not to be treated as being at any time a close company if shares in the company carrying not less than thirty-five per cent. of the voting power in the company (and not being shares entitled to a fixed rate of dividend, whether with or without a further right to participate in profits) have been allotted unconditionally to, or acquired unconditionally by and are at that time beneficially held by, the public, and any such shares have within the preceding twelve months been the subject of dealings on a recognised stock exchange, and the shares have within those twelve months been quoted in the official list of a recognised stock exchange; but for this purpose shares shall not be deemed to be allotted to, or acquired or held by, the public if they are allotted to, or acquired or held by—

(a) any director or associate of a director of the company; or

(b) any company which is under the control of any such director or associate or of two or more persons each of whom is such a director or associate; or

(c) any associated company of the company.

In this sub-paragraph "share" includes "stock".

Hon. Members
Hear, hear.

§ Mr. Diamond
I think that if discussion on this Bill lasted long enough we should all be extremely popular with the other side of the House.
This Amendment will exclude from being a close company any company in which, although the control is in the hands of five or more directors, 35 per cent. of the voting power is held by the public through ordinary shares in that company. It is modelled on the existing law affecting Surtax companies, with two important changes. The first is that voting power of the public is raised from 25 per cent. to 35 per cent., and that the possibility that any of the directors or their associates can be treated as part of the public is excluded. The second change is related to the Amendment by the hon. Gentleman the Member for Crosby (Mr. Graham Page), Amendment No. 336, and I am glad to think that we are on the same lines in this respect.
In explaining this Amendment, I ought to remind the House of a letter which, no doubt, many hon. Members saw in the Financial Times on 19th May last, and which was headed "'Close' Companies." It read, The article on the Finance Bill in Monday's Financial Times makes clear the worries which controlling directors may have to face but a great many small, hitherto completely defenceless minority shareholders, will surely welcome the larger part of the provisions relating to 'close' companies. The minority shareholder will now have a certain amount of protection and be truly a participator instead of being completely at the mercy of the 70 per cent. director-controlled company, so many of which have become 'Public'(?) —there is a question mark after that word, … in recent years. I wonder how many of the subscribers to some of the new issues have truly realised their hopeless and (in practice) voteless position? Credit wherever and whenever it is due, please". That letter was signed Guy Nicholson, who gave an address at Holmbush Farm House, Haywards Heath.
Mr. Nicholson may be a Labour voter, although I should not have thought it the most likely place to find him. However, I read that letter to make it clear that, even in the present situation of 25 per cent. control, a number of shareholders in the so-called public 227 should recognise that they have no control whatever over the affairs of their company, and to demonstrate that one can have a closer controlled company, notwithstanding that 25 per cent. of control is in the hands of the public.
Ever since 1927, people have been learning to accommodate themselves to the requirement of having a 25 per cent. holding and it has become a method of tax avoidance, because, once one can show that there is a 25 per cent. holding by the public, and that there is dealing on the Stock Exchange—and I hope that hon. Gentlemen will forgive me saying this—one can do precisely what one likes so far as tax avoidance is concerned. I do not know if there is a Stock Exchange at Nottingham, but once one is in that position, that is what can happen.
My first point is that this is a situation which has obtained for a very long time. That is why we are not anxious to imperil the position by having any kind of situation where the very fact of public ownership of part of the shares can open the doors completely. Nevertheless, we are anxious to demonstrate that, in our belief—which I think is confirmed by what the right hon. Gentleman the Member for Bexley (Mr. Heath) said on the last occasion when this was discussed—the real difficulty about the introduction of a new tax is that a lot of people feel they are being subjected for the first time to a kind of restraint which we do not want them to feel they are subjected to. It is the same kind of constraint that a company feels when an auditor is first appointed. Those concerned feel as if somebody is looking over their shoulder and inquiring. But after a time they get used to it and realise the valuable services of the auditor and regard him as a friend.
It is similar with the Surtax provisions. I do not know, but I imagine that when they were first introduced the business community accepted them with very considerable irritation. But now the remarkable thing is that in speech after speech from both sides of the House, and from very knowledgeable practitioners on both sides, hon. Members have paid tribute to the Revenue for the working of the Surtax provisions. I have no doubt that in the course of time the business community 228 will accept similarly that the working of the close company provisions is sensible and intended to help production, retention, plough back and investment, and that there is no other purpose at all.
But I recognise that when one has changed circumstances one has to do something to meet the change and ease it from a phychological point of view. I accept broadly the essential content of what the right hon. Gentleman said when he wound up the debate the other day on this topic. We have had a number of speeches. I hope the House will forgive me if I say that I noticed that each hon. Member who spoke from the back benches gave a different reason for objecting, showing that none of them had the right reason. [Interruption.] Hon. Members will find that I am being perfectly serious and not at all partisan in this. When one finds a lot of intelligent people all providing a different analysis of a given situation, the probability is that not one of them is right, that there is something which has escaped everybody. I think that what was escaping everybody was that what we were really dealing with was change, purely the problems of change. Each person drew attention to one particular aspect which was not the cause but the occasion of the objection.
I hope that I have explained why the Government have felt it right, though not going as far as 25 per cent. because that has already been overtaken by existing tax avoidance cases, to recommend to the House that we should have a 35 per cent. test, which is a much more substantial test and which I hope will ease in the introduction of Corporation Tax, and, particularly, the close company arrangements.
I am bound to add that I hope this will be the case. I hope that, as the right hon. Member for Bexley indicated in his speech, a provision of this kind will not lead to tax avoidance and that people would not be irritated at the thought of the Inland Revenue breathing down their necks, not because they were proposing to avoid tax but just because they wanted to be free citizens carrying on their work in their own way using their own judgment. I recognise that essential spirit of private enterprise. We are trying hard to meet it. We hope that it will not be abused. In that spirit I put forward this Amendment.

