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Clause 17—(Valuation Of Securities For Compensation Purposes)

Volume 436: debated on Wednesday 30 April 1947

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5.45 p.m.

I beg to move, in page 18, line 22, at the end, to insert:

"other than securities guaranteed by the Treasury."
Those hon. Members who sat on the Committee dealing with this Bill will remember that in the course of the discussions I gave, on behalf of my right hon. Friend the Chancellor of the Exchequer, and undertaking that either later during the Committee stage, if that were possible, or certainly on the Report stage provision would be made in the appropriate places in the Bill to carry out the undertaking that the three per cent L. P.T. B. guaranteed stock (1967–72) should be given special treatment. As I think the House knows, the decision is that a special Transport Board stock should be created which will carry with it the same rate of interest and will be paid off, in due course, on the same dates and on the same terms as the present stock. Under Part I of the Fourth Schedule this is listed to be taken over at 107⅞. That will not continue to apply. Apart from that, special Transport Commission stock will be created, which will run on the same term in every particular as the present L.P.T.B. stock. This Amendment enables that to be done.

We, on this side of the House, are sincerely thankful that the Government have come to this decision I was almost going to say "grateful," but it would be a most extraordinary thing to say that we were thankful to the Government for implementing the obligations of His Majesty's Treasury. That is something which we expect. When this Bill was first presented, one of its most serious blots was that Government guaranteed security was to be treated in this extraordinary way, and when the Financial Secretary talks about "special treatment" being given to this stock, I think that he is exaggerating All that he is doing is to implement the guarantee of His Majesty's Treasury in the way these guarantees have always been implemented. I suppose that the Chancellor of the Exchequer realises that if he were not to implement the guarantee of this stock no one would have any confidence in the transport stock issue which was also to be subject to Government guarantee. It is a matter for great regret that the Govern ment have not made it possible for the obligations of the railway companies to be implemented in the same way. The railway companies have security with certain fixed dates of redemption. These obligations are not being taken over by the Government, and the holders of those stocks are therefore being defeated and defrauded of their proper security.

Amendment agreed to.

I beg to move, in page 19, line 36, at the end, to insert:

(c) the holder of any securities of a body may appoint the directors of the body to act as his representatives for the purpose of being heard in any proceedings with respect to those securities before the arbitration tribunal; and where such an appointment is made the arbitration tribunal shall hear the directors instead of that holder.
This is consequential on the Amendment to page i8, line 22, which has been already moved.

I should like to say a few words of thanks to the Minister and his staff for their efficiency and courtesy in getting this Amendment—

There is some confusion owing to the order of printing of the Amendments on the Order Paper. There are two Amendments to page 19, line 36, and the one we are taking is to insert the paragraph (c).

Once again I should Like to thank the Minister and his staff for the system he has instituted as a result of the Guillotine, thus ensuring that certain Amendments are called. I put this Amendment down on Friday afternoon at 3.30, and I was delighted to see it on the Order Paper next morning with the Minister's name added to it and that of my hon. Friend the Member for Western Dorset (Mr. Digby). I think we must thank both the Minister and his staff for taking this action so promptly. We on this side of the House do not mind finding ourselves associated with the Minister, when he takes action which we regard as right and proper. Elsewhere among Members opposite there is an idea that there is something wrong if the Government gets support from this side of the House. In this particular case the Amendment proposed is correct, and I thank the Minister for having accepted it

Amendment agreed to.

I beg to move, in page 19, line 36, at the end, to insert:

"(4) The value of the securities specified in Part III of the said Fourth Schedule, being securities guaranteed by the Treasury, shall be deemed to be the nominal value of those securities."

This is consequential.

The Parliamentary Secretary to the Ministry of Transport says that this Amendment is consequential. Is it consequential upon the Amendment moved by the Financial Secretary to the Treasury in page 18, line 22, or is it consequential to the Amendment he himself has just moved?

This Amendment is consequential on the Amendment which was put down by the hon. Member for Banbury (Mr. Dodds-Parker) and the hon. Member for Western Dorset (Mr. Digby), which was accepted by the Minister, and on which the hon. Member for Banbury has just spoken.

I think there is a mistake here. If the Parliamentary Secretary is -addressing his mind to the same Amendment as I am thinking of, his remarks would be relevant. Perhaps he will tell us to what Amendment he is speaking.

There are two Amendments in page 19, line 36. One of them is in the name of the Minister and of my two hon. Friends behind me, the hon. Member for Banbury (Mr. Dodds-Parker) and the hon. Member for Western Dorset (Mr. Digby), with regard to which my hon. Friend the Member for Banbury has made some courteous remarks to the Front Bench opposite. There is another Amendment dealing with a different topic and the Parliamentary Secretary's remarks would not be relevant to it. Perhaps he would give us a word of explanation.

