Lords Sitting of 24 January 1967

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Chester.

SOUTH-EAST PLANNING AND BANBURY EXPANSION
2.36 p.m.
LORD ELTON: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the recent admission by the Standing Conference on London and the South East Regional Planning—that, in the light of the 1961 Census, many of the assumptions on which national planning in the regions has hitherto been based have proved to be wholly erroneous—has altered the attitude of the Government to such local plans as that to expand the population of Banbury to 80,000.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, the Report to which the noble Lord refers is devoted mainly to an analysis of data from the 1961 Census on employment and migration. It suggests that if this data had been available earlier the conclusions of the South-East Study might have been different, but makes no specific suggestions. The Study was reviewed by the present Government in 1965, by which time much of the information mentioned in the Standing Conference Report was either available or known in broad outline. The Report does not alter the Government's view about the size of the London overspill problem and the scale of the New Town and town expansion programme which is needed. A decision about the expansion of Banbury is a matter for the borough council. They know that the Minister would like the expansion to go ahead.
LORD ELTON: My Lords, may I thank the noble Lord for that Answer?

LORRY AND COACH DRIVERS' HOURS
LORD ELTON: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they propose to take further action designed to check the illegal practices by which drivers of passenger and goods vehicles are enabled to operate for much longer hours than the law permits, thus frequently becoming a danger to other users of the road.]
LORD SHEPHERD: My Lords, as my right honourable friend the Minister of Transport has already announced (and I refer to her statement of yesterday) she is reviewing the present statutory limits on the working hours of drivers of lorries and buses. Particular attention is being paid during this review to the improvement of methods of enforcing observance of the limits.
LORD ELTON: My Lords, while thanking the noble Lord for that Answer, may I ask if he is able to say whether it is likely that authority will be given to Ministry of Transport inspectors to examine wages sheets and consignment records, without which it would seem that they are not likely to have much success in controlling excess driving hours?
LORD SHEPHERD: My Lords, it is quite clear that the present methods of examining the performance of drivers, the time they work, is not satisfactory, and therefore there is a radical review covering all forms of control, and in particular the opportunities for inspectors to obtain the necessary information to see that the law is enforced.
LORD POPPLEWELL: My Lords, arising out of that reply, may I ask whether there is going to be an increase in the number of these inspectors, and, if so, is my noble friend Lord Shepherd able to say how many?
LORD SHEPHERD: My Lords, not at this stage. I hope my right honourable

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friend will be able to make a Statement in the not too far distant future, and I think the noble Lord will find from that Statement that there has been a radical review to see that the enforcement of the law is carried out
LORD BLYTON: My Lords, will my noble friend try to guard against intimidation of the employee, where a man has to drive long hours because he fears that he will get the sack if he does not do so?
Loan SHEPHERD: My Lords, the main aim for the Government in this matter is to see that the law is enforced. Clearly, if a driver is intimidated by his employer to break the law then he must be given the necessary protection. Our first and paramount aim is to see that the law is enforced.
LORD ELTON: My Lords, may I ask a question about a matter which seems particularly difficult to deal with: that is, the so-called "moonlighting", where a person is doing two different jobs, one or both of which involve driving?
LORD SHEPHERD: My Lords, I have had no experience of "moonlighting": I thought it was something to do with the old bootlegging. But I will certainly take note of the point that the noble Lord has made. The whole matter is being most carefully and exhaustively reviewed.

RHODESIA: SALISBURY UNIVERSITY
2.40 p.m.
LORD MITCHISON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware of any changes made within the past three months in the constitution or personnel of the Board which allots scholarships in the University of Salisbury, Rhodesia; who made such changes and on what dates, and whether they consider that such changes are consistent with academic freedom, with equality of opportunity as between students of different races or with any conditions upon which Her Majesty's Government authorise contributions to or for the benefit of the University.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR COMMONWEALTH AFFAIRS (LORD BESWICK): My Lords, the Rhodesian Scholarships Board, which is concerned with the award of Government grants to students of all races obtaining places at the University College, has recently been reconstituted by the Rhodesian Ministry of Education. It formerly comprised a majority of non-officials, including two representatives of the University College, and was chaired by a High Court Judge. The new body is a board of trustees consisting solely of officials of the Ministry of Education. It remains to be seen whether these changes have any adverse or limiting effects. So far the University College has been free to select its students solely on the basis of their academic qualifications and merits. Until it is known what grants have been made for admission of students in the next academic year at the beginning of March, it will not be possible to express a view on the points referred to in the last part of the noble Lord's Question.
LORD MITCHISON: My Lords, while thanking my noble friend Lord Beswick for that Answer, may I ask him this further question? Is it not the case that the Rhodesian Ministry of Education and its representatives are part of a treasonable and illegal régime; and in those circumstances are the Government of opinion that it is desirable, for instance, to continue grants to a University which in this respect appears to be run by the representatives of the illegal régime? And do they think it consistent with the considerations I put forward in my Question?
LORD BESWICK: My Lords, Her Majesty's Government think it desirable to have a University College operating there so long as the Ministry's representatives fulfil the objectives which were set before the College at the outset; and so far there has been no evidence that they will depart from these objectives.
With regard to the more specific aspects of my noble friend's remarks, the Rhodesian Scholarships Board, about which he asked his Question—and I have already given some details—is not the body responsible for governing the College. That is a separate body and, as

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I indicated to my noble friend Lord Brockway last week, the College Council have said that they do not propose to be intimidated by any political Party.
LORD MITCHISON: My Lords, I appreciate that it is the College Council which runs the College, but is it consistent with academic freedom and with the supposedly multiracial character of the university, that the Board which appoints people for scholarships consists of civil servants, so-called, who are the representatives of a treasonable régime pledged, as I understand it, to a uniracial attitude? Whether the Government wait a little or not, do they really intend to continue grants when this position exists as regards these scholarships, which will presumably depend to some extent on money provided by the Government of this country? To put the matter quite succinctly, the British lion's tail is being twisted, and we pay for teaching people to do it.
LORD BESWICK: My Lords, I put it to my noble friend that there is a balance of argument here. Some people have argued, as my noble friend has done, that the grants must stop. There are others who have argued, with equal sincerity, that it would be a mistake to stop the grants at this point of time. Those people, including Her Majesty's Government, who are not unmindful of the considerations brought forward by my noble friend, nevertheless feel that for the time being it would be wrong to withhold the grant. However, it will certainly be a matter for further consideration, when the next quarterly instalment becomes due, as to what has been done so far about giving grants to Africans.

MALTA
LORD SHEPHERD: My Lords, at a suitable moment after 3.30 p.m. my noble friend Lord Beswick will be making a statement on changes in the defence forces in Malta.

COMPANIES BILL [H.L.]
2.45 p.m.
Further considered on Report (according to Order).
LORD BROWN LORD BROWN moved, after Clause 30, to insert the following new clause:
Disclosure by companies as regards certain gifts of money for charitable purposes, of amounts thereof and identities of donees or purposes of gifts
".—(1) Where, in the case of a financial year, a company is under obligation to comply with subsection (1) or (2) of section 18 of this Act (otherwise than by virtue only of it or, as the case may be, it and its subsidiaries between them, having given money for political purposes), then,—

(a) if in that year money exceeding £50 in amount has been given by it or, as the case may be, by it and its subsidiaries between them, for charitable purposes to one person only, it shall, on and after the day on which copies of the directors' report relating to that year are first sent to members of the company in compliance with section 158 of the principal Act, keep at its registered office a statement of the name of that person (or, if the money was received by him in a fiduciary capacity, of the purposes for which it was given) and, in either case, the amount of money given;

(b) if in that year money exceeding £50 in amount has been given as aforesaid to each of two persons or more for charitable purposes, it shall, on and after the said day. Keep at its registered office a statement of the names of those persons (or, in the case of any of them who received money in a fiduciary capacity, the purposes for which it was given) and of the amount of money given in each case.

(2) The said statement shall, during business hours (subject to such reasonable restrictions as the company may in general meeting impose, so that not less than two hours in each day be allowed for inspection), be open to the inspection of any member of the company without charge.
(3) Any member of the company may require a copy of the said statement, or of any part thereof, on payment of two shillings, or such less sum as the company may prescribe, for every hundred words or fractional part thereof required to be copied.
The company shall cause any copy so required by any person to be sent to that person within the period of ten days beginning with the day next following that on which the requirement is received by the company.
(4) If default is made in complying with subsection (2) of this section, or if an inspection required under this section is refused or any copy required there under is not sent within the proper period, the company and every officer of the company who is in default shall be liable to a fine not exceeding £500 and further to a default fine.
(5) In the case of a refusal of an inspection required under this section of the said statement, the court may by order compel an immediate inspection thereof; and in the case of a failure to send within the proper period a copy required under this section, the court may by order direct that the copy required shall be sent to the person requiring it.
(6) Subsections (4A) and (5) of section 18 of this Act shall have effect for the purposes of this section as they have effect for the purposes of that."
The noble Lord said: My Lords, this Amendment constitutes a new clause and gives effect to the alterations in the method of dealing with charitable contributions which this House discussed under Amendments 28 and 33 yesterday, on Clause 18. Therefore, I think I can deal with a weighty clause fairly quickly. Subsection (1) states, in effect, that the clause applies to a company which in a financial year has on its own or together with its subsidiaries given more than £50 to each of one or more persons for charitable purposes. Such a company is required to keep at its registered office a statement of the name or names of the person or persons to each of whom more than £50 was given and of the amount given to each. Subsection (2) provides that the statement shall be open to the inspection of any member of the company without charge. Subsection (3) requires the company to supply to members only, on demand and on payment, a copy of the statement or any part of it. Subsection (4) provides penalties to which a company and its officers will be liable if an inspection of the register is refused or if a copy is not sent. Subsection (5) empowers the court to compel a company to permit an inspection of the statement. Subsection (6) excludes money given for charitable purposes to a person who, when the money was given, was ordinarily resident abroad, and states the meaning of the term "charitable purposes". I beg to move.
Amendment moved—
After Clause 30, insert the said new clause.—(Lord Brown.)
LORD DRUMALBYN: My Lords, my noble friend Lord Polwarth is not here, and I am sure he would like me to say to the noble Lord, on his behalf, and indeed on behalf of all of us on these Benches, that we are grateful to the noble Lord, Lord Brown, for having
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included this clause, which I think completely meets the arguments put forward on this issue.
On Question, Amendment agreed to.
Clause 32 [Unlimited companies may be re-registered as limited]:
LORD BROWN: My Lords, I beg to move Amendment 51, which is purely a drafting Amendment to Clause 32. Subsection (2) referred to the alterations in the memorandum. Subsection (4)(b) should also refer to the alterations and not to the alteration, in the singular.
Amendment moved—
Page 36, line 27, leave out ("alteration") and insert ("alterations").—(Lord Brown.)
On Question, Amendment agreed to.
VISCOUNT ECCLES VISCOUNT ECCLES moved, after Clause 33, to insert the following new clause:
Shares of no par value
".—(1) The authorised capital of a company may consist wholly of shares having a nominal or par value or wholly of shares without nominal or par value, but not partly of the one and partly of the other.
(2) Every certificate for shares without nominal or par value shall have plainly written or printed upon its face the number of such shares which it represents and the number of such shares which the company issuing it is authorised to issue and, where the shares are partly paid, the amount paid on each share; and no such certificate shall express any nominal or par value of such shares.
(3) Where a company issues shares without nominal or par value, whether for cash or otherwise, a sum equal to the aggregate amount or value of the consideration payable for those shares shall be transferred to a capital account, to be called "the stated capital account"; and, where the shares are issued for a consideration other than cash, the value of the consideration shall, for the purposes of this subsection, be assessed by the directors of the company.
(4) The provisions of the principal Act relating to the reduction of the share capital of a company shall apply as if the stated capital account were the paid-up share capital of the company, except that the stated capital account may, notwithstanding anything in the principal Act, be applied by the company in writing off—

(a) the preliminary expenses of the company; or

(b) the expenses of, or the commission paid on, any issue of shares or debentures of the company.

(5) Where under subsection (4) of this section amounts standing to the credit of the stated capital account of a company are applied in writing off expenses or commission, a note

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of the expenses or commission written off shall appear in the company's balance sheets for two years afterwards.
(6) A company the shares of which are without nominal or par value may, by special resolution, increase its stated capital account by the transfer to that account of sums from the profits of the company or its reserves.
(7) A company may by special resolution—

(a) convert all its shares having a nominal or par value, whether fully paid or not, to shares without nominal or par value, so, however, that after the conversion the proportion between the amount paid and the amount, if any, unpaid, on each share shall be the same as, before conversion;

(b) convert all its shares which are without nominal or par value, provided they are fully paid, to fully paid shares having a nominal or par value, so, however, that after the conversion the aggregate nominal value of all the issued shares of the company shall not exceed the amount standing to the credit of the company's stated capital account immediately before the conversion;

and may alter the conditions of its memorandum accordingly.
(8) Where a company converts all its shares having a nominal or par value to shares without nominal or par value, a sum equal to the aggregate amount of the paid-up share capital of the company together with the amount, if any, standing to the credit of the company's share premium account, shall be transferred under appropriate headings to the company's stated capital account.
(9) Where a company converts all its shares which are without nominal or par value to shares having a nominal or par value—

(a) the aggregate nominal value of all the issued shares of the company immediately after the conversion shall be transferred from the stated capital account to the paid-up capital account of the company; and

(b) if immediately after the conversion the aggregate nominal value of all the issued shares of the company is less than the amount standing to the credit of the company's stated capital account immediately before the conversion, an amount equal to the difference shall be transferred from the stated capital account to the share premium account of the company.

(10) In the case of a company the share capital of which is divided into different classes of shares, the exercise by the company of any of the powers conferred by subsection (1) of this section shall require the sanction of an extraordinary resolution passed at a separate meeting of the holders of the shares of each class; and section 72of the principal Act shall apply as it applies to the variation of the rights attached to any class of shares.
(11) Where a company the shares of which are without nominal or par value has passed a resolution for reducing its share capital under section 66of the principal Act, and the proposed reduction of share capital involves the payment to any shareholder of any amount standing to the credit of the company's stated capital account, section 67 of the principal Act
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shall apply as if the reduction involved the payment to a shareholder of paid-up share capital.
(12) In relation to a reduction of the share capital of a company the shares of which are without nominal or par value—

(a) subsection (1) of section 69 of the principal Act shall apply as if for the words "the amount of the share capital, the number of shares into which it is to be divided, and the amount of each share", there were substituted "the number of shares, the amount, if any, at the date of registration, deemed to be unpaid on each share";

(b) section 70 of the principal Act shall apply as if for the words "the difference, if any, between the amount of the share as fixed by the minute and the amount paid, or the reduced amount, if any, which is to be deemed to have been paid, on the share, as the case may be," there were substituted the words "the amount, if any, which, as shown by the minute, is to be deemed to be unpaid on the share".

(13) The principal Act shall be amended in accordance with the provisions of Schedule (Amendments of the Companies Act 1948 consequential on the introduction of Shares of No Par Value) to this Act.
(14) Every company which mentions the amount of its authorized capital or the number of shares which it is authorized to issue in—

(a) any business letter of the company;

(b) any notice or other official publication of the company;

(c)any order of the company for goods;

(d) any bill of parcels, invoice, receipt or letter of credit of the company;

(e) any trade catalogue, trade circular or show card which is issued or sent by the company to any person in any part of Her Majesty's dominions,

shall state in that document in legible characters and with no less prominence—

(i) the amount of the company's issued share capital or, in the case of a company the shares in which are without nominal or par value, the number of shares issued and the amount of the company's stated capital account; and

(ii) the amount, if any, unpaid on the company's issued share capital."

The noble Viscount said: My Lords, this new clause provides for the structure of the no-par-value shares system, and I should like to say briefly what it does. Subsection (1) follows the Gedge Committee recommendation in compelling companies to choose whether the whole of their capital is in no-par-value shares or in shares with a nominal value. Subsection (2) is taken from the Companies Act of Canada, 1934, Section 12(9), and, I think, is a sensible provision.
Subsections (3) to (6) deal with the capital account of a company whose

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shares are of no par value. Subsections (7) to (9) provide for the conversion of shares of nominal value into shares of no par value and vice versa. Subsection (10) requires the consent of all classes of shareholders to such a conversion; and subsections (11) and (12) deal with a reduction of capital. Subsection (14) is of some interest because it extends to all companies, whether they have shares of nominal value or no par value, and it provides that whenever a company makes reference to its authorised capital it must make an equally prominent reference to its issued and paid-up capital, because sometimes that is in very small type and people are misled by the size of the authorised capital. I beg to move.
Amendment moved—
After Clause 33 insert the said new clause.—(Viscount Eccles.)
On Question, Amendment agreed to.
LORD DRUMALBYN LORD DRUMALBYN moved, after Clause 34, to insert the following new clause:
Exemption from sections 6 to 8 and 17 of this Act and section 196 of principal Act in respect of Companies or bodies corporate whose shares are not quoted on a recognised stock exchange or offered to the public
".—(1) Section 127 of the principal Act (documents to be annexed to annual return) shall have effect subject to the following subsection.
(2) A company shall not be required to annex to the copy of the balance sheet which is annexed to the annual return a statement showing the information referred to in sections 6, 7 or 8 of this Act or in section 196 of the principal Act nor shall be required to include in the copy of the directors' report attached to the balance sheet annexed to the annual return the information referred to in section 17 of this Act, if no shares or debentures of the company or of a body corporate of which it is the subsidiary have been quoted on a recognised stock exchange (whether in Great Britain or elsewhere) or offered (whether in Great Britain or elsewhere) to the public for subscription or purchase."
The noble Lord said: My Lords, I beg to move the new clause on the Order Paper. The purpose of this clause is to implement the Jenkins recommendation in paragraph 351, to which reference has been made at Committee stage, which says:
"To meet this … well founded objection to general disclosure we would give a limited exemption to companies whose securities have been neither quoted nor offered to the public
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and which are not subsidiaries of companies whose securities have been quoted or offered to the public. While requiring such companies to circulate full accounts to their members and their debenture holders, we would permit them to exclude from accounts Sled with the Registrar of Companies:—

(i) the information about directors' emoluments now required by section 196;

(ii) the details of turnover and rents receivable and payable which we suggest below should in future be required by the Eighth Schedule."

This clause is drafted to cover Clauses 6, 7, 8 and 17. Clause 6, deals with particulars of emoluments of chairmen and directors in the £2,500 band; Clause 7 with particulars of emoluments waived; Clause 8 with particulars of salaries of employees receiving more than £10,000; and Clause 17 with turnover in different classes of business done. It therefore covers quite a large part of the recommendations made by Jenkins, and also some recommendations that he would no doubt have made if he had known that particulars of salaries of employees receiving more than £10,000 a year were to be called for.
The Amendment also makes clear that the information in question must be circulated to members of the company, but need not be annexed to the annual report and accounts which have to be filed with the Registrar. In the course of our earlier discussions I think we made it very clear that we accepted the Jenkins Report in this respect. Of course, any company, even though its shares are not quoted or not issued to the public, will be able, if it should so wish, to attach its directors report in full to the annual report and accounts. This merely exempts it from the necessity to do so so far as emoluments and the classes of turnover are concerned. We agree with Jenkins, because we think that the disclosure of this information to small localised companies may be a source of embarrassment, and indeed a definite trading prejudice in certain cases. The arguments were fully gone into at the earlier stage, and I do not think I need repeat them. I beg to move.
Amendment moved—
After Clause 34 insert the said new clause.—(Lord Drumalbyn.)
LORD BROWN: My Lords we have, I think, a fairly basic division of opinion between the Government and

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some Members of this House over this matter, and it really centres on two main things. First, the Government are concerned to have to the maximum extent possible one class of limited liability company, and not two with different provisions. Secondly, the Government are concerned to disclose a much wider range of information to the general public than those who oppose some parts of this Bill. This again is a manifestation—it has appeared frequently in our debates on this Bill—of this basic division of viewpoint on the matter. There are, as I have said before, many large unquoted companies which are important to our economy, and we believe it is important that the sort of particulars that appear in Clauses 6, 7, 8 and 17 should be available to the public at large. We believe that creditors are entitled to know many of the facts that would appear publicly under these clauses; and we believe that if a company is going to claim the privilege of limited liability, which on the whole has been awarded a little too lightly in the past, then this is not an unfair condition to impose.
Lastly, we are concerned about incomes policy. Of whatever political persuasion one may be, there is going to be a definite requirement for some sort of discipline about incomes and wages in the future in our economy; and we know to-day that there are a large number of people in society who have quite exaggerated ideas about the sort of emoluments earned by directors, built up on the examples of a few very unfortunate cases which make the headlines from time to time. It would be an excellent thing, in our view, if there were more daylight let in on the real remuneration of directors and their arrangements, and so on. It is on these grounds that I would ask the noble Lord to withdraw his Amendment, because this is a matter of fairly basic principle which has been debated throughout the clauses of this Bill, and it would be very difficult for the Government to give way on this particular Amendment.
LORD DRUMALBYN: My Lords, I think that the weight of argument in the course of our debates in the Committee stage, in terms of those who spoke, at any rate, was very much in favour of following Jenkins. When one has had a Report which has gone so deeply into these affairs over a period of years, I
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think one must attach full weight to the recommendations and findings of that Report.
One must concede, of course, that the effect of this Amendment would be that some large unquoted companies would be able to avail themselves of the exemption which the clause would allow. But against that one has to weigh the very many small companies which would be able to avail themselves of the exemption, and for whom the exemption is particularly designed. This is the balance of advantage. We on this side think it is not wise, on a matter of this kind, to go too fast or to make too sudden a break with the past. The noble Lord has said that there will be another Companies Bill in a couple of years. The sensible thing, surely, is to take one step at a time, to see how the thing runs in the next two or three years, whenever the next Bill may come, and to allow this Amendment to be accepted by the House in the meantime.
The noble Lord referred to the incomes policy. No doubt it is desirable that exaggerated views of what directors earn should be corrected. Indeed, this was an argument I adduced in the other sense. But the fact is that in regard to the vast number of small companies which would then have to report emoluments if this Bill were carried through, the information about the chairmen's salaries would never filter through into the Press. Unless the Government were themselves to tot up the figures and give some statistics about this, it would never come through to the general Press. There would still be only isolated examples, and again and again there would be evidence of considerable local embarrassment to the chairmen and directors of companies whose salaries were disclosed. If the Government want this information, surely there are far more efficient and effective ways of obtaining it than to cause it to be put into the directors' report. For that reason, if for no other, I would recommend my noble friends to support this Amendment.
3.2 p.m.
LORD MITCHISON: My Lords, I suppose that nothing can prevent the Tories from dividing this House on a question of this kind; it is so obviously the kind of thing they like. But I think they have not thought sufficiently about

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what has happened since the Jenkins Report. There has been a good deal of what one can call, quite frankly, dirty practice about companies. On the whole, it has not been the big companies; it has been the smaller ones. Compliance with these provisions is the concession required from companies in return for limited liability. Limited liability gives them the privilege, in certain circumstances, of limiting their liability to their creditors, and, as I see it, these provisions are really for the protection of creditors; otherwise, a small company run by some rogue can grossly overpay the rogue without anybody knowing what has happened. That is what these provisions are intended to prevent, or to take a step towards preventing, for it is perfectly clear that more than this may be required.
But, says the noble Lord, Lord Drumalbyn, why not leave things as they are and wait until the next Companies Bill comes along? There are two answers to that. One is that there is a certain urgency about the matter, and—for I see noble Lords anxiously consulting the Jenkins Report—an urgency and anxiety which has arisen or been aggravated since that Report. The second is that this, or something of this kind, is an old-standing provision. If one looks at the clause here, it is Section 196 of the principal Act which has requirements about disclosing directors' salaries. Those were brought in, I should have thought, for good and sufficient reasons by the Government of the day. What is now proposed by noble Lords opposite is not to leave things as they are but, as regards this kind of company, to avoid not only the provisions in this Bill which we are considering but also provisions which have been in force since 1948. I suggest that that does not amount to leaving things as they are at present.
Is there any real reason against this being done? Why this passion for the dark? What is it that these companies have done that noble Lords opposite think ought to be concealed, and why? I quite understand people objecting occasionally to too much disclosure, on business grounds and the like. But there is no question of business grounds here. This is substantially what the directors are getting out of it; and I think that
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the ordinary public, if they wish to know and take steps to know, ought to be allowed to discover, and there ought to be no right to hide it.
With respect to noble Lords opposite, I would say that this passion for hiding everything seems to be growing on people. I cannot see the reason for it, and I wonder whether some noble Lord, in reply, would tell us why they are so anxious to do this. Is it merely to save people trouble? I think that is an insufficient reason, in the case of the provisions in the Bill, as it was counted to be in respect of the corresponding provision in the 1948 Act, and I urge noble Lords opposite to "make these companies come clean". I would agree at once that the vast majority of them have nothing to hide that they need be ashamed of; but there are exceptions, as we have seen lately, and we ought to take this precaution in the interests of the public.
3.5 p.m.
LORD ERROLL OF HALE: My Lords, I had thought that one or two other noble Lords might wish to contribute to the debate, but since that is apparently not the case I would apologise to your Lordships for having arrived a few minutes late on this particular section of the debate. I am glad to reply to the noble Lord, Lord Mitchison, in regard to some of his points. The interesting point about what the noble Lord opposite had to say about disclosure was that he himself was a passionate advocate of the Land Commission's not disclosing their reasons for doing certain things. The noble Lord really should consider what he is after in this idea of disclosure. I do not wish always to bring into the debate the noble and learned Lord the Lord Chancellor, but as he has been kind enough to be with us again this afternoon perhaps I should remind him of what I said during the Second Reading debate on the Bill; and it applies particularly to the noble Lord, Lord Mitchison, who is also a distinguished Queen's Counsel. I said that I should greatly like to know about barristers' fees, but they never tell us what their fees are. If directors' emoluments are to be disclosed, let us hear about the emolument of barristers. If there are a few naughty directors—and I expect there are—there are one or two barristers who may be a little

