§ 2.45 p.m.
§ Further considered on Report (according to Order).
§ 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.419
§ (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 420 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.
Page 36, line 27, leave out ("alteration") and insert ("alterations").—(Lord Brown.)
§ On Question, Amendment agreed to.
§ 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 421 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;
§ (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 422 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".
§ (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,
- (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 423 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 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
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:—
§ 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 425 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 426 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 427 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 428 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 429 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.
430 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 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 431 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 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 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 434 £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 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 435 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.
§ 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, 59.437
|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.|
|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 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 438 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 439 that there should not be an anomaly between the old legislation and the new, and this brings the two together.
§ 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.
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 444 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 445 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 446 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.