§ Mr. Clinton Davis
I beg to move amendment No. 182, in page 77, line 40, leave out 'is entitled to exercise' and insert 'in practice exercises'.
I raised this matter during the "clause stand part" debate in Committee. It arose because the Council for the Securities Industry expressed concern about some inadequacy in the drafting of the Bill and thought that the words "in practice exercises" were an improvement on the Bill. 234 The Minister has had an opportunity to consider the matter, and I am somewhat disappointed that the Secretary of State did not do what he has done on other occasions and gently and almost without notice add his name to our names against certain amendments. Why did he not do so on this occasion? I am bound to say that there is some force in the representations that were made by the CSI. The expression "is entitled to exercise" is one with which I am not familiar in company legislation. I hope that the Minister will tell us, as he has been given notice of the matter, whether it has been used elsewhere in company legislation or whether it is a novel phrase. Is there the ambiguity in the expression that the CSI says there is? Why does the wording of our amendment not eliminate the ambiguity which the CSI considers lies in the wording of the Bill?
During our debates the Under-Secretary said that the wording that I have proposed in the amendment, and which I merely suggested on Second Reading, would damage the interests of investment protection committees. I expressed surprise that the CSI, which I should have thought would have been concerned about the question of investment protection committees, nevertheless still considered that these words were preferable. Apparently, the CSI did not believe that what the Minister said was valid.
Perhaps the matter could be put in a more recent context. I am not familiar with the discussions that have taken place between the Department's officials, perhaps the Minister, and the CSI and other bodies. Therefore, I hope that the Minister will tell us what the reaction was. If the Minister's reply is forthcoming, I may hesitate to encourage hon. Members who normally would be impelled to support the amendment to go into the Division Lobbies tonight. It is up to the Minister. He can avoid that calamity.
§ Mr. Peter Rees
I fully understand the motives which led the hon. Member for Hackney, Central (Mr. Davis) and his hon. Friends to table the amendment. As he rightly says, it was foreshadowed in Committee, and the matter was touched on in consultation prior to the Committee stage by the Council for the Securities Industry. However, the amendment, which presumably was designed to enlarge rather than narrow the existing definition, might have the contrary effect, in that it would seem to exclude those who were entitled to exercise any right conferred by the holding of shares if they did not exercise that right in practice. Beyond that, I think that it would introduce a measure of ambiguity as to what in fact constituted the practical or consistent exercise of a right.
We have therefore felt, on reflection, that it would be better to limit it to those who are entitled to exercise the right because that would cover those who habitually exercise it and those who are entitled to do so but do not do so. In other words, the present definition is a practical definition for which there are many precedents. Although I think that we have scrutinised as best we can the statute books and the cases, I do not think that there are any precedents—perhaps I should cover my flank by saying "no respectable precedents"—for the phrase "in practice exercises".
Having, I hope, establshed that there is an identity of objective here, and having recognised the assiduity which obviously the hon. Member has exercised in trying to devise a solution to this problem, I hope that on reflection 235 the hon. Member will recognise that possibly, with all its limitations, the phrase to be found in the clause will suit the purpose for which it has been designed.
§ Mr. Clinton Davis
So engaging, so beguiling, so siren-like is the voice of the hon. and learned Gentleman that all those hundreds of Members who have been waiting with bated breath to see whether they would be called to go into the Division Lobbies may sigh a breath of relief. I do not propose to challenge the matter in a Division. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.