TRUSTEE INVESTMENTS BILL [H.L.] (Hansard, 31 July 1961)

§ LORD CONESFORD

My Lords, when the Trustee Investments Bill was before this House I was somewhat critical of its provisions. When it went to another place my criticisms were taken up energetically by various Members, and the result is a considerable body of Amendments which I think has considerably improved the Bill. This afternoon we are undertaking a somewhat novel though, I think, very useful procedure in having a general discussion after which we shall be invited, and I have no doubt agree, to approve the Amendments en bloc. Because the noble Lord, Lord Nathan, delivered some general observations I want to say a few words not completely confined to the Amendments. First, I should like to thank either the Government or other authorities of this House, for having adopted the extremely convenient course of having the Bill printed as amended by the Commons. Thus it is possible for all of us to see what the measure will be, if all these Amendments are approved.

37 My main criticism of the Bill remains and will be understood by anybody who reads that document—namely, that it is as nearly incomprehensible to a layman as an Act of Parliament can be. I regret that result, but in drawing attention to it I am not criticising the admirable work of the Parliamentary draftsman. The whole of this complexity arises from the compulsory division of the trust fund and, as the House may be aware, I believe that that compulsory division is wrong both in theory and in practice. Nevertheless, I think it would be quite improper to resume a debate on that topic this afternoon, because it was raised as much in another place as it was raised by me here, and we now know that the Government have gone as far as they are prepared to go and that our choice, therefore, is to have this Bill as now improved or to have nothing; and as between those alternatives I have no hesitation in greatly welcoming the Bill.

I would only add one other point, since the undertakings given to me personally on some points of criticism which I made when the matter was before this House have been so excellently met by Her Majesty's Government in another place. Amendment No. 15, which deals with diversification, meets a point of criticism which I ventured to make in this House and on which I wrote once or twice to my noble and learned friend on the Woolsack. I thank the Government for the great improvement which I think they have made in the drafting of that passage of the Bill. My noble friend Lord Dundee made one small slip in alluding to my attitude, when he thought I was troubled about the position of the unit trust. I know very little about unit trusts. What I mentioned was an investment trust, but the point is largely the same.

The other matter in which an undertaking to me has been met is the introduction of a clause saving the powers of the court. My noble and learned friend on the Woolsack invited me to withdraw the Amendment Which I had put down, on his undertaking to consult the Judges of the Chancery Division and, if he had their approval, to introduce the necessary Amendments in another place. All that has been done, and I am very grateful to the Government for it. The result is that, though 38 my main two criticisms of the Bill still remain—namely, its complexity, which will make it very difficult to get any layman to consent to become a trustee of any trust to Which this Bill applies, and the division of the trust fund, which I believe to be wrong in theory and in practice—all the 'arguments on that matter have been developed both in this House and in another place. So far as the Amendments which are now before us are concerned, I think they greatly improve the Bill, and for my part I have no hesitation in approving them en bloc.

§ THE EARL OF DUNDEE

My Lords, I am grateful to both the noble Lords who have spoken, the noble Lord, Lord Conesford, and the noble Lord, Lord Nathan, who have supported the Amendments. It was particularly interesting to hear what Lord Nathan had to say on this subject, in view of the fact that he was Chairman of the Committee which made certain recommendations on these matters, some of which have been adopted. The only one he regretted was not adopted was that trustees should have power to invest in land. I think it has generally been assumed, however, that if the creator of a trust, the testator or whoever sets up the trust, wishes the trust to have power to invest in land he wall say so in the trust. This Bill never gave any power to invest in land, and of course none of the Commons Amendments bears on that question.

The noble Lord also expressed his own view that dates ought to be given to Government undated securities. He will agree, of course, that it would not be possible to achieve that objective by disagreeing with any of the Commons Amendments to this Bill. The only point I should like to comment on in his observations on that matter is the right which the Government have to repay the 3½ per cent. War Loan in 1952 or after. The noble Lord thought that had been taken to mean by some people 1952 or soon after. But, of course, a Government stipulation to this effect is common form in undated stocks. It applies to a great many of them. For instance, the 2½ per cent. Consols for a long time had a date of 1923 "or after", and they have never been repaid. I think the Dalton Loan had a date, "or after".

39 The reason for putting in those words is not for the benefit of the public but for the benefit of the Government, that if it were to their advantage to repay at a certain date or after they should have the right to do so. It has never been taken to mean, so far as I know, by anybody who has any understanding of the facts, that that implied any obligation on the Government's side ever to repay an undated stock simply because they have put in this common stipulation, which I think applies to a great many undated stocks and has done so for at least 100 years or so. They have the power to repay them at a certain time if it suits them to do so.

I am glad that bath my noble friends and the noble Lord opposite think the Bill has been improved by these Amendments, and that they are at least partly satisfied with the efforts which the Government have made to meet the views which they expressed to your Lordships and which have been repeated by their friends in another place. I beg to move.