§ Amendment proposed [28th June]: No. 471, in page 13,line 37, to leave out subsection (1)—[Sir Elwyn Jones.]
§ Question again proposed.
§ 3.31 p.m.
§ Mr. Brynmor John (Pontypridd)When the operation of the guillotine rendered any further contribution to the debate last Wednesday ultra vires I was turning my attention to the report of the Jenkins Commitee, which I thought had been rather patronisingly played down by hon. and learned Members on the Government side.
That Committee found that the desire to remove the ultra vires doctrine was a wish to invest a company with the powers of a natural person. But it was pointed out that the company could not act as a natural person because it had to act through delegates and agents—namely, its directors. I repeat what I said earlier, that I am unwilling to see a company invested with all the advantages of a natural person without any of the legal disadvantages. I am also unwilling to see it have the advantages of an artificial creation without the disadvantages of that creation. That illustrates the stupidity of trying to reform company law in a subsection of a Bill on an entirely different matter. It is a partial reform and an enforced reform. If a company is to be given powers of a natural person towards which the subsection goes some way, I would look for a curtailment of the doctrine of limited liability so as to increase the personal liability of directors—financially as well as legally.
It is said that Clause 9(1) is necessary to make our company law conform to the EEC directive 68/151. But here I repeat 244 what was said by my hon. Friend the Member for Llanelly (Mr. Denzil Davies). What was the purpose of introducing those provisions into a system of law which is largely unknown on the Continent?
My second point is: do we as a country need to conform to article 9(2) as well as (1)? If so, what is the real legal significance of the wording of that paragraph in this context? Is it the case, as appears to me, that paragraph (2) modifies the statutory ultra vires as well as the ultra vires applying to the memorandum and articles of association, even though third parties may know of the existence of a limitation in the articles?
If that is so, if we need to conform to article 9(2) of the directive, is it not a fact that it is not incorporated in Clause 9(1) as it is at present drafted and, therefore, that the Bill does not wholly meet our obligations to bring our law into line with Community law and that we may require at some later stage further modification of the doctrine? If it incorporated article 9(2) what is the value of the purchasers being protected only if they are acting in good faith? According to article 9(2) the company can never rely upon any statutory modification or modification in the articles or memorandum. Whether or not that party knows of any limitation it cannot be presumed in English law to be acting in good faith. In other words, the Minister must make clear to us what is the value of limiting the protection to a person acting in good faith in the context of the Bill.
I hope we shall have precise and detailed answers. It is time that on one subsection of one Clause we should have precision, because otherwise the law will be unclear. The overall answer to the problem is that the Government should withdraw the subsection and replace it with a Measure which will place our need to modify our company law so as to conform with that of the EEC within a coherent overall Measure of change.
§ Mr. Michael English (Nottingham, West)I support my hon. Friend the Member for Pontypridd (Mr. John) in his last suggestion. We know that the Government do not want to amend the Bill in the House of Commons but they could adopt his suggestion in the House of Lords without even troubling themselves with a Report stage in this House. I do 245 not wish to elaborate the point at length on this Clause.
Several of my hon. Friends and hon. Members on the Government side have remarked upon the odd points of the Clause, the oddest of all being that it is here at all. Earlier in the Bill we have taken power to do exactly the things the Clause does by Order in Council laid before the House of Commons. The provision is in the Clause but it has obviously been put in hurriedly, and my hon. Friends have already mentioned the peculiarity of the word "directors". It is fairly obvious these days in the case of large companies that many transactions are not decided by the directors.
One point does not appear to have been mentioned. We discused at great length the operation of the ultra vires rule in Britain in relation to a company. No one has mentioned its operation in relation to any other body. Other hon. Members have remarked upon the differences between the European Roman law system, where the doctrine of ultra vires does not exist, and our own system, where it does. It has been pointed out that the ultra vires rule is relatively recent in the history of English law. But it also exists in relation to other corporations than companies. It is a general doctrine which is present in English law and it is absent in the Roman law systems. The result of the Clause is therefore to alter our company law in such a way that we alter it towards the European system but do not do the same for these other corporations. In Europe the other corporations are on the same footing as companies. At the moment in England they are all subject to the ultra vires rule. It shows that the Clause has not been fully thought out by the Government. Someone in the recesses of Whitehall has said that it is necessary to have a Clause which brings British law into conformity with European company law. What has not been realised is that what is wanted is a Clause bringing our rule of ultra vires into conformity with Roman law, where it does not exist but where in certain cases other things have been put in its place.
We all know that in Britain the ultra vires rule applies to the Government themselves. If they produce an Order in Council or a ministerial order which is not in conformity with the Act giving a 246 Minister power to make such an order, that can be held to be ultra vires and voided by the courts. The same sort of situation did not exist in Roman Law, which is precisely why in the Roman law system the French Conseil ďEtat, for example, had to invent the doctrine of abuse of power, which is somewhat different from our ultra vires rule but was designed for the same purpose of preventing the Executive doing what the Legislature had not permitted it to do.
The other case where the rule is of interest is that of local authorities and nationalised corporations. I see no mention in the Bill of the position of nationalised corporations with regard to the ultra vires rule. Do the Government wish them to be on the same footing as companies? At present they are. If a nationalised corporation acts outside the powers laid down for it by the original Act of Parliament, something can be done about it in the courts. If the position of companies in this respect is being altered, what is the position of an individual who may be engaged in exactly the same sort of commercial transaction with a nationalised industry as he would be with a company? He may be selling goods to them both. Under the Clause it is now said that if the company he is dealing with goes outside its powers and he does not know about it, the transaction is valid, but it is still said, presumably, that if a nationalised industry goes outside its powers, the transaction, whether the individual knows about it or not, is invalid. From the point of view of the other party, that is a ridiculous system. At present, everybody at least knows that the ultra vires rule applies to all corporations. Now, apparently, it will not apply to some. I should like to know whether the Government think that is desirable for the general commercial law of the country.
With regard to local authorities, strangely enough in the old mediaeval law of England we used to be much nearer the Continental system. It used to be held to be true that a chartered corporation could do anything that a natural person could do. Subsequently, in the nineteenth century, judicial decisions became much more restrictive as to whether or not that was possible. In any case, many local authorities, such as the county councils, the new major authorities we are 247 setting up under the Local Government Bill, and so on, are not chartered corporations, so the rule is relatively irrelevant. But why should a person dealing with a local authority be placed in any different position from a person dealing with a company?
Like my hon. Friend the Member for Pontypridd (Mr. John), I should like the Government to think again about the Clause. I would go a little further than my hon. Friend and suggest not merely that they should think about a revision of company law in this respect but that if they wish to deal with the ultra vires rule they should deal with transactions that individuals or corporations have with all other corporations.
§ Sir Brandon Rhys Williams (Kensington, South)I tremble, after hearing the two learned hon. Gentlemen who have just spoken on the subject, to enter into such a technical field, but I have always felt that the ultra vires rule was one of the nastiest and most quirky corners of our company law. My first reaction is to give a warm welcome to a Clause which will do away with it.
I should like to address one question to my own Member, the hon. Member for Pontypridd (Mr. John), who has convinced the Committee of his knowledge of the subject. He said that it would be wrong for a company to have the advantages of trading as a person without also being exposed to the disadvantages. But I am not certain that it is correct that the company would not be exposed to those disadvantages, nor am I certain what those disadvantages are. The hon. Gentleman will not find it difficult to explain to the Committee what he meant, but I should be grateful if he would explain it to me.
§ 3.45 p.m.
§ Mr. JohnI normally hold surgeries for constituents, but I will use the Floor of the Chamber on this occasion.
What I meant was that if the company is being set free from the ultra vires doctrine, its agents, its directors, are free to contract in the same way as a natural person, untrammelled by any objects. But the doctrine of limitation of liability gives them a great advantage over the natural person. What I am saying is that 248 if the Government are to confer on them the advantage of a natural person, their freedom to contract, the Government should also consider the disadvantages—namely, the avoidance or curtailment of the doctrine of limitation on liability, so that directors who make such decisions stand by their own financial judgment to the extent of their personal fortunes.
