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Clause 43—(Inspection Of Company's Affairs In Other Cases)

Volume 440: debated on Friday 25 July 1947

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3.0 p.m.

I beg to move, in page 40, to leave out lines 26 and 27.

The reason for this Amendment is because of some doubt which has been cast upon the significance of the words
"and if it also appears to the Board that the matter is one of public concern."
During the Committee stage, it was doubted whether that would not limit the exercise of the powers given to the Board as regards investigations, which powers were desired to be very wide powers because of what was taking the place of the various other Clauses, which had formerly been there, as regards nominee shareholders. It is, of course, obvious that, in any case, the powers of the Board under this Clause must be discretionary, subject to what I might say on the next Amendment, and these words, possibly, do appear to have a somewhat narrower significance than was intended, particularly having regard to the fact that, in Clause 46, dealing with the appointment of inspectors, the words used are:
"Where it appears to the Board of Trade that there is good reason so to do."
It was thought that the courts might read the words as in some measure distinguishing from that state of affairs. We do not want to limit the distinction in Clause 43 by putting in the words "The matter is one of public concern," because that is going to be read so as to make it more limited, and we therefore suggest that it would be better to leave those words out rather than try to qualify, in a rather dubious way, these discretionary powers.

We are very grateful to the President of the Board of Trade for his explanation. It seems to me to be a very much tidier arrangement and so far as my hon. Friends are concerned, we entirely accept it.

I rather feel that it would not be advisable to leave out these words at all, because there are matters which may be of public concern and which may not come under Subsection (1, b). I want to refer to a particular instance where we might consider that it was a matter for investigation or public concern, but which did not come under this Subsection.

For a long time, we in Liverpool have been cursed, if I might say so, with he difficulties of the greyhound racing track of a company which was formed in 1935, and, peculiarly enough, was taken over by another company, which some of us on the Betting and Lotteries Committee in Liverpool felt was not a fair section of the people to represent the money that came in on greyhound racing. The Betting and Lotteries Committee in Liverpool have paid a very great deal of attention to this matter and have gone very deeply into the question of the shareholders and those who control the company, and, while we are positive that there is somebody in the background who has had a conviction for fraud and has actually been in prison for that fraud, we are unable, because of the limited details that are given, to put our fingers on that particular individual. Therefore, I would think that, in instances of that sort, and there must be many of them, it would be a matter of public concern whether it would be necessary for an investigation by representatives of the Board of Trade. Let me go more fully into this matter. This particular company has shares to a very great amount. Its shares are in the nature of over 1,800,000 shilling shares—

May I interrupt the hon. Lady? She is under a misapprehension as regards this Amendment. The words which are proposed to be left out are an added limitation to the Clause. It is not that leaving them out would allow more to be done; it would allow less to be done, and, by taking the words out, it gives a wider discretion to the Board of Trade and not a narrower one. Therefore the hon. Lady's argument is in favour of the Amendment.

Most people would understand—[HON. MEMBERS: "No."] Well, then, I do not understand what hon. Members opposite understand, and I am very glad that I do not. I take it that it would give wider power, but if my right hon. and learned Friend says it does not, then I can continue my speech in support of the Government. I would much sooner do that.

The position is that there have been so many changes of shareholders in this company, from time to time, and so much complication about the matter, that the Liverpool Betting and Lotteries Committee, because they were unable to obtain the necessary information, have been compelled to issue licences to this track, although the majority of us are certain that this company is being—

On a point of Order. This is very interesting, but, surely, Major Milner, it should come under Clause 46, and should not be discussed on this Amendment.

I understand that the hon. Lady has put forward a proposition with regard to this Clause which enables inspection to take place. I do not know whether it is necessary or desirable for the hon. Lady to go into further details, having regard to the fact that her object will he achieved by this Amendment which I gather is acceptable to all sides of the Committee.

Further to that point of Order. If hon. Members will look at Clause 46, they will see that it is the one which deals with the

"Appointment and powers of inspectors to investigate ownership of company."
This Clause has nothing to do with the ownership or directorship of companies.

I do not think that the hon. Lady is out of Order. She has, however, been assured by the right hon. and learned Gentleman the President of the Board of Trade that there are adequate powers of inspection in respect to the case she has in mind, but if she desires to continue she may do so on her own responsibility.

