HL Deb 03 February 1976 vol 367 cc1224-5
Lord CHAMPION

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 what steps they are taking to safeguard the interests of unit trust holders when unit trusts are subject to takeovers and their managements change hands.

Lord WINTERBOTTOM

My Lords, no unit trust scheme may be promoted to the public unless it has been authorised by the Department of Trade under Section 17 of the Prevention of Fraud (Investments) Act 1958. When any change of management of a trust is proposed, the Department must satisfy itself, in consultation with the Trustee, that the reputation of the prospective managers is sufficiently high to warrant continued authorisation if the transfer takes place. In reaching this decision, the Department pays due regard to the interests of the unitholders concerned.

Lord CHAMPION

My Lords, I thank my noble friend for that reply which I do not regard as dusty. It goes some little way to meet my point; namely, that before any investor invests in a unit trust he will, if he is sensible, assess the character and ability of the management of that trust. But, understandably, if the trust changes hands, he will not be so satisfied, particularly if it falls into the hands of a firm like Slater Walker, which is not exactly a name that I should like very much if I were an investor in, say, the National group of trusts.

Lord WINTERBOTTOM

My Lords, about the second half of that supplementary question I can make no comment. But the Department of Trade takes very careful steps to ensure that if there is a change of management the new management is considered appropriate. Checks are made through the Stock Exchange and elsewhere to ensure that this is so. But what one cannot do as a Government or as a Department is to ensure that the new management has the flair of the old management. This can be proved only by events. But every care is taken to ensure that the new management is at least as acceptable as the one that it is replacing.

Lord CHAMPION

My Lords, if someone invests in a company which is about to change hands the investor has some say in the matter. Is it not possible to ensure that in the takeover of unit trusts investors have at least some little say before the change takes place? Can the Government do something about that?

Lord WINTERBOTTOM

My Lords, I will bring the views of my noble friend to the attention of my right honourable friend the Secretary of State for Trade.