§ Sir B. Rhys WilliamsWe are getting so far out to sea that I have almost lost touch with land. We are now introducing the question of limited liability, which I think is one of the most important main springs for the further reform of company law.
Is not the hon. Gentleman making the best the enemy of the good, in that it is an advance in our company law to do away with the ultra vires doctrine, even if an enormous lacuna then opens up for further reform of company law? The hon. Gentleman may know, although we did not have the pleasure of his joining us in the Committee considering my own Companies Bill this year, that I am extremely enthusiastic that the Government should do something as soon as possible about company law reform on the grand scale. I hope that a Companies Bill may be introduced in the next Session. It seems to me somewhat querulous, and a mistake, to prevent a small advance simply on the ground that the Government should be introducing a much bigger Bill.
§ Sir Derek Walker-Smith (Hertfordshire, East)I rise only to add one very brief comment to what has been said during the debate. I agree with my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) that the ulra vires rule should go, in so far as it does in the Clause, and that it is not a valid criticism to say that while doing one thing the Bill should do a lot of other things in company law. After all, it is not a Companies Bill as such.
Nor do I think valid the criticism made by the hon. Member for Nottingham, West (Mr. English) in regard to the limitation of the matter in respect of public corporations and local authorities. It is certainly a point that should be considered whether a nationalised industry or public corporation is to be put into a more favourable position than a company.
§ Mr. EnglishI was trying to make the point not so much that the Clause put nationalised corporations in an unfavourable position as that it put other parties who might be dealing with local authorities, nationalised corporations and companies, perhaps selling the same product to them all, in an inconvenient position if they had to understand that one set of law applied to companies and another to some other customers.
§ Sir D. Walker-SmithI follow the point. What I was saying was that there may well be a case for doing the same thing in regard to public corporations in order that persons trading with them should not be at that disadvantage. That is a stronger point than the criticism that the Bill does not go far enough in the reform of company law, but it does not necessarily destroy the efficacy or the virtue of the provision if otherwise it is appropriate.
The position is somewhat narrower than has been suggested. The position really is whether, assuming that it is a good object to do away with the ultra vires principle to the extent set out in the Clause, it is done in a sufficiently clear and satisfactory way. There is general agreement, although some doubts were expressed on certain matters about creditors and the like, about the desirability of doing away with the ultra vires principle to the extent set out in the Clause. My understanding is that the effect of the Clause is not to do away with the ultra vires principle in toto regarding companies.
There are presumably two aspects of the ultra vires principle regarding companies, one of which is to enable the company to repudiate transactions with third parties which go outside the objects of the company defined in the memorandum and articles of association. However, there is surely a second and important part of the principle of ultra vires; that is to say, that part of it which enables members of a company to restrain their directors from acting ultra vires the objects of the company. The Clause does away with certain modifications and safeguards on the first of those ultra vires aspects. The second is unaffected, and it is right it should be so. It seems right that part of the ultra vires principle, which goes to trading 250 with third parties, should be done away with, since it is hardly possible as a practical aspect of modern commercial life for people entering into ordinary trading transactions to make themselves aware of the objects of the company in detail. No doubt it would be prudent to do so but theoretical prudence and commercial practicality are often far apart.
I remember on one occasion observing that the only reasonably certain way to win a building contract case was for the contractor to take the operation of the works from the start precisely as if he were fighting the case backwards. I went on to say that it is not really a viable proposition because of the difference between the commercial climate, the climate of the site, so to speak, in that case, and the theoretical requirements of law.
Therefore, I agree with those who have said that the ultra vires principle should go to the extent set out in the Clause. After all, as we have been reminded, its abolition was recommended as long ago as the Cohen Report, albeit not wholly reproduced in the later Jenkins Report. I shall certainly not oppose the subsection, provided that we can have a reassurance that its drafting is less unsatisfactory than it appears. At the start of the subsection the word "dealing" is not clear. Is it intended to be wider than "trading", and, if so, in what respects? The main disadvantage is the phrase,
decided on by the directors".That is a phrase which we understand to be a loose adaptation of the phase in Article 9 of the directive—…the organs of the company…".We want to know what this means in practice, or what it is intended to mean, and whether it is reasonably certain that its intended meaning will be valid.
§ Mr. Ronald King Murray (Edinburgh, Leith)Does the right hon. and learned Gentleman agree that it is highly unsatisfactory to seek to amend company law in a Bill to which the Government are not prepared to allow any Amendment?
§ Sir D. Walker-SmithI was coming on to that point, because this is a subsection which requires improvement or amendment. We do not know whether "directors" means the totality of the directors, a quorum of the directors or 251 an individual director—for example, the managing director enjoying delegated powers. We do not know whether an express delegation by his colleagues for a particular transaction would bring the managing director within the definition "decided on by the directors", whereas his conduct in the ordinary delegation under the Companies Acts might put him in a different position. We do not know exactly what the position would be if he were acting as an agent of the directors, having ostensible authority, and whether that would bring his single act to be understood as an act of all the directors, which therefore would come within the definition "decided on by the directors".
These appear to be defects or imprecisions in drafting, and I agree with what has been said on this point by hon. Members opposite. It is difficult to think that we would not get better or clearer drafting if we started de novo in this matter in an English companies Bill designed to exclude the ultra vires principle in favour of bona fide traders with companies or if the Government would reconsider the matter and propose clarifying Amendments on Report.
This situation illustrates the disadvantage of not having a Report stage, though in this particular case, as the hon. Member for Nottingham, West said, it could be dealt with by an Amendment in the other place. The other place is quite an appropriate place for dealing with matters of this sort. We can get this wording in order, or should be able to do so, because even if article 9 of the directive is not clear in all respects we are not bound by the words of a Community directive. We are at liberty to achieve its result in whatever form of words we wish.
I thought it right to indicate my position on this matter. I consider that the basic object of the subsection is a good one, even if it is not a particularly burning issue. I should not on that account wish to support an Amendment to omit it. On the other hand, the drafting is imperfect and should be improved. I should prefer not to have to vote to take out the subsection because I approve of its objects. However, unless we can have a reasonable degree of reassurance on the various points of drafting, it is 252 possible that one might be constrained, albeit reluctantly, to do so.
§ 4.0 p.m.
§ The Minister for Trade (Mr. Michael Noble)I am grateful to the hon. Member for Pontypridd (Mr. John) because his right hon. and learned Friend the Member for West Ham, South (Sir Elwyn Jones) said in opening this debate that the requirement of all lawyers was complete clarity and precision. As the debate has been almost but not entirely taken up with lawyers and their varying views, it was a great kindness to me that the hon. Member for Pontypridd intervened late last week, enabling me to obtain the views of our own lawyers, and perhaps to answer with greater clarity and precision than I would have done if I had had to make this speech off the cuff.
Whereas I have found all lawyers to seek clarity and precision, I have not always found that all lawyers regard the same things as equally clear and precise. However, I shall genuinely do my best, as I am advised, to clear up the many questions which have been asked during the course of this interesting debate.
The right hon. and learned Member for West Ham, South found not only the subsection but the directive upon which it is based obscure and ambiguous. Doubts about the directive were also expressed by the hon. Member for Llanelly (Mr. Denzil Davies), who asked why a directive relating to freedom of establishment should be concerned with company law. The hon. Member for Pontypridd said he found paragraph 2 of article 9difficult and loosely phrased.
The directive was made under Chapter 2 of the EEC Treaty. Therefore, it relates, as the hon. Member for Llanelly rightly said, to freedom of establishment. The article under which it was made was 54(3)(g) which provides that ths Council shall issue directives to co-ordinate to the necessary extent the guarantees which member States require of companies so as to protect the interest of both members and outsiders.