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sharp in their practice. Does the noble Lord, Lord Mitchison, really suggest that we should be able to control barristers better if their fees were to be disclosed?
We on this side of the House accept that in the running of companies there should be a disclosure of matters which are properly in the public interest; but this must not just become a kind of parrot cry, that everything must be disclosed because the alternative is the secrecy which the noble Lord, Lord Brown, says is so reprehensible in company practice. We must be sensible about this matter. I am afraid that noble Lords on the opposite side of the House are running away with the idea that anything short of full disclosure—which at times appears almost to be indecent exposure—is in some way reprehensible and against the interests of the country as a whole. This is not the point. The point is that there should be a reasonable balance between disclosure and nondisclosure, and Lord Mitchison's contention that, in return for the benefit of limited liability, disclosure must be made without any limit at all (because that is how I listened to his argument) is not an argument which can be sustained.
Limited liability has been the right of any corporation setting itself up as a limited liability company. Such companies set themselves up knowing, first, what the limited liability was, and secondly, how much would have to be disclosed in their accounts. Now, suddenly, in the middle of the game, the rules are to be changed; and apparently, according to the reasoning of the noble Lord, because a new benefit is being created of limited liability, therefore a great deal of disclosure is now to take place. There is no justification at all for this great increase in disclosure. We on our side of the House stand by Jenkins. We think that he went as far as it was necessary to go. While the noble Lord may say that conditions have changed since the Jenkins Report (and I agree that they have changed: we have a Labour Government instead of a Conservative Government; and we have many other things), by and large, limited liability companies behave in the same good and respectable way now as they didthen—with one or two exceptions of which I am sure Lord Jenkins, was cognisant at the time he was writing his Report.
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I would remind noble Lords what the Jenkins Report said on this very important matter. Paragraph 351, on page 137, says:
"We recognised, however, that some information required in the accounts, while of interest to the members, was not of prime importance to creditors, and that its public disclosure by some small companies might be embarrassing to them; we had in mind particularly the requirement to disclose directors' emoluments. To meet this, in our opinion, well-founded objection to general disclosure we would give a limited exemption to companies whose securities have been neither quoted nor offered to the public and which are not subsidiaries of companies whose securities have been quoted or offered to the public. While requiring such companies to circulate full accounts to their members and their debenture holders, we would permit them to exclude from accounts filed with the Registrar of Companies: the information about directors' emoluments … and the details of turnover and rents receivable …"
In putting this forward by this Amendment, all we are doing is to follow the Jenkins recommendations.
LORD SHEPHERD: Because it suits you.
LORD ERROLL OF HALE: The noble Lord, Lord Shepherd, interjects: because it suits us. This is not a Party matter. This is a matter of trying to improve the Company Law of the country. I am sorry that the noble Lord seeks to inject Party bias into the matter. This is not a Party matter. We are trying here to ensure that the doctrine of limited liability will be able to continue to flourish in this country and do in the future the great good for this country that it has done in the past, with the minimum of damage to the small companies, many of whom in the past have been able to become great companies. That is why we stand by the Jenkins' doctrine in this matter, and we hope that when this Amendment goes to a Division, if the Government will not accept it, noble Lords will support us in the Lobby.
VISCOUNT ADDISON: My Lords, the noble Lord is continually saying that his Party go all the way with Jenkins. I think that the Jenkins Report was issued in 1962. If that is the view the noble Lord's Party take, I wonder why the previous Administration did not do something about implementing Jenkins over this matter.
LORD MACPHERSON OF DRUMOCHTER: My Lords, may I get

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one point clear? The argument against this Amendment, as I understand it, is based on consideration for the creditors of various companies. As the position stands at the moment, directors' emoluments are disclosed in the company's balance sheet, and I fail to see how the creditors' position is made either any better or any worse by knowing that director "A" has so much and director "B" a different figure. I cannot follow the argument which is being put forward here.
LORD BROWN: My Lords, may I intervene to clarify this point? It is true that the total of directors' salaries and emoluments appears on the balance sheet, but the new provision for disclosure of salaries of directors in brackets—that is to say, from £2,500 to £5,000; £5,000 to £7,500; and so on—appears in the directors' report and is not available to the public unless it is filed at Company House.
LORD CARRINGTON: My Lords, the noble Lord wanted to know why, and he has not received an answer.
LORD BROWN: I rose to clarify the matter. I have not risen to answer the point because I shall be accused of speaking twice on the Report stage, as I was yesterday.
LORD CARRINGTON: I was only pointing out, I hope courteously, that although the noble Lord rose to reply to the point, he has not in fact replied to it.
LORD BROWN: With respect, the noble Lord was under a misapprehension in thinking that the figures we are talking about are already given in the report. They are not, and I wanted to correct that misapprehension.
LORD CARRINGTON: The noble Lord was referring to the blance sheet.
LORD BROWN: I have not sought to argue the case, for the reasons given.
LORD MITCHISON: My Lords, may I have the leave of the House to put in one sentence, and one only? The obligation to disclose directors' salaries and the like arises at present under Section 196 of the 1948 Act, which this Amendment proposes to repeal in part.
3.15 p.m.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, as the noble Lord, Lord Erroll of Hale, has referred to what I said on Second Reading, may I say that I do not withdraw a word of it? We live in days of an incomes policy when everybody's income is, quite naturally, of interest to everyone else. I personally should have no objection at all to the incomes of all professional men, or for that matter anyone else, being recorded. But what we are dealing with primarily here is credit, which all the time, and indeed since the Jenkins Committee reported, tends to expand. It is not long ago since every barrister was always sent a cheque with the brief, but this practice gradually dropped out and now it is sometimes a year or two before he is paid. But the barrister, unlike a small limited company, is not a person who normally owes money in the course of his profession. Solicitors do, because they owe money to the barristers; but barristers do not owe money to anybody. But it is with the small company which turns out to be insolvent that we are concerned. We are concerned with the position of creditors.
I would suggest, as I think I suggested on Second Reading, that the whole history of Company Law shows that it is fatal to grant exemption to a particular kind of company in relation to disclosure. Originally we did this as between the public and private companies, thinking that the private companies would be small family concerns. Then we found that everybody with anything to hide was a private company. We did it again as between the private company and the exempt private company, and we said. "If we limit the definition, we shall find that the exempt private company is just a small family concern". Whereupon everybody with something to hide became an exempt private company. I should have thought that that history was itself sufficient warning against creating a new kind of exemption, as this Amendment would seek to do. It is solely in the interest, apparently, of the directors—it is not suggested that it is in anybody else's interest—that this Amendment is moved. I venture to hope that the noble Lord, Lord Drumalbyn, in view of everything that has been said, will reconsider this Amendment.
THE DUKE OF ATHOLL: My Lords, can we not give leave to the noble Lord, Lord Brown, to answer properly the question put by the noble Lord, Lord Macpherson of Drumochter, because I, for one, fail to understand why it is better from the point of view of creditors to know what the individual directors and highly-paid employees receive. Secondly, I should have thought that if these companies were going to cheat over this matter, they would only delay the publication of their annual report even more than they do at the moment. I cannot see that it protects creditors in any way. I can see that if there are any outside shareholders that they might be very interested in this information, but that is exempted by the way the new clause is drafted.
LORD BROWN: My Lords, I am happy to answer the question. It seems to me obvious that there are a large number of small companies which are honestly run and in which the directors draw appropriate and not too big amounts, and all is well. But equally, there are a minority of companies where those who run them are drawing extortionate amounts from the companies; they build up a very large balance of credits, and they suddenly go broke. It is in the interests of creditors that they should see whether they are offering credit to a company which is mismanaged in this way and which is being exploited by its directors. It seems to me that even if there is only a tiny minority of these companies, it is very important indeed that the public and those who offer the credit should be protected from these practices. We have had too much of this sort of development emerging in society recently. There have been too many scandals reported in the newspapers, and it is very important that we should take every reasonable step open to us to limit the possibility of people doing things such as this. That is why we want these disclosures.
LORD DERWENT: My Lords, I am sorry to interrupt before the noble Lord sits down, but he still has not answered the question. I quite understand that the creditors would be very interested if they found that the directors in a small company were being paid a total sum of, shall we say, £40,000. But of what interest is it to the creditors to know that
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£20,000 of that goes to one man, £10,000 to another, with two further sums of £5,000? What they are interested in is the fact that they think the whole board are being paid too much, and that appears in the balance sheet. I cannot see what further information the creditors will get out of this. That is a point which has not been explained, and as the noble Lord has not yet sat down perhaps he would deal with that point.
LORD BROWN: My Lords, as the noble Lord says, I do not think that in the case of the small, tiny company, this is of interest. If the creditors are aware of the total amount being paid, well and good, and they can get that from the balance-sheet filed at Companies House. But in the case of the bigger companies, I think it is of importance. I do not rest only on that point as the noble Lord is well aware, because I am also interested in the further incomes point. I will not try to argue that again, because that would be taking advantage of the question and having a second go. But I think it is of importance that the creditors should know whether one or more of the directors are exploiting the position by drawing extortionate salaries.
LORD DRUMALBYN: My Lords, be-for the noble Lord sits down, may I ask him—
LORD SHEPHERD: My Lords, may I just say this? I was sitting through yesterday's Report stage, and I think most noble Lords who did so would feel that our Report stage was developing very much into a Committee stage. My noble friend was forced, out of courtesy to the House, to intervene on three or four occasions yesterday, and I think this is wrong. Certainly it is a bad habit, and I think it is against the general procedure in a Report stage. I know that it is hard to conduct a Bill of this nature, but I think it is wrong to put my noble friend into a situation where he is breaking the Rules of the House. To use the phrase—although I know it is done—"Before the noble Lord sits down" when, clearly, he has sat down, is I think in some ways an abuse. It can be done on some occasions, but for it to be done continually is wrong.
LORD CARRINGTON: My Lords, may I intervene for one moment on this subject, although I have spoken for a

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very short time already, to say that I agree with the noble Lord, Lord Shepherd. I think that there is a tendency for a Report stage to become a Committee stage; perhaps we are sometimes at fault, and I think we were at fault yesterday. But I would put this to the noble Lord and to other noble Lords opposite. On this occasion the noble Lord, Lord Brown, perhaps because he did not understand the question, or misunderstood it, or (dare I say it?) did not know the answer, did not answer the questions which three noble Lords put to him. Therefore, it is very difficult for noble Lords on this side of the House, when they are being asked by their colleagues on their Front Bench to divide, to make up their minds on the merits of the issue, when a question which is as important as the one which was asked is not answered by the Minister responsible for the Bill. This puts us in a very difficult position. I think the noble Lord, Lord Shepherd, is quite right, and that from the procedural point of view we were probably at fault, perhaps yesterday and to-day. But I would put it to him that if he could encourage his colleagues to answer the questions which are asked, we should have less of this difficulty.
LORD SHEPHERD: My Lords, there may be occasions when those who sit on
the other side of the House, and we on this side who once sat on the other side, feel it opportune not to understand what has been said by the Minister. It is a very useful debating point. I can understand the difficulty of the noble Lord, Lord Carrington, in this matter. Perhaps we could break the Rule to this extent. If my noble friend would like to reply to this point now, we could complete this Amendment and then stick strictly to the Rules of Procedure.
LORD DRUMALBYN: My Lords, I was rising only to ask the noble Lord whether he was aware that the point which he and his noble friends have made, that Section 196 of the principal Act would be repealed by the Amendment, is quite untrue?
A NOBLE LORD: Of course not.
LORD DRUMALBYN: Not at all. If the noble Lord will look at the Amendment, at what it does, and the qualifications which it makes, he will find that Section 196 is not touched in any way whatsoever.
3.25 p.m.
On Question, Whether the said Amendment (No. 53) shall be agreed to?
Their Lordships divided: Contents, 75; Not-Contents, 59.

CONTENTS

Ailwyn, L.

Emmet of Amberley, Bs.

Macpherson of Drumochter, L.

Albemarle, E.

Erroll of Hale, L.

Merrivale, L.

Alport, L.

Falkland, V.

Mersey, V.

Ampthill, L.

Ferrers, E.

Milverton, L.

Atholl, D.

Ferrier, L.

Monson, L.

Auckland, L.

Forbes, L.

Morrison, L.

Boston, L.

Forster of Harraby, L.

Rathcavan, L.

Brocket, L.

Fortescue, E.

Redesdale, L.

Brooke of Ystradfellte, Bs.

Fraser of North Cape, L.

Sackville, L.

Buckton, L.

Godber, L.

St. Aldwyn, E. [Teller.]

Carrington, L.

Greenway, L.

St. Helens, L.

Clifford of Chudleigh, L.

Gridley, L.

St. Oswald, L.

Coleraine, L.

Harlech, L.

Salisbury, M.

Conesford, L.

Hawke, L.

Sandys, L.

Cottesloe, L.

Hereford, V.

Sempill, Ly.

Craigavon, V.

Horsbrugh, Bs.

Somers, L.

Crathorne, L.

Howard of Glossop, L.

Strange, L.

Daventry, V.

Hylton-Foster, Bs.

Strange of Knokin, Bs.

Denham, L. [Teller.]

Ilford, L.

Teynham, L.

Derwent, L.

Ironside, L.

Thurlow, L.

Drumalbyn, L.

Jessel, L.

Vivian, L.

Dudley, L.

Kilmany, L.

Willingdon, M.

Dundee, E.

Limerick, E.

Windlesham, L.

Effingham, E.

Lloyd, L.

Wolverton, L.

Elliot of Harwood, Bs.

MacAndrew, L.

Ypres, E.

NOT-CONTENTS

Addison, V.

Hilton of Upton, L. [Teller.]

Ritchie-Calder, L.

Airedale, L.

Hunt, L.

Royle, L.

Archibald, L.

Hurcomb, L.

St. Davids, V.

Arwyn, L.

Iddesleigh, E.

Shackleton, L.

Asquith of Yarnbury, Bs.

Inman, L.

Shepherd, L.

Beswick, L.

Kinloss, Ly.

Snow, L.

Blyton, L.

Kirkwood, L.

Soper, L.

Bowles, L.

Leatherland, L.

Sorensen, L.

Brockway, L.

Longford, E. (L. Privy Seal.)

Stow Hill, L.

Brown, L.

Maelor, L.

Strabolgi, L.

Burden, L.

Mitchison, L.

Strang, L.

Chester, Bp.

Moyle, L.

Summerskill, Bs.

Crook, L.

Ogmore, L.

Taylor, L.

Elton, L.

Pargiter, L.

Taylor of Mansfield, L.

Faringdon, L.

Peddie, L.

Uvedale of North End, L

Gaitskell, Bs.

Phillips, Bs. [Teller.]

Wade, L.

Gardiner, L. (L. Chancellor.)

Piercy, L.

Wells-Pestell, L.

Granville-West, L.

Popplewell, L.

Williamson, L.

Henderson, L.

Raglan, L.

Wise, L.

Rhodes, L.

Wootton of Abinger, Bs.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
3.35 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 36, to insert the following new clause:
Increase of maximum charges of registers of debenture holders, debentures trust deeds and registers of members
".—(1) Section 87 of the principal Act shall be amended as follows:—

(a) in subsection (2) (which entitles any person to a copy of the register of holders of debentures of a company or any part thereof on payment of sixpence for every hundred words required to be copied), for the words 'on payment of sixpence for every hundred words required to be copied' there shall be substituted the words 'on payment of two shillings, or such less sum as may be prescribed by the company, for every hundred words or fractional part thereof required to be copied'; and

(b) in subsection (3) (which entitles a holder of debentures of a company to a copy of the trust deed for securing the issue thereof on payment in the case of a printed deed of the sum of one shilling or such less sum as may be prescribed by the company or, where the trust deed has not been printed, on payment of sixpence for every hundred words required to be copied), for the words 'one shilling' there shall be substituted the words 'four shillings' and, for the words 'on payment of sixpence for every hundred words required to be copied' there shall be substituted the words 'on payment of two shillings, or such less sum as may be prescribed by the company for every hundred words or fractional part thereof required to be copied'.

(2) In section 113(2) of the principal Act (which entitles any person to a copy of, or of any part of, the register of members of a company on payment of sixpence, or such less sum as the company may prescribe, for
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every hundred words or fractional part thereof required to be copied), for the word 'sixpence' there shall be substituted the words two shillings'."
The noble and learned Lord said: My Lords, I beg to move Amendment No. 54, which stands in the name of my noble friend Lord Brown. I think the substance of the Amendment has been covered already by the discussions which took place on the Amendments to Clauses 28 and 30. Section 87 of the principal Act entitles any person to a copy of the register of debenture holders, or a part of it, on payment of 6d. for every hundred words required to be copied, and it also entitles a debenture holder to a copy of the trust deed on the same terms except where the trust deed is printed. If it is printed, the debenture holder is entitled to a copy on payment of 1s. Subsection (1) of the new clause increases the charge of 6d. to 2s., and the charge of 1s. to 4s.
Section 113 of the principal Act provides for copies of a company's register of members. Subsection (2) of the new clause increases the permitted charge from 6d. per hundred words to 2s. As in the case of Clauses 28 and 30, I think it was suggested by the Opposition that it should be increased from 6d. to 2s. 6d. We have increased it to 2s., which I submit is a reasonable amount, and accordingly I beg to move.
Amendment moved—
After Clause 36, insert the said new clause.—(The Lord Chancellor.)
LORD DRUMALBYN: My Lords, may I again thank the Government for this Amendment? It is obviously desirable

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that there should not be an anomaly between the old legislation and the new, and this brings the two together.
LORD DRUMALBYN LORD DRUMALBYN moved, after Clause 37, to insert the following new clause:
Amendment of section 18 of principal Act
". In section 18 of the principal Act (change of name of company) there shall be inserted after subsection (2) the following sub-sections—
'(2A) Where the Board of Trade is of opinion that the name by which a company is registered is likely to convey a false or misleading indication of the activities of the company or of the nature of the goods supplied or services performed by the company the Board of Trade may at any time so inform the company in writing, specifying the reasons on which they base their opinion and affording the company an opportunity of making representations to the Board of Trade thereupon either orally or in writing, as the company may prefer; and the Board of Trade may, after considering any representations that the company may make, direct the company to change its name within such period as the Board of Trade may specify, not being less than thirty days.
(2B) Any person aggrieved by a direction given under the foregoing subsection may appeal to the High Court (or, in Scotland, the Court of Session) within thirty days from the issue of the direction, and the Court may make an order confirming or setting aside the direction or substituting there for such order as it may think fit.
(2C) If any person fails to comply with a direction given under subsection (2A) of this section or an order under subsection (2B) of this section, as the case may be, the company and every officer of the company who is in default shall be liable to a fine of £5 for every day during which the default continues.
For the purposes of this subsection, the expression "officer" shall include any person in accordance with whose directions or instructions the directors of the company are accustomed to act.' "
The noble Lord said: My Lords, this new clause follows paragraph 456(o) of the Jenkins Report, and is very much in line with the clause which was moved by my noble friend Baroness Elliot of Harwood during the Committee stage of the Bill. Paragraph 456(o) says:
"the Board of Trade should be empowered to direct a company to change its name at any time if the name has become misleading in such a manner that it is likely to cause harm to the public. There should be a right of appeal to the Court."
During the discussions on Committee stage (OFFICIAL REPORT: 19/12/66, col.
440
1933) the noble and learned Lord on the Woolsack mentioned the five criteria which the Board of Trade follow in applying Section 17 of the principal Act, which says:
"No company shall be registered by a name which in the opinion of the Board of Trade is undesirable."
The most important of these criteria for the protection of the consumer seem to be: first, is the name pretentious, or does it give a false indication of the nature of the company; and, secondly, is it likely to lead to confusion, either by being identical with a registered trade mark not the property of the company or through close resemblance to the name of an existing company?
Section 18(2) of the principal Act permits the Board of Trade, within six months of registration, to direct a company to change its name if it is too much like the name of an existing company; but, as I pointed out during the Committee stage, it is not easy for the Board of Trade to exercise these powers because at the time of registration it is difficult to know with certainty exactly what the activities of the company are likely to be. The memorandum of the company will go very wide, and it is difficult for the Board of Trade to know exactly which of the activities mentioned in the memorandum are those on which the Company is going to concentrate.
My Lords, in paragraph 454 of their Report the Jenkins Committee said this:
"Experience has shown that this power,"—
they were talking of the power in Section 18(2), to which they had just referred—
"which is very infrequently used, is necessary to rectify mistakes, and we agree that it should be extended to cover undesirability on any ground. We also think that the Board of Trade should be given power to direct a company to change its name at any time if the name has become misleading in such a manner as to be liable to cause harm to the public."
The Merchandise Marks Acts make the misdescription of goods an offence, and the proposed Bill for consumer protection would strengthen those Acts very considerably.
But neither the Merchandise Marks Act nor that Bill would have prevented the company which manufactured or distributed goods or which offered services to the public from using a name which conveyed a false and misleading

441
impression of the nature of the goods or services in which the company dealt; and, as I have said, it would not be possible in many cases for the Board of Trade to know, at the time of the application for that name, whether or not the name would become misleading as time went on. My noble friend Lady Elliot of Harwood gave two examples. I think she intends to give more. But the sort of examples I have in mind particularly are those companies whose names indicate that they are manufacturing goods or that they are wholesaling goods whereas, in fact, they exist purely to sell goods to the retailer. This makes it easy for them to pretend that they are getting goods direct from their own factories, at factory prices, when they have no factories. This is the kind of case in which one would expect the Board of Trade to intervene if this particular clause were adopted. I think I have said enough to make clear the purpose of the clause. I beg to move.
Amendment moved—
After Clause 37 insert the said new clause.—(Lord Drumalbyn.)
BARONESS ELLIOT OF HARWOOD: My Lords, I rise to support the Amendment of my noble friend Lord Drumalbyn. As he said, we discussed this matter in the Committee stage of the Bill, when the noble Lord, Lord Brown, said that he thought it could be dealt with in another Bill. I think he was referring to the proposed Bill for the protection of consumers; but we do not yet know when it is likely to be here. I think it would be much better if we could insert in this Bill, which is here, which is being discussed to-day and which is going to another place, some protection on the lines we have already discussed. We do not want the public to be misled; we do not want them to be taken in. We read distressing accounts in the newspapers of companies which are dishonest or "phoney"—whichever word one wants to use. The Amendment which has been moved and which I am supporting would give the public the protection to which they have a right.
In the Committee stage I mentioned the names of companies which are known to the Consumer Council to be operating unfairly and dishonestly in regard to the general public. There are others which have come to our knowledge since then; for this is something which is happening continuously. There was one company
442
called The Consumers' Information Council. It was registered under that title and people thought the title represented what it did, but in fact it was doing nothing of the kind. Then it had to change its name and chose something different. None of these names bore any relation to what the company was doing. In our last discussion, the noble Lord, Lord Mitchison, said that the recommendations of the Jenkins Committee, which we were supporting, were out of date because they were made in 1962. I can only tell the House that these matters connected with false names and wrong descriptions arise every day, and the situation is urgent. I would strongly urge the Government to accept this Amendment and thereby do something immediately to protect the consumers, the users of goods and services of all kinds, against fraudulent exploitation. It is not something which can be put off. I hope the Government will see their way to accept this Amendment.
THE LORD CHANCELLOR: My Lords, as has been said, on the Committee stage there were competing Amendments dealing with this point and submitted by the noble Baroness, Lady Elliot of Harwood, by my noble friend Lord Peddie, and also by the noble Lords, Lord Drumalbyn and Lord Erroll of Hale. I promised the noble Baroness that the Government would look at this question again. The Government have done so, but I regret that they feel unable to accept Amendments which are outside the scope of the Bill. The scope of the Bill is, as we know, disclosure and such matters as provisions with regard to insurance companies, in which field recent events have shown a particularly urgent need that the law should be amended at once. That being so, I do not propose to say a great deal about this matter. I have already explained the Government position, as I thought it right to do, rather fully on the Committee stage; and the noble Lord, Lord Erroll of Hale, then said that I had read the Committee a lecture. I do not want to give him grounds for saying the same thing again.
Your Lordships know the history of this Bill and know why (in view of the position with regard to legislative time in another place during the months which remain in this Session) the Government

