HC Deb 03 November 1976 vol 918 cc1509-10

Lords amendment: No. 1, in page 3, line 11, at end insert: () A member of a licensing board who holds a disqualifying interest in a company shall not take part in any proceedings before the board in which that company is an applicant or an objector, and in this subsection "disqualifying interest" means a beneficial interest in shares or stock of a close company within the meaning of section 282 of the Income and Corporation Taxes Act 1970 which have a total nominal value exceeding £50 or which amount to more than one hundredth part of the nominal value of the issued share capital, or stock, as the case may be, of the company or any class of such capital or stock.

8.41 p.m.

The Secretary of State for Scotland (Mr. Bruce Millan)

I beg to move, That this House doth agree with the Lords in the said amendment.

Lords Amendment No. 1 disqualifies any member of a licensing board who is a shareholder with more than a specified minimum holding in a close company who is an applicant or objector in proceedings before that licensing board from taking part in those proceedings.

I shall not deal with the matter in detail because, obviously a potential conflict of interest is involved and the purpose of the amendment is to avoid that.

Mr. Teddy Taylor (Glasgow, Cathcart)

In general I think that the Lords have acted with a great deal of irresponsibility in some of the amendments which they have passed. I find it difficult to understand this amendment and I hope that the Secretary of State can give me some guidance.

So far as I can see, it indicates that the "disqualifying interest" means a beneficial interest in the stock of a close company which has a nominal value exceeding £50. I understand that the Secretary of State is an accountant. He will know more about these things than I do. Does "nominal value" not mean the number of shares? I understand that we could have a £1 share which stands at 3p. yet the nominal value would be £1. We could have a £1 share worth £100 and yet the nominal value would still be £1. Many of these companies have £100 as the nominal share capital although the real value of the company concerned might be considerably more. Is it fair and reasonable to talk about £50 nominal value of shares in a company when they might be worth £1 or £10,000? We know that many private businesses are drawn up under the terms of £100, £300 or £1,000 companies. To put in a nominal share value of £50 could be quite meaningless.

Would it not be better to relate this provision to the real value of the business and not the nominal share value of the company? This is important because the Bill will radically alter the economic prospects of some licensed premises. Some people say that extra hours of Sunday opening will reduce the profits of the pubs. Others, like myself, think that it will mean more dringing and therefore greater profitability. We are talking about big money and big business. Does the right hon. Gentleman feel that a nominal share value is a valid basis for disqualification when the nominal value can mean anything at all?

Mr. Millan

The matter which worries the hon. Gentleman is taken care of by the second definition. Whatever the total nominal value of the shares of the company, the second definition would bring in shareholders whose holding is more than one-hundredth of the nominal value. Therefore, whatever the real value of the company, someone with more than 1 per cent, of it would be covered. We are dealing with close companies, which are controlled by comparatively small numbers of people.

Question put and agreed to.

Back to
Forward to