I beg to move, in page 2, line 15, at the end, to insert:

"(2) The provisions of this section shall not apply to the issue by a body corporate incorporated under the law of England or Scotland of any shares in debentures or other securities of that body corporate if such issue is for the sole purpose of the amalgamation of two or more bodies corporate or the absorption of one or more bodies corporate by another body corporate or the acquisition by one body corporate of control of another body corporate."

This Clause is not only bad in itself, but it shows that the Chancellor of the Exchequer is a grasping Cabinet colleague. He is one of the worst of power misers. The House will recollect that, not so long ago, the right hon. and learned Gentleman the President of the Board of Trade announced his intention of introducing a Bill to fulfil the recommendations of the Cohen Committee, which, of course, touch upon amalgamations. While his right hon. and learned Friend perspires in India, the Chancellor coldly grabs his right hon. and learned Friend's rightful sphere. I must say that this Clause is a very peculiar arrangement. This Bill is supposed to deal with new money, and, of course, the Board of Trade is the proper Department to deal with amalgamations. We want to reinforce the authority of the absent President of the Board of Trade; hence the Amendment. But as the Chancellor has insisted upon dragging amalgamations into this messy Bill, I shall say a few words about them.

Most amalgamations are made to obtain reduced costs, which generally, although not always, come from larger scale enterprises. Many Royal Commissions and other public bodies have recommended amalgamations to improve conditions in various industries. Previous Socialist Governments have set up Royal Commissions which have reported in favour of amalgamations, and it will be within the recollection of the House that, both in the cotton industry and in the coal industry, wholesale amalgamations were recommended. Therefore, I cannot see why the Chancellor should bring this particular Clause into the Bill. There is another point. There has been a tremendous amalgamation movement in the Co-operative Societies, and it is still in full swing. If amalgamations are so bad, will the Chancellor or the Government stop the merging of co-operative societies?

Nothing doing.

The Chancellor says "nothing doing"

I maintained silence.

I move this Amendment because I believe that amalgamations often lead to a substantial lowering of costs and, of course, often they increase efficiency. It will be no news to hon. Members that in the case of a business like Imperial Chemical Industries, which is by no means perfect, but which has nevertheless proved itself to be one of the greatest producers in the world, if one compares either their costs or their management with their opposite numbers, the Dupont organisation, in the United States, one will find that Imperial Chemical Industries come out of the test extremely well. Again, if the co-operative societies feel that it is necessary continuously to amalgamate, surely there must be something in the argument—I do not put it any higher than that—that amalgamations often increase efficiency. The Chancellor of the Exchequer has been delivering a number of exhortations to British industry, reinforced by many of his colleagues, in which he has stressed the absolute necessity of low costs and increased efficiency in all our industries. If the Chancellor really believes what he has said in such a fine rhetorical way, he should not oppose this Amendment. Hundreds of amalgamations have been achieved without raising a penny of new money.

I suggest that the House should accept this Amendment for two reasons. The first is that there is no case for preventing amalgamations under the Bill. The Bill is a Borrowing Bill, and amalgamations do not necessarily involve any borrowing. The second point, which will appeal to constitutionalists in all parts of the House, is that it is wrong that one Government Department should usurp the functions of another Government Department. Amalgamations are within the province of the President of the Board of Trade, and that right hon. Gentleman has promised us a Bill at the earliest possible opportunity; but while he is away in India, the Chancellor jumps his claim and drags this quite irrelevant issue into this Bill. I am sure that all hon. Members will feel a sense of chivalry towards the absent and affronted President of the Board of Trade. Therefore, I think we should, on this occasion, drop all party considerations and wait until the return of the right hon. and learned Gentleman, and then we may have an opportunity of seeing a Bill which has been compiled by the Board of Trade, the Department responsible for amalgamations. I do not know whether the Treasury amateurs who drafted this Bill in singularly ill-chosen language quite understand the principles at stake in this ban on amalgamations, because having to wait on the Treasury for permission to amalgamate is in effect a ban. I make an appeal to the Chancellor and to hon. Members behind him. It would be both courteous and sensible for us to wait until the President of the Board of Trade returns, at which time we can have a proper opportunity of considering this most important question of amalgamations, something that affects almost every type of industry in this country. I am sure that many hon. Members behind the Chancellor will feel that the appeal I have made in such moderate language is so compelling that they will join with me in trying to persuade the Chancellor to postpone this Clause of the Bill, or to leave it out altogether, and that would best be done by voting for our Amendment. We could then come refreshed to the task of considering the question of amalgamations when the President of the Board of Trade brings forward his Bill to implement the recommendations of the Cohen Report.

Hon. Members who took part in the proceedings in Committee on this Bill will recall that this matter was debated at some length and at the end of the discussion those of us who sat on the Opposition side of the Committee felt that we discerned some glimmerings of light in right hon. Gentlemen opposite. Particularly did we expect some hope from the words of the Solicitor-General. There was an impression on our side that the minds of Ministers were not entirely closed on the subject, and that some reconsideration was to be given to the matter between then and the Report stage. It is true that those who sat behind the Chancellor expressed their customary displeasure whenever employers were mentioned, but among Ministers there was a greater sense of reality in the matter. As my right hon. Friend the Member for Bournemouth (Mr. Bracken) has said, this Amendment is designed to exclude from the machinery of the Bill amalgamations in which no question of new money arises.

I should have thought we would have succeeded in enlisting the support of the Chancellor, if only because of his past history. Many of us had the pleasure of sitting behind him during Coalition days when, as President of the Board of Trade, the right hon. Gentleman, with great energy, pushed forward the concentration of industry. Small firms were concentrated for the purposes of war production and I have found in my visits of late that in some cases those concentrations have been found so agreeable by those who were forcibly concentrated, that there is now a desire in many areas to consummate some of these marriages. Many of these firms forcibly amalgamated by the right hon. Gentleman have found their new colleagues so congenial that they are anxious to go forward into the peacetime era as amalgamated firms. I was talking to a gentleman connected with an issuing house within the last seven days, and he told me he had at present before the Capital Issues Committee some 23 propositions of this sort for amalgamation, and that they had been for some weeks in this bottleneck by which employment suffers and exports suffer. I should have thought that for that reason the right hon. Gentleman would have taken sympathethically to our Amendment. The Chancellor has always described everything he has done as "streamlined"—an adjective we hear every time he opens his mouth, whether here or in Bishop Auckland. Surely this is a simple proposal for streamlined finance, whereby small businesses can go forward without the eternal wait while the Capital Issues Committee deal with a long queue of applications, and I should have thought that the Chancellor would have welcomed it as a method of hastening on the Government's policy of stimulating exports and full employment.

After all, this is a simple, ordinary process of reorganisation—I almost said of "rationalisation," but that word has rather gone out of favour in recent years. We used to hear a great deal about "rationalisation," but it now seems to have given way to "nationalisation," which is the latest fetish on the Benches opposite. The right hon. Gentleman did show some sympathy on this matter upstairs. I hope that he has not hardened his heart but will be prepared to give us a sympathetic reply and to accept my right hon. Friend's suggestion that this eminently reasonable Amendment should be incorporated in the Bill.

I should like in a few words to explain why I support this Amendment. I do not do so because I think that amalgamations are always good or that there should be no kind of public control over amalgamations of certain types. I do so for the very simple reason that the Bill, as it stands, gives power to block amalgamations for reasons which have nothing to do with the declared purposes of the Bill. The purposes of this Bill, so far as concerns Clause I, are clearly stated in the Memorandum which reads:

"CLAUSE I is to regulate borrowing of money and the raising of money by the issue of securities."

Paragraph 2 (c) says:

"It is the policy of His Majesty's Government to secure and maintain a proper balance between the economic resources of the community and the demands upon them."

In many cases of amalgamation, however, there is no question whatever of raising any new money, either by borrowing or by issues of securities, as defined in the terms of the memorandum. In those cases, why should this Bill give powers to examine and block amalgamation? I raised this question upstairs and the Chancellor of the Exchequer then said that he accepted the principle that if no new money was involved, this Bill was not the way to deal with amalgamation. I pressed him on whether the Government were not considering another Bill to deal with amalgamations which are undesirable from the public point of view, because they create an injurious monopoly. He replied that the President of the Board of Trade had stated that to deal with the general question of combines, trusts, amalgamations, monopolies and the like he would introduce a new Bill in Parliament—

At a later Session.