443
feel they are unable to extend the scope of the Bill. The noble Lord, Lord Erroll of Hale, said yesterday, in relation to shares of no par value, that it was always possible for the Government to say: "So far; no further"; and that if they did not go further at least they should have the provisions regarding shares of no par value. If I might respectfully make two comments on that, I would say, first, that the Opposition having got their shares of no par value and having carried their Amendment, the noble Lord, Lord Drumalbyn, does not get up and say: "In view of that we shall not now press this Amendment". They are still asking for a whole range of things, nothing to do with non-disclosure, frauds, and so on. Secondly, to say that the Government can say: "So far, no further", is wholly to misunderstand the position which is going to arise.
In the other place there are, for example, the trade unions who are anxious to obtain Amendments to give further protection to employees on the liquidation of companies. This, of course, is Company Law. Undoubtedly, it is within the Title of the Bill, but, having regard to the Parliamentary timetable, the Government will be bound to say: "We are sorry, but we cannot accept this Amendment because it is outside the scope of the Bill. It will be very proper for the second Bill; but it is outside the scope of this one". But how can they possibly say that if they have allowed the Opposition in this House to introduce a series of new sections on shares of no par value involving alterations in income tax, surtax, capital gains tax, corporation tax, stamp duty and estate duty? How can the Government then seriously say to Amendments moved from their side of the House that they cannot go outside the field of disclosure?
The noble Lord, Lord Erroll of Hale, said, quite rightly, that I had had no experience of the fourth year of the Cabinet and that it was therefore all very well to express an intention to introduce some further Bill at some later date. That is quite true. I can well understand that some Governments might be afraid to do something in the fourth year which might make them unpopular. I hope I am not biased in thinking that this Government have never shown any sign at all of being afraid to do anything that would make
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them unpopular; but, even if that were so, I can hardly envisage a situation in which somebody says: "I would have voted Labour if they had not introduced that second Bill to reform Company Law". If I may say so, that seems rather an exaggerated idea. I know what was said in the Cabinet among my colleagues about the second Bill before this Bill was introduced. First, as I,understand it, no Government would ever give an unqualified undertaking as to the introduction of legislation in future Sessions; and, secondly, and in any case, obviously I cannot say what was said. All I can say is that I am confident that we shall have a second Companies Bill in the lifetime of this Parliament.
Most of the remaining recommendations of the Jenkins Committee clearly ought to be enacted. Moreover, it may be that we ought to think rather more of what the point of view of Socialists should be about the attributes of a modern company in a modern economic State. Many, of course, think that it should be the same as is taking place in some other Western democracies; that the people who really make a success of a company are not only those who provide its capital, but those who work for it, and that therefore, those who work for it ought always to be represented on the board more than is the case to-day. But these things we can consider when we come to the second Bill. I am not a betting man, but I would bet my boots, or shoes as they are (though not these, because they are very old; I have a pair of new shoes that I would bet) that we shall see a second Companies Bill in the lifetime of this Parliament.
My Lords, I am sorry that I cannot say more. We on this side of the House or where, but for Henry VIII's Statute I should be, that is, on that side of the House, are just as anxious as anybody to see Company Law fully reformed and made up-to-date. We are determined that that shall happen in the lifetime of this Parliament. But for the reasons that I have given before, I am afraid that from the Government's point of view this Amendment is outside the scope of the Bill and I hope that, having heard what I have said, the noble Lord may think fit to withdraw the Amendment.
3.52 p.m.
LORD CONESFORD: My Lords, may I say how very much I regret that the

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noble and learned Lord who sits on the Woolsack has not given any views on the merits of this Amendment? The position as I see it is that the Government made, and deliberately made, the decision—I think a wise and good decision—to introduce the Bill into this House; whereupon Members in every section of the House thought it their task to try to make it a better Bill according to their lights. I cannot see that there is anything wrong about that and the matter that I find most questionable in what was said by the noble and learned Lord who sits on the Woolsack (and indeed by the Minister speaking for the Board of Trade yesterday) is the confidence with which they make assertions about the attitude of another place.
My Lords, unlike the noble and learned Lord who sits on the Woolsack, and unlike the representative of the Board of Trade, the noble Lord, Lord Brown, I had the honour of serving for twenty years in another place. I can only say that I differ entirely from the view that they take about another place. First of all, I do not think the other place very much likes confident statements being made about what their attitude will be before they have themselves had an opportunity of considering it. I think that is a regrettable thing. But so far as time is concerned, does anybody seriously believe that the time that will be taken over this Bill in another place is going to be affected in the least by whether the clause we are now discussing is in the Bill or is not in the Bill? It will not make an atom of difference to the time that will be taken in another place.
My Lords, I was sorry that the noble and learned Lord also made a statement about the Amendments that we passed yesterday dealing with shares of no par value, and I think unwittingly said something which was not accurate. He said that our Amendments necessitated some changes in the Income Tax Acts, and so forth. My Lords, they did not. They altered the Companies Act by inserting in the Act certain provisions which will
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come into operation only when the Government make an Order bringing them into operation. It is perfectly true that the Amendments lay a foundation for a reform that can be completed only by changes which will have to be accomplished in a Finance Bill; but that can be done whenever the Government and another place think fit to do it. There is nothing about the Amendments that we passed on no par value shares that of themselves necessitate any further change in the law, in the Finance Bill, or otherwise.
My Lords, I felt it was worth making that statement because I want to say that one, I hope reasonably independent, Member of this House has tried to concentrate on improving a Bill which was deliberately introduced into this House. I believe that similar attempts have been made by noble Lords in all quarters of the House, and I cannot accept that there is any reason why the Government should not give their opinion on a short Amendment, like the one before them, and on the merits of that Amendment. I am very sorry indeed that that was not done.
LORD PEDDIE: My Lords, I can quite understand the concern shown by my noble and learned friend who sits on the Woolsack about the possibility of extending the scope of this Bill. Obviously, it would be possible so to widen the scope of the Bill as to make it unnecessary to have a second Bill. I am sure that the House has no intention of doing that, but in view of the fact that my noble friend stated that the main purpose of the Bill was that of disclosure, I should like to ask whether it could not be considered that the Amendment before the House at this stage is concerned with the question of disclosure and, therefore, that its acceptance would not offend the justifiable principle which my noble friend has laid down, that it would be unwise to widen the scope of the Bill? It is my humble opinion that this would not widen the scope of the Bill because it comes within the compass of the definition which my noble friend has given.

MALTA: RUN-DOWN OF BRITISH FORCES
3.58 p.m.
LORD BESWICK: My Lords, with permission I should like to repeat a Statement on Malta made by my right honourable friend the Secretary of State for Commonwealth Relations. He said:
"I wish to make a Statement on my recent visit to Malta in connection with the proposed reductions of our forces there.
"It was stated in last year's Defence White Paper (Command 2901) that we proposed to enter into consultations with the Government of Malta, in accordance with Article 6 of the Defence Agreement, for a reduction of British forces there in the next few years. My noble friend Lord Beswick inititiated these consultations in Malta last August when he put forward proposals for reducing our forces to Defence Review levels by the end of 1968. In the light of the strong reactions of the Malta Government and of subsequent representations made in London by the Maltese Prime Minister, Her Majesty's Government concluded that the proposals should be modified in order to reduce their impact on the Maltese economy, principally by deferring the withdrawal of British Army units for two years until 1970.
"The revised proposals envisage the withdrawal of Her Majesty's ships based on Malta and the disbandment of a second R.A.F. Squadron during the current year, the ending of British responsibility for the Royal Malta Artillery during 1968, and the withdrawal of both British infantry battalions in 1970. At the end of the run-down one R.A.F. Squadron would remain and a range of defence facilities would be retained. As a consequence of these reductions British defence expenditure in Malta would by 1970 fall by about a half from its present level of £12½ million a year. The number of British servicemen would be reduced from the present level of about 4,300 by about two-thirds by the end of 1970.
"I visited Malta from January 12 to 17 to continue our consultations and to present these revised proposals to the Malta Government. I had a series
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of meetings with the Prime Minister and his advisers and also had discussions with leaders and representatives of many sections of Maltese opinion. I explained that the reduction of our forces in Malta was part of a worldwide redeployment of our defence effort, the object of which was to secure the most efficient use of the resources available to us. It would make a significant contribution to the worldwide economies which we are determined to make, without in our view affecting our ability—or our determination—to fulfil our obligations under the Defence Agreement for the defence of Malta itself. We recognised that the run-down of our forces would create serious problems for Malta particularly during the early years. It was in order to lessen the impact on the Malta economy and in response to the representations made by the Malta Government that we were now proposing to phase the run-down over four years instead of two. These revisions meant, for example, that in 1969–70 the level of employment would be more than 2,000 higher and service expenditure in Malta more than £3 million higher than under our previous proposals. These changes, which were not justified on purely defence grounds, represented a considerable sacrifice of savings in defence expenditure which we could otherwise have achieved. I also referred to the exceptionally high level of aid, running at about £18 per head a year which, despite cuts elsewhere, we were continuing to provide for Malta. I offered our co-operation in measures to alleviate the consequences of our run-down.
"The Government of Malta stressed the serious economic difficulties and heavy unemployment which they contended even our revised proposals would cause for Malta, particularly during the first two years. They also maintained that with our revised force levels we should be unable to honour effectively our obligations to assist in the defence of Malta under the Defence Agreement. They claimed that we were in breach of the Agreement in failing to consult them properly on these matters in advance. Many other expressions of disquiet at the economic effects of the run-down were made to me.

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"A summary of the views of each side is contained in the joint communiqué, copies of which I have placed in the Library. I undertook to report the reactions of the Malta Government to Her Majesty's Government but discouraged expectations of further changes in our proposals. After considering my report, Her Majesty's Government have confirmed, with regret, that they cannot offer any further changes in their proposals for the run-down and must now proceed to put these into effect. I have so informed Dr. Borg Olivier in a personal message.
"While Her Majesty's Government do not deny that even the revised proposals will cause difficulties for the Maltese economy, we believe that these will be only temporary. In the longer run, Malta's economic prospects are good; industry and tourism are expanding, and the dockyard is a valuable asset. I hope that our aid can help Malta to surmount these short-term problems and lay the foundations for future prosperity in the island.
"I cannot conclude this Statement without a warm personal tribute to the Maltese Prime Minister and his colleagues who received me with unfailing courtesy and consideration, despite the difficult mission we had come to perform. One cannot visit Malta without being conscious of the great good will which exists there for Britain, and I have every hope that this good will, which is born of over 150 years of close association, in peace and war, will survive our present difficulties."
LORD HARLECH: My Lords, we are most grateful to the noble Lord for repeating that Statement made by the Commonwealth Secretary. I think he will realise that it is a very grave Statement. I rather doubt whether the tributes paid to the Prime Minister of Malta in the last paragraph will compensate for the very harsh terms that have been imposed on his Government by the British Government. I think that there will be a feeling that the Government's actions are perhaps against the spirit, if not against the letter, of our Defence Agreement with Malta; and we on this side would wish to be convinced that Her Majesty's Government can carry out the commitments
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they have entered into for the defence of Malta.
As to the effects upon the Malta economy, I have heard it suggested (and I wonder whether the noble Lord could confirm this) that in two years' time the rate of unemployment in Malta may rise to a figure of 17 per cent. Is that so? If it is, I think we should have to conclude that Her Majesty's treatment of Malta was niggardly on this occasion and that such treatment would not be acceptable to the people of this country, in view of our 150 years of close association about which the Minister spoke. We shall, of course, have to study very carefully the joint communiqué, which I understand is being placed in the Library, and if our fears about these actions are confirmed, it may well be that we shall ask for a debate on this subject at an early date.
LORD OGMORE: My Lords, I, too, am grateful to the noble Lord, Lord Beswick, for repeating this long Statement. We on these Benches are concerned about that part of the Statement which says that the Maltese Government are upset by reason of the fact that they claim that we are in breach of the Agreement in failing to consult them properly on these matters in advance. I think that the House would wish to know to what extent, if any, the British Government have failed to meet their obligations in this matter.
On the problems arising out of the Statement, I should like to ask a few questions. First, about the Royal Malta Artillery. Although it may be said that it is desirable to bring home some of our troops, why should it not be possible to continue our support to the Royal Malta Artillery, an old and honourable regiment for which we have been responsible for many years? Even in our present time of stringency, it seems to me that we could do something to keep on this old regiment, even if in a modified form. Surely that would be better than disbanding it altogether, as will happen.
I understand that the number of Servicemen in Malta will be reduced from 4,200 to 1,400, I should like to ask what will be the number of Service families who will be brought home, and where the Government are going to put them when they get them home.

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Lastly, will the Government consult both B.E.A. and the charter air firms to try to provide much cheaper aircraft fares to Malta, because without far cheaper fares than obtain at present there cannot, in my view, be any great increase in the number of tourists to Malta. I do not accept the noble Lord's and the Minister's optimistic view of the long-term economic prospects of Malta. In view of the water shortage, apart from anything else, it has always been difficult to believe that there is likely to be any great economic advance, except possibly in tourism.
BARONESS EMMET OF AMBERLEY: My Lords, I wonder whether the noble Lord would elucidate one point. Is the saving mentioned by the Minister gross or net; that is to say, does the saving take into account the re-housing of families that will be brought home?
LORD BESWICK: My Lords, answering the noble Lady's point first, the saving will be on our expenditure in Malta. There will be, of course, other expenditures in this country. It is difficult to say what the net figure will be, because the fact that a man is housed in this country means that certain expenditures are saved. But the crucial point here, so far as the balance of payments is concerned, is, I think, the saving of currency spent overseas. I hear the murmurs all over the House about this. I assure the noble Lady, and all those who have reminded me that Malta is in the sterling area, that I am well aware of this fact. But having argued this point for some weeks with the Treasury, I am bound to say that I am convinced that money spent within the sterling area still affects our balance-of-payments considerations.
Turning to the noble Lord, Lord Harlech, I agree with him that this is a grave Statement, and if, after reading the details in the communiqué, he has further questions to ask, or if he wishes to raise the matter in any other way, we will endeavour to provide him with all the information for which he asks. So far as our obligation to consult is concerned, there is here a difference of opinion. All I can say is that Her Majesty's Government are convinced that they have honoured their obligation to consult with the Maltese Government before any reductions are made. It is the fact that,
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since I first went there in August of last year, there have been continual discussions; indeed, these could, I should have thought, quite rightly be called consultations. As the result of those discussions, significant changes have been made in the proposed reductions.
So far as the Royal Malta Artillery are concerned, I fully understand the noble Lord's question. Everybody will wish to pay tribute, as he has done, to the service which they have rendered. But the fact remains that there is no continuing role for this regiment, so far as our defence requirements are concerned, and we have therefore reluctantly had to say that by 1968 we shall have to end our responsibility for the R.M.A. Whether it will be possible for the Malta Government to accept that responsibility is for them to decide.
The noble Lord, Lord Ogmore, asked, also, about the possibility of reducing air fares to Malta in order to assist the Island's tourist industry. As it happens, I have had discussions with the B.E.A. on this point. It is true to say that the lowest fare charged for flights overseas from this country, is the fare from here to Malta. In fact, I may say that we are in breach (and there is nothing underhand about this) of our I.A.T.A. Agreement by continuing to charge, for another year at any rate, a very low air fare to Malta. But this has had the effect of helping the Malta tourist industry. The real difficulty, so far as tourists are concerned, is not air transport, but the hotel accommodation on the Island.
LORD HARLECH: My Lords, the noble Lord did not answer my question about the level of unemployment which Her Majesty's Government think may obtain in Malta in, say, two years' time.
LORD BESWICK: My Lords, the short answer is that the 17 per cent. figure would not, I think, be an agreed one. But it is considerable and I should not wish to try to hide that fact. We hope, however, that as a result of the extension of the run-down period from two years to four years the original fears will be diminished, and it is hoped that in the extended time new jobs will be found by those displaced.
LORD MERRIVALE: My Lords, the noble Lord has referred in his Statement

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to the phasing of the run-down of the Service personnel from two years to four years. Is it not a fact that, with regard to Maltese civilians, there will be 5,000 unemployed in two years (and this period has not been increased), and that in four years it will be 10,000? In fact, in the phasing there has been no change in the number of civilians who will be unemployed.
LORD BESWICK: My Lords, the numbers affected are indeed considerable, but it is not true to say that as a result of these consultations no changes have been made. As a matter of fact, so far as locally engaged personnel are concerned, considerable easements have been made. The figures, as I understand them now, are as follows. The British Services at present employ about 2,500 locally enlisted Maltese servicemen, including the 400 with the Royal Malta Artillery, and about 7,800 civilians. By the end of 1970—that is, the end of the run-down period—these figures will be about 750 enlisted servicemen, and 3,000 civilians.
LORD THURLOW: My Lords, is the noble Lord not aware that, with the money we spend on the Island, Malta buys a vast amount of British goods which are sold to tourists from all over the world? From the point of view of overseas expenditure, I do not see that Malta is so different from, say, the Isle of Man or the Channel Islands. Is the noble Lord aware, also, that in the last ten years we have spent an enormous amount of British money on the balance and the quarters of the Forces in Malta, all of which, presumably, will be thrown away? Lastly, is the noble Lord aware that when the Royal Malta Artillery was reduced on an earlier occasion there was an opportunity, at least for the officers who were on long-term engagements, to transfer to our own Royal Artillery, but that, in view of the fact that there are so many redundancies in our own Royal Artillery, such a career prospect now is highly unlikely?
LORD BESWICK: My Lords, so far as the export element is concerned, it is true that a proportion of what we spend in Malta is used by the Maltese for buying goods from this country, and this must be taken into account when assessing the economic benefit to this country. It is not true to say that all we spend there is
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used for buying British goods; but a proportion is. It is not 100 per cent.; nor indeed 50 per cent., but less. This aspect has, of course, been considered.
So far as accommodation is concerned, I recognise what has been said about this. It has been said by Members on this side of the house, too, from time to time, about other bases which Conservative Administrations have had to leave, that money has been spent on accommodation, which has then been vacated. I am afraid that if we are to make any reductions in our overseas defence commitments, this will happen. I only hope that better use will be made of the accommodation which we are vacating. I hope particularly, that, so far as the medical facilities are concerned, they will be of great value to the Maltese.
On the point with regard to the Royal Malta Artillery, again I have to accept what the noble Lord says: that the opportunities for enlistment in the British Services, particularly so far as the commissioned officers are concerned, are now much less than they were. So far as other ranks are concerned, I still hope that some will be able to find places within the British services.
LORD OGMORE: My Lords, may I ask the noble Lord whether he will reply to one question which I asked but which he has not so far answered? That is, about the number of families affected.
LORD BESWICK: My Lords, I did not answer that question because, quite frankly, I do not know the numbers of families involved. If it is possible to obtain the figures, I will let the noble Lord know. But, of course, the fact that we have extended the presence of the two battalions for a further two years means that this is not an immediate problem.
LORD BROCKWAY: My Lords, may I ask my noble friend, while recognising the need to reduce military expenditure, whether Her Majesty's Government have given full consideration to the services which the people of Malta have rendered to this country; how for years it was the naval bastion of this country; how in the last war we gave the George Cross to the whole of the Maltese population; how General Eisenhower said that their resistance had meant that the war had been concluded three months earlier than otherwise would have been the case? In

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view of these facts, will our Government give them the fullest possible economic aid, in order that the economy of Malta may be changed from a naval to an industrial basis? And will they ask America and the United Nations, who both benefited from Maltese resistance, to make some contribution to a fund for that purpose?
LORD BESWICK: My Lords, the answer to my noble friend is that we shall do all that is possible; that we are now doing a good deal, and that should not be overlooked. Eighteen pounds per head of the population of Malta is not an insignificant contribution. So far as the naval facilities there are concerned, as my noble friend probably knows, the majority of those facilities are already being used as a civilian dockyard; and I hope this dockyard will be expanded for the benefit of the Maltese economy.
So far as the general point which he makes is concerned, I would say this to him. I recognise—and it would be true to say none more—the contribution made by Malta during the time of the war. I have emphasised the point in many quarters. It is a fact. But it is also a fact that people cannot go round, as my noble friend has gone round, demanding economies in general, and resisting each in particular. If we are going to make economies in military expenditure, all theatres will be affected.
LORD SHEPHERD: My Lords, in view of the fact that the noble Lord, Lord Harlech, recognised the importance of this matter and might well wish an opportunity for a debate, I wonder whether—as we have now been on the Statement for some 25 minutes—we should not now resume our consideration of the Companies Bill, on the understanding that if noble Lords wish to raise this matter we will see what can be done, through the usual channels, to provide the necessary time.

COMPANIES BILL [H.L.]
4.22 p.m.
Report stage resumed.
LORD OGMORE: My Lords, as we are back on the Companies Bill I should like to follow up something said by the noble and learned Lord on the Woolsack and also by the noble Lord, Lord Conesford; that is to say, to what extent we as a House should deal with a matter of this kind which was not in the original Bill. As I understand it, in the past in this House, if a matter was within the Title of a Bill any noble Lord was quite entitled to put down an Amendment or a new clause, if he thought fit, for it to be discussed. This is particularly the case when it is a House of Lords Bill. The only time in my recollection when I have heard the kind of argument we have heard adduced to-day from the Woolsack, and also adduced by the noble Lord, Lord Brown, yesterday, has been at the end of a Session, when the Government, Labour or Conservative, would in case of need come forward and more or less put a pistol to the head of the House and say, "Look, we think this is an admirable thing, but if you press it we shall not get the Bill at all". We have always grumbled even then; I have grumbled many times myself and talked about pistols and blackmail, but it has not made any difference at all. One had to give way because the Government turned round and said, "Either/or—either you let this go through as it is, or you do not get the Bill".
There is no question of that position arising on this Bill. This is a House of Lords Bill. I assume that the Lord Chancellor was talking about a fourth year for the Government; he does not think they are going to collapse very quickly. Therefore, according to the Government's view, there is no need to think that they are going to the country in any short space of time and that therefore the Bill will not be taken through the House of Commons. So I, for my part, cannot see why we should not deal with this new clause on its merits, irrespective of what administrative difficulty it may cause the Government. That is one of the purposes we are here for: to cause administrative difficulty to the Government. That is their look-out, not ours.