The Amendments have been taken in a different order from that which I expected. The Amendment to insert paragraph (4) is consequential on the Amendment in page 18, line 22, which has been moved and accepted. The other Amendment which is in the name of the Minister and also of the hon. Member for Banbury (Mr. Dodds-Parker)—

The Minister is aware that we have already passed that Amendment and cannot debate it again.

We seem to be getting into a slight difficulty, and I do not know whether what I have to say on this difficulty is a point of Order, though I rather think that it is. We have in the Bill already a paragraph (4) which starts with the words "In this section. …" and now we are to have another paragraph (4) which starts with the words "The value of the securities. …" It seems to me that there is something wrong with the drafting.

On a further point of Order. Why is it that having taken the Amendment in the name of the Minister and the hon. Member for Banbury (Mr. Dodds-Parker) and the hon. Member for Western Dorset (Mr. Digby) we are now going back to an Amendment which is in the name of the Minister only?

I think I will deal with the two points of Order before I have any more. There seems to be some confusion, which is due to the compilation of the Amendments on the Order Paper. The Amendment which is to page 19, line 36, to insert paragraph (c), we have already passed. The next Amendment we have to consider is the one above it on the Order Paper. It is a question of printing. I hope that the House is now ready to come to a decision on the Amendment under consideration.

I should like to ask tot your guidance, Mr. Deputy-Speaker. The Amendment under consideration refers to Part III of the Fourth Schedule, but I find that there are only two parts to the Fourth Schedule. Could I have your guidance as to what we are discussing?

I gather that later it will be moved to add a Part III to the Schedule.

The Parliamentary Secretary said a few moments ago, when trying to disentangle the confusion which has arisen, that this Amendment was consequential to the one in the name of the hon. Member for Banbury (Mr. Dodds Parker). Is that one still to come, or have we finished with it?

I am afraid I was led into the confusion because the Amendments were not taken in the order in which they stand on the Order Paper.

Then there is nothing consequential on the Amendment in the name of the hon. Member for Banbury?

We have not yet solved the problem put to us by the hon. Member for Sutton Coldfield (Sir J. Mellor). This Amendment refers to Part III of the Fourth Schedule and although it has been suggested that at some future date another part is to be added to the Schedule there are at the moment only two parts to that Schedule and we have not had the further Amendment brought before us. Would it not be right, therefore, to refer to the part of the Schedule which is, in fact, to be inserted in the Bill?

This Amendment refers forward to a new Amendment to be moved later. If the right hon. Gentleman the Member for the City of London (Mr. Assheton) will look at page 2455 of the Order Paper he will see there is an Amendment, in page 127, line 8, to leave out "Part I" and insert "Parts I and III."

I do not think that I am called upon to answer a hypothetical case of that kind.

I should like to ask then if that is the case, is it in Order to move this Amendment to page 19, line 36?

I understand that this has been done before and with the consent of the House I propose to do it again.

The matter is really quite simple, and it is only a question of an explanation from the Government being required. This Amendment and the one which comes later merely implement the Government's change of policy, which we welcome, with regard to the guaranteed stock of the London Passenger Transport Board. Could we have a word of explanation on that?

I should like to support the remarks of my hon. Friend the Member for Huntingdon (Mr. Renton). This Amendment was moved by the Parliamentary Secretary when he thought he was moving the next Amendment and he thought it was consequential on one we had already discussed. After that we got the point raised by the hon. Member for Sutton Coldfield (Sir J. Mellor) and it now transpires that this Amendment we are discussing at the moment has reference to another Amendment later on. I suggest that we cannot accept this Amendment without a further explanation from the Parliamentary Secretary of exactly what it means and on what it is consequential.

6.0 p.m.

May I try again to help the House? The Amendment we are now considering is consequential on that which was moved in page 18, line 22. But it also refers to a subsequent Amendment which will be moved later and to which Mr. Deputy-Speaker has just referred.

I hope that the mists have been cleared away and that the House is now prepared to reach a decision.

I am afraid the mists have not been cleared away or all of us. Do I understand that paragraph (4) on page 19 now becomes paragraph (5) in view of the acceptance of the Amendment in page 19, line 36? Otherwise there will be two paragraph (4)'s in the Bill.