The Six, when it drew up the treaty, no doubt considered that a member State could be expected to allow freedom of establishment in its territory to companies incorporated in other member States only if those companies were subject to laws which provided adequate 253 safeguards for those who invested in them and did business with them. These laws are mainly the company laws of the member States.
A directive relating to freedom of establishment, when it is made under article 54(3)(g) of the treaty, will require member States to provide safeguards which they will usually provide by means of their company laws.
I hope that explanation will satisfy the hon. Member for Llanelly that a directive relating to freedom of establishment may properly be concerned with company law.
The basic requirement of paragraph 1 of article 9 of the directive is that an act done by an organ of a company towards a third person shall bind the company even though that act is not within the objects of the company.
We consider that a company incorporated in Britain has two organs—the company in general meeting and the board of directors—and only the second of those, the board of directors, is relevant to the requirement. The requirement is, therefore, that an act done by the board of directors of a company towards a third person shall bind the company even though that act is not within the objects of the company.
Subsection (1) of the Clause gives effect to that requirement by providing that
In favour of a person dealing with a company…any transaction decided on by the directors shall be deemed to be one which it is within the capacity of the company to enter into".The right hon. and learned Member for West Ham, South said, in relation to the word "capacity", that he found the language of the subsection difficult. He observed that the proviso in the article, to the effect that a company was not to be bound if the act exceeded the powers which the law confers or allows to be conferred on the organ, was not reflected in the subsection. I am advised that a company has capacity to enter into any transaction which is in pursuit of the objects expressly stated in its memorandum or which is ancillary to the pursuit of those objects.The subsection provides that, in favour of a person dealing with a company, a transaction decided on by the directors shall be deemed to be within the 254 capacity of the company; that is, if the transaction was not within the capacity of the company it shall be treated as though it were within the capacity. If the transaction is to be so treated it must be one that would have been within the capacity of the company if the company's memorandum had included an appropriate object.
Section 1 of the Companies Act, 1948, states that persons may associate to form a company for any lawful purpose. It follows that a transaction may be deemed to be within the capacity of the company if it is lawful, but not if it is unlawful.
The right hon. and learned Member for West Ham, South came to this conclusion, as he said that the subsection could mean that the transactions which bind the company are not free of any limitation imposed by the general law. The subsection does not protect a person who buys a section of the M1, nor, as the hon. Member for Llanelly feared might, does it protect a subsidiary company which receives, without giving any consideration, assets or money from its parent company.
I should like to put one very small point on the record which seemed to me to be in some danger last week. There is apparently a distinguished professor—I think Professor Gower—who in talking about gold mines suggested that it would be very improper if one were to buy a gold mine and found that instead one had got a fish and chip shop. As a person who until a few years ago was responsible for a very large number of fish and chip shops—and if hon. Members will forget the events of the last few days—I should like to record that the fish and chip shops are exceedingly good businesses, extremely well run. I should hate to think that the House had recorded for ever that a fish and chip shod was necessarily a somewhat disreputable thing one might get in mistake for a gold mine.
§ Sir Elwyn Jones (West Ham, South)Would the right hon. Gentleman not agree that it is only in a figurative sense that a fish and chip shop is a gold mine?
§ Mr. NobleI agree with the right hon. and learned Gentleman on that point. Fish and chip shops seem to be under a considerable cloud, as mentioned by 255 the right hon. and learned Gentleman, by my hon. and learned Friend the Member for Solihull (Mr. Grieve) and one or two other hon. Members in what appeared to me to be a pejorative sense. I was hoping to set the record straight that they could be exceedingly good and pleasant things, and could make money.
I said that the basic requirement of paragraph 1 of article 9 was that a company should be bound by a transaction decided on by its directors although that transaction was not within the objects of the company. The paragraph permits a departure from that requirement where the company can prove that the person with whom it entered into a transaction knew that the transaction was outside the objects of the company or could not in the circumstances have been unaware of that fact.
The subsection makes such a departure by requiring a person who deals with a company, if he is to benefit from the subsection, to deal in good faith. The meaning of "good faith" troubled the right hon. and learned Member for West Ham, South and, I think, the hon. Member for Cardigan (Mr. Elystan Morgan). The subsection provides some guidance. It provides explicitly that a person who is a party to the kind of transaction with which the subsection is concerned shall not be bound to inquire as to the capacity of the company to enter into it. The fact that he had not examined the company's memorandum would not therefore be ground for holding that he had not dealt in good faith, even though, as the hon. Member for Cardigan suggested, under our law as it stands his failure to do so might be regarded as negligence.
As for other grounds for holding that he had not dealt in good faith, the subsection provides that he shall be presumed to have acted in good faith unless the contrary is proved. Proof that he had actual knowledge that the transaction was beyond the capacity of the company would be proof that he had not acted in good faith. A person must act honestly if he is to act in good faith. If he is reckless or negligent, his behaviour might not amount to dishonesty or bad faith. Recklessness or negligence might lead to his entering into a transaction which was unlawful and would have 256 been unlawful whatever the company s objects.
If that were so, he would not have the benefit of the subsection. However, the reason would not be that he had failed to act in good faith; it would be, as I have explained, that the subsection is relevant only to a transaction which would have been within the company's capacity had it a relevant object in its memorandum.
§ Mr. Douglas Jay (Battersea, North)Has the right hon. Gentleman now said that the phrase "decided by the board of directors" means the board of directors and not one or two individual directors? If that is so, should it not be made clear, and is this not a respect in which the Bill should plainly be amended?
§ Mr. NobleI am coming to this point, which was raised by a number of hon. and right hon. Members. Paragraph 1 of article 9 is to do with the limitation to the powers of the directors of a company imposed by the objects of the company. It requires, provided that certain conditions are satisfied, that this limitation be disregarded so far as the rights of the person contracting with the company are concerned. However, such a person may be affected not by a limitation to the capacity of the company but by a limitation to the powers of the directors.
This would be so where the articles give to the directors powers which fall short of the full powers of the company. Paragraph 2 of article 9, which the hon. Member for Pontypridd asked me to explain, deals with this point. The paragraph provides that limits on the powers of the directors, arising under the statutes or from a decision of the competent bodies, may never be relied upon, even if they have been disclosed. The statutes to which the paragraph refers are in Britain the company's articles, and a decision by the competent body is a resolution of the company in general meeting which would lead to a change in the articles.
The subsection implements this paragraph by providing, in favour of a person dealing with a company, not only that a transaction decided on by the directors shall be deemed to be one which it is within the capacity of the company to enter into, but also that the powers of 257 the directors to bind the company shall be deemed to be free of any limitation under the articles of association and that a party to a transaction so decided shall not be bound to inquire as to any such limitation on the powers of the directors.
Some hon. Members have spoken as though the subsection abolishes the doctrine of ultra vires. As my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) and my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) have said, this is not so. The subsection does not alter the contract between shareholders and the company; it only affects third persons dealing with the company. It does not absolve directors from liability to compensate the company if they act outside the powers of the company or outside their own powers. They can also be restrained from acting beyond these powers, as they were in the Daily News case which was mentioned by the hon. Member for Llanelly. This is not affected by the subsection.
§ 4.15 p.m.
§ I have explained that the words "the directors" in the subsection mean the board of directors. I have not commented on the point made by the right hon. and learned Member for West Ham, South about the managing director who enjoys the very wide powers which can be conferred upon him under regulation 109 of Table A of the Companies Act, 1948. Where the directors of a company have conferred upon a managing director substantially all their powers relevant to transactions with third persons to the exclusion of their own powers, that director is the only director who can decide whether a transaction is one which the company shall enter into. In such a case the words "the directors' in the subsection would mean the "managing director". Similarly, the words could mean a group of two or more managing directors if the directors had conferred all their relevant powers to the exclusion of their own powers on such a group.
§ The subsection does not aim at wholly relieving a person who contemplates entering into a transaction with a company from the need to make inquiries.
