HL Deb 27 July 1967 vol 285 cc1160-5

[No. 4]

Clause 3, page 3, line 41, leave out subsection (7).


My Lords, in moving Amendment No. 4 I seek to discuss Amendments Nos. 12, 92, 114, 131 and 317. These Amendments are concerned with the withdrawal from the Bill of the Amendments inserted in this House concerned with no-par-value shares. In another place at Committee stage the Amendments inserted to deal with these no-par-value shares were omitted. My right honourable friend said in Committee: The view we really take … is that a technical case can certainly be made out, but we are not convinced that the technical case is sufficiently clear.… Noble Lords are already aware that this measure also involves changes in four or five other Acts, and changes, possibly in tax laws, too. To make certain that the changes introduced in the Bill were consistent with the consequential changes in other Acts, it would have been necessary to consider those other changes also. Otherwise it might have been found later that changes to the Bill were not apposite.

These are some of the reasons why the Amendments introduced here were deleted in another place. However, my noble friend has indicated his readiness to introduce these changes into the next Companies Bill which the Government intend to enact before the end of this Parliament. In the light of these comments I would ask your Lordships to accept these Amendments, and I beg to move that the House doth agree with the Commons in Amendment No. 4.

Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Brown.)

2.17 p.m.


My Lords, the history of these Amendments is going to be remembered with sorrow by those who care for the standards of legislation for which the British Parliament has become famous. Of course, the Government have the right, the power and the duty to remove from a Bill any Amendment which they conceive to be prejudicial to the Bill concerned. No one disputes that. But hitherto it has been thought that a Government also have the duty to give consistent and cogent reasons for the rejection. Amendments from any quarter were to be treated on their merits; and that was—and, I hope, will one day be again—an essential feature of government in this country by discussion and consent.

Here we have a proposal to introduce a system of no-par-value shares which had twice been recommended by influential Committees appointed by the Government of the day; and, at any rate, the Report of the Jenkins Committee, was very carefully considered and appreciated by the present Government. No public disapproval has been voiced against this system of no-par-value shares. In this House the Amendments were supported from all sides. Why then did the Government refuse to accept them? We have had a number of different reasons. The main reason, advanced by the noble and learned Lord the Lord Chancellor, was that the Government had decided in no circumstances to enlarge the Bill. The merits of the Amendments introducing new aspects of company law were therefore not to be discussed, and in this House the Government refused to discuss either the merits of these Amendments or the drafting of them.

This highly dictatorial attitude was, as your Lordships know, objected to in the Division Lobbies. We were also told that the consequential changes in other Statutes and in taxation required by a system of no-par-value shares had not yet been worked out. We met that objection by inserting into the Bill a clause which gave to the President of the Board of Trade the power to delay the coming into operation of this system until after these changes had been made in a future Finance Bill. I must say that I thought the Government's arguments about the consequential changes were very thin. As I think I have already told your Lordships, I gave notice to the noble and learned Lord the Lord Chancellor, before Christmas, that we intended to put down an Amendment introducing no-par-value shares when the Bill came before this House. We have had eight months, even if we go no further back than last December. There has been plenty of time to work out these changes, but in fact the Government have not been willing to do it.

The Government also hinted that there was some kind of bargain with the Back- Benchers in another place that they must hold back from putting down Amendments to enlarge the scope of the Bill and that, if they did, no Amendment from the Opposition to do something of the same nature would be allowed. This kind of bargain I consider very bad legislation. When the Bill reached another place nothing was heard of the restlessness of Back-Benchers to enlarge its scope and put down new provisions, and I cannot now easily believe that there was anything much in this argument. Indeed, the first spokesman in another place changed the ground for rejecting these Amendments. This is what Mr. Darling, the Minister of State said: There may well be a case for altering our company law to provide for the issue of no par value shares. We do not deny that. If the issue is properly discussed in Parliament—it has not been properly discussed yet—there may, under this Government, be a majority opinion in favour of the issue of no par value shares. But it is a matter which we would like to have discussed, and, if need be, we shall play our part in making sure it is discussed. What has happened in this case is that, without adequate Parliamentary discussion, provisions for the issue of no par value shares were put into the Bill in another place, and put into it in such a way that neither the advocates of no par value shares in the other place nor those of us who have to deal with the problem here can be sure that the drafting of the Bill on the matter is satisfactory."—[OFFICIAL REPORT, Commons Standing Committee E. col. 154, 2/3/67.] My Lords, that is a shocking thing to say. If there was no discussion it was the Government who did not allow discussion. Your Lordships discussed no-par-value shares in this House and no one from the Government Front Bench ever referred to the drafting of our Amendments. This is one of the few occasions which I can remember when very serious work has been put in on the drafting of long Amendments on the advice of the very best lawyers in the City of London, and not one single minute has been spent by the Government in discussing the drafting of the Amendment.