§ Mr. Heath
As the Chief Secretary has said, at the end of our debate on this matter on 6th July I very strongly urged that, for a number of reasons, and, particularly, in the national interest as a whole, he should reconsider the matter. I say straight away that I am very glad that he has done so. I believe that the decision which he has reached is the right decision, and I believe that it has already done good.
The right hon. Gentleman, in introducing the Amendment, first of all tended to argue that perhaps it was not a very good thing. The right hon. Gentleman then moved on, towards the end of his speech, to say that he was making it in order to meet the different points of views expressed on both sides of the House.
12.45 a.m.
I agree with him very much in what he has said. It is true that we have had two debates in order to achieve this result, but it has been well worth the time of the Committee and of the House. Looking back—and perhaps the right hon. Gentleman will agree—if he was going to do this it would have been very helpful to industry and to finance if it had been one of the original proposals. He has repeatedly explained why he did not find this possible and we are fully prepared to say that we are delighted that he has moved the Amendment. We do not in any way underestimate its importance. Although it has come late, we are glad that it has come.

§ Mr. Graham Page (Crosby)
As the right hon. Gentleman generously referred to my Amendment No. 336, I should like to express my gratitude for the introduction of the Government's Amendment at this stage in wording much similar to that which I put on the Order Paper. However, I would also express my amazement that it comes at this very late hour after pressure from this side of the House which was resisted in two debates.
It was, of course, fairly evident that, if one wished to relieve a company which had a substantial public interest from the restrictions of the close company provisions, one would have to move a little further than 25 per cent. In my Amendment I inserted 30 per cent. It would have been better to have 30 per cent. with the rather tighter definition in my Amendment, but I do not think there is 230 a great difference between that and the 35 per cent. and rather looser definition proposed in this Amendment. I therefore express my gratitude to the Government for their Amendment.

§ Mr. Patrick Jenkin
I beg to move Amendment No. 346, Schedule 17, in page 215, line 2, to leave out "and" and to insert "or".
This is a drafting Amendment—or at least I hope that it is. If it is not, then we shall require considerable explanation from the Chief Secretary. Paragraph 1(3,a) takes out of the definition of a close company a company, broadly, that is controlled by a public company, a non-close company.
I think that this provision must be in the alternative if a company … could only be treated as a close company as being under the control of five or fewer participators … This must include director-controlled companies which, in the circumstances, are clearly not relevant. The company could not … be so treated except by taking as one of the participators a company which is not a close company. It seems to me that paragraph 1(3,a) and (b) must be in the alternative and cannot be cumulative because they apply to different circumstances. Indeed, if any attempt were made to apply both of them there must be a very limited number of circumstances where that could be so. It occurred to me that, because it is intended to take different close company provisions—companies either controlled by public companies or where one of the five participators is a public company—these two must be alternative and the word "or" and not the word "and" is the correct one to use here.