§ Mr. Tom Normanton (Cheadle)May I ask how one deals in practice with the situation where there are no managing 258 director appointments—and there are a number of situations where this applies—and where the appointment of a managing director confers upon the recipient powers and authority way beyond those which exist at present? I raise this in a constructive sense.
§ Mr. NobleI would imagine that if there was no managing director in a company the powers which the directors have would be the relevant ones. If there is a managing director then the extent to which he becomes the relevant person according to this subsection would depend entirely on what powers the directors had given him to make decisions and under which he acted.
§ Mr. JaySurely if the phrase means what the right hon. Gentleman has now told us it means, the Bill should say so? The point still remains that the Bill ought to be amended.
§ Sir Elwyn JonesMay I intervene at this point, too? If "the directors" means "the board of directors", should not the Bill say that? In dealing with good faith the submissions that have been made by the right hon. Gentleman seem to go far beyond mere construction of the words of the subsection. In relation to negligence and recklessness there seems to be an attempt to state matters of law not covered at all by the subsection. If that is the case, then again the subsection should be amended to provide for it.
§ Mr. NobleFar be it from me to try to interfere with the points of view which hon. and learned Members may hold. All I was trying to do was to set out, as I understand it, what the English law is on this point and to saw how far, if at all, it is altered by the particular directive to which this Clause refers.
§ Mr. JohnThe right hon. Gentleman has devoted a great deal of this explanation to defining "organs of the company" as being the board of directors. Now he says that it is not an organ of the company which is being benefited but any one, two or three managing directors to whom power is delegated. Either we are carrying into effect the purpose of article 9(1), in which case we are dealing with organs of the company and the board of directors properly so called, or we are going much wider than this; and the 259 latter appears to be the case at the moment.
§ Mr. NobleThis is a difficult field. In the directive we have to deal with what it calls "the organs of the company". As we understand it, the only relevant organ of the company is the board of directors. If one assumes that a board of directors has delegated its functions in certain respects to one or more managing directors, he or they, for the purpose of this, then become the organ of the company. That is as I understand it, and I believe it is right.
§ Mr. Ronald King MurrayI should like to make a non-legal intervention. The hon. Gentleman has mentioned the directive again. I wonder whether he would accept that many of the difficulties in this debate have arisen from the English of article 9 of the regulation we are dealing with. It seems to us on this side of the Committee that paragraph (2) of that article is barely intelligible in the English in which it is drafted. I want to draw the Government's attention to this and to express the hope that when an authentic text is issued for 1st January, 1973, it will be in intelligible English. I would draw the attention of the Government to Campbell on Community Law in which the translation in paragraph 2307 of the same article of the same directive is in intelligible English.
§ Mr. NobleIf one layman may speak to another across the Floor of this House, I am bound to admit that, even if a text is authentic, when it is in legal language I sometimes find it very difficult to understand. Having said that, I certainly take the point the hon. and learned Gentleman has made.
The subsection does not aim at wholly relieving a person who contemplates entering into a transaction with the company of the need to make inquiries. However the company may be organised——
§ Mr. Elystan Morgan (Cardigan)My question concerns the point which the hon. Gentleman was just about to leave—the meaning of "directors" in this subsection. We all appreciate by now what the present state of the law is, and, even accepting that the terms of the directive are clear, nevertheless we must take 260 responsibility for the way in which a court would have to approach the question of interpreting this provision if it became law. At the moment it is perfectly clear that it is shrouded in uncertainty, and in those circumstances I would respectfully ask the Minister whether he would not be prepared to allow an Amendment to be made by adding after "directors" the words "collectively or singly or otherwise in accordance with powers lawfully conferred upon them by the said company". It seems to me that at the moment this is in a state of fundamental and fatal in precision and that that can be removed only by making an Amendment on these lines.
§ Mr. NobleThat is an attractive idea but I believe that it is totally inaccurate because I am advised that the position is absolutely clear and I do not believe that the hon. and learned Gentleman's Amendment would make the position any different. I will continue with what I was saying and start again at the beginning of the sentence.
However the company may be organised, if the proposed transaction is important or of an exceptional nature the person contemplating entering into it would be wise to obtain an assurance that it had been decided on by the directors. In the exceptional case I have mentioned, the assurance he might obtain is that all decisions are made by the managing director and that the managing director has decided on the transaction in question. What the subsection does is relieve the person of the need also to enquire whether the transaction is within the capacity of the company and the powers of the directors.
§ Mr. JohnTo the extent, surely, that we are not incorporating article 9(2), because if the hon. Gentleman is right in his explanation about the limitation on the powers of the directors, article 9(2) says that the limit on the powers of the organs of the company—and that is a limitation on the directors—may never be relied upon against third parties even if they have been disclosed? So the fact is that, quite contrary to what the hon. Gentleman is now saying about being bound to inquire about the limitation on the powers of the directors, if we were carrying out article 9(2) he would never 261 be bound to do so, because the company could never rely upon it as against him.
§ Mr. NobleAgain I may get a carrier pigeon from the Official Box, but I am told that we do exactly in this Clause what we are required to do in article 9(2).
My hon. and learned Friend the Member for Darwen asked for an explanation of the concept of nullity which appears in Section III of the directive. Like him, I was a little surprised that this got mixed up with company law, but I understand that in some countries of the Six a company may be declared to be a nullity on the ground that there was a failure to observe some formality when it was incorporated. Section III of the directive is concerned with the protection of third persons from the effects of such a declaration.
In this country, a certificate of incorporation given by the registrar of companies in respect of an association is conclusive evidence that the association is a company authorised to be registered, and duly registered. A declaration of nullity cannot be made in Britain. We need to make no provision in this Clause based on Section III of the directive.
The subsection will make a useful change in our law on the lines recommended by the Jenkins Committee. It will also enable us to comply with obligations as a member of the Community. As my hon. and learned Friend the Member for Solihull said, it kills two birds with one stone.
I think that the point made by my right hon. and learned Friend the Member for Hertfordshire, East was perfectly right, that this goes a considerable way towards the recommendations of the
§ Jenkins Committee. It is not an attempt to implement those recommendations—that may be made later, as my hon. Friend the Member for Kensington, South (Sir B. Rhys-Williams) suggested, in a companies Bill—but it is moving in the right direction, the direction to which many hon. Members on both sides of the House have asked the Government to direct their attention on other matters.
§ My right hon. and learned Friend asked me whether dealing is confined to trading, and I think some other hon. Gentleman—perhaps the hon. Member for Pontypridd—also raised this. It is not, but dealing which is not trading may be unenforceable for other reasons than lack of vires. There might be no consideration for such a dealing, and in English law a contract for which no consideration or quid pro quo has been given cannot be enforced unless it be under seal.
§ The hon. Gentleman the Member for Nottingham, West (Mr. English) asked me why this did not apply also to local authorities and nationalised industries or corporations. The simple answer is that, as he suspected, it does not. All that we are doing in Clause 9 is to bring our law into conformity with the particular directive with which it is concerned. We are not trying to amend the whole of our company law in this section.
§ With those remarks, which I hope have cleared up at least some of the points, if not all of them, I recommend that the Committee should not accept this Amendment.
§ Question put, That the Amendment be made: —
§ The Committee divided: Ayes 216, Noes 241.