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The noble and learned Lord the Lord Chancellor, or the noble Lord, Lord Brown, said that they had to consult a lot of Departments and some of the Departments would not like it if the Amendment went in. What has that to do with us? We do not care whether they like it or not. We put in Bills what we think should be in them, and if some backroom boy in the Treasury or the Board of Trade does not like it, it is just too bad. If we had taken a firmer line, even at the end of a Session, it would have been better, because in my experience a number of Bills have gone through this House which could have been much improved by our taking a firm line with the Government.
To-day I would suggest to your Lordships that we stand on our rights, and if we think that this is the sort of new clause that ought to be in the Bill, then let us put it in the Bill; and if the noble Lord, Lord Drumalbyn, decides to divide on it we must exercise our individual judgment on whether we like the clause or whether we do not.
LORD BROWN: My Lords, I have not been in this House a great length of time, nor have I a great deal of experience of this House, but I am a little shocked to hear that it is the duty or right of noble Lords here to put in the Bill whatever they like without regard to the circumstances. The Labour Governments of this country since the war have been the only Governments which have introduced Companies Bills. This is not a political debate, but in view of what has been said I am going to say that in their thirteen years in office the Opposition Party never introduced a Companies Bill.
This Government see the urgent necessity of amending the Companies Act. It is urgent. We have a crowded timetable of legislation, but the Government have proceeded on to the Companies Act and have taken the Jenkins Report as a basis. There is not in this Bill a third of the recommendations which appear in the Jenkins Report; there are twice as many recommendations, most of which seem very sound, in the Jenkins Report as we have in this Bill. It is open to anybody in respect of a vast mass of potential Amendment to advance precisely the same arguments which the noble Lord on the Liberal Benches has just put. If anyone in the House took up this irresponsible
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attitude we should send out a Bill two or three times as long as the one we have here.
It is not wrong or stupid, but wise, to point out from the Government Benches that there is a limit to the length of the Bill. We have started dealing with the matter, and I feel a little cross when noble Lords say what has been said. It is as though a committee were trying to run a sports meeting and had decided that in order to attract the public it would be necessary to limit it from 2 to 5 o'clock, and then people came along and said, "Surely we can have a hop, skip and jump. It will only take five minutes." The reply is, "We are trying to limit it from 2 till 5 o'clock, and if we put that in we shall have to put other things in as well." But they keep saying, "It will only be an additional five minutes." We get this argument every time, without reference to the real argument which this side of the House is making. Noble Lords are entitled to ignore the main argument I have made and which others have made as well, but we shall not respect Members from the other side for completely ignoring our argument, which is a cogent argument.
LORD OGMORE: My Lords, the noble Lord ignores my argument. If you want to limit the scope of the Bill it is done by the Title. If something is within the Title we can move an Amendment upon it. The noble Lord is trying to introduce a completely new procedure in Parliament.
LORD BROWN: My Lords, so long as the procedure results in the Government spokesman standing up and being entirely objective about the situation, I see nothing wrong with such a new procedure and perhaps it would be a good idea if this House became a little more objective and faced the issue of Parliamentary time. There is not untold time in which to get these Motions through. If you want to move an Amendment on this matter you are entitled to do so. The content of this Amendment is perfectly sound; there is no mistake about that. But if we go on amending the Bill and extending it, the same thing will happen in another place and a great deal of time will be wasted.
VISCOUNT ECCLES: My Lords, I must say a word because I was responsible for

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the no-par-value shares Amendment. It seems to me that the Government are saying that the scope of every Bill shall remain what it was when they introduced it. I must draw on my experience in another place. Take the Finance Bill. Year after year honourable Members in another place try to get into the Finance Bill, to effect some relief or other in taxation, new clauses for which they think there is a good case, and from time to time they get them in. It has never been assumed in another place that the scope of the Bill was absolutely fixed when the Bill arrived. It was always considered the right of an honourable Member to try to make the legislation better.
If we put in good Amendments—and I hope any Amendments on which we chose to divide the House would be good Amendments—and if they are sound, the Members in another place will not waste any time on those Amendments, especially if the Government admit them in principle. What the Government are saying to us is, "We are afraid, even with our majority of one hundred in another place, that if you here set an example of putting something good into the Bill, the Members there will follow it and we shall not be able to keep our people in order".
This is a rather difficult doctrine to swallow, because a man is elected a Member of another place to do what he thinks right. If a majority of another place wants to put in Amendments and they win the Division, that is the way our country is governed. To start now and say we must take every precaution that there are no majority votes in another place for Amendments which will enlarge the scope of the Bill is, I think, constitutionally very dangerous. I am sorry we have to say this. I have always thought the Executive was getting more and more powerful all the time, and I think I see certain reasons why that is so, but I did suppose that Members of Parliament on the Back Benches would always have the right to try to make legislation better. If that is taken away from them it is not very clear what we come here for.
LORD DRUMALBYN: My Lords, I wonder whether I may follow up some of the remarks that have been made on
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the attitude of the Government. May I put this to the noble Lord opposite and to the noble and learned Lord on the Woolsack: that they are saying to us that if we in this House put Amendments into the Bill then another place is likely to bring in a great many other Amendments which will take a great deal of time, Amendments which it will be difficult to resist. I wonder whether they would look at it from the other point of view? If they are suggesting to us that it is provocative to put Amendments in, what do they think it is to say, "You must not put Amendments in"? This Bill will go to another place, a Bill on which the Government have said, "On no account will we accept any Amendments in here". What is another place going to think of that? What would your reactions be, my Lords? What would be the attitude of noble Lords opposite in similar circumstances, if they were in Opposition? They would find out every single Amendment they could get and the Bill would go on and on in Committee. Surely that is human nature, and it cannot be described as irresponsible. Because what we are here to do is to discuss Acts of Parliament and to legislate and to move into those Acts of Parliament those things which we think will be of benefit to the public.
LORD BROWN: My Lords, I know the noble Lord does not intend to be unfair, but I think he is very unfair when he uses words to suggest that our attitude has been that no Amendments to the Bill are to be allowed, particularly as a large number of Amendments have been accepted. It is ungenerous to say that. We have leant over backwards to try to take note of the very wide counsel from the Opposition Benches. But we do not want to extend this Bill outside certain limits.
LORD DRUMALBYN: My Lords, I accept that, and we are grateful to the noble Lord for making improvements to the Bill. None of these improvements have involved new clauses. The Amendments I was talking about were new clauses. This is what is at issue. We pride ourselves on being a democratic community, and one would imagine that the Government would be prepared to accept advice on improvements that they themselves admit are improvements being

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added to the Bill. This is partly what we are here for. But, instead of that, we are accused of an irresponsible attitude for wanting to improve the Bill. This is just the pure fact of the matter. This is what the noble Lord said: "If you try to improve the Bill by extending it to cover things which the Government themselves admit will be to the benefit of the public, you are irresponsible". That is what the noble Lord said, in terms, on this particular Amendment. All we have had from him is that this Amendment is sound. My Lords, what on earth are we expected to do in those circumstances?
SEVERAL NOBLE LORDS: Carry it.
LORD DRUMALBYN: It seems incredible that noble Lords should get up from the other side and say that the Amendment is sound and then say, "But we must not have it in the Bill". It has been in the Jenkins Report. It is within the scope of the Bill. What does he expect us to do? I think he has put us in a terribly difficult position. In a way I was almost hoping he would not say anything at all, as the noble and learned Lord on the Woolsack did, about the content, although I must say it is very odd we should be moving an Amendment here. I have nearly passed my majority of twenty-one years in Parliament, but I have never on any occasion, so far as I can remember, known an Amendment to be moved but the substance of it not discussed at all by the Government. All the noble Lord can say to us is, "The Amendment is sound, but we reject it". My Lords, he is really being extraordinarily provocative to the point of irresponsibility himself. I must invite noble Lords to take what action they think on this matter, because it is only right that there should be a protest against the treatment that Parliament is receiving.
LORD PEDDIE: My Lords, I beg permission of the House to speak twice on this Amendment, although precedent will indicate that such begging of leave is not necessary. I think we are getting a long way wide of the mark in this debate. I appreciate the attitude of the Government in seeking to restrict the scope of the Bill. That I think is completely justified—
LORD CARRINGTON: My Lords, I hesitate to interrupt the noble Lord, who has the great respect of this House and who is very popular on all sides, but I think it is an abuse of the procedure of this House to get up and say, "May I have the leave of the House?" and then to speak a second time. I think it is just permissible, as we said earlier to-day, to intervene to ask a question, but to make a speech I think is out of order.
LORD PEDDIE: My Lords, I was proceeding, possibly in too long-winded a way, to ask for an answer to a question which I put to my noble friend and which apparently has been lost in the welter of discussion on matters which had no strict relevance to this particular Amendment. I would request my noble friend to give an answer to the question I put as to whether or not this particular Amendment came within the scope of the Bill.
LORD BROWN: I think the answer is, No. It is difficult to draw hard and fast lines. I am not going to pretend that it is easy to draw a line on one side of which fall all matters which should be included in the Bill and on the other all matters which should not be included. It is a question of judgment in trying to get a reasonable limitation. I think this falls on the wrong side of the line.
LORD HAWKE: My Lords, I do not believe the noble Lord the Minister who has just replied has any sound grounds for saying that. I look at this particular matter as one of disclosure. You are asking a company to disclose its true business. Before it starts business it has to disclose it to the Board of Trade, and they have to agree what sort of name it will have. It must not be a deceptive name. After it has started to trade, for some reason or other it manages to work itself away into a position where its actual trade bears no relation to its title. Therefore, it is proposed to insert this clause, in order to cause the company to disclose what it should have disclosed at the beginning. Therefore, I submit that it is well within the spirit of this Bill. It is merely carrying the doctrine of disclosure a little further, and while I do not regard it as a terribly important Amendment, in view of the difficulties the noble Lord has been making about accepting it I think we should be quite justified in putting it into the Bill.
VISCOUNT DILHORNE: My Lords, I am astonished that the noble Lord should say that this Amendment is not within the scope of the Bill. I do not think he can possibly justify that observation. This Amendment seeks to amend a section of the principal Act. Furthermore, if the Amendment is made it will not involve any alteration to the Title of the Bill. If it were not within the scope of the Bill, then to make the Bill right the Long Title would have to be amended; but no such Amendment is required. No doubt it was convenient
Resolved in the affirmative, and Amendment agreed to accordingly.
4.50 p.m.
BARONESS ELLIOT OF HARWOOD BARONESS ELLIOT OF HARWOOD moved, after Clause 37, to insert the following new clause:
Amendment of section 188 of principal Act
". Section 188(1) of the principal Act (which provides for the restraint of fraudulent
to the noble Lord to say, in answer to his noble friend, that in his opinion the Amendment was not within the scope of the Bill. But if he consulted anyone with any experience of these matters they would be bound to say that, whether or not the Amendment is desirable, clearly it is within the scope of the Bill.
4.42 p.m.
On Question, Whether the said Amendment (No. 55) shall be agreed to?
Their Lordships divided: Contents, 77; Not-Contents, 36.

CONTENTS

Ailwyn. L.

Ebbisham, L.

McCorquodale of Newton, L.

Airedale, L.

Eccles, V.

Macpherson of Drumochter, L.

Albemarle, E.

Effingham, E.

Merrivale, L.

Amulree, L.

Elliot of Harwood, Bs.

Merthyr, L.

Atholl, D.

Erroll of Hale, L.

Morrison, L.

Auckland, L.

Falkland, V.

Mowbray & Stourton, L.

Blackford, L.

Ferrers, E.

Moynihan, L.

Boston, L.

Ferrier, L.

Napier and Ettrick, L.

Brentford, V.

Forster of Harraby, L.

Nugent of Guildford, L.

Brooke of Cumnor, L.

Fortescue, E.

Ogmore, L.

Brooke of Ystradfellte, Bs.

Fraser of North Cape, L.

St. Aldwyn, E. [Teller.]

Buckton, L.

Greenway, L.

St. Helens, L.

Caccia, L.

Gridley, L.

St. Oswald, L.

Carrington, L.

Hawke, L.

Salter, L.

Clifford of Chudleigh, L.

Hereford, V.

Sandys, L.

Cohen, L.

Horsbrugh, Bs.

Shannon, E.

Conesford, L.

Howard of Glossop. t

Slim, V.

Crathorne, L.

Howe, E.

Somers, L.

Daventry, V.

Iddesleigh, E.

Strange of Knokin, Bs.

Denham, L. [Teller.]

Ilford, L.

Tenby, V.

Derwent, L.

Inchyra, L.

Thurlow, L.

Devonshire, D.

Inglewood, L.

Vivian, L.

Dilhorne, V.

Jessel, L.

Wade, L.

Drumalbyn, L.

Kilmarnock, L.

Willingdon, M.

Dudley, L.

Kirkwood, L.

Wolverton, L.

Limerick, E.

Ypres, E.

NOT-CONTENTS

Addison, V.

Hilton of Upton, L.

St. Davids. V.

Archibald, L.

Latham, L.

Shackleton, L.

Bowles, L.

Leatherland, L.

Shepherd, L.

Brockway, L.

Lindgren, L.

Silkin, L.

Brown, L.

Longford, E. (L. Privy Seal)

Snow, L.

Champion, L.

Maelor, L.

Sorensen. L. [Teller.]

Collison, L.

Mitchison, L.

Summerskill, Bs.

Crook, L.

Pargiter, L.

Taylor, L.

Faringdon, L.

Phillips, Bs.

Taylor of Mansfield, L.

Gardiner, L. (L. Chancellor.)

Piercy, L. [Teller.]

Wells-Pestell, L.

Hall. V.

Rhodes, L.

Williamson, L.

Henderson, L.

Ritchie-Calder, L.

Wootton of Abinger, Bs.

persons from managing companies) shall be amended by the insertion, after sub-paragraph (ii) of paragraph (b), of the following subparagraphs:—

'(iii) has been convicted on indictment of any offence involving fraud or dishonesty whether in connection with a company or not;

(iv) has been persistently in default in complying with the provisions of the Companies Acts 1948 to 1966;

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(v) has shown himself, when acting as a director of any company or when otherwise concerned in their management, to have acted in an improper, reckless or incompetent manner in relation to the company's affairs.'"

The noble Baroness said: My Lords, I rise to move Amendment No. 56 which stands in my name and that of the noble Lord, Lord Drumalbyn. This refers again to something in the Jenkins Report, which we have been discussing at some length to-day, but it also refers to the discussion we had in Committee when my noble friend Lord Peddie moved a somewhat similar Amendment, and also the noble Lord, Lord Drumalbyn. All these Amendments have been put together in one Amendment. It is a composite Amendment and it covers recommendations contained in paragraph 85(b) of the Jenkins Committee Report, page 29. We hope it will clear up some of the confusion to which the discussion on Committee stage led, since we had two Amendments down.
We are concerned with the list of individuals who involve themselves in short-term private companies and operate with financially fraudulent intentions. This list is maintained by the Consumer Council. There is no sign that such activities are decreasing. We have knowledge in the Council of pending liquidations long before they come about, but we have been unable to take steps to protect or warn the public.
During the Committee stage the noble and learned Lord on the Woolsack pointed out that the objection to the Amendments was that any increase in the subject matter of the Bill might lead the Government to decide not to proceed with the Bill and therefore this would be detrimental. We discussed that matter at great length just now and I will not go over the ground again. But this particular Amendment is not one which is contentious. My noble friend and colleague on the Council, the noble Lord, Lord Peddie, is supporting it, and we do not approach this matter in any Party political spirit at all. We are simply concerned to try to improve the Bill in the interests of the people in whom we are particularly interested—that is, the general public and those who are taken in and suffer from the fraudulent activities of dishonest people.
I hope that in the course of the discussion I may get some encouragement
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from the Government and some indication that they realise that this is a matter of great significance to the public, and some assurance that if they are not prepared to accept this Amendment to-day they could, without lengthening the Bill, without complicating things in another place as the noble and learned Lord has asked us not to do, add something which would deal with this very distressing fradulent behaviour which we all know goes on. Only recently the newspapers have been full of actions by directors which have led to great distress and unhappiness and cheating of the public, and this is what we all want to avoid. I know that members of the Government feel just as strongly as we on this side do. I hope the Government will see their way to incorporate this clause in the Bill. I beg to move.
Amendment moved—
After Clause 37, insert the said new clause.—(Baroness Elliot of Harwood.)
LORD DRUMALBYN: My Lords, I should like to support my noble friend in this Amendment. This again, of course, is a recommendation of Jenkins, as she has indicated. It provides that the court may disqualify a person from being a director, or being in any way concerned or taking part in the management of a company, for up to five years without the leave of the court if it finds in the course of winding up a company that he has been convicted. Noble Lords can see the three points mentioned here. This was a recommendation of the Jenkins Committee, in paragraph 85(b), that the powers of the court to disqualify should be extended to cover such persons.
I am not certain that this clause goes quite so far as it might, but at any rate it is a step in the right direction. If the noble Lord felt it would be better to alter the new clause slightly in order to provide that the two points mentioned here—that is, conviction on indictment of an offence involving fraud or dishonesty and the following case—should be coupled for the disqualification, quite apart from winding-up proceedings, I think we would assent to that; and we would further assent to an extension of the disqualification up to a period of five years, to run from the termination of the sentence of imprisonment, if such were imposed.

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The point of this Amendment is that it brings this part of the legislation into line with what is being done in Part II to a large extent, where in Clause 48 the Board of Trade are given powers to disqualify from taking part in the conduct of a business someone who is not a fit and proper person in the sphere of insurance. It seems to me it is difficult for the Government to resist doing the same in the wider sphere, and if they can see their way to do this it plainly is advisable to take this step at this time, because by so doing they will be preventing a good deal of fraud and dishonesty, and preventing a good many people from being defrauded in the course of the next two or three years before the next Companies Bill comes along. In my view, there is an irresistible case for doing something here, and I hope the noble Lord will agree. I think it would be wise to move one or two new clauses into the Bill; simply because it would avoid that kind of complication to which I referred on the last Amendment. If it were plain that the Lords had not been debarred from moving new clauses into the Bill, I think that the passage of the Bill in another place would be much quicker than it would otherwise be.
LORD PEDDIE: I rise to support the noble Baroness and the noble Lord opposite in this Amendment. The Amendment itself is the sum of the Amendments which the noble Lord, Lord Drumalbyn, and I put forward on the Committee stage and is, I think, something of an improvement. I need not repeat the arguments that I used on a previous occasion. To some extent, they have already been repeated by the noble Lord and the noble Baroness opposite. But I certainly hope that the Government will receive this Amendment sympathetically. I was able on the last occasion to give some indication of the experience of the Consumer Council who had evidence of a long procession of exceedingly doubtful characters, clearly operating with short-term companies, to the detriment of the general public, though it appeared that little could be done about it. To my mind at least, this Amendment does not go outside the scope of the Bill. I appreciate the Government's difficulties in this regard, but this Amendment gives adequate protection to the consumer. In
468
the light of the arguments put forward, supported by considerable experience, particularly by the Consumer Council, I sincerely hope that the Front Bench will give sympathetic consideration to this Amendment.
LORD COHEN: My Lords, I want to say only one thing. I am in favour of the principle of the Amendment, but I should be interested to hear a word from the noble and learned Lord on the Woolsack on paragraph (b), which refers to a man who
"has shown himself, when acting as a director of any company or when otherwise concerned in their management, to have acted in an improper, reckless or incompetent manner …"
It seems to me that that may be a difficult thing for the court to decide. However, no doubt the wording can be improved upon. But I am a little worried as to the generality of those words.
5.3 p.m.
THE LORD CHANCELLOR: I would respectfully agree with the noble and learned Lord, Lord Cohen, as to the width of the clause. But the Government's objection is really one of principle, which I can deal with very shortly; namely, that this matter is outside the scope of the Bill. In view of one or two things which were recently said by Members of your Lordships' House, may I make it quite clear that there is no constitutional question here? There is, of course, no question that your Lordships' House have an absolute right to make any Amendment to any Bill, as your Lordships like. In another place, Members are at least limited to the Title to the Bill; but in your Lordships' House the Title can always be altered, and there is almost no Amendment which this House is not entitled to make in a Bill, if it wishes to do so. References to the scope of the Bill are simply references to a decision by the Government to have a limited Bill, rather than an unlimited one.
This is the first year of the life of this Government. So far, only about nine months have gone by. Considering the size of the promises in their Election Manifesto, they could hardly have been blamed if they had said, "We have said that we are in favour of law reform. In various respects, we are going to carry out law reform, in this, our first year, in

469
small Bills. But in respect of Company Law reform, which Conservative Governments did not touch for 13 years, we really cannot do that in the first year. "The Government decided to introduce a Bill for the reform of Company Law, but have explained from the start that legislative time does not allow for a full Bill.
In the Jenkins Committee Report there are something like 325 separate recommendations. One section—and in the Government's view much the most important—comprises all those recommendations which relate to disclosure. Accordingly, it was to that section, plus another forty clauses dealing with insurance companies (for reasons with which your Lordships are all familiar), that the Government felt bound to limit the Bill. Of course there are separate Parts of the Bill. The Jenkins Report contains a separate chapter dealing with business and company names—business names, company names, change of company's name, disclosure of names of company directors; and there are 16 different recommendations. The Amendment which your Lordships have already made as to names is one out of the large number to which the Government had no real objection, except that it was outside what I have defined as the scope of the Bill.
Here also the Jenkins Committee have made a number of recommendations, dealing with fraud and incompetence on the part of directors. This is just one of them. There is also a recommendation, in paragraph 503(a), that the power of the court under Section 270 to order the public examination of the directors of insolvent companies should be extended. It may well be that this is a good proposal. There is a recommendation, in paragraph 503(b), that directors be made responsible for the debts of a company which has carried on business recklessly. That also may be an admirable recommendation. There is a recommendation, in paragraph 503(c), that penalties for fraudulent trading provided by Section 322 can be applied whether the facts are discovered in a winding-up or not. There is also a recommendation, in paragraph 503(d), that Section 333 should provide a summary procedure to deal with actionable negligence by directors. All these recommendations in relation to directors may be admirable recom
470
mendations, but they are outside the scope of the Bill. It is for that reason that, regretfully, the Government are unable to accept this Amendment, even if it were not in its terms too wide.
If I may go on to express my own personal and additional regret, as your Lordships know I am particularly interested in law reform, and interested, as I believe many Members of your Lordship's House are, in getting more Bills started in your Lordships' House. My right honourable friend the President of the Board of Trade is about the only Minister so far who has felt prepared to trust his Bill to your Lordships' House in the first place. I suppose it is not unnatural that Ministers should want to introduce their own Bills before their own colleagues in their own House, where they have a majority; and I should greatly regret it if your Lordships, as you appear to be going to do, were to treat this Bill in a way which will make it much less likely that any of my colleagues will wish to start their Bills in your Lordships' House. In view of all those considerations I hope that the noble Baroness will think it right to withdraw this Amendment.
5.18 p.m.
VISCOUNT DILHORNE: My Lords, I am glad that the noble and learned Lord the Lord Chancellor has made it quite clear what he meant by the use of the expression" scope of the Bill". In another place that has a certain technical connotation, and when Is poke about the last Amendment not being outside the scope of the Bill I was dealing with it from that point of view. I think it is also true to say that this particular Amendment is not in any technical sense outside the scope of the Bill. It would not require any amendment of the Long Title. Of course, in another place, as indeed in this House, the Long Title can, if need be, be amended.
The Lord Chancellor has made a powerful plea that we should not add greatly to the content of the Bill. The Government wished to introduce a limited Bill, and anything that is not within the limits which the Government thought fit to prescribe is, in that sense, as the noble and learned Lord has made quite clear, outside the scope of the Bill in the sense in which he has used the

471
term. The reason which the noble and learned Lord the Lord Chancellor has advanced is that of pressure on Parliamentary time. On a Bill of this kind, I fully realise, and indeed sympathise with, the desire of a Government that it should not become too controversial and so have its passage delayed. But I should have thought it was only if highly controversial Amendments were introduced into the Bill that there was any real risk of more legislative time being consumed in getting it through another place.
The noble and learned Lord the Lord Chancellor has pointed out that some of the Amendments pick up only particular recommendations of the Jenkins Committee Report. So be it: but if those recommendations are recommendations which meet with approval from both sides of this House, then is there really much objection to their inclusion in the Bill? If after careful consideration the Amendments meet with approval from both sides of this House, I should have thought that it would be extremely unlikely—of course anything may happen, as one knows, in another place—that they would be the subject of acute controversy in another place and would delay the passage of the Bill for one moment. They would possibly pass without any discussion at all. Therefore, while I sympathise with what the noble and learned Lord the Lord Chancellor has said as indicating the view of the Government on this matter, I hope that neither he nor the noble Lord, Lord Brown, who has fought so valiantly to maintain the Bill in its present form, will resist too strenuously Amendments which are not likely to be controversial in another place, and so not likely to lead to the consumption of more time in the passage of the Bill.
Having said that, I hope that my noble friend who moved the Amendment, and the noble Lord opposite who supported her, will not press it, because, as my noble and learned friend Lord Cohen has said, I think the wording of subsection (5) is so wide as to be almost ineffective and needs a good deal of reconsideration. With those words in that Amendment, even if it were not for what the noble and learned Lord the Lord Chancellor has said, I myself would not find it possible to vote for it.
LORD MITCHISON: My Lords, I rise only for two purposes. The first is to correct with very great respect the recollection of my noble and learned friend, in that a Bill for the preservation of commons was introduced in this place by another Minister. The second purpose is to say a word or two, I hope in a completely non-contentious spirit this time, about what seems to me to be a rather interesting and, I think, constitutional question, the scope of legislation.
On the technical point, I have always understood, when considering this in another place, that there were two separate matters. One was what could be comprehended within the words of the Long Title; and the second was the scope of the Bill which was occasionally, though not often in the nature of the case, applied to ruled-out Amendments which were within the actual wording. The actual wording in this Long Title happens to be very wide. When one comes to the scope of a Bill the question is: whose business is it to decide how much of the cherry is to be bitten off, or, if you like, in how many bites the cherry is to be taken?
I think it is fair to say that when the Jenkins Report appeared, and for some time afterwards, there was a good deal of criticism of it on the lines that it did not go quite far enough. I do not want to embark upon that question now, but I noticed that criticism in the Press at the time, as did other people. There was some pressure on the Government of the day to carry out the Jenkins Report. I charge my memory, but I think that it has been said that they did not accept it as by any means the last word, and that they wanted to see whether it needed supplementing at any point. It is true that the Jenkins Committee made a very large number of recommendations, and I remember pressure being put on the Conservative Government of the day in connection with the Trustee Bill when it was in the other place. We tried to get them to carry out certain things on the lines of the Jenkins recommendations, and I think the answer we were given was that they were not quite acceptable as a whole. I always understood this to mean that, while in some respects they might think the Jenkins Report went too far, in other respects they thought it did not go far enough.

