Clause 24.—(INTERPRETATION.) (Hansard, 9 March 1965)

§ Sir M. Redmayne
I beg to move Amendment No. 11, in page 18, to leave out lines 23 and 24 and to insert: 2 calendar months from the date on which the contract was made". This Amendment was discussed in Committee, although in a slightly different form. It was one which the Minister himself promised to look at, in rather favourable terms I thought, but he has not come forward with an Amendment to deal with the point. I do not say that in any critical way, because he has been generous in other respects, but, at the same time, I think that it is a point which is worth reconsidering.
As the Bill is drafted, the operation of a forward contract may be interpreted as being for a period of only one day over one month. Indeed, that is really the declaration of the Minister's intent in Committee as he gave it on 23rd February, 1965, at col. 353 in the short speech that he made then. Yet, on studying that speech, it seems that by his own argument he demonstrates that there is too little difference between contracts which are really spot contracts, where for some reason or another delivery is delayed, and contracts which are true forward contracts, for which the fulfilment is clearly separate from the date of the contract.
I do not doubt that the right hon. Gentleman has carefully considered this, but I ask him to think about it again in the sense that if the degree of separation in a forward contract is only one month, as it is practically speaking in the Bill, there is no clear distinction between a spot deal which is varied for some reason, and a forward contract. If the forward contract as described in the Bill is to achieve the object which we have set out to achieve, it must have a clear, separate character of its own.
The right hon. Gentleman suggested that the Bill as drafted was nearer to commercial practice, but, as I said before, my hon. Friends are not without commercial experience, and they hold strongly to the view that two full months conforms more fully with commercial practice and also much more practically achieves the object of the Bill.
Perhaps the Minister thinks that he has given us too much already, although no 293 Minister can give too much. Perhaps he has not given just that kind of thought to this point which he might have done. Possibly he reckons that the commercial advice which he receives is better than the commercial advice which my hon. Friends offered him. That would be a dangerous assumption, and I therefore ask him to consider this. It is a simple point. We believe that our advice is right.
The Minister has already been forthcoming, and he might accept the Amendment. I think that by doing so the Bill will be still further improved.

§ Mr. Peart
The right hon. Member for Rushcliffe (Sir M. Redmayne) has been reasonable. I discussed this during the Second Reading debate. Here we are dealing with definitions, and the Clause deals really with the definition of forward contracts. The Amendment seeks to insert the words: 2 calendar months from the date on which the contract was made. This is precisely the argument that we had in Committee.
I assure the right hon. Gentleman that I have carefully considered this matter. I cannot accept that the trade takes the view taken by hon. Gentlemen opposite. I am advised that this is not so. Indeed, I stressed this over and over again during the Committee stage of the Bill. I assure the right hon. Gentleman that I have looked at this very carefully. I assure him that I am not trying to dodge the issue. After all, this is not a point of principle as such. It is a point which deals with how the Authority shall operate, and the right hon. Gentleman has explained that it is intended to meet the criticism which was made in Committee.
As I have said, I have looked at this matter very carefully, and perhaps I might just repeat some of the arguments which were put forward. The Government's intention is to define a forward contract as a contract whose date of fulfilment falls in the next calendar month but one after the date on which it was made. The Amendment will defeat this intention because if it is accepted a forward contract would become a contract whose date of fulfilment fell more than two calendar months after the date on which it was made. That is what is 294 would mean, and it would be subject to the same objection as the Amendment proposed in Committee.
I remember the Amendments that were moved. In that it would fix the commencement of delivery from 14th January—as in the example I gave in Committee—if the contract was signed on the previous 14th November, by specifying a date halfway through the month it would run counter to trade practice. which deals with calendar months as a whole. It would be possible to draft an Amendment to give effect to the intention of the mover, and I have considered carefully whether this should be done. However, after all the advice I have taken I have come to the conclusion that this should not be done.