I want to finish the statement I started to make because it is of such great importance to the Liverpool area. There are numbers of people in that area who could easily have been defrauded if certain steps had not been taken with reference to the flotation of a company, and I want to be certain that there are sufficient powers under this Clause to deal with this particuar matter in Liverpool.

I think the hon. Lady is now going beyond the particular Amendment before the Committee, which is to leave out lines 26 and 27 in page 40. It does not seem to me, in order either to support or to oppose that particular Amendment, that it is necessary to go so much into the details of the case which the hon. Lady is putting forward. I think that she is going beyond the Amendment before the Committee.

Can you tell me, Major Milner, under which particular Clause I can raise this matter, because it is of great public interest, so far as Liverpool is concerned, and I have a responsibility in regard to it?

On a point of Order. Would not the hon. Lady be able to raise the matter quite easily on Clause 46? It seems to me that would be the proper Clause on which to raise it. I would like your guidance, Major Milner, as to whether, if some of us want to say something on this point, it will be in Order?

At any rate, I do not think this is an Amendment on which to raise the matter. Clause 46 may he the right one.

Clause 46 appears to deal with the question of the appointment and powers of inspectors to investigate the ownership of a company. My point is not concerned quite with the ownership of a company. It is a question of the control and appointment of shareholders for particular purposes. It is a question not of ownership, but of which person or persons have the right to appoint shareholders in order to keep the company going. [Interruption.] I do not need to make any reference to Liverpool, and I might say to hon. Members opposite that when I make a statement I make it irrespective of what comments come from the other side of the Committee. I am not asking for the guidance of hon. Members opposite. I am asking your guidance, Major Milner, as to whether I can raise this matter later. If you give me your assurance that I can, I will leave the matter now and I will proceed with it on Clause 46.

Before you give your Ruling, Major Milner, may I be permitted to point out that on Clause 43 we are discussing a question of the rights and powers of the Board of Trade to appoint inspectors to inspect a company's affairs in various cases. As my hon. Friend the Member for the Exchange Division of Liverpool (Mrs. Braddock) has mentioned, Clause 46 deals merely with the powers of inspectors to investigate the ownership of companies. In what I regard as a most interesting and valuable speech which the hon. Lady was in process of making, we were being told of a specific instance concerning a company's affairs which are being conducted in a manner which may be unlawful or oppressive, or which may involve precisely the set of circumstances which Clause 43 is designed to cover. I submit it would be very unfortunate if, after hon. Members have challenged the suggestion of my right hon. and learned Friend that we should discuss all these Amendments together, and after having insisted that they should be dealt with separately, that the hon. Lady should not be allowed to continue her argument on Clause 43.

The question before the Committee is whether the words,

"and if it also appears to the Board that the matter is one of public concern"
should be left in or taken out. If the lion. Lady can address her remarks to that particular proposition, she will be in Order. Otherwise, there will be other opportunities, possibly either on the Clause itself or on Clause 46, for raising this question, but she must address her remarks to the question whether these words should remain in the Clause or not. I do not think it is in Order for the hon. Lady to use this Amendment for the purpose of giving her detailed version of what, no doubt, she very properly believes to be the facts concerning the control of a particular company, for which she must take responsibility.

Clause 46 is considerably narrower in scope than Clause 43, and I submit, Major Milner, that the hon. Lady will be restricted on Clause 46 to a discussion of the ownership of shares. It is perfectly true that the Amendment seeks to leave out from Clause 43 the words,

"and if it also appears to the Board that the matter is one of public concern."
Bearing in mind those words, it is conceivable that the hon. Lady would not be in Order in raising her point, but those words are conjoined with paragraph (b) (iii) which reads:
"that its members have not been given all the information with respect to its affairs which they might reasonably expect."
That paragraph is followed by the worth,
"and if it also appears to the Board that the matter is one of public concern."
I submit, therefore, that the hon. Lady is clearly entitled to speak on paragraph (b) (iii) in conjunction with the words:
"…that the matter is one of public concern,"
and on the effect of the omission of those words. In my submission, she is clearly entitled on this Clause to raise the point to which she was referring.