265| Division No. 259.] | AYES | [4.29 p.m. |
| Abse, Leo | Boardman, H. (Leigh) | Cohen, Stanley |
| Allaun, Frank (Salford, E.) | Booth, Albert | Coleman, Donald |
| Allen, Scholefield | Bottomley, Rt. Hn. Arthur | Concannon, J. D. |
| Archer, Peter (Rowley Regis) | Bradley, Tom | Cox, Thomas (Wandsworth, C.) |
| Armstrong, Ernest | Brown, Robert C. (N'c'tle-u-Tyne, W.) | Crawshaw, Richard |
| Ashley, Jack | Buchan, Norman | Cronin, John |
| Ashton, Joe | Buchanan, Richard (G'gow, Sp'burn) | Crosland, Rt. Hn. Anthony |
| Atkinson, Norman | Butler, Mrs. Joyce (Wood Green) | Crossman, Rt. Hn. Richard |
| Bagier, Gordon A. T. | Callaghan, Rt. Hn. James | Dalyell, Tam |
| Barnett, Guy (Greenwich) | Campbell, I. (Dunbartonshire, W.) | Darling, Rt. Hn. George |
| Baxter, William | Cant, R. B. | Davidson, Arthur |
| Benn, Rt. Hn. Anthony Wedgwood | Carmichael, Neil | Davies, Denzil (Llanelly) |
| Bennett, James (Glasgow, Bridgeton) | Carter, Ray (Birmingham, Northfield) | Davis, Clinton (Hackney, C.) |
| Bidwell, Sydney | Carter-Jones, Lewis (Eccles) | Davis, Terry (Bromsgrove) |
| Biffen, John | Castle, Rt. Hn. Barbara | Deakins, Eric |
| Bishop, E. S. | Clark, David (Colne Valley) | de Freitas, Rt. Hn. Sir Geoffrey |
| Blenkinsop, Arthur | Cocks, Michael (Bristol, S.) | Dell, Rt. Hn. Edmund |
| Dempsey, James | Kerr, Russell | Prentice, Rt. Hn. Reg. |
| Doig, Peter | Kinnock, Neil | Prescott, John |
| Douglas, Dick (Stirlingshire, E.) | Lambie, David | Price, J. T. (Westhoughton) |
| Driberg, Tom | Lamborn, Harry | Price, William (Rugby) |
| Duffy, A. E. P. | Lamond, James | Probert, Arthur |
| Dunn, James A. | Latham, Arthur | Rankin, John |
| Edelman, Maurice | Leadbitter, Ted | Reed, D. (Sedgefield) |
| Edwards, Robert (Bilston) | Lee, Rt. Hn. Frederick | Rees, Merlyn (Leeds, S.) |
| Ellis, Tom | Leonard, Dick | Rhodes, Geoffrey |
| English, Michael | Lestor, Miss Joan | Robertson, John (Paisley) |
| Evans, Fred | Lever, Rt. Hn. Harold | Rodgers, William (Stockton-on-Tees) |
| Ewing, Harry | Lewis, Arthur (W. Ham, N.) | Roper, John |
| Faulds, Andrew | Lomas, Kenneth | Ross, Rt. Hn. William (Kilmarnock) |
| Fell, Anthony | Loughlin, Charles | Rowlands, Ted |
| Fisher, Mrs.Doris(B'ham,Ladywood) | Lyon, Alexander W. (York) | Sandelson, Neville |
| Fitch, Alan (Wigan) | Lyons, Edward (Bradford, E.) | Sheldon, Robert (Ashton-under-Lyne) |
| Fletcher, Ted (Darlington) | Mabon, Dr. J. Dickson | Shore, Rt. Hn. Peter (Stepney) |
| Foley, Maurice | McBride, Neil | Short,Rt.Hn.Edward(N'c'tle-u-Tyne) |
| Foot, Michael | McCartney, Hugh | Silkin, Rt. Hn. John (Deptford) |
| Fraser, John (Norwood) | McElhone, Frank | Silkin, Hn. S. C. (Dulwich) |
| Gilbert, Dr. John | Mackenzie, Gregor | Silverman, Julius |
| Ginsburg, David (Dewsbury) | McMillan, Tom (Glasgow, C.) | |
| Gordon Walker, Rt. Hn. P. C. | McNamara, J. Kevin | Skinner, Dennis |
| Gourlay, Harry | Mahon, Simon (Bootle) | Small, William |
| Grant, George (Morpeth) | Marquand, David | Smith, John (Lanarkshire, N.) |
| Grant, John D. (Islington, E.) | Marsden, F. | Spearing, Nigel |
| Griffiths, Eddie (Brightside) | Marshall, Dr. Edmund | Spriggs, Leslie |
| Griffiths, Will (Exchange) | Mason, Rt. Hn. Roy | Stallard, A. W. |
| Hamilton, James (Bothwell) | Mellish, Rt. Hn. Robert | Stewart, Donald (Western Isles) |
| Hamilton, William (Fife, W.) | Mendelson, John | Stoddart, David (Swindon) |
| Hamling, William | Mikardo, Ian | Stonehouse, Rt. Hn. John |
| Hardy, Peter | Millan, Bruce | Strang, Gavin |
| Harper, Joseph | Miller, Dr. M. S. | Strauss, Rt. Hn. G. R. |
| Harrison, Walter (Wakefield) | Milne, Edward | Summerskill, Hn. Dr. Shirley |
| Hart, Rt. Hn. Judith | Mitchell, R. C. (S'hampton, Itchen) | Swain, Thomas |
| Hattersley, Roy | Moate, Roger | Thomas, Jeffrey (Abertillery) |
| Healey, Rt. Hn. Denis | Molloy, William | Torney, Tom |
| Heffer, Eric S. | Morgan, Elystan (Cardiganshire) | Urwin, T. W. |
| Horam, John | Morris, Alfred (Wythenshawe) | Wallace, George |
| Houghton, Rt. Hn. Douglas | Morris, Charles R. (Openshaw) | Watkins, David |
| Howell, Denis (Small Heath) | Mulley, Rt. Hn. Frederick | Weitzman, David |
| Hughes, Rt. Hn. Cledwyn (Anglesey) | Murray, Ronald King | Wellbeloved, James |
| Hughes, Robert (Aberdeen, N.) | Oakes, Gordon | White, James (Glasgow, Pollok) |
| Hughes, Roy (Newport) | Ogden, Eric | Whitehead, Phillip |
| Janner, Greville | O'Halloran, Michael | Whitlock, William |
| Jay, Rt. Hn. Douglas | O'Malley, Brian | Willey, Rt. Hn. Frederick |
| Jenkins, Hugh (Putney) | Oram, Bert | Williams, Alan (Swansea, W.) |
| Jenkins, Rt. Hn. Roy (Stechford) | Orbach, Maurice | Williams, Mrs. Shirley (Hitchin) |
| John, Brynmor | Orme, Stanley | Wilson, Alexander (Hamilton) |
| Johnson, James (K'ston-on-Hull, W.) | Oswald, Thomas | Wilson, Rt. Hn. Harold (Huyton) |
| Johnson, Walter (Derby, S.) | Padley, Walter | Wilson, William (Coventry, S.) |
| Jones, Dan (Burnley) | Paget, R. T. | Woof, Robert |
| Jones,Rt.Hn.Elwyn(W.Ham,S.) | Pannell, Rt. Hn. Charles | |
| Jones, Gwynoro (Carmarthen) | Parry, Robert (Liverpool, Exchange) | TELLERS FOR THE AYES: |
| Judd, Frank | Pavitt, Laurie | Mr. John Golding and |
| Kaufman, Gerald | Peart, Rt. Hn. Fred | Mr. Ernest G. Perry |
| Kelley, Richard | Pentland, Norman | |
| NOES | ||
| Adley, Robert | Bruce-Gardyne, J. | Deedes, Rt. Hn. W. F. |
| Alison, Michael (Barkston Ash) | Bryan, Sir Paul | Digby, Simon Wingfield |
| Allason, James (Hemel Hempstead) | Buchanan-Smith, Alick(Angus,N&M) | Dixon, Piers |