I do not think there could be any argument more out of place to-day than that an Amendment must not be proceeded with because there is no time for discussion. What are we doing to-day? We are to pass 300 Amendments with far less discussion than was given to the Amendments on no-par-value shares. My Lords, there is one standard of legislation for Government Amendments and another standard for Amendments proposed from any other quarter of the House.

Of course, Mr. Jay, President of the Board of Trade, did not stand by all these flimsy far-fetched arguments put up by his colleagues. With a charming candour (and I was glad that the noble Lord, Lord Brown, read out his words) Mr. Jay told the Commons (col. 182, 7/3/67): The view we really take"— of course he had to say that, it was high time someone said what the view really was— … is that a technical case can certainly be made out but we are not convinced that that technical case is sufficiently clear, or that the claim is sufficiently pressing, to justify making the change in this Bill. Later on, the President said (col. 184): … although there is a technical case, it has not been made out with any clarity or cogency for making a change at this stage. I do not know how much more time we were expected to spend in your Lordships' House making out the technical case. I thought it was made out by the noble Lord, Lord Polwarth, and other noble Lords on the other side of the House with extreme clarity and cogency, which of course was not the opinion of the President of the Board of Trade.

The Amendments have to come out, not because there was anything wrong with the system of no-par-value shares, but because, unless they had been put in by the Government, they could not be considered a pressing matter; and Parliament must learn its lesson not to challenge the view of the Labour Government on what is pressing and what is not. My Lords, this is a story of bad manners and bad legislation, and I do not know which I dislike more. I hope that the Ministers concerned realise that this is something which will long be remembered—particularly the manner in which it was done—by those who care about Parliamentary government. I have listened to what was said by the noble Lord, Lord Brown, and I must accept his undertaking that in the next Bill in the next Session these Amendments will appear again. It will be a matter of very great interest to us all to see whether in fact the Government are going to make much change in the drafting which was so carefully prepared by such very eminent lawyers.


My Lords, before we part with this subject may I say that I was most interested to hear what the noble Lord, Lord Brown, had to say about the next Bill. It was always to come in the next Session, but now he says that it will come before the end of this Parliament. I would point out to my noble friend Lord Eccles that we have no assurance that we are to get the next Companies Bill in the next Session, but only in the life of the present Parliament. I shall be very interested to see whether it comes even during that period. I hope that the noble Lords opposite, and the noble and learned Lord the Lord Chancellor, will pay special heed to what my noble friend has said about the manners of legislating, as well as making sure that the legislation is good.

2.27 p.m.


My Lords, I want to make a very brief comment on what was said by the noble Viscount, Lord Eccles. The argument I have used in this House is directed to the complexity of the consequential legislation arising out of the whole business of no-par-value shares. This has been put on one side as not being a serious argument, but I would draw the attention of the House to the fact that the last Government, in 1957, I think, studied this matter seriously. If my memory is correct, they gave an undertaking that the whole matter of the introduction of no-par-value shares and the examination of the consequent legislation—which was regarded at that time as a complex matter—would be examined in due course. The fact is that it has not been examined. I am not criticising the past Government for this, but merely drawing attention to the fact that there is some evidence of the complexity of this measure contained in that little story of what happened in the last Government.

If I may I will leave the matter there as I should prefer to rest the case for the withdrawal of these provisions from this Bill more on that argument than any other. I am sure that the noble Viscount will agree, despite his enthusiasm for no-par-value shares—which I have already agreed would be a useful measure—that it is not a matter of great urgency. It is a matter of presentation of information rather than anything which affects the security of our economy and so on, and therefore not so important as the insurance provisions and provisions with regard to fraud. I think that too little account has been taken of the argument put forward by the Government, and I will, so to speak, rest my case there.

On Question, Motion agreed to.