On consideration, I would say that probably the hon. Lady could deal with this point more appropriately on the Question "That the Clause stand part of the Bill "when she could cover the whole of this matter.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

3.15 p.m

I think I can remember the stage I had reached in my speech. The affairs of this company have given the elected representatives in Liverpool cause for grave concern. An attempt was made to float a company, and certain of those put forward as directors of the company were actually elected members of the city council, and also members of the Betting and Lotteries Committee. When the attempt was made to float this company and their names appeared as directors, managing directors or shareholders, they resigned their membership of the Betting and Lotteries Committee. When, because of certain inquiries that were made, it was discovered that permission would not be granted to float the company, these two gentlemen immediately obtained reinstatement on the Betting and Lotteries Committee; and one of them actually proposed the other as chairman of that committee.

It would help us to understand the position a little clearer if the hon. Lady could tell us the purposes of the Betting and Lotteries Committee. I understand it is a Committee composed of members of the Liverpool Town Council.

The Betting and Lotteries Committee puts into operation the Betting and Lotteries Act. It is a committee appointed with judicial powers, and it either licenses or refuses to license greyhound racing tracks for certain periods. Because the Betting and Lotteries Committee had, on a previous occasion, because of information they had received, refused to grant the transfer of a licence in order that this company could be floated, these difficulties took place. Suggestions were made that certain people on the committee had been offered large sums of money in return for assisting the granting of a licence. The peculiar circumstances are that, following a unanimous refusal by the committee to grant the transfer of a licence in order that the greyhound racing track could float a company, at the next meeting—after the difficulties to which I have referred had arisen—the majority of members on the committee voted to renew the licence for a further seven years. Some of us in Liverpool—and not only of one political party—are very concerned about the peculiar position of this company, but because we can obtain no information from Somerset House about the names of those who are directors, We are unable to get at the real position

I will give way in a moment. Under the Betting and Lotteries Act, if it can be proved that anybody associated with a greyhound racing track has been convicted of fraud, the committee are empowered not to renew the licence. The difficulty arises because of the peculiar methods adopted by the shareholders. I have with me a full transcript of a meeting which took place in Liverpool, and in this transcript the shareholder—

Let me finish my sentence—the shareholders are shown to have been altered so often, and the circumstances are shown to be so peculiar, that we are positive somebody is controlling—I do not say wholly owning—the shares and policy of this greyhound racing track, without any indication that he has any power or authority for so dealing with it.

Could the hon. Lady give us some further information about when these extraordinary matters took place? Are they quite recent? If they are, I suppose it is not too late to have an inquiry into them. Did they take place at the time when there was a Labour majority on the Liverpool City Council?

The ignorance of the hon. and learned Member is appalling. No, fortunately, this could not have happened if there had been a Labour majority. The Labour Party only have a third of the representation on the Liverpool City Council. That is why these things have taken place. These happenings are within the last three months. I have waited for this opportunity, and I have to put the matter in this way. The difficulty is that the Betting and Lotteries Committee is so controlled that one is unable to raise any matter in open council. It all has to go to this committee The only time one can raise such matters is when the new Committee is being appointed after the municipal elections. Will this Clause give power to make very full inquiries—I ask the President of the Board of Trade—into the matters that are dealt with in the Clause? Some of us are very concerned about the position in Liverpool, arising out of the business transactions of this firm, because we are anxious about the clean running of municipal politics. In the first place—

On a point of Order. Have we to spend our time talking about the cleaning up of municipal politics and the affairs of the Liverpool Betting Committee? Can we not get on t3 the Bill and deal with something which is in that Bill?

I know that this is the sort of thing which people who are financiers or have relationships with financiers do not like. These things hap-pen when people are interested in large financial transactions of one sort or another.

I do not want to start a wordy battle with the right hon. Gentleman. I ask the President of the Board of Trade to tell me whether the Clause contains full power to make inquiries in a matter of this sort. If so, I shall be satisfied and shall support the Amendment.

It would be improper for me to say that the Clause will or will not do so, because I shall have to decide whether it does, in particular cases. It would be obviously improper for me to answer the hon. Lady's question. All I can say is that the Clause gives the widest measure in this direction and that at the appropriate time we shall see what happens.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.