Perhaps I might help to clear away the mists once and for all by asking hon. Members if they will refer to Clause 87, Subsection (4), which makes it quite obvious what we are trying to do by means of those particular Amendments. As I believe the House is aware, certain stocks are set down in Part I and Part II of the Fourth Schedule, as far as these are concerned all but one of those there listed will be taken over. What we are doing by this series of Amendments is to take out the L.P.T.B. stock. It is there listed at 107⅞ and it will go back to its nominal value and be placed in a Part of its own. Its present rate of interest is to be continued and it will be redeemed between 1967 and 1972, as provided for when the loan was issued. I should add that although my right hon. Friend the Chancellor of the Exchequer has acceded to the general wish expressed from the other side of the House that this special category should be established he does not for one moment admit that there would have been any broken faith on the part of the Government had the stockholders remained as they were originally placed in this Schedule. The guarantee was a guarantee against default by the L.P.T.B. and, as we all know, the L.P.T.B. has not defaulted.

The right hon. Gentleman the Financial Secretary has undone all the good of repentance which the Chancellor has achieved. The Chancellor went to Canossa and stood barefoot in the courtyard and the Parliamentary Secretary is now undoing it all. He now says that special treatment is being given to this particular stock to honour the Government's bond, and by not admitting any past faults he is leaving open the whole question as to whether in future the Chancellor will in fact honour his bond on guaranteed stocks. It was that doubt, with all the difficulties and dangers that flow from it, that presumably induced the right hon. Gentleman the Chancellor to repent, and by what he has said the Parliamentary Secretary has undone all that the Chancellor achieved

I think the Financial Secretary really should revise the remarks he has just addressed to the House. He has announced that this stock is in a special category but the only speciality about it was that when the British Government took over the L.P.T.B. they also took over their obligations. The Government are, in fact, fulfilling the promises which they assumed when they became possessed of the L.P.T.B. I do hope that the Financial Secretary will weigh the advice given him by my hon. Friend. It is an incredible thing for the representative of the Treasury to say that on this, a special occasion, they will fulfil their obligations but that for the future they must warn people that the Chancellor is acceding to requests from this side of the House and was good enough to give way on this point. We do not flatter ourselves that it was remarks made on this side of the House that forced the Chancellor to change his mind. The real reason was that he was informed by his advisers that the credit of the British Government would be in danger unless he fulfilled the obligations of the L.P.T.B.

I must say to the Financial Secretary that it is a pity that when his master is away he should chuck away such little prestige as the Chancellor regained when he decided that it was part of his duty to honour British Government obligations. It is a pity that we have such an infirm Government and if we cannot have senior Ministers present—apart from the Home Secretary—who really are responsible for these departmental decisions, it is a very foolish thing for the Financial Secretary to throw away in an airy way the little credit which the Chancellor gained by facing up to his responsibilities to the L.P.T.B. shareholders. We all know that the Financial Secretary is a delight and an ornament to this House and a man full of good will, and we are anxious to help him. I suggest to him that he ought really to withdraw what he has said and not talk about these special categories. The only special category that matters in this connection is the honour of British Government securities or those taken over by the British Government. The only thing that made the Chancellor change his mind was the fact that he knew that Government credit was threatened, so do not let us hear any more about acceding to the remarks from this side of the House.

On a point of Order, Mr. Deputy-Speaker, I would ask you to invoke the rule against needless repetition. The right hon. Gentleman has said three things. He has said some of them three times and some six times, and we understood them the first time.

I must say that it comes ill from a lawyer, who is feed to repeat himself, to intervene in the way the hon. and learned Gentleman has done.

On a further point of Order, is it right for a right hon. Gentleman, however contemptible, to slander a profession?

We seem to be getting into rather troubled waters, and I would suggest that we now let the matter drop.

I am entirely in favour of letting the matter drop, but very anxious that the Financial Secretary should clear up the error into which he has fallen by telling the House that there is no special reason for this change of mind, except that the. Chancellor found that it was necessary.

In the course of his remarks the Minister said that this was not a question of broken faith. It is, I think, a question of mended faith, and judging from his remarks it is not even invisibly mended. I think it is extremely important that he should now make a statement that clears away the confusion. There is no doubt that the possibility of the Chancellor implementing his cheap money, cheaper money and cheapest money policy would be seriously endangered unless credit were restored by an action of this kind.

May I be allowed to help my hon. Friend the Member for Sutton Coldfield (Sir J. Mellor), and to explain to him what the hon. Gentleman the Parliamentary Secretary did not explain to the House—how this particular Amendment comes to be phrased as it is? I think it is just a piece of bad drafting and I should like to explain to the House what I think it means. The Amendment says:

"In page 19, line 36, at the end insert—'(4) The value of the securities specified in Part III of the said Fourth Schedule.'"
That puzzled my hon. Friend because so far there is no Part III of the Fourth Schedule. We were then referred by the Parliamentary Secretary to a later Amendment which he proposed to make to include a Part III dealing with securities guaranteed by the Treasury. What puzzled me was that there is no security guaranteed by the Treasury other than the one we have been discussing. Had it been "security guaranteed by the Treasury" I could have understood the point. Now I understand it, and I hope the House does too.

Amendment agreed to.