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But can the matter really be stated like that? If one is presented with a Report on a complex matter such as this, a matter which is subject to a certain amount of reasoned criticism, is it not the responsibility of the Government of the day in promoting legislation to take it in stages, if it is necessary to do so, in order to get a proper revision of the subject as a whole? To take the Amendment which we are now considering, it may well be that it is acceptable to everybody, not necessarily in the present form, but in principle, or in some other form. That may be the case, but if these bits and pieces are to be accepted as we go through the Bill, each of them said to be comparatively minor, each said to carry general consent, are we not taking the risk thereby of making a mess of the task which will have to be faced ultimately? I refer to the task of revising Company Law as a whole, not only in the light of the Jenkins Report, but in the light of criticisms made of it and of developments which have occurred since it was passed.
My feeling about this is that it is a great pity to have to tailor the scope of what you are doing—the size of the job, the bite of the cherry, whatever you like to call it—by the political accident of what is or what is not sought to be put in during the course of proceedings here or, for that matter, in another place. I believe that the ultimate responsibility must rest with the Government of the day, whatever its colour, of deciding in what stages it takes a broad subject and, when it is dealing with a Bill directed to one aspect of it, whether it should or should not include incidental things even though they are by common consent. What I am really saying is that it is never sufficient that we should be broadly agreed on a piece of a Bill as it is. We must also be agreed on its taking its proper place in the framework of legislation such as we are bound to have when we are dealing with subjects in this modern, changing world.
BARONESS ELLIOT OF HARWOOD: My Lords, I beg leave to withdraw the Amendment.
Amenment, by leave, withdrawn.
Clause 42 [Commencement of, and exercise of powers to make regulations under, certain provisions of Part 1]:
VISCOUNT ECCLES: My Lords, this Amendment lays on the Board of Trade the duty to appoint the day on which the system of no-par-value shares shall come into operation. I beg to move.
Amendment moved—
Page 42, line 7, at end insert—
(" ( ) section (Shares of no par value) of this Act and Schedule (Amendments of the Companies Acts 1948 consequential on the introduction of Shares of No Par Value) thereto shall come into operation on such day as the Board of Trade may by order appoint.")—(Viscount Eccles.)
On Question, Amendment agreed to.
Clause 48 [Provisions for preventing unfit persons from being associated with insurance companies]:
LORD DRUMALBYN LORD DRUMALBYN moved, after "an incorporated company if", to insert "after due consideration". The noble Lord said: My Lords, on the Committee stage we had considerable discussion, to which both sides of the House contributed, arising out of a feeling of disquiet that there was no kind of appeal for any persons whom the Board of Trade considered not to be fit and proper persons to conduct, or to be involved in, insurance. The purpose of this Amendment is to give a form of appeal to the Board of Trade itself. This, I think, implements to a large extent the suggestion made by the noble Lord, Lord Mitchison. If the noble Lord will look at what he said, he will see that he was advocating the same kind of appeal as applies in town and country planning and certain aspects of that sort.
What is proposed in my next Amendment, No. 59, is that the Board of Trade should afford
"the officer or other person in question an opportunity of making representations to them, either in person or in writing, as he may elect."
The other point—and this was not raised in the Committee Stage—is that when the Board of Trade refuses an authorisation to a company to carry on some form of insurance business, the company will not know why that refusal has been made unless the Board of Trade tells them.
Two points seem to arise here. In the normal way, one would expect the Board of Trade to give a reason for not giving an authorisation, especially if it was related to some shortcoming that is I laid down, as to capital and so forth.

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So at the end of the day the company would be almost certain to know by a process of deduction that, if they were not told the reason, it was because somebody in their ranks was not a fit and proper person. The company will want to get its authorisation and, therefore, it seems to follow that it should be told how it can put its house in order, and of whom it must get rid if it is to get its authorisation. I find it difficult to see how this can be avoided.
The other matter to which I should just like to draw attention is this. The point of the first, and paving, Amendment is to give an appeal able cause of action, if the Board of Trade does not give "due consideration". In other words, the only circumstances in which an appeal will lie to a court is when somebody is told that he is not a fit and proper person, and is not given an opportunity of making representations. Therefore, this Amendment is purely to ensure that the Board of Trade does give an opportunity of making representations. In that way, it will be entirely in the hands of the person who is said to be not a fit and proper person, as to whether he avails himself of the opportunity for an appeal on the ground that he has not been given a hearing.
If the person is not given a hearing, he may prefer to "lump" it, and not to raise the matter publicly, but it seems inconceivable that the Board of Trade would not give the person in question an opportunity of making representations, and I think I am right in saying that this is commonly done. But I think that it is very hard on a company, if it is refused an authorisation on the ground that it has within its ranks an officer or a director who is not a fit and proper person, and when it complies in every other respect and does not even know that it has such a person within its ranks, that it should not be told how to put its house in order. I recognise the difficulties here, but this is a matter which plainly exercised the House at an earlier stage, and the reason why I have put down this Amendment is to allow it to be explored further. I beg to move.
Amendment moved—
Page 45, line 34, after ("if") insert ("after due consideration").—(Lord Drumalbyn.)
LORD MITCHISON: My Lords, I am not going to make a speech. In order to avoid any misunderstanding, I should like the noble Lord to confirm, if he will, that my suggestion about people being heard was not in connection with this matter at all, but arose on an Amendment from the Opposition to provide for an appeal to the court in a case where I thought that an appeal was inappropriate. That is right is it not?
LORD DRUMALBYN: Yes, my Lords, I quite agree. But I understood that in the course of his observations the noble Lord laid stress on the need for a person to be heard in a case of this kind.
LORD MITCHISON: In the case to which I was referring.
THE LORD CHANCELLOR: My Lords, this is an Amendment that is within the scope of the Bill: it is very much a matter of opinion, and certainly not unimportant. We shall all agree, I think—certainly, all lawyers will agree—that if a man is to be penalised in some way or other he ought to be told what is alleged against him, and he ought to be given an opportunity of answering it. The Bill as drafted does not do this. The effect of the Bill is that a man can be refused a licence to start a new insurance business without being given any reason, and without having a legal right to make representations. It is one of those difficult cases where we have to balance the interests of the individual and the interests of the community.
The difficulty lies in the fact that the Amendments require the Board to identify the person considered unfit and to state their reasons for refusing the authorisation. Obviously, this would mean that the Board could not act on confidential information, since they could not disclose it in stating their reasons to the applicant. The Board might thus be obliged to authorise companies to undertake insurance business, even though they suspected that the business would be conducted dishonestly or recklessly. To reveal to the person considered unfit the confidential information on which the decision was based—quite apart from being a breach of confidence—could rarely be done without risking charges of defamation, either against the Board or against the source of the information, and would obviously prejudice the future supply of confidential information.
LORD DRUMALBYN: My Lords, may I ask the noble and learned Lord a question? He has pointed to a possible weakness in my Amendment arising out of one possible way of interpreting the words "the reason for their refusal". But what I meant by these words, "the reason for their refusal" was simply that the Board might take the view that a company had an unfit and "improper" person, if I may put it in that way, in their ranks, as opposed to the reason that the capital was insufficient, or whatever the reason for the refusal was. I did not say, and I did not intend to imply, that the Board should have to give a reason why they thought that a man was an "improper" person. That is a different matter.
THE LORD CHANCELLOR: My Lords, with great respect, I thought that the individual was much more important than the company. I do not know whether the Amendment was intended to provide that the Board of Trade should go to the company and, behind the person's back, tell the company, "This is your employee whom we have got something against", without the individual's ever knowing it. I see that the noble Lord agrees that of course the individual has to know. That being so, surely the individual ought to be told, if he is to make representations, what it is that the Board of Trade have against him.
The difficulty, of course, is that, where the Board's information is confidential information received from the City, if they have to do this they will never again get any confidential information from the City. One has to weigh up the importance of the two things: refusing to authorise insurance business where it would not be advisable to do so, and the protection of the insuring public.
It is not only the insured public. After all, in one recent case there were, I think, 240,000 policy holders, and this may mean people losing their homes. But in the case of those who are insured in respect of third party risks, there are also the third parties to be considered. We all know of cases in the courts involving terrible injuries which may take two or three years to come on. The plaintiff succeeds, and then he finds that, not only has the defendant no money, but that his insurance company has no money either.
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One has the difficult task, therefore, of balancing as best one can how far the interests of the public as a whole ought to be given precedence over the interests of the individual. This was, I think, fully recognised in Committee by the noble Lord, Lord Erroll of Hale, when he said:
"The practical difficulty, whatever course is pursued, is that the Board of Trade's sources of information in this delicate field must be kept confidential. It might be difficult for them to go into open court and reveal what they know, since not only might it be highly embarrassing in itself, but it might mean that a source of information of particular reliability would dry up in future".—[OFFICIAL REPORT: 12/12/66, col. 2108].
It is very difficult.
In those circumstances, what the Government have done is to draw a distinction between Clause 46, which determines whether or not somebody should be allowed to start a new insurance business, and Clause 50, which provides that the Board of Trade may revoke an authority in the case where the business has already started. In the second case, notwithstanding the difficulties, they have expressly provided for a legal right to make representations, and for an obligation on the part of the Board of Trade to give reasons. The difference between the two is, I think, very like the difference which faced the Conservative Government of 1939, when they were considering this problem under the Prevention of Fraud (Investments) Act. In that Act they had four things to consider: first of all, that the Board might declare anybody to be an exempted dealer for the purposes of the Act; secondly, that the Board might authorise particular unit trust schemes as authorised schemes; thirdly, that the Board, where it had made somebody an exempted dealer, might revoke that; and fourthly, that where they had made a particular unit trust scheme an authorised scheme, they might revoke that.
Considering the position of the individual and the position of the public in relation to these four things, Parliament then took the view that two of them were in one class and two were in another. They took the view that where a man is already an exempted dealer and he is dealing, and where there is already a unit trust scheme which has been authorised (and, I think one might fairly

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say, in this particular case, where somebody has been authorised to start an insurance business, and has started it), then to close them down is really to deprive them of a right of property; whereas, on the other hand, merely to refuse them the licence to start is entirely different. That was the view taken by Parliament in the Prevention of Fraud (Investments) Act, in which, as I say, they drew a distinction between allowing somebody to start something and closing it down once it had started, and in which they provided that reasons must be given and representations could be made, not in the starting cases but in what I have called the closing down cases.
It has seemed to the Government that that is right, and that is why no right of representation is provided for in Clause 46, which is in many ways like any other case where you either give somebody a licence or you do not, and where it is discretionary. In spite of all the difficulties of confidential information, when it comes to Clause 50, which provides that the Board may revoke the authority, there is the specific provision that they must give their reasons and allow the representations to be made. It is for those reasons that the Government feel that they must resist this Amendment, and I hope that, having heard that explanation, and in view of the precedent set by a Conservative Government, the noble Lord will withdraw the Amendment.
There is one additional point. There is now a marked safeguard for the individual which did not exist at the time of the Prevention of Fraud (Investments) Act, which is that in, I think, a fortnight's time there is to be introduced into this House (it has already passed through the other House) the Parliamentary Commissioner Bill. This case is exactly one in which, within the terms of that Bill, the Parliamentary Commissioner will be able to walk into the Board of Trade and look at any minutes or other documents, and cross-examine civil servants, to find out exactly what has happened—and that will have the great advantage that it will be done in private. There is, therefore, that additional safeguard, which I would also ask the noble Lord to take into account.
VISCOUNT DILHORNE: My Lords, I am sure the whole House is grateful to
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the noble and learned Lord the Lord Chancellor for the explanation he has given for not including in Clause 48 any right of representation by the individual. Some of the arguments advanced by the noble and learned Lord are indeed powerful; but, at the same time, I hope that he will give an undertaking to give further consideration to this problem, because I think it may be possible to find a better solution to it than that which is now contained in the Bill.
My Lords, I follow the difficulties with regard to confidential information. The noble and learned Lord the Lord Chancellor used a powerful argument. I also see the strength of the argument that this power to refuse authorisation must be contained in the Bill. I challenge neither of those propositions. But, my Lords, I do not think the case put forward by my noble friend is really met by reference to the Parliamentary Commissioner. It may be that the Board of Trade, acting perfectly bona fide, will be in receipt of confidential information about some individual and, acting on that information, refuse to give an authorisation to a company which in all other respects is a very respectable company, with respectable persons in it. The fact that authorisation is refused is bound to leak out, and so it seems possible that in many cases the effect of what the Board of Trade does, on information which they have received confidentially, and which they have believed, will be to cast something in the nature of a slur upon the reputation of all those concerned with that company.
But suppose the information which the Board have received in confidence is wrong, and that they act upon that perfectly sincerely, no one being in a position to blame them. The Parliamentary Commissioner will be able to find out on what information they have acted, but the person in respect of whom they have acted will not know; the company in respect of which they have acted will not know; and there will be no one who will ever, so far as I can see at the present moment, have an opportunity of satisfying the Board of Trade that the information on which they have acted is erroneous and should not be relied upon. It seems to me that a considerable injustice might result.
I hope that my noble friend will not press this Amendment, because I do not

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think it really meets the case—and it certainly does not meet the points which the noble and learned Lord the Lord Chancellor has advanced. At the same time, I am not now in a position to put forward a suggestion which might meet these difficulties. I should be grateful, therefore, if the noble and learned Lord the Lord Chancellor or the noble Lord. Lord Brown, would say that, between now and, perhaps, this Bill getting to another place, some further thought will be given to this problem. Perhaps they could see whether means can be devised which will safeguard this position and perhaps prevent the Board of Trade being misled by inaccurate but highly confidential information, and so, unwittingly and unintentionally, doing considerable injustice to an individual and, it may be, to many respectable people who do not know of that individual's record or do not know what suggestions there are against him but who are also affected by the same kind of impression arising from the refusal of the authorisation.
THE LORD CHANCELLOR: My Lords, the noble and learned Viscount has asked me to reply on this one point. Certainly the Government are always prepared to consider anything fresh; but I must make it plain that I cannot hold out much hope. Our belief is that the earlier Government were right. True, the reason why a man is not made an authorised, exempted dealer might be because the Board of Trade regarded with suspicion one of his leading employees. Exactly the same thing applied to that case; and the Government are not at present satisfied that the Conservative Government were wrong.
LORD DRUMALBYN: My Lords, I, too, am grateful to the noble and learned Lord for having gone so fully into this question. Perhaps I may be allowed to say that the purpose of my Amendment was not in any way to provide for the disclosure of confidential information. The purpose of the first part was to enable the Board of Trade to say to a person: "We do not consider you a fit and proper person to be associated with this kind of business. Have you anything to say?" The person may come along and say: "Here is my record. It is absolutely clean and above board."
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The Board of Trade may then say: "Was your previous name not X? Were you not convicted of fraud in 1957?" There is no need to say from where they get their information; this is what they are told. Perhaps the man can answer satisfactorily; if he does not, he is not a fit and proper person. There is no reason why this conversation should go beyond the man and the Board of Trade.
The second part of the Amendment deals with the position arrived at once the Board of Trade have decided that he is not a fit and proper person, when they decide not to give the authorisation. Before this stage it has been under consideration. Once they decide that he is not a fit and proper person they will notify the company that they are not giving the authorisation, and they will say it is because they do not consider that so-and-so is a fit and proper person. They need give no further reason than that. Then the company can take what action it likes. This was the purpose of the Amendment. Whether I carried it out in words or not I do not know; but it seems to me a not unreasonable suggestion. I would certainly defer to such weight of opinion from the noble Lord, the Lord Chancellor, and his predecessor, and I would not dream of pressing the Amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 51 [Power of Board of Trade to revoke authorisation for purposes of Section 44 on company's ceasing to carry on business]:
TILE LORD CHANCELLOR: My Lords, I beg to move the Amendment standing in the name of my noble friend, Lord Brown. This is merely a drafting point. The beginning of Clause 46 says:
"The Board of Trade shall not issue under the last foregoing section an authorisation …"
So the verb associated with "authorisation" is "to issue". In line 15 it says: "nor shall they so issue an authorisation. …" On page 45, in the penultimate line, it says: "so issue an authorisation.…"; and in Clause 49, at the top, it says: "Where the Board of Trade issue…"When we come to this particular clause, the word is changed to "granted". It says: "the authorisation

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is granted". So, for the sake of conformity, the Amendment proposed will change "granted" to "issued". I beg to move.
Amendment moved—
Page 49, line 25, leave out ("granted") and insert ("issued")—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 53 [Substitution of new provisions for those of section 9 (audit of accounts) of the principal Act]:
THE LORD CHANCELLOR: My Lords, I beg to move the Amendment standing in the name of my noble friend Lord Brown. My noble friend Lord Mitchison on the Committee stage said that the words "such person" in the Bill as it stands were too vague. Accordingly, the Amendment is designed to deal with that point. The prescribed description will require auditors to be qualified as in Section 161 of the Companies Act. This is therefore, in substance, merely an improved piece of drafting. I beg to move.
Amendment moved—
Page 50, leave out line 45 and insert ("in the prescribed manner by a person of the prescribed description,")—(The Lord Chancellor.)
LORD MITCHISON: My Lords, I ought to say "Thank you" and confess that I do not even remember the one good deed which I seem to have committed in the past year or so.
On Question, Amendment agreed to.
Clause 58 [Additional copy of accounts, &c., to be deposited by industrial or provident society]:
THE LORD CHANCELLOR: My Lords, I beg to move this Amendment standing in the name of my noble friend, Lord Brown. If I may, I will refer also to the Amendments proposed under Clause 81, since they refer to the same point, the first Amendment being consequential to the second. The second, under Clause 81, extends the definition of "registered society" to include societies registered under Northern Ireland legislation corresponding with the Industrial and Provident Societies Act 1965 so that they also are eligible to carry on insurance business in Great Britain by virtue of Clause 44 (1) (a). It would, however, serve no useful purpose for such societies to deposit with the
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Registrar in Great Britain additional copies of the accounts required under the Insurance Act, and they are accordingly excluded by this Amendment, under Clause 58, from this requirement. I beg to move.
Amendment moved—
Page 52, line 30, after ("society") insert ("(other than one registered in Northern Ireland)").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 60 [Provision for securing that a company's solvency is maintained]:
LORD AIREDALE: My Lords, this is a drafting Amendment in so far as it seeks to insert into the clause the expression "its assets". I was much encouraged with Amendment No. 13, moved yesterday by the Minister, which inserted this very expression in Clause 4. As for leaving out the expression "assets of its" to which very great exception was taken in Committee by the noble Lord, Lord Drumalbyn, I should imagine that this would be in conformity with the Government's expressed intention so far as possible to write the Statutes in language that ordinary people understand and use. I beg to move.
Amendment moved—
Page 54, line 14, leave out ("assets of its") and insert ("its assets").—(Lord Airedale.)
LORD BROWN: My Lords, I am told that it is as correct grammatically as "friends of his". Nevertheless, I agree that it does lack euphony. The trouble is that the Amendment changes the meaning. "Its assets" means all of its assets. The context requires that the value specified should be less than that of the whole of the assets, in most cases. As the meaning would be changed by the adoption of this Amendment I regret that I have to say that the Government cannot accept it. However, I join with the noble Lord in his objection to the euphony of the clause. I will attempt to get a more euphonious wording put in at a later stage.
LORD AIREDALE: My Lords, I am obliged to the Minister. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 64 [Provision for security of information]:
LORD BROWN: My Lords, this Amendment is concerned with security of

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information. The existing text of the clause does not achieve the intention of distinguishing two mutually exclusive classes, those who do and those who do not carry on industrial insurance business. The Amendment rectifies this situation. I beg to move.
Amendment moved—
Page 58, line 43, leave out ("carrying on business other than") and insert ("not carrying on").—(Lord Brown.)
On Question, Amendment agreed to.
Clause 67 [Penalisation of furnishing false information]:
LORD BROWN: My Lords, this is purely a drafting Amendment which sets out more clearly the documents in question and I beg to move.
Amendment moved—
Page 60, line 10, leave out from ("in") to ("any") in line 15 and insert—

(" (i) any account, balance-sheet, abstract or statement whereof copies are, by section 8 of the principal Act, required to be deposited with the Board of Trade;

(ii) any statement, agreement, deed or report whereof a certified copy is, by section 12 of that Act, required to be so deposited; or

(iii) any statement or declaration which is, by the last-mentioned section, required to be so deposited;").—(Lord Brown.)