Yes, at a later Session. Surely it is quite clear from that that this Bill which, as regards Clause I, is declared to be intended to cover only the question of the regulation of new money, should not in fact include, as it does, a provision which requires those who desire amalgamation where no new money at all is involved—

We are interested in old money as well.

to submit their proposals to the Treasury, who will then look at those amalgamations—as I understand it from the provisions of this Bill—not merely with a view to discovering whether there is any new money being contemplated. They may look at the proposed amalgamation to see whether it is undesirable from the point of view of the later Bill which will deal with the question of cartels. For all I know they may look at the proposed amalgamation to see whether they do not think they have a better view than the people primarily concerned in the industry as to whether it will be a profitable and lucrative thing or not. All these things are made possible, and even suggested and encouraged by the Bill as it stands.

As I said just now, the Chancellor of the Exchequer said that he accepted the proposal that the proper way to deal with the control of amalgamations where no new money was involved was by the Bill his right hon. Friend was going to produce later. He said he would see whether he could find a form of wording, possibly for inclusion in the Order to be made under the Bill, though not in the Bill itself. I should have thought that if he could have found the proper form of wording it would have been very much better that it should be inserted in the main Bill. As the matter stands, we have no assurance that he has found that form of wording, even in the Order, and he did not encourage our hopes by adding, after he had said that he would try to find it, that this was a very tricky matter indeed.

As the matter is before us now, we must assume that the Treasury, under this Bill, is going to look at proposed amalgamations from several points of view, not only to discover whether by some subterfuge new money is to be raised—even when on the face of it there is no such money—but also to see whether they can anticipate the powers that Parliament may or may not give the President of the Board of Trade at a later date to control monopolies and cartels. This is quite a different point of view from that contemplated in the Bill. Thirdly, for all I know—and I fear it very greatly—some official of the Treasury may think he is rather more intelligent than those who are managing the firms in question, and he may consider that the proposed amalgamation will lose money for the people concerned. For all those reasons I sincerely trust that this Amendment will receive the support of the House.

The right hon. Gentleman the Member for Bournemouth (Mr. Bracken) who moved the Amendment, the hon. and gallant Member for Holderness (Lieut.- Commander Gurney Braithwaite) who supported him, and the right hon. Gentleman the Member for Oxford University (Sir A. Salter) who has just spoken, have all, quite accurately, resumed the argument as we had it in the Committee upstairs. I should like to reassure the right hon. Gentleman that my right hon. Friend the President of the Board of Trade, before leaving for his important mission in India, told me that he was fully in agreement with the Bill as drafted. It had all been concerted in good time as is the habit of His Majesty's Government. I am not opposed, and the Government are not opposed, to combinations as such. The right hon. Gentleman will recall that Karl Marx said:

"Capitalist concentration is the pathway to Socialism."

There is no reason why, taking a broad, forward-looking view, we should invariably oppose amalgamations and combinations. I said in the Committee that, in so far as control of amalgamations, combines and the like was concerned, this Bill was not the Measure in which to do it. I said that clearly, and I repeat it now. There may be a Bill, in the course of the numerous future Sessions of this Parliament, in which my right hon. and learned Friend the President of the Board of Trade will deal with these matters in a comprehensive and, I am sure, effective way. I am not at all trying to do that in advance today. All I am trying to do is to make sure that there shall not be, under the guise of an amalgamation, an uncontrolled issue of new money.

I have promised to consider very carefully how far we can make effective what is our sole interest in this matter. That interest we must still maintain, in so far as what may purport to be an amalgamation may be used as a subterfuge—I do not use the word in an offensive way—for the raising of new money. In those matters we must be on the alert. because the whole principle of the Bill is that those matters must be controlled in the national interest. We have considered the matter carefully. We have consulted many people, legal experts and others. The broad conclusion that we have reached is that it should be possible to amend the draft Order. I made it clear upstairs that I was not giving any undertaking to consider Amendments to the Bill We are not disposed to accept Amendments to the Bill. The one purpose that we have in mind can be achieved equally effectively by amendment of the draft Orders, which can be modified from time to time, subject always to Parliamentary control. As those who went through the interesting discussions in the Standing Committee upstairs will be aware, we resisted Amendments to the Bill even in cases where we were prepared to consider amendment of the Order.

In our view, this is such a case. I am prepared to amend the draft Order. I will not give a formula but I will, generally, provide that issues made for the purpose of amalgamations or absorptions, without the raising of new money, should not require Treasury consent. It must be subject to the principle that a general amalgamation between two or more concerns should result in all except one of the different bodies disappearing and there being, consequently, only one body left. Subject to that condition we are prepared to make an Amendment of the Order, designed to remove such cases from Treasury control. If there has been what purports to be an amalgamation, and two or more bodies still remain in being, there is at least the possibility that such a transaction may be used as a cloak for the raising of new money, and it would not be clear of Treasury control.

4.15 p.m.

I am genuinely endeavouring to meet the point that has been put to me. The form of words is still being worked out. I am anxious that it shall be appropriate. I hope that after the long discussions we have had and the various changes clue to discussions upstairs it will be broadly accepted. As a further sign of my desire not to obstruct genuine amalgamations. I will ask the Capital Issues Committee when they are dealing with cases which will remain under control, and where they are reasonably satisfied that no new money is involved, to pass such applications without reference to the various Government Departments, because sometimes that leads to delay. I cannot accept the Amendment on the Paper, because it proposes to amend the Bill, as distinct from amending the Order, which I have undertaken to do. In those circumstances I hope that the right hon. Gentleman will be able to withdraw the Amendment. If not, we shall appeal to the judgment of the House.

Before the Chancellor appeals to the judgment of the House—the only judgment I should think he is prepared to take because he knows that it is fixed in his favour beforehand—I should like to say that I regret that we cannot accept his offer that we should withdraw the Amendment. I agree that he has gone halfway to meet us. He will realise how difficult it is in a complicated matter of this kind to agree upon a formula or upon the right hon. Gentleman's intentions which we have just heard for the first time. I should think most of my hon. Friends would agree that it sounded as though the Chancellor of the Exchequer was trying to do what they were urging upon him in Committee. It seems to me, on a first view, that the limitation that there should be only one survivor of an amalgamation is not unjust.

It was interesting to notice how in that Committee where such a good time was had by all—I read the Debates with great care—on these Amendments the routine was exactly the same. The Financial Secretary got up and said that the Amendment was iniquitous and involved all the worst evils of capitalism. He finished by appealing for less heat. I must say that after I had read the Debate I felt that what I wanted was more light. He was followed by the Solicitor-General, who said the suggestion of my right hon. Friend was intolerable because it would appear to give people some rights in the courts, which he regarded as intolerable in the modern State. It was finally left to the right hon. Gentleman to come along at the end, to throw over his colleagues and say that, after all, there might be something in the Amendment. If the right hon. Gentleman had said that he would try to put an Amendment into the Bill in another place on our lines we should have withdrawn the Amendment.

I feel we cannot do so however in view of the challenge that the right hon. Gentleman himself has thrown down upon the principle, that is, whether important alterations and important safeguards of this kind should be included in a Bill which can only be altered through the full process of Parliament, or whether it should be left to an Order to be made by the Minister, in regard to which Parliament is, as we all know, extremely restricted. That would have been a point raised in several other Amendments in the names of my hon. Friends had they been fortunate enough to be selected by Mr. Speaker. This is, I think, the only one selected where that principle is raised and we feel that we must divide on it because we think it embodies a principle of great and growing importance.

We do not feel that on matters of great importance such as this, and one or two of the other Amendments, it is right that alterations made during the discussions on a Bill should result in no change in the Bill itself and leave it perfectly free to any successor of the right hon. Gentleman, to a less enlightened successor, to reverse the decision to which we have come as a result of frank debate in Committee or the House. Take what would happen if within the next few months or next few years, the right hon. Gentleman were replaced by either of the hon. Members who sit on his right and his left respectively and who have announced their hostility to this principle. How could we then believe that what should have been enshrined as a great safeguard in legislation, would be safe in the back rooms of the Treasury?