| Amery, Rt. Hn. Julian | Burden, F. A. | Dodds-Parker, Douglas |
| Astor, John | Carlisle, Mark | Drayson, G. B. |
| Atkins, Humphrey | Carr, Rt. Hn. Robert | du Cann, Rt. Hn. Edward |
| Awdry, Daniel | Cary, Sir Robert | Eden, Rt. Hn. Sir John |
| Balniel, Rt. Hn. Lord | Chapman, Sydney | Edwards, Nicholas (Pembroke) |
| Barber, Rt. Hn. Anthony | Chataway, Rt. Hn. Christopher | Elliot, Capt. Walter (Carshalton) |
| Batsford, Brian | Churchill, W. S. | Elliott, R. W. (N'c'tle-upon-Tyne,N.) |
| Beamish, Col. Sir Tutton | Clark, William (Surrey, E.) | |
| Bennett, Dr. Reginald (Gosport) | Cockeram, Eric | Emery, Peter |
| Benyon, W. | Cooke, Robert | Eyre, Reginald |
| Berry, Hn. Anthony | Coombs, Derek | Fenner, Mrs. Peggy |
| Biggs-Davison, John | Cooper, A. E. | Fidler, Michael |
| Blaker, Peter | Corfield, Rt. Hn. Frederick | Finsberg, Geoffrey (Hampstead) |
| Boscawen, Robert | Cormack. Patrick | Fisher, Nigel (Surbiton) |
| Bossom, Sir Clive | Costaln, A. P. | Fletcher-Cooke, Charles |
| Bowden, Andrew | Critchley, Julian | Fookes, Miss Janet |
| Braine, Sir Bernard | Crouch, David | Fortescue, Tim |
| Bray, Ronald | Dalkeith, Earl of | Foster, Sir John |
| Brinton, Sir Tatton | d'Avigdor-Goldsmid, Sir Henry | Fowler, Norman |
| Brown, Sir Edward (Bath) | Dean, Paul | Fox, Marcus |
| Fry, Peter | Loveridge, John | Rippon, Rt. Hn. Geoffrey |
| Gibson-Watt, David | Luce, R. N. | Roberts, Michael (Cardiff, N.) |
| Gllmour, Ian (Norfolk, C.) | McAdden, Sir Stephen | Roberts, Wyn (Conway) |
| Glyn, Dr. Alan | McCrindle, R. A. | Rossi, Hugh (Hornsey) |
| Goodhart, Philip | McLaren, Martin | Rost, Peter |
| Goodhew, Victor | Maclean, Sir Fitzroy | Royle, Anthony |
| Gower, Raymond | McNair-Wilson, Michael | Scott, Nicholas |
| Grant, Anthony (Harrow, C.) | Madel, David | Scott-Hopkins, James |
| Gray, Hamish | Marples, Rt. Hn. Ernest | Sharples, Richard |
| Green, Alan | Mather, Carol | Shaw, Michael (Sc'b'gh & Whitby) |
| Grylls, Michael | Maude, Angus | Shelton, William (Clapham) |
| Gummer, J. Selwyn | Maudling, Rt. Hn. Reginald | Simeons, Charles |
| Gurden, Harold | Mawby, Ray | Sinclair, Sir George |
| Hall, Miss Joan (Keighley) | Maxwell-Hyslop, R. J. | Skeet, T. H. H. |
| Hall, John (Wycombe) | Meyer, Sir Anthony | Smith, Dudley (W'wick & L mington) |
| Hall-Davis, A. G. F. | Mills, Peter (Torrington) | Soref, Harold |
| Hamilton, Michael (Salisbury) | Miscampbell, Norman | Speed, Keith |
| Hannam, John (Exeter) | Mitchell,Lt.-Col.C.(Aberdeenshire.W; | Spence, John |
| Harrison, Brian (Maldon) | Mitchell, David (Basingstoke) | Sproat, Iain |
| Haselhurst, Alan | Money, Ernle | Stanbrook, Ivor |
| Hastings, Stephen | Monks, Mrs. Connie | Steel, David |
| Havers, Michael | Monro, Hector | Stewart-Smith, Geoffrey (Belper) |
| Hawkins, Paul | Montgomery, Fergus | Stuttaford, Dr. Tom |
| Hayhoe. Barney | More, Jasper | Tapsell, Peter |
| Heath. Rt. Hn. Edward | Morgan-Giles, Rear-Adm. | Taylor, Sir Charles (Eastbourne) |
| Higgins. Terence L. | Morrison, Charles | Taylor, Frank (Moss Side) |
| Hiley. Joseph | Mudd, David | Taylor, Robert (Croydon, N.W.) |
| Holland, Philip | Murton, Oscar | Tebbit, Norman |
| Holt, Miss Mary | Neave, Airey | Temple, John M. |
| Hordern, Peter | Nicholls, Sir Harmar | Thatcher, Rt. Hn. Mrs. Margaret |
| Hornby, Richard | Noble, Rt. Hn. Michael | Thomas, John Stradling (Monmouth) |
| Hornsby-Smith,Rt.Hn.Dame Patricia | Normanton, Tom | Thompson, Sir Richard (Croydon, S.) |
| Howe, Hn. Sir Geoffrey (Reigate) | Nott, John | Thorpe, Rt. Hn. Jeremy |
| Howell, David (Guildford) | Onslow, Cranley | Trafford, Dr. Anthony |
| Howell, Ralph (Norfolk, N.) | Oppenheim, Mrs. Sally | Trew, Peter |
| Iremonger, T. L. | Owen, Idris (Stockport, N.) | Tugendhat, Christopher |
| James, David | Page, Rt. Hn. Graham (Crosby) | Vaughan, Dr. Gerard |
| Jessel, Toby | Page, John (Harrow, W.) | Vickers, Dame Joan |
| Johnson Smith, G. (E. Grinstead) | Pardoe, John | Waddington, David |
| Johnston, Russell (Inverness) | Parkinson, Cecll | Walder, David (Clitheroe) |
| Jopling, Michael | Peel, John | Wail, Patrick |
| Joseph, Rt. Hn. Sir Keith | Percival, Ian | Warren, Kenneth |
| Kaberry, Sir Donald | Pike, Miss Mervyn | Weatherill, Bernard |
| Kellett-Bowman, Mrs. Elaine | Pink, R. Bonner | White, Roger (Gravesend) |
| Kersaw, Anthony | ||
| Kimball, Marcus | Price, David (Eastleigh) | Wiggin, Jerry |
| King, Evelyn (Dorset, S.) | Prior, Rt. Hn. J. M. L. | Wilkinson, John |
| King, Tom (Bridgwater) | Proudfoot, Wilfred | Winterton, Nicholas |
| Kinsey, J. R. | Pym, Rt. Hn. Francis | Wolrige-Gordon, Patrick |
| Kirk, Peter | Quenneil, Miss J. M. | Wood, Rt. Hn. Richard |
| Kitson, Timothy | Raison, Timothy | Woodhouse, Hn. Christopher |
| Knight, Mrs. Jill | Ramsden, Rt. Hn. James | Woodnutt, Mark |
| Lamont Norman | Rawlinson, Rt. Hn. Sir Peter | Worsley, Marcus |
| Lane, David | Redmond, Robert | Wylie, Rt. Hn. N. R. |
| Langford-Holt, Sir John | Reed, Laurance (Bolton, E.) | Younger, Hn. George |
| Legge-Bourke, Sir Harry | Rees, Peter (Dover) | |
| Le Marchant, Spencer | Renton, Rt. Hn. Sir David | TELLERS FOR THE NOES: |
| Lewis, Kenneth (Rutland) | Rhys Williams, Sir Brandon | Mr. Walter Clegg and |
| Lloyd, Ian (P'tsm'th, Langstone) | Ridley, Hn. Nicholas | Mr. Kenneth Clarke |
| Longden. Sir Gilbert | Ridsdale, Julian |
§ Question accordingly negatived.
§ Question put, That the Clause stand part of the Bill:—
266§ The Committee divided: Ayes 239, Noes 221.
