COMPANIES BILL. [H.L.] (Hansard, 5 August 1947)

§ THE LORD CHANCELLOR
My Lords, I beg to Move that the Commons Amendments be now considered. Perhaps I may just say a word on these Amendments. The Amendments as a whole are of a drafting nature, and in due course, when the proper time comes, I am going to advise your Lordships that we can quite properly and without hesitation agree to all of them. I suggested to the two noble Lords who took a prominent part in connexion with these matters that they should see the officials of the Board of Trade and should go through the Amendments with them, is I feel fairly confident that, having done that, they would feel that there was no reason why we should object to any of them.
There is just this question which I may raise, however; your Lordships will want to know in connexion with these Amendments the time at which this measure is likely to come into force. Your, Lordships will remember that Clause 119 (2) provides that the Act shall come into force "on such day as the Board of Trade may by order appoint, and different days may be appointed for the purpose of different provisions thereof." We should not have introduced this Bill at all at this time of pressure unless we had thought it absolutely necessary to do so, and I cannot, therefore, give an absolute undertaking that the whole will not be brought into effect pending consolidation. On the other hand, in so far as it affects me, I consider that we should give a very high place in our order of priority to the consolidation of this measure, and I am hopeful that that will be done.
Subject to that general reservation, o it intentions are as follows: First, to bring into force without delay concessions and alleviations such as that relating to the disclosure by directors of their previous nationality or previous names. Secondly, to bring into force as soon as possible 951 those provisions which place duties on the Board of Trade rather than on the business community; for instance, the powers with regard to investigations into the affairs of companies and to share ownership, as well as those relating to the names of companies and the registration of business names. Thirdly, it is of very great importance that the accounts provisions which are largely self-contained should be operative as soon as possible, and on the other hand it would not be fair to put these into operation without sufficient notice to all persons concerned who must adjust their accounts accordingly, and we do not think notice of less than six months would be proper. Fourthly, the enforcement of the detailed provisions will, if possible, be deferred until consolidation, but consideration will be given to any requests to bring into operation at an earlier date any provisions likely to be helpful to the business community, and naturally the Government reserve the right to bring into force any particular provisions which appear to them to be necessary in the national interests. I hope that in the next Session of Parliament it may be possible to introduce the necessary consolidation measure. This may be, perhaps, rather irregular, but I thought your Lordships would like to know these facts in considering these Amendments. I beg to move that the Commons Amendments be now considered.

§ LORD RUSHCLIFFE
My Lords, the noble and learned Viscount has answered the questions I was going to put to him. The question of when this Bill will come into force is vitally important to secretaries, directors and auditors. It is also important that they should know if the powers of the Board of Trade are to be retrospective or not. With regard to consolidation, may I respectfully give My warmest support to what the noble and learned Viscount said? Many of the clauses in this Bill are already unintelligible to the layman, and indeed the most trained lawyer would have a good deal of difficulty in construing some of them. I had the interest and curiosity to go through the Bill, and there are no fewer 952 than a hundred references to the principal Act and other references to other Acts. For the layman to construe such a Bill is quite impossible. Therefore, if I may say so, I warmly welcome the statement of the noble and learned Viscount that the greater part of it, at any rate, will not come into force until there has been a Consolidation Bill. I am sure your Lordships will welcome the statement made the other day to the effect that a special department of the Parliamentary draftsmen's office is to be set up to deal with consolidation, and is being put into the very competent and experienced hands of Sir Granville Ram. I hope this will be only one of the first matters to be treated by him. I am sure the House is very grateful for the information which the noble and learned Viscount has been good enough to give us.