The right hon. Gentleman must remember that he is mortal. He is mortal in the ordinary physical sense of the word. At any moment what I might describe as a right-minded bacillus—not of course in the political sense—might bite him. But he is also mortal in the political sense, and some eager economist, of whom I see plenty on the benches behind him—[Interruption]. I do not include under the description of economist the hon. Gentleman who interrupted. I could find many nouns to describe him, but never that. Therefore we cannot depend upon such a precious but frail life, and we cannot be certain, odd as it may seem, that a successor to the right hon. Gentleman might not be worse than he is. We do not disguise the fact that the right hon. Gentleman is a bad Chancellor of the Exchequer. We do riot disguise the fact, that, as at present advised, we find it difficult to imagine a worse. But we must be prepared for all eventualities. No doubt the subjects of King Rehoboam, who were often chastised with whips, went round saying, "Well, there cannot be anybody worse than this." When King Jeroboam came along and substituted scorpions, the subjects soon found they were mistaken. We want to be protected in legislation which has the sanction of this House. We do not want to be protected merely by the word of a Minister enshrined in an Order over which, as we all know, at subsequent stages the House has very little control.

I quite agree that it it was a matter which might need alterations in small ways—not of vital importance—this is the sort of thing which might well be left to an Order, but when it is what we believe to be a fundamental safeguard of the Bill, we say that it should be enshrined in the legislation itself. By the agreement of the Chancellor and in an Order one section of technical borrowers will be removed from the operations of this Measure. The Chancellor says it is not really the sort of thing the Measure was intended to deal with and it does not seem something which either is likely to be or should be altered during the continuance of the Measure. Although we are grateful to the Chancellor that he should have tried, by the Order, to meet the point we have proposed, I shall ask my hon. Friends to divide on this Amendment in order to emphasise our contention that major matters of this kind should be included in a Bill however streamlined it may purport to be.

After listening to the right hon. Gentleman the Chancellor I feel that he has had a very difficult case to make for refusing this Amendment. He has rather toyed with us and suggested that he has given us something. If ever I thought that he and his friends on the other side of the House—and I have thought it on many occasions—controlling for control's sake, this is a perfect example. In my opinion, the Bill is the place where this point should be dealt with. It is a far-reaching principle. Government Members are going up and down the country asking people to develop their export trade and to adopt every possible measure to create employment and give activity to the country, and one of the fundamental principles in a sound business is that where it is possible for two or three or more businesses to amalgamate, it is their duty in the interests of that industry to amalgamate. This is a direct deterrent to that. I feel that the Chancellor of the Exchequer's answer is insufficient. The only thing not indefinite was "I am not going to alter the Bill." That statement in itself has convinced me that the right hon. Gentleman has a very poor case. He has put it forward as best he can, in his own charming way. I always appreciate the way he puts it across to this side of the House. Sometimes we swallow it, but I think in this case we ought not to swallow it, and for those reasons I think there is no justification for not accepting this Amendment.

I do not understand the position of the Chancellor of the Exchequer. He goes a long way towards meeting the Amendment and he says this Bill is not the place for it. He says that there will be another Bill. That is the position, and he proposes to meet the proposal of the Amendment in an Order. I should have thought that the proper way to deal with an Amendment of this importance was to put it in the Bill. The control of the House over the Bill is direct. If there is to be an Amendment, why should it not be included in the Bill instead of being left in this nebulous way to be put into an Order? Surely, on a matter of such grave importance as this, where the Chancellor agrees, the procedure would be to have the proper form of words now, to put them into the Bill, and deal with amalgamation in the Bill which the right hon. Gentleman or the President of the Board of Trade proposes to introduce at a later stage. In the circumstances, the only course open to those of us who believe that the Bill is the proper place for the Amendment, is to vote for the Amendment.

Question put, "That those words he there inserted in the Bill."

The House divided: Ayes, 131; Noes, 250.

I beg to move, in page 2, line 16, to leave out Subsection (2).

May I, for the benefit of hon. Members who were not on the Standing Committee, very briefly recapitulate the point of this Amendment? It was put down upstairs, according to a time-honoured Parliamentary tactic, not so much because we desired the deletion of the Subsection, but in order to give the right hon. Gentleman an opportunity of clarifying one or two points in the Subsection, which seemed to require elucidation. The Subsection deals specifically with unit trusts, but the Chairman of the Standing Committee allowed me to widen the discussion a little to bring in investment trusts instead of waiting until the Question "That the Clause stand part of the Bill" was put. As we have no such Motion on the Report stage, I wonder whether I might now take this opportunity of interrogating the Chancellor on this subject of investment trusts? There is a closed capital market and no money can be sent abroad. The point which I asked upstairs was a simple one, whether the investment trusts, being unable to make foreign investments—

This Clause deals only with unit trusts and I cannot see that there can be a discussion on investment trusts. We must stick to what is in the Bill.

That places me in a great difficulty because the right hon. Gentleman indicated that on the Report stage he might be able to tell us something on this matter. If that is not the case, I presume I should be out of Order in proceeding on that line. On Third Reading I might perhaps be able to make a speech of an interrogatory nature in order that some light may be thrown on the matter. On the question of unit trusts, the Chancellor satisfied us and was most forthcoming. In view of your Ruling, Mr. Speaker, I must hope to catch your eye when we reach the Third Reading and also hope that we may have a reply on that occasion. In the meantime. I wish to move the Amendment.

I beg to second the Amendment.

It is all very well for the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) to say that he is satisfied, but I cannot see how most of us can be satisfied when the Chancellor has not given the House any sort of sign of what is happening. Could we have information as to what the unit trusts really mean and what they do? Are they sufficient and adequate as a whole? I cannot be certain what the Subsection means. It contains the words:

"as if any reference to shares in a body corporate incorporated, or not incorporated,"—

What does that mean? Does it mean that we are widening the number of bodies whether incorporated or not? That is what I understand by it, but I want to be quite clear. I sometimes try to explain these matters to constituents as they are interested in such cases. Then the Subsection proceeds:

"under the law of England or Scotland were a reference to units issued under a scheme governed, or not governed, by the law of England or Scotland."

That seems to go as far as is necessary, but I want to be quite sure that these laws applying to England and Scotland also apply as far as unit trusts are concerned to Northern Ireland. I do not want it to be necessary for the Chancellor to come here later and take up the time of the House, while we try to find out whether it applies to Northern Ireland as well. I think probably Northern Ireland is covered, and if the Chancellor can give that information I shall be quite satisfied and hope that in due course the Amendment will be withdrawn. I want a definite verbal answer on Northern Ireland, and on the previous point I raised, because this is a complicated Subsection. I am very glad we have had a chance of considering this on the Floor of the House as well as in Committee upstairs, because these matters of loans and unit trusts are matters of vital importance to the business community of the whole country. It is essential that we should be able to deal with them in such a way as to get the widest possible amount of investment for development purposes.

As the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) found that the point he desired to raise is out of Order, it is rather difficult for me to reply and I have no doubt that I should be ruled out of Order if I attempted to answer him. I was very ready to do so had that been possible. Most of the other points raised on this Amendment were dealt with in Committee and can hardly be said to need repetition here I would however tell the hon. Member for Torquay (Mr. C. Williams) that this Bill does not apply to Northern Ireland. If he turns to Clause 6 he will find that Northern Ireland is expressly taken out, but that Subsection (2) of that Clause provides that:

"the Parliament of Northern Ireland has power to make laws for purposes similar to the purposes of any of the provisions "

contained in this Bill.

I can see that as far as Clause 6 is concerned, but I want to be absolutely certain, from a legal point of view, that Northern Ireland is covered here. What happens to a trust of this sort which is partly in Northern Ireland and partly in this country?

It will all depend on where the trust is domiciled. If it is an English trust, it will be domiciled here and will come under this Bill when it becomes an Act. If it is an Irish company domiciled in Northern Ireland it is outside the scope of the provisions of this legislation until Northern Ireland follows suit and promotes a similar Bill. So far as I know, and I speak under correction, in this country the volume of unit trusts run to something like £3 million. We shall however try to find out the exact amount and let the hon. Member know.