269| Division No. 260.] | AYES | [4.39 p.m. |
| Adley, Robert | Biggs-Davison, John | Carr, Rt. Hn. Robert |
| Alison, Michael (Barkston Ash) | Blaker, Peter | Cary, Sir Robert |
| Allason, James (Hemel Hempstead) | Boscawen, Robert | Chapman, Sydney |
| Amery, Rt. Hn. Julian | Bossom, Sir Clive | Chataway, Rt. Hn. Christopher |
| Astor, John | Bowden, Andrew | Churchill, W. S. |
| Atkins, Humphrey | Braine, Sir Bernard | Clark, William (Surrey, E.) |
| Awdry, Daniel | Bray, Ronald | Clegg, Walter |
| Balniel, Rt. Hn. Lord | Brinton, Sir Tatton | Cockeram, Eric |
| Barber, Rt. Hn. Anthony | Brown, Sir Edward (Bath) | Cooke, Robert |
| Batsford, Brian | Bruce-Gardyne, J. | Coombs, Derek |
| Beamish, Col. Sir Tufton | Bryan, Sir Paul | Cooper, A. E. |
| Bennett, Dr. Reginald (Gosport) | Buchanan-Smith, Alick (Angus,N&M) | Corfield, Rt. Hn. Sir Frederick |
| Benyon, W. | Burden, F. A. | Cormack, Patrick |
| Berry, Hn. Anthony | Carlisle, Mark | Costain, A. P. |
| Critchley, Julian | Joseph, Rt. Hn. Sir Keith | Quennell, Miss J. M. |
| Crouch, David | Kaberry, Sir Donald | Raison. Timothy |
| Dalkeith, Earl of | Kellett-Bowman, Mrs. Elaine | Ramsden, Rt. Hn. James |
| d'Avigdor-Goldsmid, Sir Henry | Kershaw, Anthony | Rawlinson, Rt. Hn. Sir Peter |
| Dean. Paul | Kimball, Marcus | Redmond, Robert |
| Deedes, Rt. Hn. W. F. | King, Evelyn (Dorset, S.) | Reed, Laurance (Bolton, E.) |
| Digby, Simon Wingfield | King, Tom (Bridgwater) | Rees, Peter (Dover) |
| Dixon, Piers | Kinsey, J. R. | Renton, Rt. Hn. Sir David |
| Dodds-Parker, Douglas | Kirk, Peter | Rhys Williams, Sir Brandon |
| Drayson, G. B. | Kitson, Timothy | Ridley, Hn. Nicholas |
| du Cann, Rt. Hn. Edward | Knight, Mrs. Jill | Ridsdale, Julian |
| Eden, Rt. Hn. Sir John | Lamont, Norman | Rippon, Rt. Hn. Geoffrey |
| Edwards, Nicholas (Pembroke) | Lane, David | Roberts, Michael (Cardiff, N.) |
| Elliot, Capt. Walter (Carshalton) | Langford-Holt, Sir John | Roberts, Wyn Conway) |
| Elliott, R. W. (N'c'tle-upon-Tyne,N.) | Legge-Bourke, Sir Harry | Rost, Peter |
| Emery, Peter | Le Merchant, Spencer | Royle, Anthony |
| Fenner, Mrs. Peggy | Lewis, Kenneth (Rutland) | Scott, Nicholas |
| Fidler, Michael | Lloyd, Ian (P'tsm'th, Langstone) | Scott-Hopkins, James |
| Finsberg, Geoffrey (Hampstead) | Longden, Sir Gilbert | Sharples, Sir Richard |
| Fisher, Nigel (Surbiton) | Loveridge, John | Shaw, Michael (Sc'b'gh & Whitby) |
| Fletcher-Cooke, Charles | Luce, R. N. | Shelton, William (Clapham) |
| Fookes, Miss Janet | McAdden, Sir Stephen | Simeons, Charles |
| Fortescue, Tim | MeCrindle, R. A. | Sinclair, Sir Georgo |
| Foster, Sir John | McLaren, Martin | Skeet, T. H. H. |
| Fowler, Norman | Maclean, Sir Fitzroy | Smith, Dudley (W'wick & L'mington) |
| Fox, Marcus | McNair-Wilson, Michael | Soref, Harold |
| Fry, Peter | Madel, David | Speed, Keith |
| Gibson-Watt, David | Marples, Rt. Hn. Ernest | Spence, John |
| Gilmour, Ian (Norfolk, C.) | Mather, Carol | Sproat, Iain |
| Glyn, Dr. Alan | Maude, Angus | Stanbrook, Ivor |
| Goodhart, Philip | Maudling, Rt. Hn. Reginald | Steel, David |
| Goodhew, Victor | Mawby, Ray | Stewart-Smith, Geoffrey (Belper) |
| Gower, Raymond | Maxwell-Hyslop, R. J. | Stuttaford, Dr. Tom |
| Grant, Anthony (Harrow, C.) | Meyer, Sir Anthony | Tapsell, Peter |
| Gray, Hamish | Mills, Peter (Torrington) | Taylor, Sir Charles (Eastbourne) |
| Taylor, Frank (Moss Side) | ||
| Green, Alan | Miscampbell, Norman | Taylor, Robert (Croydon, N.W.) |
| Grylls, Michael | Mitchell,Lt.-Col.C.(Aberdenshire,W.) | Tebbit, Norman |
| Gummer, Selwyn | Mitchell, David (Basingstoke) | Temple, John M. |
| Gurden, Harold | Money, Ernle | Thatcher, Rt. Hn. Mrs. Margaret |
| Hall, Miss Joan (Keighley) | Monks, Mrs. Connie | Thomas, John Stradling (Monmouth) |
| Hall, John (Wycombe) | Monro, Hector | Thompson, Sir Richard (Croydon, S.) |
| Hall-Davis, A. G. F. | Montgomery, Fergus | Trafford, Dr. Anthony |
| Hamilton, Michael (Salisbury) | More, Jasper | Trew, Peter |
| Hannam, John (Exeter) | Morgan-Giles, Rear-Adm. | Tugendhat, Christopher |
| Harrison, Brian (Maldon) | Morrison, Charles | Vaughan, Dr. Gerard |
| Haselhurst, Alan | Mudd, David | Vickers, Dame Joan |
| Hastings, Stephen | Murton, Oscar | Waddington, David |
| Havers, Michael | Neave, Airey | Walder, David (Clilheroe) |
| Hawkins, Paul | Nicholls, Sir Harmar | Wall, Patrick |
| Hayhoe, Barney | Noble, Rt. Hn. Michael | Warren, Kenneth |
| Heath, Rt. Hn. Edward | Normanton, Tom | Weatherill, Bernard |
| Higgins, Terence L. | Nott, John | White, Roger (Gravesend) |
| Hiley, Joseph | Onslow, Cranley | Wiggin, Jerry |
| Holland, Philip | Oppenheim, Mrs. Sally | Wilkinson, John |
| Holt, Miss Mary | Owen,Idris (Stockport, N.) | Winterton. Nicholas |
| Hordern, Peter | Page, Rt. Hn. Graham (Crosby) | Wolrige-Gordon, Patrick |
| Hornby, Richard | Page, John (Harrow, W.) | Wood, Rt. Hn. Richard |
| Hornsby-Smith.Rt.Hn.Dame Patricia | Pardoe, John | Woodhouse, Hn. Christopher |
| Howe, Hn. Sir Geoffrey (Reigate) | Parkinson, Cecil | Woodnutt, Mark |
| Howell, David (Guildford) | Peel, John | Worsley, Marcus |
| Howell, Ralph (Norfolk, N.) | Percival, Ian | Wylie, Rt. Hn. N. R. |
| Iremonger, T. L. | Pike, Miss Mervyn | Younger, Hn. George |
| James, David | Pink, R. Bonner | |
| Jessel, Toby | Price, David (Eastleigh) | TELLERS FOR THE AYES: |
| Johnson Smith, G. (E. Grinstead) | Prior, Rt. Hn. J. M. L. | Mr. Kenneth Clarke and |
| Johnston, Russell (Inverness) | Proudfoot, Wilfred | Mr. Hush Rossi. |