§ Mr. Diamond
I am sorry that I could not possibly accept the Amendment. It may be that the hon. Member moved it under a misapprehension, thinking that it is purely a matter of drafting, but, in practice, it is nothing of the sort. It would considerably widen the circumstances in which a company could escape from being a close company by reason of the participation of non-close companies in its control.
231 The provisions of the company Surtax legislation which are reproduced, in effect, in paragraph 1(3,b) go back to 1937, when they were introduced to defeat highly artificial arrangements for exploiting the then existing conditions for the exemption of a company from "company Surtax" provisions on the ground that it was the subsidiary of a company which was not itself a Surtax company.
This Amendment would permit avoidance to be revived. I can go into further detail if the hon. Gentleman the Member for Wanstead and Woodford (Mr. Patrick Jenkin) wishes, but at this hour I think that I am probably right in assuming that he did not intend to open the door so widely, or to open a door which had already been open and closed by a previous Administration many years ago. I am sorry that I cannot recommend acceptance of this Amendment.

§ Mr. John Harvey
I beg to move Amendment No. 298, Schedule 17, in page 215, line 22, at the end to insert excluding preference share capital entitled only to a fixed rate of dividend".

§ Mr. Speaker
With this Amendment we can also discuss Amendment No. 299, Schedule 17, in page 215, line 25, after "capital" insert excluding preference share capital entitled only to a fixed rate of dividend".

§ Mr. Harvey
The anomaly to which these Amendments draw attention relates to companies whose share capital consists of a small amount of ordinary capital, fairly widely held, and a large amount of preference share capital, which carries no voting rights and which is concentrated in the hands of very few holders. I am advised that there are a good number of such companies.
232 In such a company five or fewer preference share holders could well hold more than 50 per cent. in value of the total share capital, while having no effective control over the company's affairs, including the disposal of its profits. Even though it does not, therefore, follow, that the company's affairs could be controlled by five or fewer people, the Bill as drawn, would, nevertheless, deem such a company to be a closed company. These Amendments would exclude a case of this type from the provisions affecting close companies.
While I realise that the definition of control in Schedule 17(3,1a) and (3,1b) follows very closely the wording to be found in section 256(2,a) and (2,b) of the Income Tax Act of 1952, dealing with the surtaxing of companies, a reform in the whole basis on which this type of company has been taxed has long been overdue. Although a trading company making a reasonable distribution of income has not hitherto been too seriously affected where preference shareholding has brought it into the definition of a controlled company, such a company will now have to prove to the Inland Revenue that a 60 per cent. distribution of its trading income would be prejudicial to its business.
My Amendments are designed to deal with the fact that there are companies in which the effective control is more widely held than by perhaps four or five people, who may have a large preference holding and who could, without these Amendments, leave such companies to fall under the close companies regulation.

§ Mr. Diamond
The effect of Amendments of the hon. Gentleman, the Member for Walthamstow, East (Mr. John Harvey), are, I think, considerably greater than he imagines. He is quite right in saying that the language of the Bill reproduces almost exactly the corresponding provisions of the existing company Surtax legislation, but I can say that we have no knowledge of a single case in which it could be said that those provisions have operated unreasonably, through taking account of fixed rate preference shares.
The hon. Gentleman is, in effect, proposing that fixed rate preference shares should be ignored in determining the question of control throughout paragraph 3 of Schedule 17. His Amendment would 233 enable an avoider to drive a coach and horses straight through the close company provisions. I could give several examples, the most obvious one is that of a man who would fix a very high rate of preference dividend that would pretty well scoop the pool of the company's profits.
Another example would be the issue of shares on condition that they were redeemable at an enormous premium; a man would hold the shares and would issue a few ordinary shares to a number of individuals in such a way that no five or fewer of them held a majority of those shares. Therefore, I could not possibly recommend the House to accept the Amendment.

§ Mr. van Straubenzee
I beg to move Amendment No. 332, Schedule 17, in page 217, line 15 after "trust", to insert: (other than a trust for the benefit of all or a substantial number of the employees of the company)". We are dealing here with the definition of an associate in relation to a participator, and paragraph 5 of the Schedule lists a number of people, persons and situations which fall within the definition. One of them is where the participator is interested in any shares or obligations of the company which are subject to a trust, for example. I quite follow that it is necessary to have broadly a provision of this kind—[Interruption.] I wonder whether I might have your assistance, Mr. Speaker. It is difficult to make the argument when there is noise. I am grateful to the Chief Secretary for helping me—[Interruption.]

§ Sir D. Glover
Order.

