HC Deb 20 October 1981 vol 10 cc224-6
Mr. Peter Rees

I beg to move amendment No. 59, in page 70, line 16, at end insert

'; and it is hereby declared for the avoidance of doubt that the temporary suspension of voting rights in respect of shares comprised in issued share capital of a public company of any such class does not affect the application of this Part of this Act in relation to interests in those or any other shares comprised in that class'.
Mr. Deputy Speaker

With this, we may take Government amendment No. 87.

Mr. Rees

The amendment is designed to cover a drafting point made by the Law Society, which I believe was foreshadowed, with his usual perception, by the hon. Member for Hackney, Central (Mr. Davis) in Committee. Clause 58(10) defines relevant share capital for the purposes of part IV of the Bill as share capital carrying rights to vote in all circumstances at general meetings of the company. The hon. Gentleman and the Law Society pointed out that there might be cases where the voting rights were suspended temporarily. One example is where a direction has been issued by the Secretary of State under section 174 of the 1948 Act. It is to meet that point, which is obviously a point of substance, that we have put down this amendment and amendment No. 87.

Mr. Nicholas Baker

I support the amendment, but it has been suggested to me that the welcome clarification made still produces a clause that is extremely complex and unlikely to be easily understood by company secretaries whose job it will be to examine the disclosure provision.

Will my hon. and learned Friend consider issuing a consultative document to explain the disclosure provisions, on the lines that he has done frequently in tax legislation? That would be a great help.

Mr. Rees

I know of the close practical attention that my hon. Friend pays to these matters and I should like to respond to his point. I am not sure that a consultative document is entirely the right way, but I shall take the problem away and see how we can publicise the views of the Department. There is, or should be, a certain diffidence by Ministries in publishing these explanatory documents. As my hon. Friend and the House will readily know, such documents do not have the force of law in the courts, which are the final arbiters on these matters once they have passed out of the care of Houses of Parliament and Her Majesty. The mere view of the Department as to what the legislation might be thought to mean is not decisive.

However, having given what might be thought to be a pedantic constitutional lawyer's point, I hope that in practical terms I have given some reassurance to people who have to construe these matters, because this is the way in which the provisions might have to be applied in practice in extremity. I shall take away the point and see how far we can offer an expanded layman's view of how the disclosure provisions operate. Subject to that, I commend the amendments to the House.

Mr. Clinton Davis

I am a little perturbed by what the Minister has just said. I should like the Department of Trade to have a blind shot at what it believes some of these provisions might mean. It might be better than humble solicitors such as the hon. Member for Dorset, North (Mr. Baker) and myself having a blind shot at it. Perhaps the Department's blind shot and our blind shot might combine to give the right view. I urge the Minister not to dismiss the matter quite so lightly simply on the basis of tradition, and perhaps to think a little more about the proposition that was advanced. Thai would be helpful. I do not believe that the courts would feel that they were impelled to consider an explanatory memorandum that was issued by a Government Department. It might be hopelessly wrong. It would not be the first time that the Department of Trade was wrong. After all, the purpose of this legislation is to help the business man and the professional adviser to arrive at the right construction of the law. The more help that they can get, the better. The Minister may say that they could be misled, but the help that professional advisers can get by considering another point of view is always desirable. It could still mean that they would come to a different conclusion in advising their clients. I hope that the hon. and learned Gentleman will reconsider what he said.

Amendment agreed to.

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