On Question, Amendment agreed to.
LORD BROWN: My Lords, this again is a drafting Amendment. I beg to move.
Amendment moved—
Page 60, line 19, leave out ("and liable") and insert—
(" (2) A person guilty of an offence under this section shall be liable—").—(Lord Brown.)
On Question, Amendment agreed to.
Clause 71 [Criminal liability of directors, &c.]:
LORD BROWN: My Lords, I beg to move this Amendment, which is another drafting Amendment.
Amendment moved—
Page 62, line 28, leave out ("company") and insert ("body").—(Lord Brown.)
On Question, Amendment agreed to.
Clause 81 [Interpretation of Part II]:
LORD BROWN: My Lords, this is another purely drafting Amendment. I beg to move.
Amendment moved—
Page 65, line 7, after ("1965") insert ("or any corresponding enactment in force in Northern Ireland").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, the additional phrase set out in this Amendment is necessary to avoid any ambiguity from the occasional use of the word "officer" in other than its principal context in this Bill—that of a company or body corporate. It appears, for example, in Clause 62(2) and (3) with reference to officers of the Board of Trade, and it is to make clear that the clause refers to officers of companies or bodies corporate that this Amendment is introduced. I beg to move.
Amendment moved—
Page 65, line 9, after ("includes") insert ("except where the context otherwise requires)").—(Lord Brown.)
On Question, Amendment agreed to.
Clause 85 [Fresh exemption from Moneylenders Acts 1900 to 1927 of persons carrying on business of banking]:
5.52 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (1), to insert as a new paragraph:
" ( ) not include a person whose main business is to lend money on marine mortgages."
The noble Lord said: My Lords, the purpose of this Amendment is to exclude persons whose main business is to lend money on marine mortgages from the definition of "moneylenders" given in Clause 85(1). Companies which advance money on marine mortgages are not moneylenders in the accepted sense, but with to-day's high interest rates they have from time to time to charge what look like high rates of interest. I am told that this is quite inevitable if they are to continue their business.
The largest body which lends money in this way is the Ship Mortgage Corporation. I am told that the Corporation promoted a Private Bill to regularise their own position, but that it did not cover the smaller competitors. This, I understand, was Chapter 28 of 1962. The proposed Amendment will not open the

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door to wholesale evasion of the Moneylenders Acts, or indeed to any evasion, because to secure this exemption a company must have the advancing of money on marine mortgages as its chief activity, and there can be only a handful of companies in this position. So long as high interest rates last, they are in considerable jeopardy, and as they perform a useful national function in financing ship construction they deserve some protection. I hope, therefore, that the noble Lord will be able to agree and to give these small people protection. I quite understand that there may be other claims from other groups, but this seems a small and not undeserving group, and I hope that the Minister will see his way to accede to this Amendment. I beg to move.
Amendment moved—
Page 66, line 40, at end insert the said paragraph.—(Lord Drumalbyn.)
LORD MITCHISON: My Lords, I hope that the Government do not propose to accept this Amendment without some definition of what constitutes a marine mortgage. I do not think it is a well-known term of art by any means. It may be well known to people who practise some particular form of business, but I think it is liable to misunderstanding. I looked at this Amendment and said to myself, "What on earth does this mean?" We are now told that marine mortgages cover advances made in respect of ships in course of construction. I thought it must be some curious form of bottomry bond on a ship on a voyage. Bottomry is rather dead nowadays, even in this House, and I was not at all clear whether it covered cargo. I do not know what the Government are going to say, but I hope that these people, if they are individuals, return their profession or occupation in the Census as that of marine mortgagee. It is rather a nice term, and I should like to know what it means.
LORD BROWN: My Lords, it is possible that this Amendment has been moved under a misunderstanding. Perhaps I can help to clear up the matter if I put a question to the noble Lord, Lord Drumalbyn. If a person who lends money on marine mortgages is a body corporate, that person can apply to the Board of Trade for exemption under Section 6 of the Moneylenders Act 1900. My question
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is: is the noble Lord aware of this, because it seems rather unlikely that he is introducing this Amendment in the interests of unincorporated marine mortgagees, which would be a rather small class of persons. Perhaps the noble Lord would be prepared to answer that question, and if there is a misunderstanding, he might wish to withdraw the Amendment. I have not completed what I have to say. I will sit down in order to get an answer, but I should like to be able to speak again when the noble Lord has answered the question.
LORD DRUMALBYN: My Lords, without prejudice to what the noble Lord, Lord Brown, may say afterwards, may I say that I was not aware of what he has said? Nevertheless, I hope that what he has to say will give me satisfaction.
LORD BROWN: My Lords, if the noble Lord, Lord Drumalbyn, was not aware of the point that I mentioned, he may see fit to withdraw the Amendment, because the unincorporated marine mortgagee may not exist. If he does exist, he is probably a very small man, and it may be that he is doing a bit of marine mortgage business and other business as well. If he is doing other business as well, the automatic grant of a licence because he is doing marine mortgage would leave us in a situation in which we should have no control over his other money lending activities. It seems to the Government that this may be a highly undesirable situation to bring about and they are bothered about it. We have not had much time to study this Amendment. We are prepared to do so, but the matter bristles with difficulties. As the noble Lord, Lord Mitchison, has pointed out, we need a little more definition. I hope that in the light of the fact that if the person is an incorporated body he can already obtain the exemption if he applies to the Board of Trade, the noble Lord will see fit to withdraw the Amendment.
LORD DRUMALBYN: My Lords, I am sure that the noble Lord does not expect me to be an expert in this matter. Perhaps this is one of the matters that I might discuss with him when we meet. There is always the possibility of dealing with it on Third Reading, should that appear necessary. Perhaps the drafting is loose, and this also could be put right

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on Third Reading. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
6.0 p.m.
LORD MACPHERSON OF DRUMOCHTER LORD MACPHERSON OF DRUMOCHTER moved, after Clause 87, to insert the following new clause:
Amendment of Registration of Business Names Act 1916
". The Registration of Business Names Act 1916. shall be amended as follows:—
(1) In section 1, at end insert the following new paragraph:
'e) Every association of firms, individuals or companies, which individually are either companies within the meaning of the Companies Act 1948, or fall within the provisions of this section, whether or not such association is carrying on a business for profit;'
(2) In section 14, at end insert the following new subsection:
'(3) The Board of Trade may prohibit the registration under this Act and the use of any name by any association of firms, individuals or companies to which this Act applies, if in the opinion of the Board the registration or use of such name is undesirable'."
The noble Lord said: My Lords, I withdrew my previous Amendment at Committee stage because the Government kindly agreed to reconsider my point. My present Amendment is the same, but incorporates a small drafting Amendment of the noble and learned Lord the Lord Chancellor. As I covered my Amendment in some detail at Committee stage, I intend only to outline briefly the two proposed subsections, which are basically to protect the name, "Chambers of Commerce".
The first new subsection would give the Board of Trade, where necessary, powers to deal with unincorporated chambers under Section 1 of the Registration of Business Names Act 1916, and would cover the omissions in the Act as it stands at present by making a provision for the registration of associations of individuals who would have to register on their own account if they adopted a business name.
My second new subsection would give the Board of Trade the right, through the Registrar of Business Names, to refuse to register a name of an association of firms on the same grounds of undesirability as the Registrar of Companies is empowered to refuse to register the name of a company. The Company Law Committee
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recognised this problem, and my Amendment implements paragraph 444 of the Jenkins Report. It would do no more than give the Board of Trade the same power in respect of unincorporated business associations, including chambers of commerce, as it already has and uses in respect of incorporated associations.
At the Committee stage of this Bill, I was told by the noble and learned Lord the Lord Chancellor that another Bill was being considered but, so far as I can gather from my more experienced friends in your Lordships' House, this could be some years away and dependent upon the amount of work the Government decide to deal with. I have had a discussion with the noble Lord, Lord Brown, and he has fairly and frankly explained the Government's position regarding this Bill. I gathered at that time that he was in agreement in principle with the Amendment, but for the reasons we heard yesterday he was concerned that, if my Amendment were allowed to stand, the Government would have difficulty in resisting a spate of Amendments in another place, which in turn would delay the Bill's passage through Parliament. This is an argument with which I do not altogether agree. The speeches we have heard on this Bill have to a degree given me second thoughts.
The noble Lord, Lord Brown, has intimated that he can give me a satisfactory assurance that the Government will be introducing a second Companies Bill in the life of this Parliament, and that they will include my Amendment in the new Bill. Nevertheless, I hope that the noble Lord will reconsider his attitude and will permit the inclusion of my small, but so important, Amendment in this Bill, and thereby show Government support for those associations dedicated to the promotion of our export trade.
As the Prime Minister is to-day on the Continent doing his best to secure Britain's entry into the Common Market, I consider that this is a matter which should be dealt with now and not delayed for some years. The Common Market countries have a different conception of a chamber of commerce movement from ours in this country, and the sole purpose of my Amendment is to bring British chambers of commerce more into line with their European neighbours, and to

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prevent unscrupulous people from taking advantage of the present position. I beg to move.
Amendment moved—
After Clause 87, insert the said new clause.—(Lord Macpherson of Drumochter.)
LORD BROWN: My Lords, the noble Lord has made it clear that the purpose of the new clause is merely to prevent the indiscriminate use of the name "Chamber of Commerce" by unincorporated associations. In the previous Committee debate, it was argued that overseas interests were misled about the status of some bodies calling themselves chambers of commerce, and that there should be a means of distinguishing between chambers of commerce and organisations, consisting mainly of retailers, which should be called "Chambers of Trade". It was also argued that it was important for the export trade because of the responsibility that chambers of commerce had in documentation for exports, particularly for the issue of certificates of origin.
I think it is important that the rather vague remarks I made on that occasion about the degree of control over the issue of certificates of origin and other documents should be made crystal clear to the House now. By the International Convention of 1923, relating to the Simplification of Customs Formalities, to which this country is a party, only authorised bodies can issue certificates of origin valid for international purposes. The authorisation of such bodies is already tightly controlled to ensure that they are of the required repute and status. If any body which was not authorised, whether calling itself a chamber of commerce or not, issued a certificate of origin, it would not be valid. There are some chambers of commerce properly so called which have not become authorised and, therefore, cannot issue valid certificates of origin. The position has been carefully considered, but it does not seem that extending the Board of Trade's power under the Registration of Business Names Act would be relevant so far as certificates of origin and the export trade are concerned.
The other leg of the argument is concerned with the status of chambers of commerce overseas. If some of these
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bodies use the name, although they are not entitled to do so because they are not of adequate status, and are included in the band, this may lower the status of other British chambers of commerce overseas. I do not want to deny the point, but I do not think that this should be taken too seriously at the moment. There is not a large number of these bodies. I think that it is the potentialities of the situation that may be worrying the noble Lord, and I believe these to be under control.
Statements have already been made about the intention of the Government to introduce a second Companies Bill in the life of this Parliament. I can add to that that the Government will undertake to consider very seriously the inclusion in that second Bill of provisions to meet the arguments advanced by the noble Lord. I think he is aware that I cannot give him a firm commitment. I cannot say definitely that if the second Bill comes this will be included, but I will go so far as I can without openly saying it. I hope that, in the light of that assurance, the noble Lord will see fit to withdraw his Amendment.
LORD MACPHERSON OF DRUMOCHTER: My Lords, may I thank the noble Lord. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Schedule 1 [Amendments of Schedule 8 to the Companies Act 1948]:
LORD BROWN: My Lords, with the permission of the House, I will speak to Amendment No. 73 and at the same time to Nos. 74 to 77 and Nos. 88 to 92. These are all purely drafting Amendments. Paragraph 5 of Schedule 1 inserts a new paragraph, 5A, in Schedule 8 to the principal Act. The new paragraph requires a company to give information in its accounts about those of its unquoted investments that are not shown at a valuation. These investments will be in bodies corporate which may or may not be companies within the Companies Act meaning of that term. The Amendments substitute bodies corporate, or its equivalent, for companies in the places in the paragraph where that, rather than companies, is the correct term to use. I beg to move.
Amendment moved—
Page 70, line 33, leave out ("companies") and insert. ("bodies corporate").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 70, line 44, leave out ("companies") and insert ("bodies").—(Lord Brown.)
On Question Amendment agreed to.
LORD BROWN: My Lords, I beg to move Amendment No. 75.
Amendment moved—
Page 71, line 3, leave out ("companies'") and insert ("bodies' ").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 71, line 7, leave out ("companies") and insert ("bodies").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move Amendment 77.
Amendment moved—
Page 71, line 12, leave out ("companies") and insert ("bodies").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, this Amendment, No. 78,relates to fears which were expressed in Committee that the words used in Schedule 8 to the1948 Act, as amended by this Bill, would require a company to charge all of its tax, including tax arising from capital gains, to revenue. The noble Lord, Lord Drumalbyn, moved Amendments designed to ensure that the charges to be shown or to be deducted were charges properly charged to revenue, and I explained that the provisions as drafted did not have the effect the noble Lord feared: that they would leave companies free to omit from the charge to revenue such tax arising from capital gains as they considered appropriate. Nevertheless, I agreed that the wording of the provisions should be examined, and I undertook to have that done.
This and the next Amendment make the first provision read that there
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shall be shown in a company profit and loss account
" the amount of the charge to revenue for United Kingdom corporation tax … and the amount of the charge for taxation imposed outside the United Kingdom of profits, income and (so far as charged to revenue) capital gains."
This makes it clear that what tax arising from capital gains is or is not charged to revenue lies within the discretion of directors. With that degree of discretion in the Bill, and it having been made clear beyond a peradventure that this is the intention, I hope that this Amendment will be accepted.
Amendment moved—
Page 74, line 1, after ("charge") insert ("to revenue").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 74, line 7, after (" and") insert (" (so far as charged to revenue)").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, this Amendment gives effect to the undertaking given on Committee stage that the requirement of companies to publish the amount of the rents paid would be deleted. I think that at this late stage this is probably all the explanation that is required for the purpose of this Amendment. I beg to move.
Amendment moved—
Page 74, line 16 leave out from the beginning to (" sums") in line 17.—(Lord Brown.)
LORD DRUMALBYN: My Lords, may I say that we regard this Amendment as important to a good many people, and a good deal of importance has been attached to it, particularly by retailers. I am grateful to the noble Lord for having met us on this point.
On Question, Amendment agreed to.
6.17 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved to add to paragraph 15:
"( ) This paragraph shall not apply to a company if no shares or debentures of the company or of a body corporate of which it is the subsidiary have been quoted on a recognised stock exchange or offered (whether in Great Britain or elsewhere) to the public for subscription or purchase."
The noble Lord said: My Lords, this is an Amendment on which the noble Lord apparently has not felt able to meet us. The purpose of the Amendment is to exempt companies and bodies corporate of which they are subsidiaries, where their shares or debentures have not been quoted on a recognised Stock Exchange, and where they have not offered shares to the public for subscription or purchase, from having to disclose their turnover for the financial year in their accounts by way of a note, if not otherwise shown. Again, this is one of the recommendations of the Jenkins Committee. There are many smaller companies which live in perpetual fear that the disclosure of their turnover may make them a target for a take-over bid.
The reason why the Jenkins Committee excluded them was because they did not think that this was information which was of particular interest to creditors, and creditors would not base their estimate of the creditworthiness of a company on a note as to turnover in their accounts; but they felt that it would leave them open to take-over bids or, indeed, to a degree of disclosure which might be embarrassing. The sort of situation these small companies have in mind is where the company has, say, only one store in a town, and disclosure of its turnover will show exactly what goes on in that store, whereas it may be in competition with a chain of shops, or with a company which has two or three stores, so that the actual turnover of any one of those stores is not revealed.
This seems to be a reasonable case. Again, I quite understand the opposite argument: that where you have big companies, it may be relevant to know what their turnover is. This can be disclosed in other ways should the Government want to know it, and it is no reason why it should be made available to all and sundry. The turnover would be disclosed, in all probability, in the directors' report, although I am not certain whether it has to be. The point is that it would not have to be disclosed in the accounts. I hope that the noble Lord will feel able to concede this point now. We have already gone some way towards a concession, or at any rate we have persuaded the House to accept the Amendment which would exclude the breakdown
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of turnover, and therefore it seems not unreasonable that the total figure of turnover should also be excluded. I beg to move.
Amendment moved—
Page 75, line 7, at end insert the said subparagraph.—(Lord Drumalbyn.)
6.20 p.m.
LORD BROWN: My Lords, I am sorry, but I do not think the Government will be able to accept this Amendment. In the first case, of course, it will deprive the public of details of turnover of a number of large companies. There are so many of these large companies which are still unquoted. The noble Lord suggested that it would not be of interest to creditors. I think he quoted the Report on this matter. I am surprised that the Report should say so. I am not going to challenge his quotation, but I reserve the right to suggest that it is of importance to creditors to know the turnover of the companies with which they are dealing. I should think it is one of the most important criteria by which they can judge whether the credit they are extending is justified or not.
The noble Lord suggested that if figures of turnover are available to the public, a small firm may become a target for a take-over bid. This question puzzles me. Take-over bids of small, privately-owned shops, or something like that, can be resisted with great ease if they are in the ownership of a man and his wife or a small family; there is no difficulty about it at all. The take-over bid may be a matter which is greatly welcomed. They might like to capitalise the business, get the money out and hand over to someone else. It is not a tragedy or menace to their own liberty; they can make up their own minds.
The people menaced by take-over bids are directors of companies which are not within their own financial control but are owned by others, when they want to remain running the business for the shareholders and fear that if a take-over bid comes about the family or a small group of shareholders will accept the bid and they might lose their jobs. However, I do not think that that is a justified attitude on the part of people who are managing a business. I therefore believe that the entire argument about the danger

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of exposing turnover and consequential approaches by people who wish to buy the business does not hold water.
The other arguments in favour of retention of the clause as it stands are concerned with the growing need for economic information about businesses of this country. We really have to be concerned about this in the future. We have a need for much more information about the nature of our economy. This really is important, and I do not think we should hesitate at this stage, and take the step of saying that these non-public companies should not have to disclose this information. I do not think the case for secrecy has been made out. The last point in support of that is that it is far more commonplace in countries such as the United States for people to talk about their business, its details and its turnover. I am not certain whether they are forced to publish their turnover or not, but in most businesses it is well known by competitors, and even by members of the public nearby. It might have an extremely good effect on many of our small businesses if one chap knew that the chap down the road, with the Fame frontage and staff, was turning over two or three times as much as he was.
It would be a great stimulus to the better use of facilities, labour and everything else if people knew how others were doing. Knowledge of how well others are doing seems to me to be a good basis for competition. On that argument alone, I think it would be worth while retaining the provision as it stands. I hope the noble Lord is listening carefully, because I think these are really important arguments, and I hope he will see fit to withdraw his Amendment.
LORD DRUMALBYN: My Lords, I am grateful to the noble Lord for the explanation he has given of the Government's attitude on this matter. My own point of view is that, unless a clear reason can be given for the disclosure of this information, this is a matter which ought not to be disclosed or need not be disclosed. I should say, rather, that there ought not to be a requirement that it should be disclosed in the case of the classes of companies about which we are talking. I recognise that there are the peaks, so to speak, but they are relatively
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rare. I do not know what the proportion is. Perhaps the noble Lord could tell me the proportion of the companies with a large turnover on which he bases his case. But I should think they represent a very small proportion of the total number of companies which we are talking about.
The next argument of the noble Lord is on this question of information. The noble Lord says we want to know a great deal more about it. The one thing that has been puzzling me throughout is how he envisages all this information is to be collated. Is there any intention on the part of the Government to collate all this information? Are they going to build up statistics on turnover through the accounts lodged with the Registrar? If not, do the universities and so on write in for copies of all the reports from all the companies in the country? I should like the noble Lord to justify the argument he has been putting up, that this information will be of great value in building up knowledge of our economy.
I can quite see that it may in some cases provide a very valuable comparison if this is done, although I should have thought that this kind of information in general terms is probably fairly well known: people will know who is prospering and who is not. I can see that argument, but what I do not see is this general argument that all this will lead to a great burst of information about the economy of our country, or how it is going to be achieved. If the noble Lord can answer those two points I have raised in particular I shall be very grateful.
There clearly is not any widespread support in the House for this particular Amendment, and in those circumstances I do not feel that it would be right to press it, but I think, all the same, that the House would like to have some substantiation of the points I have raised. I concede the advantages of comparison as between retailers. I am not so certain that this will always work particularly fairly. As I have said, in the case of the single unit the turnover of that unit has to be disclosed, whereas the turnover does not have to be disclosed by multiple units in competition with it, and to that extent the single unit is at a disadvantage. I think that has to be recognised. We are creating a considerable amount of

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disadvantages, and I have yet to be convinced that there are comparable advantages, and I hope the noble Lord will indicate what they are.
LORD BROWN: My Lords, with the consent of the House, because I am speaking a second time on this Amendment, I will as briefly as I possibly can try to give a picture of this. I think it is within the memory of the House that on the last Budget Day the Chancellor of the Exchequer gave certain figures about the numbers of people coming into employment for the first time. If I remember rightly, of the one million who had come into employment over the previous five years, 140,000 had gone into manufacturing industry, and the balance into the distributive and service trades. I mention this fact to suggest that distribution of employment between various types of business in the country is becoming a matter of very great consequence to our economy. We are no longer, happily, in the state we were in in the 'thirties in regard to employing our people. We have over-employment, though not at this precise moment of time, I admit, and we are concerned with the efficiency with which we employ people, because this relates to the basis of our standard of living in the future.
If we are going to know more about this, if we are going to enable our universities or statisticians from the Board of Trade or elsewhere in the Government society to get hold of the facts which will lead us to better policies, we must have an availability of information of the turnover of small businesses, the type of information which is crucial to studies of this sort. I cannot answer the noble Lord's question whether the Government are going to collate all these facts. I do not think they will. They are available for the sort of research that I think will be of great importance to our economy as time moves forward into the future. I should not like to miss the opportunity in this Bill of making this information available.
LORD DRUMALBYN: My Lords, is the noble Lord aware that the legislation, the name of which I do not recall at the moment, provides that the details of the information given must not be revealed if they will reveal the turnover
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or any particular information about an individual firm? The purpose of this legislation is to achieve the statistics as a whole, and they are all given confidentially. The whole basis of the Act is confidential information. Is the noble Lord seriously telling the House that the source of information for Government statistics is the accounts deposited with the Registrar? Is he going to collate the information from them? We have not been told this so far.
LORD MITCHISON: My Lords, may I ask two questions which arise from these very fascinating discussions? They are quite simple. Have the Board of Trade a computer and has the Conservative Central Office a computer? Does either of them ever use them?
LORD BROWN: My Lords, I think, with respect, there is some misunderstanding here. These figures will be available at Companies House and they are available not only to the public but to Her Majesty's Government, or to universities, and so on. I do not understand the noble Lord's concern. What have I to assure him about? If the figures are at Companies House they are universally available to society, subject to payment of the right sums or to visits. I do not see what the anxiety is about.
LORD DRUMALBYN: My Lords, I am merely asking whether it is the practice now for the Government to collate information from accounts deposited with the Registrar. If it is the practice now, if statistics are compiled from those returns now, well, that is sufficient answer; but if they are not, as I believe they are not, compiled from that source, are they going to be so compiled in the future? That is my question.
LORD BROWN: My Lords, I shall need notice of the question whether the statistics which we use are to any extent compiled from the records at Companies House. I am sorry I do not know the answer, but I will get it. As to whether these records are going to be used in the future, I should think there is no question at all that they will be used in due course of time. I do not know of any specific Government plans to use them now. The point is that if one provides them in these returns, they are

501
available for use and will be valuable, and I have no doubt they will be used.
VISCOUNT ECCLES: My Lords, there are two interests here. If one is a big company one says, "Of course we want to have all this information on the turnover of the little companies, because it will help us to rationalise them"—I am using the kindest word I can think of. If I were a small company I should not want to give that information, because there is no doubt that it is going to be more useful to the big people than it is to the small. I personally am on the side of trying to make the structure of British economy efficient. If I had to weigh up one against the other, I should say we had better have this information and we had better hope it is wisely and skilfully used for the purpose of building a more efficient structure in our economy. But do not let us pretend that this is not going to be very inconvenient for many small people. It is. This is one of those very, very difficult things to weigh up. I think my noble friend would be well advised to let the other place have a "go" at it.
LORD MITCHISON: My Lords, may I have the leave of the House to repeat my question? I gave up any hope of ever discovering what happens in the Conservative Central Office. I should like to know the extent to which the Board of Trade uses these computers for dealing with information of this kind. If my noble friend cannot give the answer now, would he be kind enough to let me have a letter about it?
LORD BROWN: Yes, my Lords.
On Question, Amendment negatived.
6.37 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved to add to paragraph 15:
" ( ) This paragraph shall not require the disclosure of turnover attributable to business carried on outside the United Kingdom, or transacted with persons outside the United Kingdom, if its disclosure would in the opinion of the directors be harmful to the interests of the company and the Board of Trade consent to the information's not being disclosed."
The noble Lord said: My Lords, this was a point about which the noble Lord made" favourable noises", if I may put it that way, at an earlier stage. I think he said on Committee stage that if the Amendment that I then moved had been
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limited to business transacted outside the country, he might have taken a different view. I do not think he committed himself too far. The purpose of the Amendment is clear on the face of it. It is that so far as turnover is concerned the paragraph will not require the disclosure of turnover attributable to business carried on outside the United Kingdom, or transacted with persons outside the United Kingdom, if this disclosure would, in the opinion of the directors, be harmful to the interests of the company and the Board of Trade consent to the information's not being disclosed.
I do not for one moment suppose there will be a great many cases of this kind, but where there are cases it may be that there might be significant damage to the company, and to the country, if the information were disclosed. The Amendment is to safeguard this position. Even if there were only one case, it would still be worth putting the Amendment in to safeguard the position. I beg to move.
Amendment moved—
Page 75, line 7, at end insert the said subparagraph.(Lord Drumalbyn.)
LORD BROWN: My Lords, I take it that the noble Lord, in moving this Amendment, aims to make certain that a dispensation obtained by a holding company with the consent of the Board of Trade is not restricted by the wording of Section 15(2) of Schedule I, which calls for disclosure of the turnover of the company. If this is so, it is unnecessary, so I am advised. If any doubt remains, may I draw the noble Lord's attention to the fact that a company can also claim exemption in given circumstances from disclosure of turnover of a subsidiary under Section 150(2)(b)(ii) of the principal Act. That states that group accounts need not deal with a subsidiary of a company if the company directors are of the opinion that the result would be harmful to the business of the company or any of its subsidiaries, subject to Board of Trade consent.
I think, having examined this matter closely, the noble Lord, if he looks into it, will find it is not necessary to have this Amendment to establish the point he seeks to establish. I hope, in the light of this considered advice I am giving, which I have drawn from other sources, he will not press the Amendment.
LORD DRUMALBYN: My Lords, indeed not, if the noble Lord is satisfied that this is not necessary. I think we are at one on the purpose of this Amendment, and therefore I have pleasure in withdrawing it.
Amendment, by leave, withdrawn.
LORD BROWN LORD BROWN moved, in paragraph 17, in sub-paragraph (1)(a) of the proposed new paragraph 14A of Schedule 8 to the Companies Act 1948, after "income and" to insert "(so far as charged to revenue)". The noble Lord said: My Lords, paragraph 13A of Schedule 8 of the principal Act, as amended by the Bill, contains the basic provision that a company shall show in its accounts the value of its turnover. Paragraphs 15(7) and 16(3) and 20A elaborate on this basic requirement when the company is a member of a group. Paragraph 15(7) requires a holding company, if it does not draw up its profit and loss account in the form of a consolidated profit and loss account for the group, to show the proportions in which its turnover is divided between business done with its subsidiaries and business done with persons outside the group.
Paragraph 16(3) requires a subsidiary company to show the proportions in which its turnover is divided between business done with its holding company and fellow subsidiaries and business done with persons outside the group. Paragraph 20A requires a holding company which prepares consolidated accounts, if it is itself a subsidiary company or if it has omitted some of its subsidiaries from the consolidation, to show the proportion in which the turnover of the companies within the consolidation is divided between, on the one hand, business done with companies in the larger group of which the reporting company is a member and with companies in its own group but outside the consolidation, and, on the other hand, business done with persons outside the two groups. With some qualifications, the three paragraphs can be regarded as requiring a company to show the division of its turnover between internal turnover and external turnover. I have given this rather formal description because I want to get the reasons for the Amendment on the Record.
The examination of this subject by the Government has led us to the conclusion that while there might be marginal value in requiring turnover to be split, in fact the trouble that companies will be put to in dividing their turnover in this way is not justified. Therefore the Amendments are designed to remove altogether the requirement to split turnover as between turnover done with fellow subsidiaries and other parts of the company and turnover done with, so to speak, the outside world. I beg to move.
Amendment moved—
Page 75, line 31, at end insert (" (so far as charged to revenue)").—(Lord Brown.)
LORD DRUMALBYN: My Lords, the noble Lord has now got this matter on the Record, and we should certainly like to look at the Record. I am bound to say that I found it exceedingly difficult to follow what he said—in fact, I wonder whether once again he was not moving the right Amendment. However, I hope that he has done so. If we may have that assurance, we shall certainly raise no objection to this Amendment.
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move Amendment No. 84.
Amendment moved—
Page 76, line 1, leave out paragraph 19.—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move No. 85.
Amendment moved—
Page 76, line 9, leave out paragraph 20 and insert—
(" 20. At the end of paragraph 16(1), there shall he added the words' and the aggregate amount of assets consisting of shares in fellow subsidiaries.' ").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 76, line 34, leave out paragraph 23.—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 79, leave out lines 6 to 9.—(Lord Brown.)
On Question, Amendment agreed to.
Schedule 2 [Form of Schedule 8 to the Companies Act, 1948, as amended by this Act]:
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 81, line 36, leave out ("companies") and insert ("bodies corporate").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 81, line 46, leave out ("companies") and insert ("bodies").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 81, line 49, leave out ("companies'") and insert ("bodies'").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 82, line 3, leave out ("companies") and insert ("bodies").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 82, line 6, leave out ("companies") and insert ("bodies").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 86, line 6, after ("charge") insert ("to revenue").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 86, line 12, after ("and") insert (" (so far as charged to revenue)").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 86, line 29, leave out from the beginning to ("sums") in line 30.—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move Amendment No. 98.
Amendment moved—
Page 88, line 4, after ("and") insert (" (so far as charged to revenue)").—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 90, leave out lines 13 to 18.—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move the new paragraph 16.
Amendment moved—
Page 90, leave out lines 19 to 36 and insert—
(" 16.—(1) The balance sheet of a company which is a subsidiary of another body corporate, whether or not it is itself a holding company, shall show the aggregate amount of its indebtedness to all bodies corporate of which it is a subsidiary or a fellow subsidiary and the aggregate amount of indebtedness of all such bodies corporate to it, distinguishing in each case between indebtedness in respect of debentures and otherwise, and the aggregate amount of assets consisting of shares in fellow subsidiaries.
(2) For the purposes of this paragraph a company shall be deemed to be a fellow subsidiary of another body corporate if both are subsidiaries of the same body corporate but neither is the other's.")—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 91, leave out lines 8 to 40.—(Lord Brown.)
On Question, Amendment agreed to.
LORD BROWN: My Lords, I beg to move.
Amendment moved—
Page 95, leave out lines 4 to 6.—(Lord Brown.)
On Question, Amendment agreed to.
VISCOUNT ECCLES VISCOUNT ECCLES moved, after Schedule 2, to insert the following new Schedule:
"Amendments of the Companies Act 1948 Consequential on the Introduction of Shares of no Par Value
1. In paragraph (a) of subsection (4) of section 2, in place of the words after 'state' to the end of the paragraph there shall be inserted—