§ VISCOUNT SWINTON
My Lords, we are all grateful to the noble and learned Viscount the Lord Chancellor for his irregularity. As regards the Amendments, I have been through them all, and I can agree very well with what the Lord Chancellor has said. Nearly all are either drafting or consequential emendations though there are one or two of substance. There were 353 Amendments to the Bill as introduced and there are twenty-six pages of further Amendments here. There could not very well be better evidence of the value of a bicameral Chamber than that, even when dealing with a Bill which is the result of extraordinary skilful drafting. As one who took considerable part in this, I would like to say that that is very largely due to the work of the Lord Chancellor himself, who took a tremendous amount of trouble the whole way through, and to the Board of Trade and those who have helped them, with certain assistance from some of us. I think we have made a practicable Bill.
As regards consolidation, I think what the Lord Chancellor has said is a very reasonable compromise. Provisions about business names have been obsolete for years and the sooner they are got rid of the better. I have been a keen advocate of placing the power of investigation on the Board of Trade, and the sooner those powers are given to the Board of Trade the better. The form of accounts has been entirely recast in the Bill, largely through the work of very able and practical accountants. I think the accounts 953 are now in such a self-contained form that, provided six months' notice or so is given, it would not be a bad thing to bring them in. Your Lordships will remember that with regard to accounts, the parallel of the previous year has only to appear after a new system of accounts have been working for a full year, so it is not as if you are going to put a great deal of work of the past on to the companies. The problem of comparison of consolidated accounts will come into the second year. There is a wide latitude in the way these accounts are to be kept, and they very largely follow, and reasonably follow, what has been the practice of good companies. I think there is a good deal of practical advantage in bringing into force the new accounting system in reasonable time.
But for the rest these very complicated but necessary Amendments which have been made are wholly unintelligible at present, and the only way they can be made intelligible is by a Consolidation Bill, like that of 1929. I think the noble and learned Viscount's proposal is a very reasonable compromise, and I, for my part, would wish to expedite the passage of these Amendments.

LORD RENNELL
My Lords, may I join with the noble Viscount who has just sat clown in expressing appreciation of what the noble and learned Viscount on the Woolsack has said? For my part, I concur with the observations of the noble Viscount, Lord Swinton. I think the Amendments which have been suggested by the other place to a very large extent amplify those that were expressed in the course of debates in your Lordships' House. In certain respects the Amendments go, perhaps, even further than some of your Lordships would have been inclined to go.
I do not think it would be right to let this moment pass without pointing out that at least two of the Amendments made in the other place are not of the comparatively small importance that might have been suggested by the remarks which the noble and learned Viscount on the Woolsack made. There are two in particular which. I think are of considerable importance, both of which commend themselves very much to me, at any rate, and I think probably to the noble Viscount who has just sat down. One 954 is the Amendment which was introduced in the other place, arid is contained in the Amendments now before your Lordships, on the numbering of shares, which has been a very controversial and difficult point which most of us who have had to do with these matters have been advocating for years past. I think it is particularly gratifying that this should. have been introduced into this Bill. It will do away with a great deal of entirely unnecessary work.
The second point is one to which I think reference has already been made, about the insertion in directors' reports of substantial changes in the activities of companies. That is absolutely right, and it was perhaps given rather too little attention, in spite of the great care that was given to the Bill, in your Lordships' House. I myself am particularly happy to find that the vexed question of nominees has been satisfactorily settled, in conformity with what was advocated in your Lordships' House during the Committee stage. The additions which were made to what might be called the nominee group of clauses, giving a mandatory right to 200 members of a company, are obviously right, and although that was implicit in the powers given to the Board of Trade to conduct an investigation, I am glad to see it expressed explicitly as well.
I do not think there is more that I need say, except to congratulate, as the noble Viscount, Lord Swinton, has done, all those in the Board of Trade who have been concerned in drafting, amending, and finally seeing this Bill through boll Houses of Parliament. I think they have every reason to be as gratified as we are to see this Bill pass. It is a Bill of far-reaching importance which, as your Lordships know, has been passed without any controversy in your Lordships' House, with the maximum possible co-operation between all persons concerned. I am very young and unversed in the procedure of your Lordships' House, but I do not think there are any points on which those of us who took part in the Committee stage of this Bill would wish to differ from the Amendments which have come to us from another place. I, for my part, shall be very glad to see these Amendments accepted en bloc without any further discussion.