Amendment proposed (4th December), in page 10, line 43, at the end, to add:
(8) For the purposes of this Part of the Act the expression 'authorised depositary' means any person who at the date when this Part of this Act comes into force is lawfully holding himself out as accepting on deposit by way of custody any security, certificate of title, coupon or secondary security as defined in section nineteen of this Act and in addition any such person as may for the time being be authorised by an order of the Treasury to act as an authorised depositary for the purposes of this Part of this Act."—[Mr. Nigel Birch.]
§ Question again proposed. "That those words be there added."
§ 4.0 p.m.
§ Lieut.-Commander Gurney Braithwaite (Holderness)
It is on record in the OFFICIAL REPORT that, when our proceedings on the Bill came to a conclusion last night, I was in the middle of the following sentence:I was hoping that the hon. and learned Solicitor-General, who is now being suppressed by his right hon. Friend."—[OFFICIAL REPORT, 4th December, 1946; Vol. 431, c. 465.]That sentence would have ended, if our proceedings had not come to a summary conclusion, with the following words: "will find it possible, after a night of repose and a morning of cogitation, to acknowledge the value of this Amendment." Hon. Members will recall that we were discussing the scope of the list of authorised depositaries, and that I had become involved in a minor difference of opinion with the Solicitor-General as to what he had said on this matter earlier in the Debate. We are now fortified by the OFFICIAL REPORT, in which the Solicitor-General will find the following passage:In practice, little difference will take place, because the authorised depositary will again be the bank.
Later, the hon. and learned Gentleman said: 521What will be done is that the Treasury will nominate particular authorised depositaries who, in fact, will be the banks.I then had the good fortunte to catch your eye, Major Milner, and I said:I was surprised to hear him say that there is to be a kind of closed shop in this matter. He says it is going to be the banks and nobody else."—[OFFICIAL REPORT, 4th December, 1946; Vol. 431; c. 463–4.]Here it is recorded in the OFFICIAL REPORT that the Solicitor-General indicated dissent. I think that the Solicitor-General, if he now roads the words which he spoke to the Committee, will agree that he has left us in some confusion in this matter, and that it was not unreasonable on my part to assume that the burden of his speech did indicate that the banks, and the banks alone, would be the authorised depositaries under this Clause. It is now on record in the OFFICIAL REPORT. We on these benches feel that the scope of those permitted to act as authorised depositaries should be widened. I gave one instance last night of the City Safe Deposit. I think that is a reasonable example, and the proviso in the Amendment moved by my hon. Friend last night would enable the Government to deal with this matter on a rather broader basis. I hope the Solicitor-General has now had time to give this matter a little further consideration, and I hope he will agree that to confine these duties to the banks would not be the most satisfactory method of dealing with the subject.
There is one other point I would like to make, and I address myself to the Chancellor rather than to the Solicitor-General. Now that we are engaged in hammering out a new Bill, cannot we get rid of some of this awkward nomenclature? After all, we are accustomed to say that so-and-so is our bank, so-and-so is our doctor, our broker, or our lawyer; but suppose I am strolling in the vicinity of Threadneedle Street with a friend, and approaching us I see a venerable figure, and when we get to him I have to say, "May I introduce Lord Catto, my authorised depositary?" how invidious and embarrassing it is. I suggest we might find a more euphonious title for those who are to carry out these duties. That is all the more reason for further reflection on this matter between now and the Report stage. I hope that, in the meantime, the Solicitor-General will tell us that we were not unjustified in 522 putting the interpretation that we did upon what he said, and that this proviso will receive favourable consideration.
§ The Solicitor-General (Sir Frank Soskice)
It grieves me to think that I was in any degree of conflict with the hon. and gallant Member for Holderness (Lieut.-Commander Gurney Braithwaite) as to what I said. What I intended to say was that ordinarily it would be the banks. Nobody other than the banks springs to my mind as likely authorised depositaries. The hon. and gallant Gentleman asked about safe deposits. One obvious difficulty about appointing them would be created by Clause 20 (6). The hon. and gallant Member will find that that Subsection reads:The certificate is deposited with him in a locked or sealed receptacle from which he is not entitled to remove it without the authority of some other person.Normally, of course, a safe deposit accepts an article for custody from a customer on the basis that it will be locked in a receptacle, and that the safe deposit will not know the contents of it, and will not be entitled to extract it from the box or other receptacle in which it is. In the case of a bank, that does not necessarily apply. That is the normal relationship between the safe deposit and its customer, but it is not necessarily the normal relationship between a customer and a bank. The authorised depositary must be a depositary who comes within Clause 20 (6). That creates an immediate difficulty in the way of appointing safe deposits as authorised depositaries. On the other hand, this Clause is so drawn as to enable the Treasury to prescribe any other institution other than a bank as an authorised depositary, if it seems good so to do. They are not excluded. There is a power to include any other institution which it seems proper to include. All I say is that the authorised depositaries which those responsible have in mind as the natural institutions are the banks. They certainly would be suitable. They have been doing this particular sort of work with distinction for a great many years, and it would seem to be the normal and proper course to continue them as authorised depositaries. The important point is that the Clause as drafted does not exclude anybody. Anybody can be included as an authorised depositary if it seems good that they should be included.
§ Mr. Oliver Stanley (Bristol, West)
We are fortunate that we adjourned last night in the middle of the discussion on this Amendment and that the Solicitor-General has thus been able to read what was said in the earlier stage of the discussion. It is perhaps unfortunate that we cannot follow that procedure at all times, but to do so it would slow down the proceedings of this Committee. The Solicitor-General did not say last night what he has said today. When I put a question to him he explicitly stated that the banks and the banks alone were to be the authorised depositaries under this Clause. My hon. Friends and I thought that was much too restrictive in scope. There are, after all, in connection with the function which has to be performed in this case only two things to consider. One is the trustworthiness of the people named, in order that the Treasury's interests should be properly safeguarded; and the second is the widest possible convenience for the general public, who have to make these deposits. I cannot help feeling that it would be possible to meet the Treasury's requirements for security, and at the same time provide a wider field for the choice of the customer than is apparently intended— according to the Solicitor-General's statement last night—under this Clause.
The Solicitor-General yesterday said that it would be the banks; today he said it would not be. That is one of the difficulties which we find in discussing legislation of this kind. In the past, we were accustomed to see a thing in black and white in a Bill. It was there and was exactly the same on Wednesday evening as on Thursday afternoon. Now we are told that nothing is required in the Bill, because the Treasury is going to do something different. So we have to rely entirely on what is told us by the Minister who may be called upon to respond from the Front Bench. We must assume that the Solicitor-General, when he first spoke, was speaking from the excellent, comprehensive brief supplied to him. He said it was the intention of the Treasury only to allow the banks to act as authorised depositaries. We feel, as I say, that that is unnecessarily restrictive. The point has been raised that the mere deposit of a thing in a locked box may not enable the Treasury's intention to be carried out, but that could not be applied to the sort of people with whom a very large number 524 deposit their securities, namely, brokers and solicitors. I do not think it at all likely, as the Solicitor-General has said, that nearly everybody leaves their securities in the bank. I believe that a large number of people leave them with brokers and solicitors.
We do not pretend that any Amendment we propose to a complicated Bill of this kind can be expected to be word perfect. All we intend to do is to raise points which we believe to be substance, in the hope that if the Government are prepared to accept the principle, they will put that principle into proper phraseology with proper safeguards. The point we really want to raise by this Amendment is that the determination to restrict this provision to the banks is unnecessary for the security of the Treasury, and that it restricts the convenience of the customer. We should like to feel that it is not only possible under this Bill to do so—everything is possible under this Bill—but that the Treasury will really consider adding to the banks, a list of reputable brokers and solicitors who can also perform this particular function. It is not a very difficult and, I gather, not a very attractive one.
I thought for one moment that the new affection of the Chancellor of the Exchequer for, the banks was making him go too far, further than he has gone even in the past, in putting business in their way. But I find that I am wrong in this case inasmuch as this function is more a burden than a benefit. Therefore, we feel that where respectable brokers or solicitors are prepared to undertake, on behalf of their clients, work which they have been doing for years, the Treasury should consider the possibility of adding them to the list of authorised depositaries. The door seemed to be slammed by the Solicitor-General last night. This afternoon it has been slightly opened.
§ 4.15 p.m.
§ Mr. Stanley
If the hon. Gentleman will look at Col. 463 of yesterday's HANSARD he will see that it was shut. I do not think the hon. Gentleman had the benefit of actually hearing the discussion—and the arguments do not look as convincing when seen the next day in cold print— but if he looks at Col. 463 he will see that the Solicitor-General said: 525In practice little difference will take place, because the authorised depositary will again be the bank.I wanted to clear the matter up, because the Solicitor-General was really very brief and so I asked:Just the banks?and the Solicitor-General's answer was:
§ Mr. Stanley
I prefer the spoken word to an indication of assent or dissent. In Col. 463 the Solicitor-General spoke; in Col. 464 he merely gave some facial or physical indication. I prefer at the moment to rely on the spoken word. I was wondering whether it was not possible for the Chancellor of the Exchequer to open that door a little further, and to say that it will be the practice of the Treasury to add to the banks as authorised depositaries, under any safeguards he chooses to devise, those people like brokers and solicitors who are doing this work. If he is prepared to do so, I feel I should be able to advise my hon. Friend not to press the Amendment to a Division.
§ Mr. Turner-Samuels (Gloucester) rose—
§ Mr. Stanley
I always give way to one of the deputy Law Officers of the Crown in the person of the hon. and learned Member, and I shall be delighted to do so again.
§ The Chancellor of the Exchequer (Mr. Dalton)
There are so many important matters that the Opposition are anxious to discuss, that it would be a pity to take too long over this Amendment. I am quite prepared, in an effort to move the chariot wheels forward, to consider this question. This is an administrative matter. I cannot accept the Amendment for reasons which I gave yesterday. I think the right hon. Gentleman the Member for West Bristol (Mr. Stanley) appreciates that this Amendment would not do, in terms, what he wants done. Therefore, I ask the Committee to resist it, but I hope that it will not be pressed. As I have said, this is a matter 526 of administrative detail and no doubt important detail. Those who are holding securities for others and who are not bankers are only a small number; certainly there is not a numerous aggregate of them. It is a rather specialised function and I am still inclined to the opinion that the majority of people who hold securities, keep those securities, including bearer securities, at their banks. However, the matter is not worth any heat at all, and I am quite prepared to look into it and see whether we could devise some rather wider category. I do not think it would be convenient to say that all persons in this business, as a class, should be put under the rule; but I think we might perfectly well consider whether we could not extend the category to some extent, to include such people as brokers, solicitors and so on, who have been engaged in this kind of work. I repeat my view that the majority of persons holding particular kinds of securities leave them with their bank, but I will give an undertaking to look into this question again and see whether anything can be done.
§ Mr. Nigel Birch (Flint)
In view of the Chancellor's assurance I beg to ask leave to withdraw the Amendment.
§ Mr. Charles Williams (Torquay)
I wanted to put one point to the Chancellor of the Exchequer before he rose, because it seems to me that what was said by the Solicitor-General suggests a different position from that indicated by the Chancellor. The Solicitor-General said last night:Therefore, for the reason given before, it will be unsatisfactory if all banks who at present act as depositories of certificates are automatically and for good authorised depositaries for the purpose of Clauses 15 and 16."— [OFFICIAL REPORT, 4th December, 1946; Vol. 431, c. 464.]As I understand it, that could easily mean that it would enable the Government to have only one bank depositary. I do not think that is in fact the Chancellor's idea, but the words are there and when I read them this morning I was struck by the fear that this provision might be used to compel the depositaries to hand everything over to the Bank of England. I do not say whether that would be good or bad, but I think it would be unfair to carry the thing so far. For that reason I should like an assurance that it is not intended to force them all into one national bank.
§ Mr. John Foster (Northwich)
I should like to ask the Chancellor of the Exchequer whether he intends to do this under Clause 31 or Clause 37?
§ Mr. J. Foster
Take administrative action. At the moment, as I think the Chancellor will agree, the administrative action is taken by the Treasury and the Bank of England, but it is difficult for the ordinary man in the street to find out. In fact, one of the difficulties with the present mass of Defence Regulations, exemptions, directions and so on, is to find one's way about in them. A number are contained in circulars to bankers, which are not available to the layman, and if the Chancellor will bear in mind, with regard to Clause 37—
§ Mr. Dalton
May I consider that for a moment? I should like the opportunity to say something about the future proceedings and to make a suggestion, but I will bear in mind what the hon. Gentleman says about the alternatives. When I make my statement I can deal with this point.
§ Amendment negatived.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. David Eccles (Chippenham)
There are two or three brief points I should like to make, before we part with the Clause. The Clause begins by defining the types of security which need not be deposited, and for which there need not be a certificate of title. Subsection 1 (b) gives the Treasury power to prescribe securities other than those which are registered shares of United Kingdom companies. I should like to point out to the Chancellor that unless he uses that power to exempt all the registered securities in this country on subsidiary registers of companies in the British Empire, he will find that anybody who possesses a share certificate in any company which is registered, say, in India or in South Africa, will have to come under this Clause and deposit it. That will cause a great deal of trouble, and I hope that when we reach Clause 31 the Chancellor will be able to say something on the subject.
As to my second point, I am not quite clear whether the certificate of title to a 528 bearer share which has been imprisoned in one of these depositaries, is good delivery. A bearer share having been stamped when issued, there is no question of any stamp duty when it changes hands. Will the certificate of title be a good delivery between two persons, one of whom wants to buy and the other to sell his bearer certificate? In other words, will it become a negotiable instrument? I hope it will, because that would save a great deal of trouble in the depositaries. One further point is that I am not quite clear how American securities circulating in the London market, are to become good delivery under this system. As the Chancellor will know, at present a buyer has to sign on the back that he has taken over the security. That point needs looking into and if we cannot have an answer now, perhaps we might have one at a later stage?
§ The Chairman (Major Milner)
It is quite clear that there is to be a Debate on Clause 31, and questions arising thereon would be better raised at that time.
§ Mr. Birch
But this point does arise on Subsection (5) of Clause 15, and therefore I should like, with permission, to raise it now. Under this Subsection the Treasury have absolute power to control dealings between residents in this country in bearer securities. It is a question of how this is to be administered. At the moment, dealings can take place in some of the securities but not all, and I should like to know, now or later, whether in fact a relaxation is intended; whether things are to stay as they are now, or whether they are to be tightened up. It is rather difficult to know from this Clause what is going to happen.
§ Mr. Dalton
May I seek your guidance, Major Milner, in connection with the question just put me by the hon. Member for Flint (Mr. Birch)? In the course of our discussion yesterday, it was generally agreed that it would be convenient, at some later stage to be indicated by the Chair, I should make a full statement on the intentions of the Government with regard to the exemption Order which we intend to make. That Order will, in fact, be made under Clause 31, and it 529 seemed to us last night that it would be convenient that I should make that statement when Clause 31 was reached. In that case, questions such as that which has just been put to me by the hon. Member for Flint could suitably be dealt with at that point, if you think that appropriate, Major Milner. It might also be possible, as a matter of procedure, to make the statement at some other time by some such means, as moving to report Progress. This, however, would be complicated and I do not think the Committee would want it so, but would prefer the statement to be made during the discussion of Clause 31. If that should be your own view, Major Milner—and here I am endeavouring to assist those who have points to raise—would it be in order for hon. Members to raise points prior to reaching Clause 31 and for me, the Solicitor-General, or the Financial Secretary, to take a note so that these points should not be lost when the statement is made? If so, I suggest that it would not be out of order for any hon. Member just to make such a reference, provided that it is understood that my reply is to be given later. If you will give your Ruling on this point, I think it would be of great help to the Committee.
§ The Chairman
I think that, if it commends itself to the Committee, we might adopt that suggestion, namely, that the Chancellor of the Exchequer should make a statement during the discussion of Clause 31 and if, between now and then, incidental references are made, the Chancellor will note them and endeavour to deal with them on the Motion that Clause 31 stand part. It would not be in Order to make a statement on a Motion to report Progress, where the Debate has to be confined to that particular Motion. I presume I may take it that the Committee is in agreement that the statement should be made as suggested.
§ Mr. J. Foster
There is just the point that some of the things which the Chancellor intends to do in the way of exemption will come not under Clause 31, but probably under Clause 37. For instance, it may be that the present administrative practice—which I believe is not under an Order in Council or a direction available to the public—whereby money under a will, for example, is transferred to America, will come under Adminstrative Order under Clause 37. I do not know whether 530 this is appreciated by the Committee but, as I read it, under Clause 31 everything is to be laid before Parliament, and quite a number of the points mentioned in the Committee will not be the kind that the Treasury will want to put in an Order in Council to lay before Parliament. The list of authorised depositaries and particulars of how to choose them will be put in Clause 37. Therefore, if the Chancellor is making an omnibus statement he will have to get leave to apply his remarks to both Clauses 31 and 37.
§ 4.30 p.m.
§ Mr. Bowles (Nuneaton)
In regard to what you have said, Major Milner, about hon. Members on any side of the Committee making points in regard to Clause 31, so as to give notice to the Chancellor, could we also agree that hon. Members should not repeat their remarks when we reach that Clause? Having made their statements on Clause 15, or whatever earlier Clause it may be, that should be sufficient.
§ The Chairman
Hon. Members should merely mention incidentally matters of which they wish the Chancellor to make a note. They can mention those matters in extenso when we come to the Clause to which they relate which, I assume, will be Clause 31.
§ Mr. Bowles
Suppose the hon. Member for Flint (Mr. Birch) or the hon. Member for Chippenham (Mr. Eccles) should raise points with the Chancellor, which you, in your wisdom, think would be more appropriate on Clause 31. If they are allowed to raise those points once, they should not, I submit, be allowed to raise them again when we come to the later Clause, and thus waste the time of the Committee.
§ The Chairman
I think it is understood that such matters should only be mentioned, in the first instance.
§ The Chairman
Clearly we cannot have a Debate upon any matter before we reach the Clause to which it relates, and then another Debate upon it when we reach the Clause. I have given a Ruling that hon. Members may raise points shortly, in order to bring them to the notice of the Chancellor, if the points have a relation to Clause 31, in order that the Committee 531 may have from the Chancellor a comprehensive statement of the whole operation of that Clause when we come to it.
§ Mr. Stanley
That arrangement suits us on this side of the Committee. It seems a convenience that hon. Members should be able to indicate certain points as we come to them, in order that the Chancellor may have in mind the matters on which we should like to hear an answer, in relation to Clause 31. On the other hand, doing that before the statement is made, obviously should not deprive us of a right of discussing them after the statement has been made, when we know what the Chancellor proposes to do. We have no desire to waste time, but we have to get through a very complicated Bill in what appears to most of us a reasonable time, and we are anxious only that that time should be used to the best advantage.
§ Mr. Dalton
We are really in agreement as to what is the best course. I would like to clear up the point raised by the hon. Member for Northwich (Mr. J. Foster). I understand that when I get to Clause 31, I shall not be held too tightly by the Chair, and that I shall be able to make a broad statement, going into some detail, on what is intended, in the way of issuing Orders. The more important of the Orders will be made under Clause 31, but some of them may be made under Clause 37. or under some other part of the Bill. I take it, Major Milner, that you would be prepared to stretch any points that needed to be stretched, in order that a full statement might be made, regardless of the particular Clause under which an Order could be made? If that if your view, we can conduct the discussion in a satisfactory way.
I would add only one more point, which is not so much a point of Order as a point concerning the programme of Business. We are now having a third day, for this Committee stage, as was announced at Question time today. We are taking Monday for the completion of the Committee stage. That proposal was generally accepted; nobody questioned it. We do not want to have a late sitting on Monday. I was presuming that we might finish the Committee stage by 10 o'Clock, although we might take power to suspend the Rule, as a matter of precaution. It might be a convenient and reasonable 532 allocation of time, if I could make the statement which has been asked for— and which I am anxious to make—early on Monday. So if we can get up to the end of Clause 30 tonight, that would leave the field free for Monday, and for what is likely to be a relatively long discussion about the Orders which are to be made. I am not asking for a commitment, but that we might so conduct our discussion, as to finish reasonably early on Monday.
§ The Chairman
I am afraid we cannot discuss the programme on the Motion before us. It is now clearly understood that the discussion on Clause 31 will not be repeated when we come to Clause 37. There will be the widest possible latitude on Clause 31.
§ Mr. Assheton (City of London)
Before we depart from Clause 15, I want to raise one point. The Chancellor may not be able to give an answer right away, and if so I shall quite understand it. The point relates to the collection of dividends on American registered bearer securities. I do not know whether the Chancellor is aware that most of the bearer securities are registered in marked names, and that the process of collecting dividends is not just a matter of cutting off coupons. The names have to be marked in order to collect the dividends. I have been looking at Subsection (3), and I see that there are various reasons which will entitle a depositary to part with a certificate and I should like to know whether any of them cover this point. I do not press the Chancellor for an answer now but I hope that it is a matter that he will look into.
§ Question put, and agreed to.
§ Clause ordered to stand part of the Bill.