§ THE LORD CHANCELLOR (LORD HAILSHAM)My Lords, before the business on the Order Paper is proceeded with I should like, with the permission of your Lordships, to be allowed to say a few words by way of personal explanation regarding a point that has arisen under the Companies Act. That Act, as your Lordships may remember, was passed during last Session and under its provisions does not become operative until such date as is fixed by an Order in Council. Your Lordships may remember that during the Committee stage of that measure in your Lordships' House I gave an undertaking on behalf of the Government that no Order in Council should be made bringing the Act into operation, except with regard to one section as to which there was no dispute, until such time as a. Consolidating Act had been passed bringing together the whole law relating to companies.
As your Lordships are probably aware, there are now in progress a number of efforts to reorganise our trade and industry, which in several instances involve considerable rearrangement of capital and reorganisation of the various rights of the different classes of shareholders. Representations have been made to His Majesty's Government by the Bank of England and by other important interests that these reorganisations cannot proceed until the section in the Act, Section 53, which provides a simple method of effecting such reorganisation by application to the Court, has been brought into force. His Majesty's Government would regard it as very unfortunate if these reorganisations were held up, to the consequent injury of trade, until some time in the autumn, which is the earliest date at which an Order in Council could possibly be made giving effect to the whole of the Act.
850 In those circumstances. I have communicated with the noble Lord, Lord Parmoor, who leads the official Opposition, and with the noble Earl who leads the Liberal Party, and I also wrote to my noble friend Lord Hunsdon, at whose suggestion in this House I originally gave the undertaking to which I have referred. I am glad to say that every one of those noble Lords has most cordially assented to our bringing the section into operation at once. But as the undertaking was given to your Lordships' House I thought it only right that I should make the statement in your Lordships' House, so that the reasons for he course we are pursuing might be made plain and so that your Lordships should not think that I had departed in any way from the undertaking which I had given.
§ LORD ASKWITHMy Lords, I should like to ask the noble and learned Lord on the Woolsack whether Section 53, to which he referred, is a section which, in fact, would not be altered at all, so far as he is aware, by the operation of any Consolidation Act.
§ THE LORD CHANCELLORSection 53 would no doubt be reproduced in the Consolidating Act, so far as I am aware. It extends to such reorganisation as that to which I have referred provisions which already exist in regard to the power of the Court to sanction arrangements between a company and the shareholders. Application has to be made to the Court and the various shareholders have an opportunity of being heard. Without that section it is impossible, in effect, to carry out the reorganisation of some of our largest industrial companies.
§ LORD ASKWITHYes; but in any Consolidating Act Section 53 would probably be reproduced as it stands?
§ THE LORD CHANCELLORYes.