Which Amendment was:
In page 14, line 18, at the end, to insert:
(c) not being special-range property, accrues to the trustee, after such division as aforesaid, as owner or former owner of special-range property comprised in the fund".
Question proposed, That those words be there inserted in the Bill.
May I remind the House that we had proposed also to take the Amendment in page 14, line 18, at end insert:
(c) being property which, in respect of any holding of special-range property, is or has at any time been acquired pursuant to the power conferred by subsection (4) of section ten of the Trustee Act, 1925".
It was said of the late Serjeant Whittaker who was once engaged as counsel for the appellant in another place, that he sought to put a question to which exception was taken by counsel an the other side. A long dispute followed and their Lordships retired to consider the point. They returned, re-examined the matter and they retired again to consider the paint and finally they told Serjeant Whitaker that he could put his question. He replied that he had, by this time, forgotten it and would proceed to put another question.I am not precisely in that position because if I tried to put another question you would very properly rule me out of order, Mr. Speaker. But I am in some difficulty in concentrating my mind on the question which was opened on Friday last in the concluding hours of a somewhat arduous day. I rose. The hon. Member for Crosby (Mr. Graham Page), who had been responsible for the Clause, and I, were here very substantially to put what we thought was an important point which seemed to indicate, perhaps, some possibility that the Act itself had not completely covered a difficulty of trustees. With that consumate tact for which I am normally noted, I realised at the very late hour that it might be easier for an hon. Member of the Opposition than an hon. Member on the Government side to raise the matter at a time when the Government were hoping to get their Bill. So I opened the question and was about to put to the House a speech on a subject which, I felt, I had mastered in the last few minutes when, because of the time, like an ever rolling stream, you put an end to my observations, Mr. Speaker, because of the rules. Then I saw the Solicitor-General and I handed to him by brief. Unfortunately, I have not got it back. Whether it is now clogging the usual channels or not, I do not know, and I speak, therefore, in some difficulty. I think I can—because I am sure that the intentions of the Government on this occasion are honourable—with the brevity of the briefless, acquaint the House of the principal nature of the problem which I have in mind. Section 10 (4) of the Trustee Act, 1925, enables trustees to exercise a preemptive or conditional rights accorded to them by any company in respect of which they hold shares by virtue of a dispensation in the will or by law of the land but, in general, by dispensation of the will because this refers primarily to equity shares. It gives trustees power to have three possible options. They may exercise the right, they may assign the right at a price, or they may renounce a right. But, of course, in either of the first two circumstances they must treat either money they have got by exercising their right or assigning their right from shares they hold as capital. Then I come to the problem which arises out of the Second Schedule of this Bill. When they have exercised the power under the will to retain shares they have taken no step which is affected by the Act. When they have exercised their powers under Section 10 (4)—
It being Ten o'clock, the debate stood adjourned.
Proceedings on the Trustee Investments Bill [ Lords] exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[ Mr. R. A. Butler.]
Question again proposed, That those words be there inserted in the Bill.
I was afraid, Mr. Speaker, that time, like an ever-rolling stream, was doing something more.As I was saying, under Section 10 (4) they exercise their right and at that moment nothing has happened which involves the necessity of taking any action even if this Bill becomes law. But when the Bill does become law and the trustees then exercise the rights given by the Bill, in Clause 3, to invest in equity shares, they come under the provisions of Clause 3 and the relevant Schedule and in due course may be called upon to make an allocation and to say which of their trustee holdings are to be classified as one range of investment and which are to be classified as the other. At that stage, of course, the problem is that they have acquired under the Trustee Act, 1925, certain rights, options and shares which then have to be allocated. I am putting the matter as briefly as I can and I hope that I am putting it clearly. If I fail to be clear, I apologise. The problem which learned counsel discovered and the difficulty to which the Law Society called their attention was that at that stage the trustees may find themselves forced to 20 back into the long and tortuous financial history of the matter involving the previous trustees, and to ascertain the history of those shareholdings which were acquired before the Measure came into operation. I do not think I need go into the details of the two separate problems which were postulated in the brief which I hope the Solicitor-General still has, and to which I hope he has given more study than I have been able to give because I have had it for a shorter period than he has. This was raised on the Amendment to the Second Schedule and the Amendment which the hon. Member for Crosby had tabled in accordance with a suggested Amendment which was put to us by those who have been exercised by this problem. It is fair that I should say—and I hope the hon. Member for Crosby will think I am right in saying—that even on that Amendment doubts were expressed as to whether it was drafted in a hurry because the point had only been recently discovered and doubts were expressed by its authors on all the problems which arose from the conflict of these provisions. I understand that Her Majesty's present advisers have had an opportunity of considering the matter, and it may be that at a later stage the House will be asked to recommit the Bill and to consider another possible Amendment. I express my gratitude to the Solicitor-General and to the Economic Secretary for the promptitude with which they have considered this point, and the hope that they and their advisers will have found a solution which will be acceptable to the House and effective in operation.