I thank the hon. Member, and am sorry for having caught him like that. Could he not only let me know, but let the House know on the Third Reading, or shall I put a Question down?

Perhaps the hon. Gentleman will put down a Question, and we will do our best to answer it.

I am sorry if the question was answered in Committee, but even so I think we in the House are entitled to ask for an explanation of the reference to units issued under a scheme not governed by the laws of England or Scotland. Could the Financial Secretary say precisely what form of scheme it is to which this paragraph is to apply?

They would be units in a unit trust which has been set up overseas. That is one of the reasons why we want this Subsection in the Bill, because unless it is there it would be perfectly proper for the units in an overseas unit trust to be offered for subscription in this country. It is our view that they too should come under control, in the same way as other forms of financial operations are to be controlled. It is for that reason we desire this provision in the Bill, and that explains the reference to which the right hon. Gentleman has alluded. Therefore, we must resist this Amendment. This provision must remain. It would be unfair to other forms of borrowing if unit trusts were not controlled with the rest. With that explanation I hope that the House will now be willing to proceed to the next Amendment.

The Financial Secretary said that the unit trust movement involved approximately £3 million. I would like him to look at that point, because it is my view that the figure is much higher than that. If the Financial Secretary carries out his undertaking 2nd lets us know the full amount, he will find he is very wide of the mark in that respect.

Someone whispered to me that they thought the figure was of that nature. On reflection, however, it is obvious that it is probably a great deal more. It is possibly £100,000,000, and may indeed be a good deal more than that. If hon. Gentlemen opposite are interested in the point, and one of them cares to put down a Question, we will do our best to discover what the real figure is, and give a reply.

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

I beg to move, in page 4, line 26, to leave out paragraph (a).

The purpose of this Amendment is to draw attention to a point which was not ventilated in the sixth day's proceeding in Standing Committee that this particular definition of borrowing is unworkable. At the top end it is unworkable for big companies who have large indebtedness in the ordinary course of business, and at the bottom end, since there is no downward limit to the £50,000, it covers even the smallest indebtedness which is incurred. That is to say, if anybody with a gas supply pays for the gas consumption at a later date by an arrangement with the gas company, they are borrowing under the provisions of Clause 4 (2, a). That seems to me to be an undue intrusion on people whom it is not desired to bring within the scope of this Bill. Again, if it is argued that the lowliest homes in this country have a slot meter, and do not in point of fact make arrangements for the later payment of their debt for gas, then I would answer that a very large percentage of those people are speculators in football pools or in some other form of credit betting. In fact, if they want to bet legally they may not have the bit of fun they desire unless they do it by credit, and in doing it by credit, they are compelled to violate this particular paragraph. The definition which the Chancellor has chosen here could surely be improved so as not to include this very worthy class of people, whom I am sure it is the intention of no one to bring within the scope of this Bill.

Having looked at the bottom end, that is to say, at the people who owe sixpence, because it must be remembered that the £50,000 limit is in the Order, not in the Bill, let us now turn to the top limit— the companies in this country which incur indebtedness in the ordinary course of their business. I do not need to go right to the top, to businesses such as the Imperial Tobacco Company, which I see states in its latest balance sheet that it has borrowed, in the sense that this Bill makes it the case that it has borrowed, over 20 million pounds. As I say, I do not need to go as high as that for an illustration. In fact, if there is a company which requires only £4,000 of indebtedness for the ordinary conduct of its business and if it revolves that sum on slightly less than a two monthly credit basis, it will in the 12 months exceed the £50,000 of the present Order. This definition of borrowing in terms of indebtedness leads to quite an unworkable state of affairs, so that a company has to make sure that nobody orders anything on credit, because that may be contravening an Act of Parliament, and it is rightly the desire of everyone that they should not, even unknowingly, through the action of some minor agent, contravene such a Measure as this. So on two counts this particular definition of borrowing rules itself out of court for acceptance by this House. In the first place it brings into the scope of this Bill an enormous number of the population; in fact, one may safely say the whole of the population, because who of us, counting football pools, and turning on electric light or gas, can go through life without incurring some indebtedness of this kind? Secondly, it makes the ordinary day to day conduct of any business, even on a minor scale, unworkable because of its all embracing effect. I ask the Chancellor to think again and to find some definition between now and the next stage of the Bill, which will meet these two very strong points.

I beg to second the Amendment.

On a point of Order. Might I ask, Mr. Speaker, if it is your intention to call the next Amendment, or whether this Amendment covers the whole of the paragraph, because if you think it desirable to do so, it might be possible to protect the next. Amendment, which stands in the name of my hon. Friend the Member for Sutton Coldfield (Sir J. Mellor) in page 4, line 3o, after " property," insert

"not being goods sold by a person in the ordinary course of his business"

I am obliged to the hon. Gentleman. The Question I shall put will be, "That the words proposed to be left out, to the word is ' in line 30, stand part of the Bill," in order to save the next Amendment.

I agree with all my hon. Friend the Member for Bath (Mr. Pitman) has said, but I venture to put the case on a little broader basis, because I have puzzled a good deal over this particular paragraph. I am bound to say that the two halves of it do not seem to hang together very well. I hope the Solicitor-General will be able to tell us what it really means. I am in very considerable doubt. I will explain why. In the first three lines it says:

"…includes a reference to the making of any arrangement by which a sum which would otherwise be payable at any date is payable at a later date…"

I stop there. That seems to contemplate a case where there is a contract to pay money at a particular time and subsequent to that a second contract is made postponing the payment. The second half of the paragraph completely contradicts that interpretation. It is much wider. I ask the Solicitor-General whether he will consider dropping or considerably amending this matter. I do not quite appreciate the point of the Amendment which stands in the name of the Chancellor but I do not think it touches this. We now come to the second part, which says:

"…and includes in particular the making of any arrangement by which the whole or any part of the price of any property is allowed to remain unpaid…"

That includes every credit purchase. If I go into a shop and I say to the shopkeeper that there is no question of a cash transaction and that I will either buy on credit or not at all, and the shopkeeper says, "Very well, I will allow you to pay on a month's or a three months' credit," that is making an arrangement by which the whole of the price is allowed to remain unpaid for a fixed period. It goes further than that. If I go into a shop and simply ask them to put down the purchase in an account because I have not got the money in my pocket, that again is making an arrangement by which payment is postponed for an indefinite period. Therefore, every credit purchase in a shop, or a purchase made by a merchant from another merchant or manufacturer, every credit purchase in the country of any goods is covered by the second half of the definition. That completely contradicts the first half because the first half refers to an arrangement by which a sum which would otherwise be payable at one date is payable at a later date. The first half contemplates that there is a sum of money payable at one date and an arrangement is made altering that date. The two things cannot hang together.

I do not object so much to the first one. Although I think it is objectionable in principle, it is intelligible. It says that nobody who has arranged to pay at a particular date shall make an arrangement to pay at a later date without permission. It seems an unnecessary kind of control. The second, however, is not intelligible. Suppose I already owe up to the limit allowed by the Order which is to follow this Bill. Am I not to be allowed to go into any shop to buy even my groceries without going to the Treasury and saying, "Please can I buy these groceries on credit because it does not suit me to carry the money around and pay for them?" It really is ludicrous. The point might not arise on a question of a few shillings, but it does arise on a question of a few pounds. I say this with- out fear of challenge by the Solicitor-General. I commit an offence under the second part of this paragraph if, being within, say, £100 of my permitted limit for the year, I go into a shop and order £150 worth of goods on credit. I do not think the Solicitor-General can deny that. If that is what it means, then it is extremely objectionable. It is wholly unnecessary for the purpose which the Government have in mind. If that is not what it means, and if all the Solicitor-General wants is to prohibit the making of an arrangement to pay a particular credit and following up with an arrangement postponing that payment, that is a much narrower field. The Solicitor-General will not achieve his object in that way.

Let us consider what is going to happen. If I have arranged to pay money on a particular day, and it does not suit me to pay on that day, I say, "I must not make an arrangement to postpone. That will not do. That will get me into trouble." I must not make a contract by which the other party to the bargain is precluded from suing me. I can tell him I am not going to pay and, of course, he will not sue me because he knows I am an honest man and that I will pay sooner or later. Therefore, all I have to do is to tell him I am not going to pay on the date arranged, but I will pay after three months. That is not an arrangement. He has not accepted it. Therefore, I can do that and escape the control quite easily. I suggest the whole of this paragraph is unnecessary and unworkable. If the Government try to apply it literally, it is going to rope in cases which the Government never contemplated. It is so easy to drive a coach and horses through it, if one wants to, that it is absurd to put it into the Bill. It is impossible to make it an offence not to pay. The logical result of this line of thought is that if anybody does not pay the money on the day he ought to do, no matter what the reason for abstaining may be, he commits an offence. Of course, the Government cannot make it a criminal offence not to pay money. The man may not have it. This draws the absurd distinction between the man who arranges postponement of payment and the man who merely intimates "I am not going to pay now, out I will pay you on such and such a date." That is an absurd distinction. I hope that the Solicitor-General will think again about this matter. First, let us bring the two halves of it into line. Let us understand which of the two positions I have described he really means. I hope the Solicitor-General will answer that question and, having answered it, bring the offending half into line with the other one. Even if he does that, I ask him to think again because this goes much too far. Whether it is good or bad in principle, it is only asking people to devise means of evasion, which is an easy task. What will happen will be what always happens. The honest man who blunders into making an arrangement will be caught, out the man who is a little bit more wily and takes the trouble to read the Act before he does anything, easily finds a way through it and is not caught. Whatever may be the view of the Government, surely they do not want to put a premium on wiliness. That is what this is doing.

The answer both to the hon. Gentleman the Member for Bath (Mr. Pitman) and the right hon. and learned Gentleman the Member for Hillhead (Mr. J. S. C. Reid) is to be found in the terms of the Order.

How can one interpret a Bill in the terms of an Order? Let us assume that the Order passes through this House. No court can interpret a Bill in the terms of an Order. An Order is interpreted in terms of a Bill but not vice versa.

The right hon. and learned Gentleman allowed me to get on to my feet, and as soon as I got on to my feet he seemingly pushed me back. I hope he will give me a little more chance. What I was saying was that the answer is in the Order. Clause I of the Bill purports to control all borrowing from a farthing upwards. If hon. Members will look at the Order they will find that borrowing up to £50,000 is excluded. Similarly, if hon. Members will look at Clause 4, (2, a) they will find that that has been further defined in the Order. The Clause in the Bill is simply a general enabling Clause.

Will the right hon. and learned Gentleman give the reference in the Order?

The reference in the draft Order is, to be found on page 7, in paragraph II, sub-paragraph (2):

(2) Any reference in this Order to the borrowing, of money includes a reference to the making of any arrangement by which the whole or any part of the price of any property, not being goods sold by a person in the ordinary course of his business, is allowed to remain unpaid either for a fixed period or indefinitely but charged on the property, but does not include a reference—

(a) to the making of any other arrangement by which a sum which would otherwise be payable at any date is payable at a later date;

We have the general wide Clause in the Bill, and, when we come to look at the draft Order, the Order shows how the Clause is to be used and applied. We find that it would only apply to a very limited class of arrangement, and transactions in the ordinary course of business are excluded even from that limited class, so that the net result is that the only types of arrangement that will be dealt with when the Order has come into force are those limited types which are described in paragraph II (2).

Then why does not the hon. and learned Gentleman put it into the Bill?

For the very simple reason, which was stated over and over again in Committee, that we want to keep the thing flexible. [Laughter.] It is all very well for hon. Members to laugh, but the argument was presented many times and considered by the Committee many times, and hon. Members were obviously prepared to accept it. As we said at the time, the object of the Bill is that it should be flexible, and that is why we keep this subordinate provision for the Order, so that we can alter the Order should it become necessary to do without having to come to the House and except by the terms of the negative Resolution procedure, go through all the stages necessary to pass a new Bill.

Will the hon. and learned Gentleman answer a question? Would I be right in assuming that it is open to the Treasury at any time to amend this Order, for instance, by reducing £50,000 to 5s., if they want to do so, and, in that case, that the whole of the Solicitor-General's argument would fall to the ground?

Most unfortunately, the hon. and learned Member is not acquainted with the very prolonged discussion in Committee, when repeated assurances were given that the Bill, when it becomes an Act, is only to be used to affect substantial transactions. The right hon. Member for the City of London (Mr. Assheton) pressed my right hon. Friend to insert in the Bill some limit, and that, again, was very fully and amply discussed. It was pointed out and generally accepted that it was difficult, impracticable and undesirable to fetter the Government and the Treasury by putting in a fixed figure, but a definite assurance was given during the course of the Second Reading Debate by my right hon. Friend—and he is prepared to repeat it now and authorises me to repeat it—that this Bill is only meant for substantial transactions.

It does not say so in the Bill.

No, of course not, but, in the Order, it makes it perfectly apparent that that was the intention of the Government. The draft Order was published at the same time as the White Paper, and it makes plain that the intention of the Bill is to deal with nothing but substantial transactions and that it excludes transactions not in excess of £50,000. The answer to the hon. Member for Bath is that, as the hon. Member knows perfectly well, the type of small scale transaction to which he referred, not being within the terms of the draft Order, will not be in the least affected by this control of borrowing.

Before the hon. and learned Gentleman departs from this point, will he answer this question? Supposing I have already borrowed £49,900 and that my next transaction is one for £150; or, even more narrowly, supposing I have borrowed already £49,995 and my next transaction is for £10, is there anything in the draft Order which excludes that final if 0 from its scope, because that will be the one which creates the offence, as it is unsubstantial?

The Order provides for this. If a person borrows £50,000 on 1st January and repays £25,000 on 1st July, he is free again to borrow to the extent of £25,000. I hope that answers the question. [HON. MEMBERS: "No, no."] That was the question that was asked, and that is as the Order is framed.

I do not like interrupting again, but, apparently, I have not made myself clear. Will the Solicitor-General consider this simple question? I have already outstanding to date £49,995, and I have not broken the law. I then indulge in a transaction which does come within the terms of the Order for a further £10. That brings my indebtedness in a year to £50,005. The Solicitor-General has said that he does not want the Order to affect small transactions. I put it to him that, in the circumstances I have described, to enter into that final transaction of £10 is an offence under the terms, not only of the Bill, but also of the Order.

Unless the hon. and learned Gentleman has Treasury permission, which will be granted readily in appropriate cases. That is the answer to that.

May I ask a question? I was a little puzzled when the Solicitor-General gave the illustration that one could borrow on 1st January and repay an amount on 1st July, and would then be able to reborrow in the course of the same year. Would the Solicitor-General explain how that happens? According to my reading of the Bill, which is not as learned as that of the hon. and learned Gentleman, it is the amount of the transaction which, if it exceeds £50,000 in one year, creates the offence.

If the right hon. Gentleman looks at the provisions of paragraph 8 (1), he will find:

"any transaction mentioned in that provision if the amount involved in the transaction together with the amount involved in any previous transaction by the same person in the previous twelve months (being a transaction to which any of the said provisions applied or would have applied if this Order had then been in force) does not exceed fifty thousand pounds."

If one repays £25,000, the amount involved is £25,000, and one can reborrow £25,000. [HON. MEMBERS: "No, no."] I am sorry, and I do not want to deal with hon. Members discourteously, though I can see the point. There it is in the Order, and the Order will have to be construed in that intention. I will not give any undertaking at the moment, but that is the intention and that is the part of the Order that deals with it. The more substantial argument was put by the right hon. and learned Gentleman the Member for Hillhead (Mr. Reid), who asked about the case of a man who had borrowed up to within £5 of the limit and had then borrowed an extra £10 so that he was £5 over the limit. As the right hon. and learned Gentleman will have observed from the draft Order, it would not apply to transactions in the ordinary course of business. I do not know what sort of case he is instancing, but, in the sort of case he has described—the normal undertaking of some particular business enterprise—one does not ordinarily borrow or have a transaction for £10, in addition to one for £49,995, unless you do so in the course of some regular business, and that course of business is excluded from the terms of the Bill.

Suppose I am stranded away from home and borrow £10 from a friend to pay for my railway ticket. Surely, that is a reasonable thing to do, but, surely, it is also an offence?

My answer is that ordinary transactions are excluded. There is a limit of £50,000, and, if a person wants to exceed that limit, he must get Treasury permission. That will, in point of fact, work equitably, and the purpose and policy of the Government are to see that control does not, in so far as it can possibly be avoided, interfere with the processes of legitimate business. That has been said again and again. But some limit has to be put somewhere. That is where the limit has been put and it is deliberately designed to operate the Measure in such a way that there shall be the minimum delay and interference with proper business transactions which are in the general interests of the community. As I was saying some time ago to the hon. Member for Bath (Mr. Pitman), small transactions such as he described are within the limit. If anyone wishes to exceed the limit, permission has to be asked, and there is no reason why it should not be asked.

The Solicitor-General has said that I ought to understand this. I do understand it, but the difficulty is that his whole point is that he wishes to keep this flexible. He refused upstairs to limit himself to £50,000 or to £10,000. He says: "I want the sum to be flexible; I might want to lower the figure however low it might be in the Bill." If, then, I say to him that he will be bringing small borrowers under the Bill because of the flexibility in the definition of what is to be regarded as borrowing, he says he wants to keep the flexibility there too.

There is another point. The hon. and learned Gentleman says it is a question of goods supplied in the ordinary course of business. There are many other things besides goods; there is what one may owe to the railway company for transport. I would not be surprised to find that I.C.I. or the Imperial Tobacco Company have indebtedness to a railway company for services rendered far in excess of even £50,000. Again, suppose I write a letter on behalf of a firm to the Inspector of Taxes and say that I am very sorry but my accountant has got 'flu and cannot complete the computation to date, and ask whether it would be in order if, instead of paying on 1st January, I paid a little later, I shall then have made an arrangement for the deferment of payment. Would that money be due for goods or services?

I will not ask the permission of the House to speak again because I thought what the hon. Member for Bath has said was intended only as an intervention, although rather a long one. May I say for the last time, in the hope that I may persuade the hon. Gentleman that I mean it, that we want to make the thing flexible? Not only does this particular provision about postponement of payment operate down to nil, but so, also, does the provision of the Bill which deals with borrowing. It starts from nil. In the draft Order, exemption is given up to £50,000. In cases above £50,000 Treasury permission has to be obtained. It is fantastic to instance and imagine cases where a person borrows the limit and then jumps above it. If that happened, Treasury permission would have to be obtained.

I should like to address myself to what the right hon. and learned Member for Hillhead said on the actual form of the Clause. The second part is not in the least inconsistent with the first. The first part is obviously necessary because if one person owes another money and they come to an arrangement that it should be repaid at a later date than was originally agreed upon, that is obviously the same as borrowing fresh money. The second part of the Clause is complementary to the first. Suppose a person buys property—I am sure the right hon. and learned Gentleman will agree with me in this—and nothing is said about the purchase price; he undertakes to pay within a reasonable time. This part of the Clause simply makes it clear, in a transaction of that kind, if, instead of paying within a reasonable time, an arrangement is come to whereby it is repaid substantially later, that it comes within the Clause, and the second part is put in, so as to put that beyond doubt. It is necessary to have this Clause; otherwise abuses might be possible, not abuses of the type mentioned by the right hon. and learned Gentleman, not tacit permission to pay the money at a later date, but definite arrangements whereby assignment of debts would bring about a state in which as much benefit would be obtained as if money were borrowed. Therefore, it is essential to have that in the Bill.

rose——

I cannot give way again; I have sat down many times already. My answer to the right hon. and learned Gentleman is that the thing is perfectly coherent as it stands. It does not require any alteration. If exemption is wanted, it is provided for in the draft Order. I have availed myself of a very necessary word in connection with this Bill—"flexible"—in order that it may be kept flexible.

Before the hon. and learned Gentleman sits down, I would like to ask him one question in regard to drafting. He rather indicated that the two halves of this Clause are not intended to be aspects of the same thing. Will he look at the words "includes in particular." Those words necessarily mean that that which follows is comprehended already within the scope of that which precedes it. I have tried to point out to the hon. and learned Gentleman that the second part goes far beyond the first part, and that therefore the words "include in particular" are wholly inappropriate. I hope he will look at the matter again.

I am sorry I cannot undertake to look at it again. It is perfectly clear. The words are put in to make sure that there is no doubt about it, but, even if they were not there, it is implied that payment should be made within a reasonable time of the purchase, and any arrangement whereby payment is made at a later time, would clearly come within the first part of the Clause, even if the latter part were not there.

It was very difficult, to start with, to understand this Subsection. Since the Solicitor-General has spoken it is even more difficult to understand what is in the mind of the Government in regard to this Clause. First, the Solicitor-General says that £50,000 can be borrowed, that £25,000 can be repaid and then, at a later date, another £50,000 can be borrowed. As far as I can see from the Order, the maximum allowed for a given 12 months is £50,000, and a person cannot be repaying and borrowing back and then again repaying. The whole of the transactions when added up must come within the figure of £50,000. There is certainly no clarity in what the hon. and learned Gentleman has said about it.

The next thing that worries me is the arrangement to delay payment. If, for instance, I make an arrangement to build a ship costing between £200,000 and £300,000, sums of £50,000 may well be involved. I may undertake to pay a certain liability in respect of that ship on a certain date, and then find that I cannot do so. Have I to obtain the sanction of the Treasury in order to make an arrangement with my creditors to pay that £50,000 at a later date? If that is what is meant by this Subsection, then it is striking at the very heart of industry and trade in this country.

Endless damage will be caused by the delay and uncertainty to these industrialists who will have to undertake these liabilities. The I.C.I. has been mentioned with regard to services in the shape of railway services. It is a feasible suggestion that some of the larger industries in this country will be involved for services up to a £50,000 liability, and they will want to make an arrangement to delay that liability because they cannot meet it. Anybody who has had any experience of the cash position of businesses during the war will know that it was exceedingly prevalent for business people who found that they could not make a certain payment on a given date to go to the creditor and make an arrangement. With liabilities, Excess Profits Tax, and so on, the position got tighter and tighter, and often those payments had to be delayed and arrangements made accordingly.

This Clause is far from explicit. If we read it in conjunction with the Order, it makes the position farcical. My view is that the Bill should be clear in itself, it should be capable of no two interpretations and it should clearly set out what is covered and what is not covered. It is no answer for the hon. and learned Gentleman to say "You have the Order; it is in the Order and, therefore, you must understand what the Bill means." The Bill is the right place for an explanation of this matter; I beg the right hon. Gentleman the Chancellor to think again and to see whether he cannot accept this Amendment and give us some clear explanation of what it really means. The explanation is unsatisfactory; there is no question but that we shall hear comments in the courts when cases have to be tried; judges will be perplexed about what this House really did mean in this legislation. Therefore, I support the Amendment.

The hon. and learned Gentleman the Solicitor-General has been so flexible in this matter as to bring this Bill near to breaking point. When we ask for information on what the Bill is intended to achieve, we are told "The matter you are referring to is not in the Bill at all," and we are told to look at the Order. That is not the way to legislate. When an Act of Parliament is passed, we should state in the Act what we want to legislate for, instead of saying "You may rest assured that there will be an Order and all will be right." As a matter of fact, we do not even know that the Order is compulsory; there is nothing in the Bill which makes it so. It is essential to follow the logical consequence of this state of affairs. I accept the view that the Government have every intention of bringing in an Order in the form of the draft, but there is no requirement or compulsion on them or on any subsequent Government to do so. The right hon. Gentleman might lay this Order on the Table, and before it becomes effective, a situation might arise in which he wanted to deal with a matter differently. He could then lay an entirely different Order on the Table, and the effect of that would be to alter the Act in its entirety. We would not have the same Act at all. By laying another Order on the Table one would achieve an entirely different Act of Parliament. That is not the way in which it is customary to undertake legislation.

Since we have been driven to refer to this draft Order, may I point out that when the hon. and learned Gentleman the Solictor-General was asked about the transactions amounting to £50,000, he said that it £25,000 of a £50,000 borrowing were repaid, a subsequent £25,000 would not go beyond the amount? That really cannot be so. I ask the hon. and learned Gentleman to look at the draft Order. It says:

"In this Article, the expression 'the amount involved' means—

(a) in relation to the borrowing or raising of money, the amount of money to be borrowed or raised."

The expression there defined, "the amount involved", is used in Article 8, paragraph (1). The position is that if one borrows £50,000, repays £25,000 and then borrows another £25,000, the amount involved is £75,000, by the right hon. Gentleman's own definition, and it has, therefore, gone beyond the £50,000. When a serious point such as this is raised, it is unsatisfactory that the hon. and learned Gentleman should give such a ridiculous answer. It is clear from the definition Clause that it can only have the consequence which I have stated. It may be—and I understand the difficulty of the learned Solicitor-General—that the right hon. Gentleman the Chancellor of the Exchequer intends it to have that effect. I believe he intends the limit to be £50,000, and I think there is no intention that a transaction such as the learned Solicitor-General has referred to is, in fact, contemplated. As the Articles stand at the moment, the limitation is £50,000 and cannot be exceeded. I ask the right hon. Gentleman to look into that definition again, because if he does mean to arrive at what the learned Solicitor-General stated it will have to be differently worded.

If it will help, I will undertake to take further legal opinion on whether the words mean that which we intend them to mean, as has been clearly explained by my hon. and learned Friend. If the legal opinion is that the draft Order should be further amended, that shall be done. I have clearly stated the intention, and by taking the best advice we can we shall make sure that the intention is conveyed by the words of the Order which, if necessary, we will amend.

We are grateful to the Chancellor for his brief intervention. If I may say so, his temporary absence had some unhappy consequences. He has just told us that his hon. and learned Friend gave us a clear explanation. I cannot believe that he would have subscribed to that opinion had he been with us, because I must say that the Solicitor-General created the maximum of confusion in the minimum of time.

The hon. and gallant Gentleman is easily confused.

Perhaps the hon. Gentleman understood the hon. and learned Gentleman's speech?

I understood it quite well.

If the hon. Gentleman wishes to intervene I will give way.

I would point out to the hon. and gallant Gentleman that the Chair indicates who is to speak. The hon. Member has not been called by the Chair.

Perhaps I may content myself by hoping that the hon. Member for Rossendale (Mr. Walker) will have the good fortune to catch your eye and enlighten the House in this matter. So far as I can see, only two points have emerged from the Solicitor-General's speech. The first is that he is rigid for flexibility, and the second that he is determined by every means in his power to by-pass the House of Commons in this matter. If ever an example of the danger of this form of legislation were needed, we have had it today. This shows the unsatisfactory consequences of producing a flexible, streamlined Bill and relying upon an Order. When we ask in polite language for explanations, all we are told is "All will be well; the Order will be drafted, it is in competent hands, and the House of Commons might just as well go home and give the Solicitor-General an opportunity of confusing some other people elsewhere."

The line taken by the Government this afternoon has not been quite the same as the line taken in Committee. I listened with great interest to the hon. and learned Gentleman, and there was one argument which he did not adduce today, which was adduced by his right hon. Friend upstairs. I can only believe that we must have made some impression by what we said there, because we were told upstairs that this, after all, was merely a continuation of what had been going on for seven years—nothing new; this was really Defence Regulation procedure. The Chancellor of the Exchequer said:

"There is nothing novel in this. For the last seven years provision substantially equivalent to this has been provided under the Defence Regulations. It is a matter for debate whether it ought to continue, but it is not a matter for debate whether it is new. . . . It is a continuation in substantially identical terms of one of the control systems which the Gentlemen who preceded me at the Treasury in the days of the Coalition and Conservative Governments imposed."

That is what he said then, but today that argument has not been submitted. It is said that it is presented on its own merits, which means, if it means anything, that the Socialist Government are now definitely determined to govern this country in time of peace by the regimentation methods imposed by the necessity of war. The hon. and learned Gentleman at least succeeded in conveying that impression across the Floor. Upstairs, the Chancellor did say something rather similar to what he has just said. I was hoping it would come from his hon. and learned Friend while the Chancellor was refreshing himself, but it did not. Upstairs the Chancellor said:

"In the light of the discussion I shall be very glad to look once again at the terms of the draft Order before we finally make it. I repeat an offer I have made before. If any Member of the Committee can suggest a form of words for embodying in the Order I shall be happy to see him; and I will look at the form of words and make use of the cooperation offered."

Then he leant for some comfort on the right hon. Gentleman the Senior Burgess for Oxford University (Sir A Salter), hoping that he would succeed where the Government had failed in bringing some coherence into their desires. He appealed to the Senior Burgess for Oxford Univer- sity to let him have some form of words which he thought would make this more clear. On that occasion we also raised the question of the large transactions. Here I would invite the close attention of the learned Solicitor-General. I assure him I shall not ask him to give another explanation. May we be spared that. I call his attention to the fact that in his speech he repeated, two or three times, that the Government are after the large transactions; they are not interested in the small transactions. This procedure is to cover the large transactions, and there must be flexibility. Upstairs the right hon. Gentleman the Member for the City of London (Mr. Assheton), who unhappily cannot be with us today, gave this example:

"In the case of a big firm with a debenture of some millions maturing in three or four years, they would want to plan now for future development. If they can look forward to being able to exercise judgment when the time comes in the normal way, they can plan ahead. If they find the Treasury does not agree with their judgment, their plans will fall down."—[OFFICIAL REPORT, Standing Committee E, 12th March, 1946; c. 215, 217.]

My right hon. Friend then went on to say that the telegraphic address of the Exchequer ought to be "Uncertainty, Whitehall." It is important that, when huge liabilities are to mature in three or four years' time, plans should be laid ahead. That is one of our fundamental objections to this Subsection. With all the goodwill in the world I repeat—though I am sure the Chancellor will do his best—that here we have a fundamental cleavage. We feel this is a matter which ought to be in the Statute in the plainest possible language, which no court of law could have any difficulty in interpreting.

The House is all agog and expectant, awaiting the intervention of the hon. Gentleman the Member for Rossendale (Mr. Walker), who will clear up for us any uncertainty left by the learned Solicitor-General. How fortunate are the members of the general public who have obtained admission to the Public Gallery today. Some hon. Members who may have been tempted to go out for a cup of tea will remain rooted to their seats, spellbound, listening to this remarkable exposition.

That would be out of Order. There is nothing about that in the Bill.

I would point out that it may be in the draft Order.

A discussion upon the draft Order would be out of Order.

I was expressing the hope that subsequent speakers on the benches opposite might be able to clarify a matter which was causing doubt and uncertainty, and that one hon. Member in particular might have the good fortune to catch your eye, Mr. Deputy-Speaker.

I feel rather differently from the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite), in that I think the learned Solicitor-General made the position of the Government fairly clear. I would like to know if I have got it absolutely right. I think I have. They want to have the greatest power to change and move about, according to the circumstances at the time. That is an understandable position. At the same time, according to the learned Solicitor-General, they want to name a substantial sum. There again, that is an understandable position, and only reasonable. What they do not want to do under any circumstances is to either put a substantial sum or to secure elasticity in the Bill itself. As far as I can see it, that is the whole complaint against this particular Subsection. When they were upstairs, with the idea that we should have a substantial sum and also have it elastic, the Government arrived at the position in which they had to name some sum, more or less to get regularity, and the sum of £50,000 was named. We now, I understand, have an Order which lays down that sum of money.

Added to that provision of that Order we had an assurance from the Chancellor just now that it was his good intention—and I believe it is his intention—to be reasonable, or something of that sort, in the matter. The fact remains that this has to operate for some while. There is nothing whatever to prevent the Government withdrawing the Order. The Chancellor might be perfectly justified in saying later, "The main appeal was to have the matter elastic. This Order does not suit. This sum is out of date. We must have a new Order at once," and the whole of his very good intentions go. The whole thing is based on his assurances, either here or upstairs. I have often heard it said by hon. Members on all sides of the House that if there is legislation of this sort which is contested in the courts, the assurance of a Minister given in the House of Commons as to what is a point of law is almost, if not completely, valueless. That is casting no reflection upon the Chancellor. I would not dream of doing that. We are now in the position whereby we may have an Order, which is only provisional at the moment but which may easily be changed, and which the Chancellor may be obliged to change at a very early date. When making a law we should try to get something definite which an ordinary businessman can understand.

The very astute brain of my right hon. and learned Friend the Member for Hill-head (Mr. Reid) devised a series of conundrums which defeated the learned Solicitor-General for a very long while, if not permanently. We do not want to lay down a law which is quite indecisive, and which will result in endless law cases on the subject. We want to get into the Bill a definite sum, with definite purposes named. I maintain it would have been easy for the Chancellor to do that if he had only made up his mind a little earlier. I would like to add my voice to those of several other hon. and right hon. Gentlemen in protest against this habit of issuing Orders which are often obscure and are hardly ever known to the wider public, instead of allowing the matter to be threshed out in the House and laid down in a permanent and definite form in the law, so that the ordinary person in business knows what the position it. The businessman would not then have to look every day to see whether some new Order has been made changing the whole purpose of this Subsection. Unless the Chancellor can give us an assurance that this matter will be put right in another place, and a genuine figure inserted, so that ordinary people may know the law, I hope the House will vote against this Subsection, which is far too vague to be of any value.

I would like to address a few remarks to the House on the word "flexibility." It is apparent that Clause 4 (2a) as it stands is, in the view of the Government, too wide. That is abundantly clear, because an examination of the draft Order shows that it has been narrowed down by Article 11 (2), which is apparently produced by the learned Solicitor-General as a singular and admirable instance of what can be done on second thoughts. Indeed, looking at Article 11 (2) one asks, how on earth can it be said that it is likely to turn out to be wrong? How is it conceivably possible that the Government would ever want to go back on Article 11 (2)? The hon. Member for Torquay (Mr. C. Williams), who is not, so far as I know, a lawyer, spoke convincingly about the nuisance of this perpetual spate of Orders. The House should look at this little manual that I have in my hand. It has 2,946 pages. A hundred years ago, in the time of our grandfathers and great-grandfathers, it started with 142 pages. We have now let it grow to this monstrous size. It is Stone's "Justices Manual." Neither we on this side nor hon. Members on the other side are responsible for what other Parliaments have done, but today it is even worse. They have been having perpetual choirboys' feasts year after year, rioting with a mass of all sorts and kinds of Orders, when with a little care, it would not have been necessary to have these things.

If I am right in saying that Article 11 (2) cannot be wrong, why was it not inserted in the Bill? The answer is a parrot-like cry from the Solicitor-General, who does not seem able to think of anything else. He is tied to the word "flexibility," which sounds very attractive but in fact is fantastic. Instead of murmuring to his supporters and to us on this side of the House that they have not got this thing quite right—which would be the truth—why does he not say what in fact he wants to say, namely, that they want to have an enormously wide Clause because they think it is necessary to be flexible? Why is it so? What is at the back of the mind of the Chancellor or of the Solicitor-General, or anybody in the Government so far as that goes? If there is a possible loophole let us block it up. Here is a fantastic Bill in which, in connection with a matter which is always held out to this House as of the first importance, a fiddling little punishment of three months' imprisonment is provided. It is fantastically inadequate if it is as important as the Chancellor is perpetually telling the House. But instead of making the Bill watertight and putting things in proper order, Article 11 (2) is produced, and we are told "We think it is right."

It is obvious that Article 11 (2) is perfectly right, and not one single reason, apart from the word "flexibility," is advanced to show why at some future time a new Article 11 (2) may be introduced. Who suggests that that Article may be wrong, and why was it not included in the Bill? Would it not have been more useful, instead of producing the draft Order, to have told us that they agreed that Clause 4 (2) (a) was fantastically wide, as has been pointed out again and again? What we have here is an outstanding example of rushed legislation. If the draft Order had been thought out at the time the Bill was drafted, Article 11 (2) would have been inserted in the Bill, and the Chancellor would have been able to stand up and say, "Nonsense, we shall have Article 11 (2) and it is a good one." So indeed it is, and it should have been in the Bill. Instead of that we have a thing which may never come into force; it is not yet even an Order, and may be changed before it comes out. It is intended to be a sop to persons who look forward to the possibility that one day the Chancellor will be gone. If he does go—and I say with all respect to him that we might have a very much worse one—what the House is proposing to do is to hand over to some Party that may have an enormous majority, a Section on the Statute Book embodying the most fantastically wide powers. They will be able to put it into force, because although the tendency may be rapidly disappearing, this country does believe in following the law.

I hesitated for a moment in a last hope that the hon. Gentleman the Member for Rossendale (Mr. Walker) would rise to his feet. I have known the hon. Gentleman for a long time in the county of Westmorland and I thought that a little Westmorland common sense, added to the legal explanations of the Solicitor-General, might have been of very great advantage to the House. I was extremely disappointed with the reply of the Solicitor-General on this point. He was, as usual, extremely courteous—if only he were as often correct as he is always courteous. This time he really confined his reply on this point to the reiteration of that dreary and, to a large extent, meaningless word "flexibility." I beg the hon. and learned Gentleman to think up another word. There was a man in history who was known as "Capability Brown." It would really be terrible if the hon. and learned Gentleman were to go down to history as "Flexibility Frank."

6.0 p.m.

The Debate on this Amendment has, I am sorry to say, taken a different course from what I expected. When the hon. Gentleman the Member for Bath (Mr. Pitman) expressed his view about this Amendment, I thought the answer would be one of two things, either that the words in the Bill did not mean what he feared they did mean; or else that there had been some oversight, that, in fact, they might be taken to mean what he feared, but that in another place they would be corrected. I never dreamt that it was, in fact, the intention of the Government by this definition to bring within the purview of the Bill, not the kind of borrowing hon. Gentlemen on the benches opposite have in mind through the money market of the City of London, but every transaction which involves getting something for which one does not pay on the nail.

It is clear, of course, that that is far outside the scope of the purposes of this Bill. It is recognised by the fact that in the draft Order an attempt is made to limit the definition in the Bill within, at any rate, the bounds of common sense. I do not want to reiterate what I advanced on this particular point on a previous Amendment. We object, and shall take our objection into the Lobby, to something as fundamental as this being placed in a draft Order and not in the Bill. This particular provision with regard to this definition not applying to transactions in the ordinary way of business—I have not the words at the moment; goods in the ordinary way of business—is not a thing anybody is going to alter. If one alters it one makes nonsense of the whole of this procedure. If that is so, why cannot it be in the Bill? That is the proper place for it, and then anybody who reads this Statute will know what is excluded. I do not want to reiterate that point, though, we must press it into the Lobby.

I want to turn now to the defence, which is that, ridiculous as this definition is in the Bill, it is made sensible again by the limitation in the draft Order. I have two points to make about that. The first the Chancellor of the Exchequer has met, and I am grateful to him. I still can see no justification for the meaning that the Solicitor-General places upon the words in the Order. It is not necessary to argue that, because the right hon. Gentleman promised that, in any case, he will make certain they do bear the meaning that he and we desire them to have. I want, therefore, only to refer to one other point, and that is the limitation of the exception. It is postponement of payment for goods ordered in the ordinary way of business that is excepted. But should not that exception be extended also to services incurred or charges incurred in the ordinary way of business? Consider, for instance, payments to the railway companies. No payments, of course, by big companies are paid the moment the traffic is carried. There are monthly, three-monthly, and, it may be, even yearly accounts, which are settled well behind; but because these transactions are not actual purchases of goods, but payment for services, they would appear to me not to come within the purview of this draft Order. Therefore, they have to be added to any real borrowing that that particular person or corporation may want to do, and may thus bring him or it outside the relief of the £50,000. I should be very grateful indeed to the right hon. Gentleman if he could just deal with that point—why in the draft Order he finds it necessary to limit the exception to the purchase of goods and not include payment for services or charges.

Question put, "That the words proposed to be left out, to 'is,' in line 30, stand part of the Bill."

The House divided: Ayes, 283; Noes, 147.