'(i) in the case of a company the shares in which are to have a nominal or par value, the amount of the share capital with which the company proposes to be registered and the division thereof into shares of a fixed amount; and

(ii) in the case of a company the shares in which are to be without nominal or par value, the number of shares which the company is to be authorized to issue;'

2. In subsection (3) of section 47, at the end there shall be added the words 'or, in the case of a share without nominal or par value, five per cent. of the total consideration to be paid for the share'.
3. In paragraph (a) of subsection (1) of section 52, after the words 'the number and' there shall be inserted the words 'in the case of shares having a nominal or par value'.
4. In subsection (1) of section 56, after the words 'Where a company issues shares' there shall be inserted the words 'having a nominal or par value'.
5. In subsection (1) of section 57, after the words 'to issue at a discount shares' there shall be inserted the words 'having a nominal or par value'.
6. Section 58 shall apply in relation to the redemption of preference shares which are without nominal or par value—

(i) with the substitution for paragraphs (c) and (d) of the proviso to subsection (1) of the following paragraphs—

'(c) the premium, if any, payable on redemption (that is to say, the amount by which the consideration payable on redemption exceeds the consideration payable on issue), must have been provided for out of the profits of the company before the shares are redeemed;

(d) where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend be transferred to a reserve fund, to be called "the capital redemption reserve fund" a sum equal to the amount or value of the consideration payable on the issue of the shares redeemed, and the provision of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the capital redemption reserve fund were part of the stated capital of the company'.

(ii) as if for the reference in subsection (3) to the amount of the company's authorized share capital there were substituted a reference to the number of shares which the company is authorized to issue;

508

(iii) as if in subsection (4) for the words 'to issue shares up to the nominal amount of the shares redeemed' there were substituted the words 'to issue shares for a total consideration the amount or value of which does not exceed the total amount or value of the consideration payable on the issue of the shares redeemed'.

7. In paragraph (a) of subsection (1) of section 61, after the words of such amount' there shall be inserted the words in the case of shares having a nominal or par value'; and paragraphs (b), (c) and (d) of that subsection shall not apply in the case of a company the shares of which are without nominal or par value.
8. In subsection (1) of section 63 the reference to the registered capital of the company shall be construed, in relation to a company the shares of which are without nominal or par value, as a reference to the number of shares which the company is authorized to issue.
9.—(1) The principal Act shall have effect in relation to a company the shares of which are without nominal or par value subject to the modifications hereafter in this paragraph set out.
(2) References to a fraction of the paid-up capital or issued share capital of a company shall be construed in relation to a company the shares of which are without nominal or par value as references to a fraction of the total number of shares comprised in that capital.
(3) References in whatever terms to a fraction in value of the shares or any class of shares of a company, or of any part of the shares or any class of shares of a company, shall be construed as references to the same fraction in number of those shares.
(4) References in whatever terms to the number, description and amount of any shares or to the number and amount of any shares shall be construed in relation to shares without nominal or par value as if the references to the amount of the shares were omitted.
(5) References in whatever terms to the amount of the share capital, or nominal or issued share capital, of a company, or any part thereof, shall be construed as references to the number of shares which are comprised in that capital or that part thereof, as the case may be; and references to the amount of any such capital which is partly paid up shall be construed as references to the number of shares comprised in that capital which are partly paid up, the amount paid up on each share and the amount unpaid.
(6) The proviso to subsection (2) of section 141 shall have effect as it has effect in the case of a company not having a share capital.
(7) Subsection (1) of section 154 shall have effect as if for sub-paragraph (ii) of paragraph (a) there were substituted—
'(ii) holds shares in its equity share capital which together represent more than half of the total voting rights of all members of the company at a meeting of the company at which all the members are present.'
(8) In section 64, paragraph (a) shall not apply.
(9) In the Eighth Schedule, for sub-paragraph (c) of paragraph 2 there shall be substituted the following sub-paragraph—
'(c) the amount of the stated capital account'."
The noble Viscount said: My Lords, this new Schedule makes amendments of the Companies Act 1948, consequential on the introduction of the provision regarding shares of no par value. As this is the last Amendment, perhaps I may, in moving it, thank the noble Lord, Lord Brown, for the gallant way in which he has stood up to this long Bill. I think he has earned our gratitude. I know what it is like to have to deal with a Bill when one is suddenly plunged into office, and I am sure that we all sympathise with him. I beg to move.
Amendment moved—
After Schedule 2, insert the said new Schedule.—(Viscount Eccles.)
On Question, Amendment agreed to.

INDUSTRIAL ACCIDENTS AND SAFETY COMMITTEES
6.48 p.m.
LORD CROOK LORD CROOK rose to ask Her Majesty's Government whether they contemplate taking any additional action in view of the slow and disappointing progress made by industry in setting up Joint Safety Committees, and the deterioration in the accident position in industry as a whole, as disclosed by the Annual Reports on the work of Her Majesty's Factory Inspectorate in 1965 (Cmnd. 3080 and Cmnd. 3081).
The noble Lord said: My Lords, I am sorry to keep your Lordships at this late hour, but I am sure you will acquit me of any blame, owing to the long time which our business has taken. I would have withdrawn the Question tonight, but for the fact that it started as a Motion on the Order Paper in October at the beginning of the "Stop Accidents Year." It deteriorated into an Unstarred Question, and this is the first occasion on which we have had the chance of getting it on to the Order Paper; and your Lordships will know that the House has a lot of business ahead of it. I should like to say that two or three of my noble friends who would have spoken have had
510
to leave on account of the lateness of the hour. For that reason, I will add a little to what I had intended to say, although I will endeavour not to keep your Lordships too long.
Your Lordships will not need me to remind you that one of the major problems of modern medicine is what can only be called the disease of accidents. Indeed, it has got beyond being a disease—it is an epidemic. To-day, many thousands of men, women and children lie in hospital wards recovering from injuries. It is estimated that 13,000 beds are occupied in United Kingdom hospitals every day of the week by accident cases. That, my Lords, is sufficient to fill 26 good sized hospitals. Every year, 309 million working days are lost through accidents, and illness arising from accidents; and deaths by accident are greater in number than deaths from either coronary disease or from cancer. I give that not as a statement of my own, but on the evidence of the Medical Research Council.
It is in the light of this serious position about accidents that I have ventured from time to time to bring to your Lordships' attention the question of accidents in the home and in industry, as well as on the roads; because the roads are always given publicity and too often the great causation of accidents in the homes, and in industry, is completely forgotten.
The economic loss to this country of accidents has been estimated to be £500 million annually. So it is to-day that I ask this Question relating to industrial accidents disclosed in the valuable and informative Reports of the Chief Inspector of Factories at the Ministry of Labour. That Inspectorate has gone a long way since it was set up in 1844 and dealt with the problem of children of less than nine years of age working in textile factories. Over the years, the legislation of Parliament, backed by excellent work in the Inspectorate, has caused a great decline in serious accidents that might otherwise have occurred in factories. But however true that might have been in earlier years, the truth is that in our recent modern society we now have this alarming trend of more and more accidents. The figure for 1965, disclosed in the Report of the Chief Inspector, has reached a new high, 293,717, compared with 268,648 in 1964,

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an increase of 9.3 per cent. which follows an increase of 31.5 per cent. in the preceding year. On present trends, the next Report of the Chief Inspector is likely to give us a figure of over 300,000.
I know that the Minister who is to reply will say that some of these figures in the Report are not completely reliable for comparative purposes, because the Inspectorate themselves during the year under review were busy improving the standard of reporting by people in factories, and that the figure may have been inflated in the course of this statistical year. But if that is true—and I accept that it is true—then it must be true that there are still accidents which are not reported, and it must be true that there have been accidents in past years that have not been reported. Of course I realise that there are more people at work, and that more people at work must always mean more people at risk.
But lest I make comparisons which are difficult, let me go back to 1962 and compare the figure for that year with the figure of 293,000 to-day. In 1962 the figure was only 190,000. It is a pretty shocking thing that anybody can stand here and use the word "only" in respect of the death and dismembering of many fellow citizens, the creation for many of them of lifelong misery and, what is more, lifelong misery for families for whom they were the breadwinner. Of course the position is really even worse, because the figures of the Factories Inspectorate show only the accidents which have to be notified to them in the factories covered by the Factories Act and, therefore, do not give a complete picture of this mounting tide of human distress.
We can take a sidelong peep at other statistics on the table in front of your Lordships by looking at the figure given by the Minister of Social Security as to the total number of applications made for industrial injuries benefit in the same year. Regrettably, that figure amounts to very nearly one million—to be exact, in the year in question, 957,000, making it clear that we can expect the next figure to be well over one million. If we looked at that figure with no regard to emotional concern it must disturb us, but I think as Parliamentarians we must
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be disturbed by the effect on the nation, what it means to productivity and to the economy of the country.
At the last Industrial Safety Study Conference of the Royal Society for the Prevention of Accidents, the latest figures were presented by those responsible, and I should like to give them to your Lordships in order to put into perspective this terrible economic factor. The loss of productivity resulting from industrial accidents in the year is £104 million; the overall cost to industry, including the replacement of labour and the cost of make-up of pay is £228 million; and the total cost to society, including the Industrial Injuries Act benefits to which I have referred, is no less than £325 million in the year.
Most of these accidents could have been avoided by co-operation between employers and workpeople. Some of the big employers do everything they can. But we must never forget that a large number of factories in this country of ours are small in size. As a nation we are based on small factories, going back 100 years. It is not a bad idea to refer to 100 years ago, because many of the premises in which people work are old-fashioned. They were not built for the modern industrial processes carried on in them, and they are dark and often totally unfitted for the jobs to be performed in them. Many of the small employers just do not bother anyway. As the Chief Inspector says in his Report, the damage and danger to our youth, newly employed, is shocking. Young people are put on to jobs with no training at all. The most that they can expect is that the older men who have been on the job for years will teach them. They must pick it up as they go along by watching. And many of these older men no longer have the habits of safety in the conditions in which they work; they have got into bad, slipshod, unsafe habits. So the lad learns not only what is good, but a lot that is bad as well.
I would be the first to say that the 1964 Industrial Training Act has provided some improvement. As the years go on it will provide more, but it will be a long time before we have the full effect of it. The Chief Inspector says:
"While a lot has been done by the larger firms in improving safety training, little or no progress has been reported in the smaller establishments. Instances were reported far

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too often of young people being almost pushed into danger as a result of false economies or to maintain production."
That is a very serious indictment made by the Chief Inspector of Factories in this country.
I should like to be clear, and say that admittedly some of the accidents are due to the complete carelessness of workers themselves. By all means let us blame the employers when fingers are cut off on a bacon-slicing machine; but we cannot blame the employer when it is a toe that is cut off, because, as the Chief Inspector points out, that could have happened only through the operative standing on the machine to open a window.
Similarly, I was interested, and a little horrified, to read that scalping is now back with us fairly badly. Some of us, in the first year when we put women to work in munition factories, in 1940, knew of this grave scalping danger, when women's hair was caught in belts, and so on. I was astonished, and at the same time amused, when I read that the Chief Inspector had offered a piece of blue ribbon to one of the men he saw in a factory where scalping had taken place. More seriously, I was glad to see that he had gone on to suggest that the men should do now what the women did in the war; that was, to wear a little cap which was given to them. He suggested that the men should take such a cap, preferably with a peak in front, and wear it to avoid this new danger that has come with the long-haired brigade.
But, my Lords, all the posters of factory inspectors, and all the exhortations on the walls, will not be any good unless the atmosphere is right in the work place. The Chief Inspector touches on one point that I know to be quite real, that of maintenance of production; when he refers to the demand for speedier production. From my personal experience I know how, in the growth in recent years of the desires to speed up production, there have been agreements between employers and unions for payment by tonnage, or alternatively by output per hour, or by bonuses on the output for a day or a week, with the result that we can expect: that the employer who wants to increase exports is pressing the men, and the men are not worrying about being pressed. They are most happy to work faster and to take the risks because of the
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bigger take-home pay they will get. They take off safety guards: they get bigger pay, and the country gets bigger exports. But I am trying to show that what we gain in one way we lose in another by the sacrifice of life and limb. I am one who refuses to accept the philosophy that a price we must pay for increased productivity in this country is the loss of life and limb.
It is now ten years since the Minister of Labour's Joint Advisory Committee, representative of both the trade unions and the employers, recommended the establishment of the works safety committees which I mention in my Question. Yet the Chief Inspector's Report has this to say:
"I am sorry to say there has been little progress since then"—
"then" being ten years ago—
"and according to our estimates the number of safety committees has not increased as much as had been hoped for."
The Ministry of Labour statement in another place last November is undoubtedly right; that joint consultative machinery on voluntary lines is much to be preferred to compulsory committees. But it is tragic, and in my view a great reflection on industry in this country, upon both the trade unions and the employers, that the Minister had to goon in that statement to say that, since progress in the past has been completely disappointing, he had decided that unless there is satisfactory progress over the next few years he will feel obliged to seek power to require the establishment of machinery for joint consultation. I echo his final words; that he hoped progress might be made in the next two or three years so as to avoid such legislation.
That brings me to the nub of my Question to the Government to-day: What is it now proposed to do in order to try to ensure that what we have failed to achieve in the last ten years is achieved by voluntary effort, so that we may avoid this compulsory Act of Parliament. I hope, of course, that the effort will be stimulated by the imaginative effort that has been made jointly by the Royal Society for the Prevention of Accidents, of which I am honoured to be a vice-president, and the Ministry of Labour in the appointment of seven regional safety organisers, the cost of whom is being paid for by the Ministry and ROSPA jointly,

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to a maximum of £16,000 per annum for the first three years, after which we all hope that it will be a self-supporting scheme. One of their tasks is to stimulate top management as to safety. As the Duke of Edinburgh, our President for the Jubilee Year of ROSPA said on the opening of this year as "Stop Accidents Year":
"Experience shows that only a strong lead from top management can ensure that safety precautions are taken seriously at all levels. There is no magic about a good safety record; any company can achieve one provided everyone is conscious of the need to stamp out unnecessary accidents at all times."
If one turns then to the second Report one finds the same kind of considerations about industrial health. I would commend the words of the Chief Inspector, who said that the maintenance of a healthy working environment is just as important as promoting safety or preventing accidents. This, he said, was sometimes forgotten by industry, but it was well worth reminding them of it, in view of the constantly changing methods of production and the introduction of technological methods. Without doubt this second Report on industrial health records the constant and unremitting work of the specialised inspectors in promoting and protecting health in the ever-changing industrial environment, a change which is bringing new hazards to health and throws up new problems for the doctors.
There was only one matter omitted from the Report that I should have liked to see included. That was a reference to the work of the Medical Commission on Accidents, which was set up in 1963, arising out of the National Convention on Accident Prevention. That has had to run on a budget of voluntary contributions. Some Members of your Lordships' House and myself have ben associated with this: those connected with I.C.I., Fisons, Unilever, and companies like that, who have put their money in; and the Board of which I had the honour to be Chairman, the National Dock Labour Board, was one of the supporters. But the Commission's total income has never exceeded £10,000 in any year. They have in hand material schemes, involving co-operation between medical bodies and hospitals, for which they need an additional £20,000 a year.
I am not going to pretend that I expect the Minister to-night, on an Unstarred Question, to start "ante-ing up" money for anything like this. But I want to get the point on record. I recognise that the Accident Commission is dealing not only with industrial accidents, the subject of this Question, but also with accidents on the roads, accidents in the home, in sport and the like. But I think that there have been too few schemes of this kind in this country for us to see this one imaginative effort founder solely for the sake of such a small amount of money. I expect nothing from the Minister to-night, but I would ask him to make a note to see that his colleagues in the Government think about this Commission when next they are looking at some of these problems.
I know that I have spoken for too long. This is partly, as I said, because there are others who have not been able to stay, and there is so much in the Report to which one would like to refer. For instance, I welcome the decision of the Inspectorate to detail inspectors to undertake surveys in particular subjects. At the same time, I realise that that means that the Chief Inspector is detaching inspectors from their normal jobs just at a time when those jobs are growing more and more. I am very clear that the Inspectorate has been starved of manpower for many years. The total authorised personnel, in my view, has never been enough to do the job as most of us connected with the trade union movement would like to see it done.
If one looks at the details it is bad enough that the totalauthorised establishment is still only 517; but it is even worse to read that, of that establishment, only 481 were in post last year, and that over that last year the increase has been only seven from the 1964 figure of 474. So, with what I regard as a minimum authorised establishment, they are still 36 under the number they could have. I hope the Minister will be able to tell us that one of the things which the Ministry of Labour can do to deal with this tragic situation is, if not to put up the established cadre, at least to see that the missing number is made up. There is so much that could be said on these valuable Reports, but the hour is late. I might have wished for a debate instead of an Unstarred Question on this important

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subject, so that I could hear some of my colleagues in industry who have clear views on the subject, but at this time I must be content with this Question which I now beg leave to ask.
7.12 p.m.
BARONESS SUMMERSKILL: My Lords, I should like to thank my noble friend for initiating this debate and thereby focusing attention on a very grave state of affairs. I must confess that he dealt with it in a very gentle way. I feel much more indignant than he does about it. Perhaps my noble friend feels indignant, but he did not express indignation with the same force that I feel tempted to do. It seems paradoxical that in an age of great technical progress we are failing to provide adequate protection to workers in comparatively simple processes—processes which have been used for many years.
I find the Report of the Chief Inspector of Factories disturbing reading. I am left with the impression that too much blame is attached to the worker and not enough to the indifferent employer and those who fail to supervise adequately the management of these small factories and works. It seems that despite the deteriorating situation—and my noble friend has given the House the figures—there is a reluctance to establish joint safety committees. I would ask my noble friend why this cannot be a statutory obligation forthwith, in view of the figures which he has been given. It appears that the position will deteriorate still further, and it seems surprising that there should be any further delay in setting up these committees.
As the victim of an accident or an industrial disease is always the employee, it would seem to me that he has every reason to protect himself, provided there is co-operation forthcoming from the management. If some workers show apathy, as has been suggested in the Report, it is because they have not been kept fully informed of some of the occupational hazards. For instance, for years the miners were kept in ignorance of the lethal properties of coal dust. And it came as a surprise to me to read in the Report on Industrial Health that the symptoms of byssinosis, the dust disease of cotton and flax workers, are described as being fairly well known even by the workers themselves. If it has
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taken so many years to warn the workers of the serious nature of this disease, then decades must pass before they are warned of the risks run by those contracting chronic interstitial fibrosis, a lung condition which has not yet had a confirmed ætiology. I find it difficult to understand why this knowledge is withheld. There are nurses, medical officers, officials of all kinds in this particular field, and yet still this amazing ignorance exists among the workers of the hazards of their occupations. I would agree that there are no doubt many workers who adopt the attitude of "I'm all right, Jack", but that is no excuse for failing to offer the maximum protection to the others.
The curious thing about this appalling problem is that public interest is not very great. It seems to me that public interest in a death rate varies according to the circumstances. While a disaster in the pits makes headlines, the fact that last year there were 293,717 industrial accidents, of which 627 were fatal, has little news value. These accidents apparently occurred in familiar surroundings—in a factory, in a works, or in a shop with a bacon machine. This has no news value. Furthermore, it was stated in the Report that at least 30 per cent. of reportable accidents have not been reported to the Inspectorate.
It seems, from reading the Report, that the large firms have improved safety training and it is the small firms which show a high accident rate; and apparently the accidents often occur on machines where the principles of guarding are well-known and where guards are known to be effective. This fact evokes this comment in the Report:
"The continuance of disabling accidents on these machines is something of which the occupiers of factories using them should be ashamed."
If we are to rely upon the bad employer's experiencing a sense of shame or even remorse in order to prevent accidents, then we can dispense with legislation and an expensive Inspectorate. I say that those who should be filled with shame are those who have allowed the callous employer to evade the law and, through sheer indifference, fail to protect the life and limbs of his workpeople.
This is a very big subject, and these Reports are fairly concentrated. The