§ Mr. van Straubenzee
I repeat, I am grateful to the Chief Secretary for his assistance. It is understood that there must be provisions of this kind. A number of hon. Members feel, I think, that paragraph 5(c) of the Schedule goes very widely. A number of other Amendments have not been selected, and we discussed the matter generally in Committee.
The Amendment is designed to exclude a trust which is for the benefit of a substantial number of employees. To put the point briefly, it would not be at all an unusual circumstance that particularly in a family company, a member of the 234 family, perhaps two generations previously, had created a trust for this purpose, which is a desirable and laudable one. Because, however, one of his descendants is a trustee, he comes within the provisions of paragraph 5. The argument is that such a trustee would have no say whatever in the operations of the company.
Indeed, the Chief Secretary himself, in Committee on 22nd June, said: In practice, it is unlikely that the trustee of an employees' trust will have any real influence over the policy of that company".—[OFFICIAL REPORT, 22nd June. 1965; Vol. 714. c. 1701] The right hon. Gentleman was quite right. I hope he will feel that if I am able to quote his arguments in favour of my Amendment, this gives added strength to the case which I put before him. It is precisely for that reason that I commend the Amendment to the House.

§ Mr. Diamond
I am grateful to the hon. Member for Wokingham (Mr. van Straubenzee). I agree that we had a similar debate—

§ Sir D. Glover
On a point of order. It may be that the Government side of the House have lost interest in the Bill, but many of my hon. Friends are still interested in it and would like to be able to hear the debate.

Hon. Members
Where are they?

§ Mr. Diamond
This is a technical stage of a slightly technical portion of the Bill, and the argument which the hon. Member for Wokingham (Mr. van Straubenzee) advanced is necessarily technical and perhaps does not command the fullest possible interest. I am sure that some of my hon. Friends do not realise the essential drama of the situation, but I will address myself to the argument.
I am grateful to the hon. Member for what he said. After a discussion in Committee I undertook to consider the matter very carefully. I have done so. My position is that, having considered it very carefully, I still think that there is no real hardship involved. If the hon. Member, who has great knowledge of these matters, feels that there is a particular case which he would like to draw to my attention either now or later, and if he 235 will be good enough to write to me, I will go into it, and if there is any real hardship I am sure that if on consideration it is found appropriate an Amendment could be introduced or the appropriate alteration could be made in a year's time. I will not deal with other points in the Amendment which are somewhat defective in drafting because that is not the essential point.
In those circumstances, I hope that the hon. Member will be good enough to withdraw the Amendment.

§ Mr. van Straubenzee
With your leave, Mr. Deputy-Speaker, and that of the House, in view of the very helpful way in which the Chief Secretary has addressed himself to the argument, and in spite of the lengthy discussion we have had, supported by hon. Members opposite, I beg to ask leave to withdraw the Amendment.

§ Mr. Diamond
I beg to move Amendment No. 221, Schedule 17, page 217, line 17, at the end to insert: and has a corresponding meaning in relation to a person other than a participator.

§ Mr. Deputy-Speaker (Dr. Horace King)
Order. I hope that hon. Members who have just come into the debate will listen quietly.

§ Mr. Diamond
This is a small but not unimportant Amendment. It ensures that the definition of associate will apply to a person who is not a participator but for instance, a whole-time service director whose wife may hold a majority of the shares.

§ Mr. Peter Bessell (Bodmin)
I beg to move Amendment No. 295, Schedule 17, in page 217, line 41, to leave out subparagraph (3) and to insert: (3) "Whole-time service director" means a director who is required to and does devote substantially the whole of his time to the service of the company in a managerial or technical capacity and whose terms of service are reasonable having regard to the nature and scope of the company's trade or business and his qualifications and the services rendered by him.

§ Mr. Deputy-Speaker
It is proposed that, at the same time, we should take 236 Amendment No. 335, Schedule 17, page 217, line 46, to leave out "five" and to insert "ten".

§ Mr. Bessell
The Bill as it stands imposes a most curious penalty upon a whole-time service director, as that is defined in subparagraph 6(3) of Schedule 17, because the effect would be to prevent a managing director or a service director of a close company from possessing more than 5 per cent. of the ordinary share capital. I think that hon. Members on both sides of the House will agree that this is likely to have a stifling effect on small businesses. I am sure that it is the Chancellor's wish to encourage small business enterprises, and yet we have this extraordinary anomaly in the Bill. I do not believe that he will allow it to stand as drafted.
For example, a managing director of a company which is earning a profit of £20,000 a year is in the position that if he were drawing a salary or remuneration in excess of £3,500 a year he would deprive the company of their right to set the excess of salary off against tax. This will discourage the growth of many small business enterprises on which the health of the national economy is very largely dependent. More than that, it will discourage many people from joining companies who could lend valuable services to those companies in technical or similar capacities. A man who joins a small company and who intends to devote his life and service to that company is obviously not undesirous of obtaining a capital holding—

§ Mr. Deputy-Speaker
Order. I hope that hon. Gentlemen who have just come into the Chamber will not spoil the debate, which has been orderly throughout.

