Skip to main content

Interpretation Of Part Iv

Volume 980: debated on Monday 3 March 1980

The text on this page has been created from Hansard archive content, it may contain typographical errors.

With this it will be convenient to discuss Government amendment No. 402.

These are both practical amendments. They provide a redefinition of quasi-loans for the purposes of part IV.

Amendment agreed to.

I beg to move amendment No. 98, in page 74, line 22, at end insert

'relevant company, for the purposes of section 49(1)(b), shall mean any company'.

With this it will be convenient to discuss amendment No. 99, in page 74, leave out lines 23 to 28.

The basic aim of the amendment is to extend the definition of "relevant company" from a public company, for the purposes of this part of the Bill, to a private company. I hope that the Minister will explain shortly why he feels that the extension is inappropriate.

Amendment No. 99 is consequential to amendments Nos. 71 to 74. As those amendments were not accepted, I hope that I may safely assume that Labour Members will not wish to press these amendments.

The effect of amendment No. 98 is to extend to all companies the prohibitions concerning quasi-loans to directors and loans and quasi-loans to directors and connected persons. As drafted, the prohibitions apply only to public companies and to companies within groups containing a public company.

I remember that I explained the Government's reason for rejecting this unnecessary extension of the prohibition when the issue was discussed in Committee. I see no reason for developing the argument, except to remind the hon. Gentleman that it was felt that the restrictions which were of importance in large organisations should not be imposed upon smaller companies, which are often controlled by families and by those much more intimately concerned in the control and day-to-day administration. Therefore, there is less reason for the rules to apply to smaller companies. That is why we have limited them to larger companies.

There are many substantial private companies that are larger than some public companies. If there is no definition that can be ascribed to size, we are confronted with a difficult problem. However, this is not the time to press the issue. The Government are reviewing this very area, as I was when I was the Under-Secretary of State for Trade. It will be useful when the Government are able to publish their proposals with some definition. That will resolve a difficult problem.

Amendment negatived.

I beg to move amendment No. 262, in page 74, line 24, leave out 'a public' and insert 'not a private'.

With this it will be convenient to take Government amendments Nos. 263 to 266.

The meaning of the expression "relevant company" in clause 63 is at present linked to the new definitions of "public" and "old public" companies in part I of the Bill. These definitions do not become operational until the clay appointed by the Secretary of State for their coming into effect. We do not wish the implementation of the provisions of part IV to be delayed to another part of the Bill whose entry into force will necessarily have to await some passage of time as it is dependent, for example, on the preparation of statutory forms. We have therefore revised this part of clause 63 so that part IV may be implemented independently of part I.

Amendment agreed to.

Amendments made: No. 263, in page 74, line 26, leave out 'a public' and insert 'not a private'.

No. 264, in page 74, line 27, leave out 'a public' and insert 'not a private'.

No. 265, in page 74, line 28, leave out 'a public' and insert 'not a private'.

No. 266, in page 74, leave out lines 30 to 32.

No. 402, in page 74, line 32, at end add—

'(1A) for the purposes of this Part of this Act—
  • (a) a quasi-loan is a transaction under which one party ('the creditor') agrees to pay, or pays otherwise than in pursuance of an agreement, a sum for another ('the borrower'), or agrees to reimburse, or reimburses otherwise than in pursuance of an agreement, expenditure incurred by another party for another ('the borrower')—
  • (i) on terms that the borrower (or a person on his behalf) will reimburse the creditor; or
  • (ii) in circumstances giving rise to a liability on the borrower to reimburse the creditor;
  • (b) any reference to the person to whom a quasi-loan is made is a reference to the borrower; and
  • (c) the liabilities of a borrower under a quasi-loan include the liabilities of any person who has agreed to reimburse the creditor on behalf of the borrower.'.—[Mr. Eyre.]
  • 8.45 pm

    With this we may take Government amendment No. 304, and the following amendments:

    No. 100, in page 74, line 35, leave out from 'goods' to end of line 36 and insert

    'under a hire purchase agreement or conditional sale agreement or sells any land under a conditional agreement'.

    No. 101, in page 74, line 37, leave out 'any land or'.

    No. 102, in page 74, line 38, at end insert:

    'or leases any land in return for periodical payments'.

    Amendments Nos. 339 and 304 are technical. The definition of the beneficiary of a credit transaction is misplaced in subsection (2) as drafted. The reference to credit transaction in subsection (5) is tautologous. The two Government amendments put the drafting straight. I commend them to the House.

    The Minister has made the point that we sought to make in Committee. He has met our amendments and we are perfectly satisfied.

    Amendment agreed to.

    Amendments made: No. 244, in page 75, line 6, leave out 'agrees' and insert 'is liable'.

    No. 304, in page 75, line 35, leave out 'it is made for him' and insert:

    'he is the person to whom goods or services are supplied, or land is sold or otherwise disposed of, under the transaction; '.—[Mr. Eyre.]