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law in this field has, of course, developed over the years and there have been exhaustive reports on many aspects of it—on the accident rate, on industrial diseases and so on—and committee after committee has been set up to examine the question. I take it that when in another place or in this House somebody stands up, as my noble friend has to-night, and initiates a debate, then perhaps, in order to quieten him or the labour world, or to quieten Members of Parliament in another place who represent industrial constituents, somebody says, "We will set up another committee". The committee sits for two or three years and then makes another report. It would be interesting to know how many of these reports have been acted upon and how many have been pigeon-holed.
In this debate to-night I want to raise two matters. Time is limited, and I want to raise these matters with my noble friend who is to answer for the Government. I do not expect him to be able to answer off the cuff, but I should be quite happy if he would promise to send me a detailed answer by letter. I should like to know what action has been taken regarding the paper written by Dr. Patricia Lees on The Vulnerability to Trauma of Women in relation to Periodic Stress, written for the Medical Commission on Accident Prevention. Many of these women workers are married women who go into industry for the first time, without any knowledge of the hazards. May I know whether women workers are given talks in groups by a nurse or medical officer, which includes this information? As this information covered 10,000 women, it would seem to be a waste of time and money and effort if the findings were not acted upon.
There is another matter which I want to talk about. Of all the horrible disabilities from which workers in our industrial areas suffer, I have picked just one because it struck me directly I went to an industrial constituency. I represented an industrial constituency after representing a London constituency where I found very few industrial diseases. I went up North to an industrial constituency, and immediately the impact of the condition of some of the workers was made upon me. I recall that very many men were,
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as they call it—it is a euphemism for deafness—"hard of hearing". Youngish men and middle-aged men were suffering from occupational deafness. When I raise my voice in industrial areas about some of these matters they say that I am curious. They say, "My father was deaf".
They also suffer from the most appalling bronchitis. I say, "You should not be like this at 40", but they say, "My father had it and my grandfather had it, and they died from it"; and, of course, father and grandfather worked in the same process. They develop a bad chest, they develop occupational deafness, and it is regarded as almost the normal thing, due, perhaps, to the altitude or the latitude or something which is peculiar to a particular town. What is peculiar to it are these appalling, dark, filthy factories in which some of our people work amid noise which deafens and the consequence of which is that so many of these young and middle-aged men are deaf long before old age comes.
On the subject of occupational deafness, I notice that in the Annual Report the Chief Inspector mentions that this condition was recorded in the 17th century as being found among flour millers and coppersmiths in Italy—200 years ago. It is also stated that deafness is "accepted" as part of a noisy job. What complacency! It is "accepted" that these middle-aged men are gradually going deaf. They sometimes find that they are shunned by their families or by their friends because they cannot reply to a conversation. They become isolated. "Accepted" the Inspector says. It is "accepted" because they know perfectly well that if they make a protest they may lose their job; therefore they live in this world of increasing silence and hope that they will not be discharged because their friends and colleagues may think them a little difficult.
The Wilson Committee, which reported in 1963, concluded that the knowledge on occupational deafness was insufficient for legislation to be made. However, the fact is that occupational deafness is at least accepted, and some attempts have been made to provide buildings which reduce the noise transmission. I am afraid that these buildings are still only prototypes. We cannot say that in this,

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that and the other large industrial town there are factories which have been insulated in a certain way so that the noise does not have a serious effect upon the workers.
The Chief Inspector, who obviously showed sympathy in this matter, said that where it is possible to reduce the noise to safe levels workers should be protected by ear defenders, as he calls them. I should like to know—and this condition has been known since the 17th century—whether the recommendation that these young men who perhaps are not already deaf should be fitted with what are called ear defenders is being carried out, and what proportion of works have failed to include this as part of a preventive medical service.
I am not being difficult to-night. All I am asking my noble friend is whether the recommendations of the Committee which inquired into women workers' conditions have been carried out, and what is being done about occupational deafness. I am not pressing about all the other diseases which are developing, perhaps due to the handling of some toxic substance, because my noble friend can well say to me that research is still going on. But I do ask him about two very simple aspects of this subject.
While successive reports tell us over and over again of the occupational hazards and the investigations which are being made, the significant omission in the two Reports before us is the evidence that the worker is benefiting from the available protection. That is why I am asking the question about ear defenders. The Chief Inspector of Factories sums up the position in a masterly understatement. He writes:
"The overall picture is not one that can be regarded with complacency by employers, employees or the members of the Inspectorate",
and very wisely he has not sought to whitewash his staff. I cannot agree with my noble friend that there is any excuse because there is a shortage of inspectors. This is so terribly serious that it might have been possible over the years to have part-time inspectors. There is no excuse at all.
I say that the individual employee is powerless in this industrial web, and an unscrupulous employer can out-maneouvre an indolent inspector. I also
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say that in these Reports the crucial information is missing. I should have liked to have an analysis of a group of small factories, with the accident and sickness rate and the nature and frequency of the surveys of the inspector—and I mean a complete survey, with a report on every aspect of the working of a factory. I should like to know what supervision is exercised over the inspector; how often a fresh mind is brought to bear. To allow the same man or woman to go into the same factory time after time is, of course, psychologically wrong. A person becomes accustomed to a place, and perhaps human beings are not always on their toes. I should like to know how often these inspectors are switched from one area to another, so that a calculating employer cannot bring any undue influence to bear.
I hope the House will realise that I am not disparaging these inspectors. But it must be remembered that before an inspector goes to one of these dirty little factories, he has to warn the employer that he is coming. In that short time all kinds of things can be done. It may even be suggested to some of the workers that if they are questioned—
LORD TAYLOR: My Lords, is my noble friend quite sure that this is done? I always thought that a factory inspector could go to a factory at any moment, without any warning.
BARONESS SUMMERSKILL: No, my Lords. I was told before I came here, by somebody who knows all about industry, that for reasons of courtesy the employer is always informed that an inspector is coming—and I also asked a factory inspector. My noble friend must realise that, after a time, such a friendship grows up between the employer and the inspector that it is a bit like calling on a friend. He has to 'phone and say, "I shall be there this afternoon". What I am saying is that this relationship should not exist, and that there should be much more supervision, in view of the appalling conditions that have been described to us to-day.
I am saying that unless this particular nettle—that is, better supervision of the factory inspectors—is grasped firmly, the Chief Inspector of Factories will find

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that the position may deteriorate still further. I hope that my noble friend has not raised this matter in vain. It is one of the most serious that could possibly come before Parliament, and for some reason which is difficult to understand there is an apathy among all those who have it in their power to change these conditions.
7.31 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, I had not intended to speak on this occasion, but I was so moved by the speech of the noble Lord, Lord Crook (with whom I share an interest in ROSPA, as I think I am, with him, a Vice-President), that I should like to add a few words to the debate. I congratulate him very much indeed on an absolutely fascinating account of a terrible problem, as I do also the noble Baroness, Lady Summerskill, on her admirable speech. All that has been said is, I think, most important, and I hope it will reach the ears both of employers and of employees, because what I think one must also say—and I know this to be true—is that quite often it is difficult to get employees to use the safety measures which have been installed.
I do not employ many people, but I do employ a certain number in agriculture; and, as your Lordships may know, there has been a great slackness in getting safety measures introduced in agriculture. I do not know why, but it is one of the last industries to have been dealt with from a safety point of view. Now, every employer has strict instructions about what he has to do, and most farmers—certainly the ones I know—have done it. But you still cannot prevent employees from doing things which they are not allowed to do. You may put up a huge notice saying what is allowed and what is not, but you cannot watch them every single moment of the day, and sometimes accidents happen which are caused simply by the employee's not being prepared to use the safety measures—the safety guards, and so on—which have been provided. That is because, as I think the noble Lord, Lord Crook, has said, these measures sometimes slow down the process, and the men are all desparately anxious to get on with the job. I do not say that
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that is the main reason, or is anything like the main reason, for the accidents which have been described, because it is not. I remember that during the war I served for a long time on a Ministry of Labour committee which was dealing with the employment of women in munition factories. Those Government factories were all supplied with every conceivable protection, but it was difficult to get the women to use them. It was not the fault of the employer; it was the fault of the employee.
However, those are only comments which I make because I think it is not fair to say that it is all the fault of the employers. It certainly is the fault of the employers that a factory is bad—and the conditions which the noble Baroness has described are, of course, shocking, and nobody would want to see them perpetuated. But there is also the question that, having provided every safety measure, still the people do not use them, and then there is an accident. I have seen it happen, so I am speaking about something of which I have had actual experience.
The noble Lord, Lord Crook, mentioned the question of safety in the home. That is not the subject of our debate to-night, but it is an extremely important matter. I know from my position on the Consumer Council that a very great deal of information comes to us about dangers from various things—unguarded fires, inflammable materials, and so on. One is most anxious to tackle all that in every possible way, to try to make life safer in the home as well as in the factory. I hope that the debate tonight, short as it is, and though at such a late hour, will get wide publicity, and that the Government will try to support in every way possible measures making for greater protection.
I have recently visited some factories in the textile industry in the Midlands where, in the past, the noise to which the noble Baroness, Lady Summerskill, referred must have been ghastly. In fact, however, the new looms which I was shown—I think they were Swiss, although I am not quite sure—whilenot silent, were so much less noisy than the old ones that it gave one great encouragement. The noble Lord who is going to reply will no doubt recollect the terrible noise in the jute factories in Dundee. I

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remember being taken there on one occasion. That is really a nightmare. There again, although I speak without the knowledge of the noble Lord, a great deal of that ancient machinery is probably now obsolete, and I hope that noise of that kind, which led to terrifying deafness, is now a thing of the past.
My Lords, I support the noble Lord, Lord Crook. I think he has done an excellent service in bringing this subject forward at this moment; and anything that I can do to help, in my capacity as chairman of the Consumer Council, in my capacity as a supporter of ROSPA, as an employer of a very small number of people or in any other way, I shall be only too happy to do, because this is a vitally important matter. I hope that the Government will do all they can to answer the points raised in the brilliant analysis of the problem which has been made by the noble Lord, Lord Crook, and the noble Baroness, Lady Summerskill.
7.38 p.m.
LORD TAYLOR: My Lords, my noble friend Baroness Summerskill has referred to deafness and to the need for ear-defenders or some other means of preventing deafness. It is an extraordinary thing, but I do not believe that deafness has ever been classified as an occupational disease, and I do not think there has ever been a Common Law action claiming damages for deafness as a disability created by work. Yet, of course, it is undoubtedly created, although it is a very slow business—and this is one of the difficulties in getting the workers to take protective action.
My noble friend mentioned protectors. These are of two kinds. There are either the things which you can wear inside your ears, which are very uncomfortable, or there are ear-muffs, which you can wear outside your ears but which are very hot—and both protectors are very unpopular for those reasons. In fact, an internal protector may irritate the ear channel and may cause a rash there; so probably a better thing is a piece of cotton wool. But far and away the best thing is to suppress the noise at source. This is the only proper answer, and often it can be done very easily if only managements will think about noise when it comes to re-equipping their fac
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tory—for example, replacing metal parts which steer mass-produced components into troughs or boxes with wooden parts, so that the impact noise of metal on metal is reduced. That is a perfectly straightforward thing to do.
But at the moment there are no means by which the amount of noise produced in a factory can be measured. There is no organisation whose job it is to measure such noise. It ought to be the job of an industrial hygiene service. That, at the moment, is non-existent, and I must honestly say that we have had very little encouragement from the Ministry of Labour in the establishment of an industrial hygiene service. I wish most strongly that we could see established in the course of the next year or so a proper set of industrial hygiene laboratories which are available freely to industry for the measurement of loud and dangerous noises, among many other dangerous things in such an environment.
My noble friend Lord Crook has done a very useful service indeed in raising this subject. Personally, I agree with every word he has said, although I think we all realise that when he gave us a figure for accidents it was a gross underestimate. He could give us only the notified industrial accidents received by the Ministry of Labour and, as he said, the Ministry of Social Security figures for occupational injuries are higher. Even then they do not really approach the true figures, because these are only for accidents which cause disability lasting for three or more days; that is to say, absence from work for three or more days. In the case of a properly-treated industrial accident, even if a comparatively severe one, like a fracture of a toe or finger, the person should be back at work within twenty-four hours, or even straight away if it were a clean injury, properly sewn up, properly supervised. The very best thing for them is not to go absent. One sees this happen so frequently with back injuries. If a fellow injures his back at work, he may be off work for six to eight weeks or more; but if it is possible for him to have physiotherapy each day at work, and to continue at work, he will get better in two or three weeks.
This is a measure of what we could do. My noble friend stressed the importance of accident committees, and asked what more could be done to stimulate

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their formation. So far as prevention of accidents is concerned, the only thing to do is to keep on nagging continually. One must go on and on. A high proportion of accidents occur to young people, in their first two or three years at work, and more particularly in their first six months at work, when they have not really learned how to use their machines or how to use their guarding apparatus. As my noble friend Lord Crook said, things will be better with the coming of proper industrial training under the Industrial Training Act.
But there is something else we can do. It is to get at the "kids" at school, before they leave, particularly those who are in the secondary modern or technical streams, and give them talks about accidents in school when industry is still something that they do not know a great deal about, or at least something they do not think they know everything about. Once they start on a lathe, they think they know it all. You can read amazing stories in this Report. For example, there was the little boy who, asked to collect some potassium cyanide, got the crystals in a plastic bucket and noticed that they started fizzing. Little did he realise that it contained hydrochloric acid. He took it round to the foreman, who said something about cleaning it out. He went back and threw in some more potassium cynanide; and if it had not been that the foreman heard him groan as he passed out, it might have had a very serious effect. But this was just pure ignorance. Certainly, the time when we can do most about accident education is before the boys and girls actually start in industry. I think this is something that we have neglected rather a lot. I hope we shall give this education in schools, and I hope we shall do it in the technical colleges.
The second field where I feel most passionately that we are not doing what we ought is in the field of early treatment; that is, in the development of treatment services. It was really a terrible story my noble friend related when he told us what it was costing. Yet we could deal with most of this for a tenth, a twentieth or even a fiftieth of the cost. Time and time again we beg that we should be allowed to develop, or be given the means to start, an industrial health service for the small factories.
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My noble friend stressed the small factories, as did the noble Lady. There is no doubt at all that there cannot be safety officers in the small factories. In every good, large factory, there are safety officers who do a good job. Whenever an accident occurs he or she investigates why it happened and finds out what can be done to prevent its happening again. In the very large number of small factories there is nobody to do this work. There cannot be, in terms of the numbers. But if one can develop small industrial health services on a local basis, then they can do for the small employer and for the employees in smaller factories what the big employer does for himself. Once these things are going they can pay for themselves, or industry will pay for the total cost of them. But they need a bit of help to start. We have been begging Conservative Governments, and now we are begging a Labour Government, to give some help to the creation of these industrial health services for the smaller factories.
Until now every one of these services has been created through the generosity of the Nuffield Provincial Hospitals Trust or the Nuffield Foundation. Once they get going they are self supporting. The Dundee Industrial Health Service, the Rochdale Industrial Health Service, the West Bromwich and Smethwick Health Services, the Slough and Central Middlesex Health Service, and my own at Harlow all started in this way. All have managed to make good, yet we cannot persuade the Government to set aside the small amount of money needed to start more. Unless you have a pump-priming grant to get things going, nothing happens.
My noble friend Lady Summerskill mentioned committees which report, after which nothing happens. We have had a Committee on the Appointed Factory Doctors' Service. I hoped (and still hope) that we may get legislation from this Committee in the course of the next twelve months. I trust I am not hoping in vain. I hope very much that in such legislation there may be provision to enable a very small part of the money which is now set aside in the event of an enormous increase in the claims for industrial injuries—I forget the amount; I think it is £300 million or more which is salted away in the Industrial Injuries

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Fund—to be spent in preventing industrial injuries. It would seem commonsense. Yet it is a commonsense that we have so far failed to get any Government to agree about.
I hope very much that the Government will take this question of industrial safety, of the prevention of industrial accidents and injuries and of illness, of getting Committees set up and of early treatment, very much more seriously than they have in the past. I do not want to see them spending the few thousand pounds for which my noble friend Lord Crook modestly asked for his Committee; I want to see them spending about £4 million to £5 million a year towards preventing the wastage of £300 million a year. It seems to me to be a very simple and sensible investment. If only we could get this done, it would pay for itself not one, twice or thrice, but thirty or forty times over. Yet I fear we shall have to go on asking for a little longer, but I hope not for very much longer, to see this happen.
7.50 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, my first duty and pleasure is to express my very sincere appreciation to my noble friend Lord Crook for having initiated this debate and for the very well-informed way in which he stated the point of view that he felt impelled to bring before the House. I should like to say right at the outset that, in speaking last in this debate, I do not regard my task to be to attempt to rebut matters which have been put forward by noble Lords; because so many of them, in fact, are incapable of being given a rebuttal. So many of the things which have been said are statements of fact, statements based on the statistics in the Reports to which my noble friend, Lord Crook has drawn attention. And if, in the first instance, I draw attention to certain aspects of the figures quoted from the Reports, it is not because I wish to fall into the trap which my noble friend Baroness Summerskill suspects that the Chief Inspector has fallen into, of being unduly complacent, but just because I wish to make a modest beginning of an examination of the figures.
My noble friend Lord Crook referred to the increase in reported accidents, and
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the last complete figure was the one for 1965, of 293,000. The figures for the first nine months of this year indicate that the present year's complete figures will be around the same as, those for 1965, or perhaps very slightly more. If the figures are taken completely at their face value, it indicates a deterioration in the position which cannot possibly be gainsaid; and when one compares the figures, as my noble friend did, with those for as recently as 1962, it seems to indicate an appalling deterioration.
Nevertheless, I must say that the figures cannot be taken quite at their face value (my noble friend indicated that he expected me to say something of this kind), not merely because of the fact that there is improved reporting but for a quite different reason, which was referred to in the Chief Inspector's Reports. It is that changes in social circumstances have taken place and one of the bases for reporting accidents, the three-days absence from work, is now related to circumstances which are perhaps not the same as they were even a few years ago.
Similarly, with the inauguration of the Health Service people suggested that there appeared to be a very sudden increase in illness among women and children because of the calls then made on doctors. But this was not the case; it was because treatment could be obtained which had not been available before, and because of the changed conditions in relation to sick pay schemes, industrial injuries benefits and so on. People who had previously continued at work, or not stayed away from work after injury, did not do so for the very admirable reason suggested by my noble friend Lord Taylor, that continuing at work was perhaps the best way of getting well, but because they could not afford to be off work. That situation has altered, and to a certain extent it has influenced these figures.
But, having said that, I must also make it clear that I do not suggest for one moment that it in any way diminishes the seriousness of these figures. As stated by my noble friend Lord Taylor, the figures of accidents which are reported do not by any means reveal the whole story. So the apparent slight diminution of the increase is probably much more than cancelled out by the unknown and unreported accidents.

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My Lords, my greatest regret in relation to this debate is that it should be taking place at an hour of the night when, by past experience, your Lordships can expect to get very little reported in the Press. The circumstances of time are against us. But so much has been said in this debate which is very much worth hearing, which is very much worth being brought to the notice of both employers and employees, that I wish the Press could find some way of using some of this material. Perhaps it might be the subject of articles which could go into weekly newspapers; or it might appear in magazine sections from time to time when the fact that it was actually said at this time on a particular night would bear no relation to its importance. The important thing is that the people concerned should get to know about some of these things.
I agree very much with what has been said by a number of people including the noble Baroness, Lady Elliot of Harwood, who followed my noble friend, Lady Summerskill, who pointed out that not all the blame could be laid at the door of the employers—and that is true. At the same time, we have to admit that the old argument, that everything that could be done for the safety of workers was done, and that accidents happened because workers neglected the use of these safeguards, is no longer true. I recall a slogan used by the Royal Society a year or two ago which I remember hearing at a conference that I attended in Scotland. It was: "Accidents don't happen—they are caused". I have never forgotten those words. I believe that their acceptance by everyone concerned could do a great deal to diminish the number of accidents. If everyone could get that firmly in his mind it would be the best way to reduce the accident figures. Accidents are caused by bad employers. They are caused by careless employees. They are caused by people, anxious to have more money—whether in the shape of profits or in wage packets—taking short cuts, removing safety devices and so on. These things are all part of the trouble.
Having said all that, however, I should also say that much has been done by these joint safety committees. In July of last year my honourable friend, the
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then Parliamentary Secretary to the Ministry of Labour, said, in reply to a Question in another place that the. Minister still wished to rely on these committees being set up by voluntary effort. From that point of view I am not to-night going to be able to satisfy my honourable friend Lady Summerskill, who desires that they should be set up as a statutory process. The Minister believes, and I think that most people in industry believe, that if the committees can be set up on a very much wider basis than at present as voluntary machinery, they will be much more valuable than something which is imposed. We have a fear (we may be wrong) that committees imposed on workers against their will, and on establishments against their will, might well receive the same treatment as the devices which workers do not wish to use because they impede the possibility of increasing earnings. But a committee which is set up voluntarily within the factory starts off with a degree of good will which is in itself a good beginning to the prevention of accidents inside the factory.
My Lords, if I were to pretend that I knew all about this subject, you would know that it was not true. After all, I have not previously had anything to do with the Ministry of Labour debates in your Lordships' House. But I would say that it is my suspicion that if we could have a comparison between the accident rates in factories which have voluntary safety committees and in those which do not, the factories where there are safety committees would come out very much better every time. For that reason, we prefer to rely for a little time longer on the efforts which are being made, and which I hope will be intensified, as a result of this debate, to get more of these committees going. A very great deal more has to be done before the position could be accepted as being even reasonable, because as yet there is only a minority of these committees in existence. But, as was stated last July, if we cannot see evidence within a reasonably short space of time of an expansion in the voluntary system, then the Minister has not by any means ruled out the possibility that compulsion will have to be applied. But we shall be doing it from the point of view that the application of compulsion is in itself an admission of failure, which would not be the best way to go ahead.

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It is not because of ignorance of the subject that I do not propose to reply to the other points which have been made to-night—although I must admit that I have an almost perfect excuse under that heading—hut because the value of this debate is that my right honourable colleague will study what has been said here with the greatest interest. Without exception, noble Lords who have taken part have had something to say which is worth while. I have only one rebuttal to make, and that is to the point questioned by my noble friend Lord Taylor, when my noble friend Lady Summerskill said that inspectors always gave notice before they called on an establishment. She asked that they should be switched round from time to time so that they should not get on too friendly terms with employers and thereby be subject to undue influence. There is no obligation on an inspector to notify anyone of his intention of calling. It may be done in some cases. Personally I can see no reason why it should be done at any time.
BARONESS SUMMERSKILL: My Lords, may I just say that my authority was one of the best—my noble friend Lord Collison, who is a member of the T.U.C.
LORD TAYLOR: My Lords, I think that it is sometimes done with very small factories to make sure that the boss is in—that is the practical reason.
LORD HUGHES: My Lords, I know from recent experience that it is not always a good thing to quote personal experience in this House, but it is not long ago since I was concerned with running a small company. We occasionally had visits from factory inspectors, and notwithstanding the fact that I was as much an absentee employer as any likely to be found in the country, I never had any intimation from the factory inspector of his intention to call. So, even in cases of small establishments, notice is not given as a matter of right in order to ensure that the employer or person responsible is in when the inspector calls.
BARONESS SUMMERSKILL: My noble friend must have been suspect.
LORD HUGHES: My Lords, that would not surprise me in the least. I
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think that I have been suspect all my days. But the fact is that there is no obligation to notify. Again (and I think that this will please my noble friend) inspectors are switched frequently, not in order to avoid their coming under the undue influence of employers—because, frankly, I think that the chances of that are not great—but in order to prevent them, because they are always going to the same places, from overlooking or ignoring, through familiarity, something which a man coming in anew would find out.
My noble friend Lord Crook referred to the number of inspectors employed, and to the fact that the establishment was not filled. I have some small encouragement for him. The last figure of the establishment which he had was 517. That has been increased to 533, although, what is of much more interest to him, the actual number in establishment is 481. My noble friend, and also I think my noble friend Lady Summerskill, asked why there could not be part-time inspectors. A special scheme for the appointment of assistant inspectors has recently been started and has got off to a fairly satisfactory, though small, beginning. These assistant inspectors are recruited from inside the Ministry of Labour's staff, and eleven have so far been trained and taken up appointments. This scheme is being examined so that there can be an expansion of this service, if possible, but the Ministry itself suffers from shortages of certain trained people, and to a certain extent shifting them over to assistant inspectors is robbing Peter to pay Paul.
I hope that I have said sufficient to indicate to all noble Lords who have taken part that I expect my right honourable friend to treat this debate in the way I am treating it to-night, as something which has been very worth while. I hope that the results that will flow from it will come from what is learned outside by industry as well as from what is learned inside the Ministry. On the two points which my noble friend Lady Summer-skill asked me, she anticipated correctly that I should not be able to give answers off the cuff. I regret that. I am happy, however, that her second anticipation, that I would write to her on these questions, is more capable of being carried out; and that I sincerely undertake to do. I should like to thank my noble friend Lord Crook for what he has said and all other noble Lords who have taken part.