§ Mr. Bessell
I am grateful for your help, Mr. Deputy-Speaker.
As I was saying, as the provision is drafted it will discourage people from joining small companies in which they might hope to acquire a substantial share-holding, and thereby enjoy the benefits of profits as well as salaries as the years go by as a reward for their effort and service to those companies. For that reason my hon. Friends and I suggest that the extraordinary definition which at present appears in the Schedule should be deleted and the Amendment inserted 237 I could speak at some length on this matter, but the hour is late and the Amendment is abundantly clear. There is no need for me to speak on it at length. That does not mean that it does not need careful attention by hon. Gentlemen opposite, whose constituents will be affected by the Bill, in many cases by this part of the Measure. We on this Bench believe that it is imperative to do everything we can to encourage the future of small companies which wish to have the best possible service directors. We fear that if the Bill is not amended in the way we suggest people will be encouraged to leave the small, progressive companies and join the large enterprises, where they may obtain higher salaries but perhaps no great share in those companies.
The provision as drafted could have a serious long-term effect on business in Britain. I think that it was Napoleon who said that Britain was a nation of shopkeepers. If he were alive today he might well say that we are a nation of directors of small companies. [Laughter.] Yes, this is largely true. The small business enterprise today is often a family business; a small family concern which has been formed into a small company. There is nothing wrong with that and we are anxious to protect the future of these enterprises and ensure that they have the best managements.

§ Mr. Diamond
The hon. Member for Bodmin (Mr. Bessell) made a moving speech in which he claimed that Napoleon might have said that we were a nation of directors of small companies. But Napoleon would have been wrong, would he not? After all, have not representations been made to us throughout our debates on the Bill that there are a large number of directors not of small but of moderate-sized companies who draw moderate remunerations from time to time?
We have had evidence of some directors drawing modest amounts—£¼ million in areas not very far from the hon. Gentleman's constituency in the West country.
I should have thought that that was in his mind also when he said that this Amendment would interest constituents in so many divisions who might be affected by it. That is absolutely right. This is an Amendment that would open 238 the doors widely to further tax avoidance, and would put on taxpayers galore in every constituency the further liability of the Income Tax that would be avoided in this way. It is right that we should say now that all the speeches that have been made time and time again and all the objections made by right hon. and hon. Gentlemen opposite when we have put forward the perfectly proper case for preventing tax avoidance, wholly neglect the simple proposition that every time anybody ceases to pay his fair share of tax a large number of small people who have no opportunity to avoid paying at all have to pay.
Some of the speeches that we have heard from time to time may sound perfectly well in certain establishments where right hon. Gentlemen opposite move—right hon. Gentlemen who say that we are obsessed, that the Treasury and the Revenue are obsessed, with tax avoidance—but I would invite them to come to a factory in my constituency, make that same speech in the canteen, and then see what the workers—who have had every proper pennyworth of tax deducted from their wages day in and day out, year in and year out—think of the propriety of allowing a certain amount of tax avoidance, as has been said from time to time.
That is the net effect of this proposal to increase from 5 per cent. to 10 per cent. the shareholding of an individual whose salary could escape the Corporation Tax and who could escape Income Tax which would not otherwise be paid if we did not treat is as a distribution. That is the effect of the two Amendments—[HON. MEMBERS: "One."]—which, under your guidance, Mr. Deputy-Speaker, we are considering. The hon. Member for Bodmin moved one, and no Conservative Member spoke to the other, but I thought that in courtesy to the House, as it had not been mentioned before, Mr. Deputy-Speaker, you would wish me to deal with it.
The effect of the Amendment moved by the hon. Member for Bodmin would be to remove the 5 per cent. shareholding limit in the definition of whole-time service directors, to introduce a vague element of what is a reasonable term of service, to produce uncertainty where there is clarity, and difficulty where there 239 is simplicity. For those reasons, and because the 5 per cent. which it is proposed to remove has been in the legislation since 1937, I am not able to propose that we should accept the Amendment.

Hon. Members
Oh.

§ Mr. Deputy-Speaker (Dr. Horace King)
There are only two voices one hears when a Question is put, "Aye" and "No." "Oh" is not in order.
Amendment made: Schedule 17, in page 221, line 34, after "property", insert: