§ 10.34 p.m.
§ Mr. J. Grimond (Orkney and Shetland)
I beg to move,That an humble Address be presented to Her Majesty, praying that the Control of Borrowing (Amendment) Order, 1956 (S.I., 1956, No. 358), dated 13th March, 1956, a copy of which was laid before this House on 13th March. be annulled.In the days when the Conservative Party were in opposition they were very severe critics of the Capital Issues Committee and all that lay behind it, and I have no doubt that the Economic Secretary to the Treasury will welcome this opportunity of explaining to the House why it is that the Government are not only maintaining this Committee but are extending its powers to cover any issue in excess of £10,000—a step which no Socialist Government, even in their heyday, thought fit to take.
I can well understand that there is great pressure on the resources which are available today for investment and that 347 it is important for this country to see that a proper distribution of those resources is made. I have no doubt that the Government will say that by extending the powers of this Committee they are enabled to exercise a firmer curb on what is called non-essential investment, and can also establish more priorities among what are called essential investment projects.
It is a little odd, perhaps, that in these times when it is believed that the Government's policy is to restrain some sorts of investment, new issues have almost doubled this year as against the corresponding period last year. We have to ask ourselves whether this Order will be of really substantial benefit to the economy and whether it will, in fact, enable the Government to exercise a reasonable control over investment.
The Capital Issues Committee deals with only one part of one section of our economy. It works on one section only of the private enterprise field. If a company can find money from its own resources, it can invest that money as it likes, and the Capital Issues Committee has no power to interfere. There seems little rhyme or reason in that situation. If the petrol companies went to the Capital Issues Committee to raise money for their new filling stations, I wonder whether authority would be granted to enable them to do so. But, of course, they have been able to raise that money from their own resources.
In fact, this is another measure which seems to favour the larger established company and possibly to make things more difficult for the small, new, enterprisim", company. It is also a fact that the number of rejections is surprisingly small. It works out at about one in twelve applications, I believe, and not a very large sum of money is involved.
One has to ask oneself then whether it is worth keeping this machinery. Further, as I say, it operates on only one section of one part of the economy, and it leaves out altogether the most serious problem facing the investment policy of the Government, namely, the problem of Government investment, and, more particularly, the investment by the nationalised industries. They can borrow large sums at a low rate of interest with a Government guarantee. They are assured that if they get into 348 trouble the Government will stand behind them. Private enterprise has to run the gauntlet of the Capital Issues Committee, and to face the ultimate sanction of bankruptcy if things go wrong.
There is no comparison between investment in the public and private sectors. It will be said that this is justifiable because the nationalised industries are basic or essential industries. We all know how vague those words are. But even if they can be given any reasonable meaning, who can say that rail transport, for example, is more basic or essential than shipping, or that coal is today more basic or essential than oil?
Personally, I think it is difficult to defend the existence of this Committee at all. But it would be more easy to defend if its activities were extended to cover the nationalised sector of industry. I do not pretend that that would be at all easy, but we have got ourselves into a position of considerable difficulty in controlling investment in the nationalised sector, and, therefore, the difficulty has to be faced.
There is something to be said for having a body which would review the competing claims of different industries, possibly nationalised and private, or possibly only nationalised, and which would then make a recommendation as to how the available resources in a given period could be allocated. I can imagine it acting like the University Grants Committee, which reconciles the competing claims of different universities and which would be free from the log-rolling which is liable to go on in Parliament.
If we are to have this Committee, it seems to me that it should be made wider and more general in scope, just because we need a better control of investment more in the nationalised than in the private sector. It might also get over some of the difficulties of public control of the nationalised industries. But here the Order is going the other way. It is giving the Capital Issues Committee more detailed responsibility for examining even smaller issues than it examines at present. It is, in fact, giving it an impossible task. After all, £10,000 is a fairly small amount to invest.
The Committee must, of course, act under the direction of the Chancellor of the Exchequer, and it is true that from time to time the Chancellor, in reply to 349 Parliamentary Questions, does publish these directions. Usually they are of a temporary nature—that it is not to discourage financing of hire purchase and so on. But now it appears that the Committee is to be a permanent feature of our financial machinery. It was set up by a Labour Government and has been maintained for five years by a Conservative Government, and its scope has been extended. No longer can it be said that it is a temporary ad hoc body. In these circumstances, the Government should tell us more about the place which they feel this Committee can usefully fill in the machinery at their disposal and the general long-term proposals upon which it is to act, give us more current information on the directives issued to the Committee about its activities and about their definition of inessential and essential investment.
There have been some rather curious incidents in the career of this Committee. We believe that one Scottish bank was refused permission to make an issue to its employees, although profit sharing is a part of Government policy. In the case of bids for control of the Savoy Hotel there was considerable criticism of the way in which money could be found. Brewers have been allowed to make very large public issues—perhaps rightly and properly so—but what is the principle and logic behind the decisions of this Committee?
No doubt there is some sort of planning, and if it is reasonable planning I am sure that Parliament will welcome it; but planning from time to time does take on the rôle of a lottery in which the croupiers are done up to look like scientists but in which the results are largely a question of chance. I wonder whether, if there had been a Capital Issues Committee 100 years ago and the whisky industry had come to it, that industry would not have been sent away with a flea in its ear?
§ Mr. Speaker
I rather think the hon. Member is now going beyond the terms of the Order, which do not raise the question of the constitution of the Committee or power to control borrowing. It merely alters the limits to which the Committee should go. The on. Member must direct his speech to the alteration proposed in the Order.
§ Mr. Grimond
I apologise, Mr. Speaker. My point is that if we are to extend the powers of the Committee we should hear a little more about how those powers are to be used and, in view of the enlargement of its scope, the Committee should now make some report to Parliament. It is going to have to review even more issues, and we know only in round figures the number of applications made to it and the number accepted or refused. Has not the time come, now that this Committee has become a permanent Committee in our economic life, when there should be an annual review of its activities? We should be told also how much it relies on its independent judgment and how much it is a creature of the Government? What machinery has it got for these minute investigations? Further, does the Committee now discriminate in the terms of issues? Originally there was a strong prejudice against bonus issues and so on Does that continue or is the question today simply one as to the purposes for which the money is wanted?
Finally, when we consider the reasons for making this reduction from £50,000 to £10,000 at this time, what exactly is its object? Is it because there has been evasion in the raising of funds for hire purchase? Have people in fact been raising more than £50,000 by raising money in different sums and making up more than £50,000 in smaller amounts? If so, can the Government assure us that this evasion is so serious that the extension of the powers of the Committee is necessary to stop it, and will the extension stop it? I have a feeling that often attempts to stop what we call evasion may do great harm to perfectly legitimate financial dealings. I am sure that the final sanction is that the rules should be reasonable and defensible. Are the rules in this case reasonable and defensible? Is £10,000 a reasonable limit? Is there evasion on such a scale that in this limited sector of the economy we need to pass every issue over £10,000 through the machinery of this Committee?
I have asked a good many questions of the Government, but I hope that they will not reply in the way they always accused the Socialist Government of replying, by ignoring all questions and simply by proceeding to operate the Committee. We are entitled to know a little more now about its working.
351 I end by making it quite clear that, in my remarks about the Committee, I certainly do not want to make any criticism of its members. They obviously have an exceedingly difficult—I should say impossible—task to do, and this House owes them a debt of gratitude. There is no suggestion in any critical remarks I make that they do not discharge the duties laid upon them, which I personally find difficult to understand, with anything except the greatest ability and attention.
§ 10.46 p.m.
§ Mr. Arthur Holt (Bolton, West)
I beg to second the Motion.
Both the Government and the House should get the Order in a proper sense of proportion. As my hon. Friend the Member for Orkney and Shetland (Mr. Grimond) has said, we are considering a proposal, which as far as I know was never even suggested, let alone carried out, by the Socialist Government, that all borrowings and loans of £10,000 and over for capital purposes should be submitted to the Capital Issues Committee.
In industry, £10,000 is a very small amount. Who is it that is asking private industry to do this and to submit its requests for borrowing, not from the Government but from other private individuals, to the Capital Issues Committee, which, as we have been told by the Chancellor of the Exchequer on frequent occasions, is an advisory body and is merely advising the Chancellor? Of course, it is the Government, whose National Debt now stands at some £27,000 million, who are asking that these small people, when they want to borrow money, should come and ask permission. It seems to me that we are getting the whole thing out of proportion.
It is also this Government which in the last four year have increased the Treasury Bill issues by something like £1,000 million, which many economists consider to be the real cause of the trouble and which is doubtless the reason the Government will give for bringing in the Order. By not dealing with that trouble, they are now trying to stop up the hole in this small way.
§ Mr. William Shepherd (Cheadle)
The hon. Member is getting more confused as he goes on. What would hon. Members opposite do? Do they want to wind 352 up this body or to extend its powers? Do they think that £10,000 is the wrong limit? What do they consider is the right limit?
§ Mr. Holt
I realise there is some difficulty, Mr. Speaker, but I am trying to keep to the Motion.
Whilst I agree that there may be some case for control by some such machinery for large borrowing, the purpose of my argument is to show that if only one keeps a sense of proportion about it, the lower the figure becomes, the worse is the case for having such a control. When we get down to £10,000 we are really reducing the whole thing to absurdity. In the context of the Government's activities, I should have thought that was a valid point.
It may be said that in this Order the Government are not concerned just with a financial exercise but are indirectly concerned to reduce capital projects. It may be said that by reducing the amount which people can borrow without going to the Capital Issues Committee they will stop some capital projects which otherwise would be carried out.
Let us bear in mind, in that respect again, the kind of figures with which we are dealing. In 1955 the gross capital investment was £2,270 million, and now we are talking about curbing people who want to borrow more than £10,000. The idea will not stand examination. When it is remembered that undistributed profits amounting to about £1,400 million can be used in these capital projects, this Order appears to be even more absurd. If a man wants to carry out a capital extension costing £20,000 and he has not the money, he has to go to the Capital Issues Committee, whereas another man might borrow it unsecured from somebody else or might use his own resources.
The hon. Member for Torquay (Mr. F. M. Bennett) inquired some time ago about the number of applications accepted by the Capital Issues Committee. We were told that about 96 per cent. were approved. Do the Government contemplate any such figure as a result of this new Order? Will 95 per cent. or 96 per cent. of the applications still be accepted, or is this Order intended 353 to be a complete bar on small borrowing? Is this another attack by the Govenrment on the small man? Why are the Government so opposed to his activities wherever he can raise his head?
The present Government are supposed to be sympathetic towards the idea that the small man should be able to make his own decisions, and they are supposed to prefer that he should take decisions rather than the man in Whitehall. How do the Government consider that this Order is consistent with that kind of outlook? The whole purpose of the Order is to scrutinise every small increase in capital investment on the part of the small man. If the Government, through the Capital Issues Committee, think it desirable in the national interest, investment is reduced. I should have thought that any party which believed in the desirability of a free economy would have turned down a proposal of the kind embodied in this Order straight away.
Surely the justification for a free economy is that anyone who may appear to have some madcap scheme as originally presented but who at last gets someone to lend him money to carry it out, should be allowed to go forward. In a free economy the Government's job is to see that as few obstacles as possible are placed in the way of such a person. Can anyone say that there is no possibility of the Capital Issues Committee turning down a scheme costing £20,000 or so which, if it had been allowed to go forward, might have become an excellent enterprise, growing eventually into a very big one and a great national asset? Of course no one can say that, because they are arbitrary decisions and many people in business must know of small beginnings which seemed foolish and unwise and risky which eventually justified the faith which the original entrepreneur put into them. Those are the kind of things which may be curtailed under such a regulation.
The Economic Secretary appears to smile at the suggestion, but the fact remains that he is putting another obstacle in the way of such an enterprise. As anyone with experience of industry knows, it is difficult enough to start such enterprises in any case, and the last thing which a Government professing to believe in private enterprise should do is to put more obstacles in the way.
354 My last point concerns the particular aspect of this matter which could be seen in the financial papers when the Order was introduced, and that was the suggestion that this was done largely to curtail the activities of the mushroom hire-purchase finance houses and that the Chancellor had sent specific instructions to the C.I.C. to curtail hire-purchase finance.
There may be some curtailment, I agree, but there has been nothing done to stop these hire-purchase finance companies getting unsecured deposits. What, in effect, the Government are doing by this Order is to encourage the unsound structure of such hire-purchase finance companies. The papers show every day the kind of interest rates that are being offered by these companies for unsecured loans, because unsecured loans are the only things they can get without going to the C.I.C., and if they went there they would be turned down in any case. There is no doubt that the Government have not yet adequately restricted credit, and the result is that these companies are being encouraged to conduct their affairs on what is considered under normal circumstances to be a thoroughly unsound basis.
I hope that when the Economic Secretary replies he will deal with that aspect of the matter, and will also give us an indication of what has happened on the C.I.C. since this Order was first promulgated. Presumably something has happened which he can tell us about, although I agree that the time is short. I hope, however, that the hon. Gentleman can tell us about the effect on the number of applications that have been made for these smaller amounts, and how many have been turned down. I also hope that, even at this late hour, the Government may regret their first action and will drop this Order.
