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Capital Issues (Control Orders)

Volume 437: debated on Thursday 22 May 1947

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asked the Chancellor of the Exchequer whether he will make a statement about the bringing into operation of Section 1 of the Borrowing (Control and Guarantees) Act.

Yes, Sir. Appropriate orders were made yesterday to come into force on 16th June. These are being laid before the House today. I will, with permission, circulate a fuller statement in the OFFICIAL REPORT.

Could my right hon. Friend say whether Subsection (1, d) of Section r, which provides for the control of offers for sale, is comprised in the Orders referred to, as these offers for sale still require control?

My right hon. Friend had hoped to get rid of this particular control under the Order which is being promulgated now, but, as hon. Members will see, he is keeping a limited control for a while longer under the regulations which are now to be published.

Following is the Statement:

An Order was made yesterday under Section 1 of the Borrowing (Control and Guarantees) Act, to come into force on 16th June. Simultaneously, two other Orders have been made. The first is an Order-in-Council revoking the greater part of Regulation 6 of the Defence (Finance) Regulations. The second is an Exemptions Order made under the remaining portion of Regulation 6. The Order under the Borrowing Act follows the general lines of the draft published last year, but has been amended to implement certain assurances given when the Bill was before the House last summer.

The principal effect of the other two Orders is to retain in force, for the time being, a limited control of public offers for sale of domestic securities. I originally intended to abolish this part of the control altogether, but I have for some months been keeping a close watch on this form of appeal to the public. As a result, I am not satisfied that it will be in the public interest to remove control altogether at this stage. I am, however, limiting the control to public offers of shares or stock, where the company concerned has made an issue of shares or stock within the previous two years under any of the current exemptions. Revised instructions are being issued to the Capital Issues Committee, who will be given discretion in the case of those public offers remaining under. control to recommend consent, unless the proposals seem undesirable in the general public interest.

Under the new arrangements, Northern Ireland will in future run its own control of capital issues. Regulation 6 remains in force as regards the Isle of Man, as an interim measure pending the passage of local legislation. I give clear warning that I shall not hesitate to use my powers under the Borrowing Act to amend the new Order at short notice, if experience suggests that it has been drawn too widely.