HC Deb 19 February 1968 vol 759 cc139-46

Amendments made: No. 22, in page 5, line 22, leave out paragraphs (b) and (c) and insert:

(b) that the contract satisfies the conditions in sub-paragraph (2) or as the case may be sub-paragraph (3) below.

No. 23, in line 29, at end insert:

(2) Where the consideration payable for the hiring is expressed in sterling, the said conditions are that there is no provision for the alteration of the terms of the contract on a change in the exchange rate of sterling with any other currency or medium of exchange, or on the withdrawal of export rebates, and—

  1. (a) either that the consideration is payable in sterling, or
  2. (b) where the consideration is not payable in sterling, that there is no provision for the conversion of the expressed sterling amount into the currency in which the consideration is payable to be at a rate of exchange which was the rate prevailing at some time before 19th November 1967.

(3) Where the consideration payable for the hiring is not expressed in sterling, the said conditions are—

  1. (a) either that the consideration is payable in sterling and the contract provided for the conversion of the expressed amount into sterling at a rate of exchange which was the rate prevailing at some time before 19th November 1967, or
  2. (b) that the consideration is not payable in sterling and the contract provided for the expressed amount to be reduced on a change in the exchange rate of sterling with the currency in which it is expressed,
and in either case that there is no provision for the alteration of the terms of the contract on the withdrawal of export rebates.—[Mr. Darling.]

Mr. Higgins

I beg to move. Amendment No. 17, in page 6. line 10, to leave out from "below" to the end of line 13.

The Chairman

With this Amendment we can also consider Amendment No. 18, in page 6, line 14, leave out subsection (2).

Mr. Higgins

The intention of this Amendment will be quite clear. It relates to paragraph 5, which deals with the right of any officer or person authorised by the Board of Trade to obtain documentation to determine whether there should be certification—if that is the right expression—of a claim for an export rebate.

The fact that we have tabled these Amendments clearly indicates that we are of the opinion that the powers sought by the Government under the Bill are too extensive. We want to enable people to obtain an export rebate—if they are entitled to it—on a transaction that is covered by the Bill. This is common ground among hon. Members on both sides of the Committee. At the same time, however, this needs to be checked and verified by the officers of the Board of Trade or Customs and Excise, and it is not unreasonable that they should have powers to call for the appropriate documentation.

Paragraph 5(1) provides that a person claiming a rebate shall furnish within such time as that officer or person may require, such information as may be reasonably necessary to enable the Board of Trade to determine whether a certificate should be issued in respect of that contract, or whether any certificate so issued should be cancelled under paragraph 6 below… That is not objectionable, because the words "may reasonably be necessary" are included. But instead of stopping there, as we suggest, the Clause goes on as follows: and to produce any books or accounts or other document of whatever nature relating to the contract, or to those goods, for inspection by that officer or person at such time and place as he may require. That is a remarkably wide provision. We feel that it is too wide. It is reasonable to require the production of the relevant documents, but why should any books or accounts or other document of whatever nature relating to the transaction be revealed to the officer concerned? All that is required to be produced is the documentation that we have been discussing on the earlier Clauses, namely, such as will show that a contract of a firm sort has been entered into and that the exporter was committed irrevocably to carrying out that contract. Yet suddenly we find these provisions at the tail end of the paragraph.

I need not weary the Committee by going into the matter in greater detail. I can only assume that the Government feel that they must take these wide powers simply to cover themselves in any con ceivable contingency—but if that is the case I hope to hear what kind of contingency the Minister has in mind.

The other Amendment is not dissimilar. Paragraph 5(2) of the Schedule reads: Any such officer or person shall be entitled to take extracts from or make copies of any document produced to him under subparagraph (1) above. This is surely not necessary. We feel rather doubtful whether it is required even in respect of the actual information necessary to enable the Board of Trade to determine whether a certificate should be issued or cancelled. That is a point on which we might be persuaded, but that these officers should have the power to copy and take extracts from any document of any sort with regard to a contract we think to be highly undesirable. I should have thought that the Minister of State would also think it highly undesirable and would therefore feel that these tidying up Amendments were not unreasonable and ought to be accepted.

Mr. Darling

This issue arises on most Board of Trade legislation. Although this is a financial Bill this Schedule refers to Board of Trade legislation. Several hon. Members opposite will remember that they raised this specific issue, and that we had long discussions about it—very useful discussions; I am not complaining—in Committee on the Companies Bill, and that we also debated it on the Industrial Development Bill, and so on.

The powers which we are giving to Board of Trade officials are very wide indeed. Anyone looking at them would inquire why we needed such wide powers. The difficulty arises if we accept the argument and try to define clearly and in all circumstances the limits of the information for which the Board of Trade officials should ask.

The point which worries the hon. Member for Worthing (Mr. Higgins), and which also worried some of his hon. Friends in previous legislation, concerns confidentiality. It should be all right if I could prove—as I am sure that I shall be able to prove—that we cannot limit in a Statute the area of information for which the Board of Trade should ask; and then could prove that there will be no breach of confidentiality, that the Board of Trade inspectors or officials will ask only for the information which they will need in a particular case and that, whatever information is given, this will never, in any circumstances, be revealed to anybody else. If I can do that, I think that the fears of hon. Members will be put at rest.