§ 10.58 p.m.
§ Mr. F. M. Bennett (Torquay)
As the hon. Member whose Question received the affirmative answer which led to the alteration of £50,000 to £10,000, I want to support the Economic Secretary in what I presume will be his defence. I was not sure exactly what was the point of the previous speeches. I was not sure whether the speakers wanted to abolish the Capital Issues Committee or to restore the 10,000 to £50,000.
Turning to the official Opposition, I hope that they will not join in the hunt 355 against this Order because, although my Question received an affirmative answer, it was preceded by one from a most distinguished Labour spokesman. The right hon. Gentleman the Member for Basset-law (Mr. Bellenger) pointed out in a Question he put only a week or two earlier that widespread evasion was taking place over the £50,000 rule, and that it ought to be altered because the Bank Rate was not proving sufficient to stop evasion.
Various questions have been asked and it is not my place to answer officially, but I can say what it was that led me to put down my Question. It was nothing to do with interfering with the small man. One can make an argument for or against dear money, one can make an argument for or against monetary policy, but one cannot make a responsible answer in this House for having a policy and then deliberately permitting an evasion of it.
The reason which led me to put down my Question was that it became known to anyone acquainted with what was going on in the City that certain institutions, bodies and individuals were starting up to borrow large sums of money and to borrow and lend so that the Bank Rate, high though it is, could not touch them—sums of £49,500, several under the same roof and with the same directors; an obvious evasion of the rule.
I do hope that the official Opposition, in any comments they may make tonight, will not fall into the error of attacking this policy, because they did set the £50,000 limit, and if evasion was taking place I should expect them to support any measure to prevent it. All that has happened, in fact, today is that one further step has been taken, as the Bank Rate has proved not sufficient, to prevent this evasion in the future.
I will show briefly what has happened with the Bank Rate at 5½ per cent. one has only to read certain financial papers and advertisements to know that one can borrow money today at seven per cent., or nine per cent. and lend it at 11 per cent, or even 13 per cent.
Of course, it is easy to say that by reducing the amount to £10,000 it would theoretically be possible for someone to start up an increased number of companies at £9,500 for each; but it becomes increasingly difficult to do.
356 I do hope that hon. Members opposite, and particularly the two hon. Members of the Liberal Opposition who have spoken tonight, do not fall into the error of thinking that what the Government are trying to do is to stop any legitimate institution, small or large, from proceeding in the same way as before this Order was made. Because of the deliberate evasion which was taking place, the Government has had no alternative but to back up the Bank Rate to get over what was beginning to amount in the City to a racket. I welcome with extreme pleasure what the hon. Gentleman the Economic Secretary was able to say when he denounced what was a calculated evasion being practised.
§ 11.5 p.m.
§ Mr. P. C. Gordon Walker (Smethwick)
I agree with the hon. Member for Orkney and Shetland (Mr. Grimond) that the Government have a little explaining to do to account for the reason why they are introducing this Order at the present time. The hon. Member for Torquay (Mr. Bennett) has said that there was a great deal of evasion. But the Financial Times, commenting on this Order in a leading article on 14th March, says:The obvious explanation of the Chancellor's decision to tighten the control exercised by the Capital Issues Committee does not, after all, appear to be the right one. There is no suggestion from official quarters that there has recently been any significant increase in capital borrowing of amounts between £10,000 and £50,000 in order to escape the C.I.C. net.The article goes on to say:If the Chancellor is concerned with a potential danger rather than an actual one, then he is showing great nervousness.Has there been great evasion? Is the Financial Times wrong, or was the Chancellor nervous, or wanting to create some psychological impression? It appears from further analysis in the Financial Times that the Order does not affect the ability of hire-purchase institutions to obtain resources by attracting deposits. They can go on just the same after the Order as before it.
I was a little surprised at the hon. Member for Torquay rushing to the defence of his Government, because this is a contradiction of the Government's general policy of relying on monetary controls. The Financial Times in that same article says: 357The fact that it is the kind of direct control over business activity which cuts across Conservative principles of commercial freedom appears to have been overlooked.That is the judgment of the Financial Times, a judgment which, I should have thought, would have been accepted by the hon. Member for Torquay.
§ Mr. Bennett
As the right hon. Member has specifically directed his remarks to me, I would say that I think he might mention the remarks of his right hon. Friend the Member for Bassetlaw (Mr. Bellenger) on the fact that evasion was taking place, and whose remarks preceded mine by a couple of weeks. I think the right hon. Gentleman might spare a word or two about his right hon. Friend's view on this matter.
§ Mr. Gordon Walker
I only mentioned the hon. Member for Torquay because he was the one who had spoken on the matter tonight. When I read what the Financial Times said I was a little shaken as to whether his information was altogether accurate in this respect.
It really is a minutely detailed discriminatory control going right down to £10,000, the very sort of thing with which this Government when making their perorations, and so forth, say they want nothing to do. The Government can only use the controls which survive and are then driven, because they will not use others, to push them much too far, as happens in this case.
This control is certainly going to affect the little men, the men who did not have to go through this before and who now face more difficulties than before. It will make a lot of difference to small businesses. The Labour Government who introduced this control never applied it below £50,000, and, of course, when that Government left office £50,000 was worth a lot more than it is today. Today £10,000 is a very real reduction compared with what the minimum was when administered by the Labour Government. We were then able to use other supplementary controls. This Government are limited to the very few controls that have survived and, therefore, are forced to push them to really rather absurd lengths.
None the less, in present circumstances and, granted we have a Government which can only use the controls which have survived, I suppose it is better that some controls should be used rather than 358 that none at all should be used. But it would be very much better if the Government would have the courage to apply in general the policy which they are applying in particular here, namely, to use other controls to supplement this one. They would then not need to push this control as far as they have in fact to push it. On balance we think that this Government should have even absurdly discriminatory controls rather than none at all.
§ 11.8 p.m.
§ The Economic Secretary to the Treasury (Sir Edward Boyle)
With one remark of the right hon. Member for Smethwick (Mr. Gordon Walker) I certainly quite agree, namely, that this Order is a clear sign that, as my right hon. Friend the Chancellor said in the debate last February, this Government do not take a doctrinaire view of direct controls. I fully agree with the right hon. Gentleman that this is a direct control, but a direct control which is a very natural and reasonable adjunct to the credit squeeze which has now been in operation ever since my right hon. Friend the Lord Privy Seal made his request to the banks last July.
The purpose of this Order is to bring under control the raising of capital, whether by borrowing or by the issue of shares, of amounts between £10,000 and £50,000. Of course, larger projects are already controlled by the Control of Borrowing Order, 1947. Projects involving less than £10,000 are very frequently financed by bank advances and have therefore been subject to scrutiny by the banks since the request of 25th July last year. I think it would have been illogical to leave entirely uncontrolled the investment of the medium sized sums.
I listened with interest to the speech of the hon. Member for Bolton, West (Mr. Holt). It seemed to me that the logical conclusion of his speech was that it was extremely wrong and anti-social on the part of the banks ever to refuse advances to anyone for investment purposes. Really, it is no good blaming the Government about Treasury Bills because of their inflationary effect and then saying, "We must have more or less unlimited bank advances". It is not only the total volume of credit which has inflationary effect but the velocity of the circulation. Therefore, a curb on bank advances is 359 not less important if we are to curb inflation than the regulation of the size of the credit base.
§ Sir E. Boyle
I got the impression that the hon. Gentleman was very much in favour of them. If that doctrine were carried out, we should certainly have an inflationary position for a very long time, and it has been thought necessary by my right hon. Friend to put on some curb. We had indications that small companies were being begun with capital below £50,000. I personally scrutinise every case where a recommendation of refusal is made by the Capital Issues Committee. That Committee has been very much concerned with applications that have been put out since the Order was made. One of the first was an application for an issue of 890 shares at 1s., which amounts to about £49,000. Applications have been sent for the raising of very nearly £50,000 by each of the six subsidiaries of a property-developing firm, applications which before 1st March would not have been necessary by companies wishing to raise capital to finance their businesses.
§ Sir E. Boyle
I can give the right hon. Gentleman the March figures. In cases of under £50,000 but over £10,000 there were 22 refusals, all after 13th March, when the new Order was made.
On the point that this bears hardly upon the smaller undertakings, I cannot see that there is any reason why small undertakings, simply because they are small, should be insulated from the effects of my right hon. Friend's present measures. I assure the House that the criteria to be applied to small projects will be no different from or more harsh than those applied to larger projects, but it cannot be right to leave a loophole by which larger concerns can escape the scrutiny or supervision of its small projects done by its subsidiary companies. Because a concern is very small it does not follow that it is begun by a small company.
360 Mention has been made of the effect of the Order on building activity. It is too early yet to assess or to know, beyond saying that the Committee will have regard to the urgency of a building scheme. It seems likely, judging by current cases I have seen, that building will be considerably affected, but we shall be spared the turning down of projects of the greatest urgency.
We have been told that this is an irksome control for the small business. I can assure the House that that is not so. There is honestly no evidence that that is happening. I cannot tonight discuss other controls which the Government, in the opinion of the right hon. Gentleman, might think of using; but I think it is one advantage of the Capital Issues Committee that it is expeditious and that there is no delay, and that no great number of staff or administrative machinery is involved. The volume of applications to the Committee did naturally increase immediately the Order was made, because there was a considerable number of urgent cases in which borrowing transactions had already been negotiated for completion at an agreed date.
The C.I.C. has had a high reputation for the prompt despatch of business and has maintained this reputation despite increased work. The average time between the receipt of an application and a decision in urgent cases is not more than from two to seven days. In straightforward cases which do not need to be referred to other Government Departments the time is from 10 to 14 days; and in cases which have to be referred to other Departments, or involve correspondence with the applicants—very much a minority of the cases—from three to four weeks. The vast majority of cases are settled in not more than from 10 to 14 days. I do my best, from the point of view of personal efficiency, not to be responsible for any case being held up.
We cannot tonight have a sort of Private Member's Motion debate on the general machinery of the C.I.C., but I hope that I have satisfied the House that there was a perfectly sensible reason for the Order as an adjunct of the general credit policy. If one is restricting credit it is not unreasonable to restrict access to capital isues at the same time. We are watching how the control works. So far as I have been able to see, it works 361 as expeditiously and efficiently as any control can be expected to do. So far, the results justify the decision to lower the exemption limit. I therefore ask the House to reject the Motion.
§ 11.18 p.m.
§ Mr. Cyril W. Black (Wimbledon)
May I put one question to my hon. Friend arising out of his statement tonight? He referred to the fact, which must be correct, that a large number of transactions were on the point of completion when this Order was made, involving sums of more than £10,000 and less than £50,000. In these transactions people had entered into commitments to borrow money, or entered into building contracts to be financed by the money they had arranged to obtain. The Economic Secretary said that in a large number of cases applications had had to be made where transactions would have gone through without application to the C.I.C. if the Order had not reduced the limit from £50,000 to £10,000. Can the hon. Gentleman give an assurance that in cases of that kind, where people have entered into contracts and would possibly be involved in heavy loss if they could not proceed with those contracts, the C.I.C. will give sympathetic consideration to them? Otherwise, it would be grossly unfair to people who have entered into contracts and at the last moment may be prevented from fulfilling them.
§ Sir E. Boyle
I am grateful to my hon. Friend for raising that point. The Chancellor of the Exchequer alluded to it in the Economic Statement in February, and I tried to explain the position in answer to the hon. Member for Ashton-under-Lyne (Mr. Rhodes). The position was that in cases where there was a request to borrow £50,000, or more, the Chancellor said in February that the C.I.C. would take no notice of the fact that contracts had been entered into. I think that that is perfectly right. In cases where there was a reqest for borrowing less 362 than £50,000, that could, as it were, be specially pleaded before the C.I.C., a special plea could be entered in those cases.
§ 11.20 p.m.
§ Sir Henry d'Avigdor-Goldsmid (Walsall, South)
I shall not keep the House for more than a minute or two, but I would not like the impression to go out from here that this Order is disliked only by the Liberal Party. Some of us on this side dislike it, too. The reason is that here we have the Capital Issues Committee, a body of highly-skilled people, asked to deal with matters which those people cannot possibly judge. They can only take decisions on principle. When we consider the range of business in this country, all the various kinds of businesses there are, how can one single body in London judge in the very short time at its disposal the merits of the propositions which are put before it?
These can only be matters of principle, and I am very unhappy at the idea of the Capital Issues Committee first judging the merits of the cases and then my hon. Friend the Economic Secretary also having to look at those cases. We have a great respect for the Economic Secretary, and I am sorry he has to add to his multifarious duties the task, the duty, of scrutinising one by one—as he has told us he does—all the applications turned down by the Capital Issues Committee. I appreciate that in the present circumstances it may be necessary to take drastic measures, but I beg of my hon. Friend to think of how soon he can relax this Order.
§ Question put and negatived.