It must be very rare indeed that Ministers find themselves able sincerely to express gratitude to an Opposition Member who has talked out one of their Bills. This is quite genuinely one of those cases, because there is no question that the hon. Member for Oldham, West (Mr. Hale) and my hon. Friend the Member for Crosby (Mr. Graham Page) were on a good point here. I am very grateful that we have had a chance of considering it, and, indeed, that the hon. Gentleman was courteous, kind and helpful enough to give me his brief. I am sincerely sorry that I have lost it by now. I handed it immediately to Treasury Counsel, and it is he really who is the dishonest one; but I will try to recover it and hand it back to the hon. Gentleman. However, the hon. Gentleman did remarkably well in speaking without a brief, and he explained the point which we have had a chance of considering. It is not only the actual logic of the position but even more the Practical difficulties which my hon. Friend the Economic Secretary and I had an opportunity of discussing at once with the Public Trustee.The problem is a genuine one, and it would, I think, have led to real difficulty in the work of trustees under the Bill on the lines which we proposed. I think it would probably be more convenient if I explained at a later stage what we propose to do and why we propose to do it. We found that the only convenient way of dealing with this matter without a muddle was—I am sorry we have to do it—to ask the House to recommit the Bill and make an Amendment to Clause 3. Therefore, I shall in due course move a Motion to recommit the Bill in respect of the Amendment in Clause 3, page 3, line 29, at the beginning to insert:
It is sufficient now for me to ask leave to withdraw the Amendment which I had moved. I hope that my hon. Friend the Member for Crosby will see fit to withdraw his Amendment in the Second Schedule, page 14, line 18, at the end to insert:"or which became part of a trust fund in consequence of the exercise by the trustee, as owner of property falling within this subsection of any power conferred by subsection (3) or (4) of section ten of the Trustee Act, 1925, or paragraph (o) or (p) of subsection (1) of section four of the Trusts (Scotland) Act, 1921".
(c) being property which, in respect of any holding of special-range property, is or has at any time been acquired pursuant to the powers conferred by subsection (4) of section ten of the Trustee Act, 1925".
The Amendment in the name of the hon. Member for Crosby has not been moved. It has only been discussed.
I am much obliged, Mr. Deputy-Speaker. I hope that my hon. Friend will not feel it necessary to move his Amendment, because the starred Amendment in Clause 3, page 3, line 29 to which I have referred fully meets his point and, as he will see, it does various things which there was not time to cover when his Amendment was being drafted.The two Government Amendments to the Second Schedule, in page 14 line 21, and in page 14, line 22, fall with the Amendment which I moved and which I now ask leave to withdraw.
May I interrupt my right hon. and learned Friend? I suspect that he is about to do something which will prevent me from thanking him at this stage for the course he has taken. I am very grateful to him, and to the hon. Member for Oldham, West (Mr. Hale) who helped me out of an embarrassing situation in this case. I did not want my right hon. and learned Friend to ask leave to withdraw his Amendment before I had an opportunity of thanking him.
I am much obliged to my hon. Friend. I hope that the House will now allow me to take the course I suggest.I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.