§ Mr. Prior
We are grateful to the right hon. Gentleman for the care that he has taken and for the conciliatory attitude he has adopted towards the Amendment. He has taken a great deal of trouble to ascertain the views of the trade. We felt that the period of five weeks which could apply in the case of a forward contract was not long enough to justify taking out such a contract, but in view of what the right hon. Gentleman has said and the fact that the trade wish forward contracts to operate from calendar month to calendar month it would be better to stick to the drafting of the Bill.
I want to ask the right hon. Gentleman one question. These forward contracts are very important. What happens if a farmer breaks such a contract? Perhaps on Third Reading, if not now, we might hear from the Government what happens if a forward contract is broken.

§ Sir M. Redmayne
I do not seem to have quite the unanimity on this point of which I previously boasted. I therefore beg to ask leave to withdraw the Amendment.

§ Mr. Hoy
I beg to move Amendment No. 14, in page 20, to leave out lines 42 to 44 and insert but may, nevertheless, he taken into account for the purpose of constituting a quorum of the Authority". In Committee, the hon. Member for Cornwall, North (Mr. Scott-Hopkins) moved an Amendment similar to this 295 one. He wanted to delete sub-paragraph (2,b). He said that he could imagine that all the trade members of the Authority might be interested in a contract, either directly or indirectly, and that it was possible that the entire trade side of the Authority might have to withdraw. He felt that this would be an insuperable difficulty in the way of the smooth working of the Authority.
I said that we would consider the matter before Report. We appreciated that there might come a time when so many people were involved in a contract that was being discussed by the Authority that a quorum would not be available, and the proceedings of the Authority would be held up. I promised to see whether we could devise words which would give the meaning of the Amendment proposed by the hon. Member, plus some protection for the Authority so that everything would appear to be absolutely fair and above board while, at the same time the Authority was given the power to continue to do its work.
It is to meet the point of the Amendment proposed by the hon. Member that we have put down this Amendment. It is to the same effect as that Amendment, except that instead of simply leaving out the words shall be disregarded for the purpose of constituting a quorum of the Authority for any such deliberation or decision", it replaces them with words stating unequivocally that a member who has made a disclosure of interest may be taken into account for the purpose of constituting a quorum. This avoids any possible uncertainty.

§ Mr. Scott-Hopkins
Once again, I am grateful to the hon. Member for bringing forward the Amendment, which fulfils the undertaking which he gave in Committee. I agree that it is much better to put the matter in a positive way as in the Amendment, rather than to leave it out. This was a real difficulty which could have arisen with an Authority which had so many trade members on it who might be indirectly concerned with a contract.
I am still sorry that the Parliamentary Secretary has not been able to take into account the other point that I made in Committee concerning the words "indirectly interested in". They take the matter extremely wide and involve almost 296 every trade member on the Authority. If we interpret the words strictly it is clear that they are almost certain to be indirectly interested in almost every contract made in the trade. Therfore, the members will be involved and to a certain extent debarred.
I asked the hon. Member to consider the matter bearing in mind the fact that members can sit and be part of a quorum as well as carrying out other functions. I appreciate they can now be part of a quorum, and the Authority can get on with its work. I hope that the hon. Member will think about the other point that I made, which is wide of the Amendment but still very relevant to ths general issue.

§ Mr. Hoy
As I promised the hon. Member, I went into this matter. There is no doubt that the question of indirect interest in a contract raises a much more difficult issue. I am advised that when the Authority is considering a certain contract for the purchase or sale of cereals, representatives of trade interests on the Authority who were concerned, in their private capacity, with the purchase or sale of cereals might be deemed to have an interest. Similarly, representatives of growers on the Authority who had grain of their own to sell could also be regarded as having an indirect interest in a certain contract for the purchase of cereals.
However, I do not think that this need militate against the efficient conduct of the Authority's business where it is concerning itself with a certain contract. The point is that even if members of the Authority are precluded by the provisions of the paragraph from taking part in any deliberation or decision about a certain contract, it should nevertheless be possible to take them into account for the purpose of constituting a quorum, so that the Authority can take decisions on matters before it. This was the principle behind the Amendment which was moved in Committee, and it was because of that that I have implemented the undertaking that I gave.