| Jopling, Michael | Pym, Rt. Hn. Francis | |
| NOES | ||
| Abse, Leo | Bidwell, Sydney | Campbell, I. (Dunbartonshire, W.) |
| Allaun, Frank (Salford, E.) | Biffen, John | Cant, R. B. |
| Allen, Scholefield | Bishop, E. S. | Carmichael, Neil |
| Archer, Peter (Rowley Regis) | Blenkinsop, Arthur | Carter, Ray (Birmingham, Northfield) |
| Armstrong, Ernest | Boardman, H. (Leigh) | Carter-Jones, Lewis (Eccles) |
| Ashley, Jack | Booth, Albert | Castle, Rt. Hn. Barbara |
| Ashton, Joe | Bottomley, Rt. Hn. Arthur | Clark, David (Colne Valley) |
| Atkinson, Norman | Bradley, Tom | Cocks, Michael (Bristol, S.) |
| Bagier, Gordon A. T. | Brown, Bob (N'c'tle-upon-Tyne, W.) | Cohen, Stanley |
| Barnett, Guy (Greenwich) | Buchan, Norman | Coleman, Donald |
| Baxter, William | Buchanan, Richard (G'gow, Sp'burn) | Concannon, J. D. |
| Benn, Rt. Hn. Anthony Wedgwood | Butler, Mrs. Joyce (Wood Green) | Cox, Thomas (Wandsworth, C.) |
| Bennett, James (Glasgow, Bridgeton) | Callaghan, Rt. Hn. James | Crawshaw, Richard |
| Cronin, John | Johnson, James (K'ston-on-Hull, W.) | Parry, Robert (Liverpool, Exchange) |
| Crosland, Rt. Hn. Anthony | Johnson, Walter (Derby, S.) | Pavitt, Laurie |
| Crossman, Rt. Hn. Richard | Jones, Dan (Burnley) | Peart, Rt. Hn. Fred |
| Dalyell, Tam | Jones,Rt.Hn.Sir Elwyn(W.Ham,S.) | Pentland, Norman |
| Darling, Rt. Hn. George | Jones, Gwynoro (Carmarthen) | Prentice, Rt. Hn. Reg. |
| Davidson, Arthur | Judd, Frank | Prescott, John |
| Davies, Denzil (Llanelly) | Kaufman, Gerald | Price, J. T. (Westhoughton) |
| Davis, Clinton (Hackney, C.) | Kelley, Richard | Price, William (Rugby) |
| Davis, Terry (Bromsgrove) | Kerr, Russell | Probert, Arthur |
| Deakins, Eric | Kinnock, Neil | Rankin, John |
| de Freitas, Rt. Hn. Sir Geoffrey | Lambie, David | Reed, D. (Sedgefield) |
| Dell, Rt. Hn. Edmund | Lamborn, Harry | Rees, Merlyn (Leeds, S.) |
| Dempsey, James | Lamond, James | Rhodes, Geoffrey |
| Doig, Peter | Latham, Arthur | Roberts,Rt.Hn. Goronwy (Caernarvon) |
| Douglas, Dick (Stirlingshire, E.) | Leadbitter, Ted | Robertson, John (Paisley) |
| Driberg, Tom | Lee, Rt. Hn. Frederick | Rodgers, William (Stockton-on-Tees) |
| Duffy, A. E. P. | Leonard, Dick | Roper, John |
| Dunn, James A. | Lestor, Miss Joan | Rose, Paul B. |
| Dunnett, Jack | Lever, Rt. Hn. Harold | Ross, Rt. Hn. William (Kilmarnock) |
| Edelman, Maurice | Lewis, Arthur (W. Ham, N.) | Rowlands, Ted |
| Edwards, Robert (Bilston) | Lomas, Kenneth | Sandelson, Neville |
| Ellis, Tom | Loughlin, Charles | Sheldon, Robert (Ashton-under-Lyne) |
| English, Michael | Lyon, Alexander W. (York) | Shore, Rt. Hn. Peter (Stepney) |
| Evans, Fred | Lyons, Edward (Bradford, E.) | Short,Rt.Hn.Edward (N'c'tle-u-Tyne) |
| Ewing, Henry | Mabon, Dr. J. Dickson | Silkin, Rt. Hn. John (Deptford) |
| Faulds, Andrew | McBride, Neil | Silkin, Hn. S. C. (Dulwich) |
| Fell, Anthony | McCartney, Hugh | Silverman, Julius |
| Fisher, Mrs. Dorls(B'ham,Ladywood) | McElhone, Frank | Skinner, Dennis |
| Fitch, Alan (Wigan) | Mackenzie, Gregor | Small, William |
| Fletcher, Ted (Darlington) | McMillan, Tom (Glasgow, C.) | Smith, John (Lanarkshire, N.) |
| Foley, Maurice | McNamara, J. Kevin | Spearing, Nigel |
| Foot, Michael | Mahon, Simon (Bootle) | Spriggs, Leslie |
| Fraser, John (Norwood) | Marquand, David | Stallard, A. W |
| Gilbert, Dr. John | Marsden, F. | Stewart, Donald (Western Isles) |
| Ginsburg, David (Dewsbury) | Marshall. Dr. Edmund | Stoddart, David (Swindon) |
| Gordon Walker, Rt. Hn. P. C. | Mason, Rt. Hn. Roy | Stonehouse, Rt. Hn. John |
| Gourlay, Harry | Mellish, Rt. Hn. Robert | Strang, Gavin |
| Grant, George (Morpeth) | Mendelson, John | Strauss, Rt. Hn. G. R. |
| Grant, John D. (Islington, E.) | Mikardo, Ian | Summerskill, Hn. Dr. Shirley |
| Griffiths, Eddie (Brightside) | Millan, Bruce | Swain, Thomas |
| Griffiths, Will (Exchange) | Miller, Dr. M. S. | Thomas, Jeffrey (Abertillery) |
| Hamilton, James (Bothwell) | Milne, Edward | Torney, Tom |
| Hamilton, William (Fife, W.) | Mitchell, R. C. (S'hamplon, Itchen) | Turton, Rt. Hn. Sir Robin |
| Hamling, William | Moate, Roger | Urwin, T. W. |
| Hardy, Peter | Molloy, William | Wallace, George |
| Harper, Joseph | Morgan, Elystan (Cardiganshire) | Watkins, David |
| Harrison, Walter (Wakefield) | Morris, Alfred (Wythenshawe) | Weitzman, David |
| Hart, Rt. Hn. Judith | Morris, Charles R. (Openshaw) | Wellbeloved, James |
| White, James (Glasgow, Pollok) | ||
| Hattersley, Roy | Mulley, Rt. Hn. Frederick | Whitehead, Phillip |
| Healey, Rt. Hn. Denis | Murray, Ronald King | Whitlock, William |
| Heffer, Eric S. | Oakes, Gordon | Willey, Rt. Hn. Frederick |
| Horam, John | Ogden, Eric | Williams, Alan (Swansea, W.) |
| Houghton, Rt. Hn. Douglas | O'Halloran, Michael | Williams, Mrs. Shirley (Hitchin) |
| Howell, Denis (Small Heath) | O'Malley, Brian | Wilson, Alexander (Hamilton) |
| Hughes, Rt. Hn. Cledwyn (Anglesey) | Oram, Bert | Wilson, Rt. Hn. Harold (Huyton) |
| Hughes, Robert (Aberdeen, N.) | Orbach, Maurice | Wilson, William (Coventry, S.) |
| Hughes, Roy (Newport) | Orme, Stanley | Woof, Robert |
| Janner, Greville | Oswald, Thomas | |
| Jay, Rt. Hn. Douglas | Padley, Walter | TELLERS FOR THE NOES: |
| Jenkins, Hugh (Putney) | Paget, R. T. | Mr. John Golding and |
| Jenkins, Rt. Hn. Roy (Stechford) | Palmer, Arthur | Mr. Ernest G. Perry. |
| John, Brynmor | Pannell, Rt. Hn. Charles |
§ Question accordingly agreed to.
§ Clause 9 ordered to stand part of the Bill.