When we discussed the matter in the Companies Act and in the Bill which provided for investment grants I succeeded in assuring hon. Members that all Board of Trade officials who deal with this kind of information—which goes much wider than the Bill—have the Official Secrets Act drawn to their attention and, as it were, operate under that Act. No hon. Member can give me any case in the course of investment grants or dealing with insurance companies or dealing with company law in which there has ever been any disclosure of information by the Board of Trade. The staff deserve a tribute for the fact that the way in which they operate makes it clear that in no circumstances would any confidential information ever be disclosed to anybody but the officials concerned with the case which they are investigating.

The hon. Member for Worthing was on the right track when he agreed that the Amendment would deny the Board of Trade power to require applicants for a certificate to produce books, accounts and other documents relating to the contracts which have come into question. The contracts would need to be examined by the Board of Trade to make sure that they conformed to the conditions laid down in the Bill. The Board of Trade, however, would be denied power to take extracts or copies of such documents. If the Board of Trade were denied those powers they would be unable to satisfy themselves about the terms of the contract because they would not have the information and would be denied the right to obtain it. They would therefore be unable to issue a certificate. The hon. Member himself said that unless they got the information which satisfied them that it was a valid contract and that it conformed to the terms and conditions of the Bill, they would be unable to issue a certificate.

Mr. Higgins

That is covered by the earlier phrase, such information as may be reasonably necessary to enable the Board of Trade to determine". If the right hon. Member wishes to go wider, then one part of the "reasonably necessary" ought to be deleted and the other part retained. He cannot have it both ways.

9.0 p.m.

Mr. Darling

No. The effect of the Amendments would be as I say.

There might be a greater risk, if the hon. Gentleman is right, of certificates being issued wrongly against an incomplete or misleading disclosure of information. We must have full information in order to decide these matters. That risk could be very real in transactions in which the relevant contracts of sale consisted of exchanges of correspondence in contrast to the formal legal documents, when the withholding of a relevant document or information might not be so noticeable.

Another important aspect of the need for this full provision, without Amendment, is that the Board of Trade also has power to cancel a certificate once issued if indications emerge that the certificate has been issued against incomplete or false information. Therefore, the Board of Trade must have power to look at the books, take copies of documents, and so on.

Mr. Nott

Will the Board of Trade have power to show any of the documents which it has taken from a company for this purpose to, say, the Inland Revenue or to another Government Department? Would that happen in any circumstances?

Mr. Darling

I am quite sure that it would not, but I will check that point before we finish this part of the debate. I am quite sure that the guarantees would apply that I gave on a similar question—asked, I think, by the hon. Gentleman—about information being given to other Government Departments. It was then the problem of the Board of Trade investigation of breaches of exchange control. I do not think that sort of thing would arise here.

I do not know to what extent I have to qualify that assurance in the same way that I had previously to qualify the assurance covering breaches of exchange control, but unless something like that happens—and I am obviously asking for the assurance to be given to me—there is no need to show the documents to other people, because the purpose of the exercise is to satisfy the Board of Trade that the contract conforms to the conditions laid down. The power to call for documents in all the circumstances that I have tried to describe might well be absolutely essential to enable the Board of Trade to check the information on which the certificate was issued, and to call 'or further information which may have been withheld.

I am sure that the point of the Amendment lies in concern about the need for the disclosure of confidential information. I must press that point about the scope of the information required. This kind of investigation does not arise regularly, but only in cases where full information has not been given to the Board of Trade in the first place.

The Department's officials go along in a perfectly friendly and by no means objectionable manner, and say, "We have not got the full information—will you please give it to us?" If the firm says, "We have had enough of these requests to provide information for the Board of Trade," we reply that we have power to ask for the information, and from that poi it onwards it usually happens that the powers do not need to be used. There is no further pressure. I would hope that in all these cases we would have very little pressure indeed, but the fact remains that we are dealing with public funds and we must have the information. We cannot prescribe in the terms of the Bill any limitation of information for this purpose.

If that point is accepted, as I am sure it must be, what is concerning hon. Members on both sides is this disclosure of confidential information or documents—documents that may be held, for example, by third parties such as solicitors or bank managers. I can give the Committee an absolute assurance that, as in all other Measures where the Board of Trade has this kind of power to require documents to he disclosed, no information will be given to any other people unless an issue like exchange control comes up. We do not need to write anything into the Bill, because it is our practice to follow what the Monopolies Act says: Nothing in this section shall be taken to require any person who has acted as a counsel or solicitor for any person to disclose any privileged communication made to him in that capacity. We never ask for that kind of information to be disclosed, or we try to avoid asking for it, and I repeat the assurance that in all the Measures the Board of Trade looks after we shall obey this rule about confidentiality that we have imposed upon ourselves.

Amendment negatived.

Schedule agreed to.

Bill reported, with Amendments; as amended, considered.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to standing Order No. 55 (Third Reading), and agreed to.

Bill accordingly read the Third time, and passed.