I beg to move,

"That the Bill be re-committed to a Committee of the whole House in respect of the amendments to Clauses 12 and 21, of the new Clause (Transfer of interests in patents and designs), and of the amendments to Schedule 1, page 44, line 34, page 45, line 19 and page 45, line 41, standing on the Notice Paper in my name."

It may suit the convenience of hon. Members if I say, at once, that, subject to your consent, Mr. Speaker, I do not propose to resist the Amendment on the Order Paper in the name of the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan).

I beg to move, in line 5, at the end, to add:

"and of the new Clauses (Consumers' Councils), (Coal Appeal Tribunal) and (Export Development Council), standing on the Notice Paper in the name of Mr. Harold Macmillan."

I think this Amendment is technically required by the Rules of Order. It will allow the Debate to proceed, should you, Mr. Speaker, decide to call the new Clause standing on the Order Paper in my name

I beg to move, in page 14, line 37, at the end, to insert:

"Provided that provision may be made by regulations requiring the said amount to be estimated on the basis that the purchaser on the assumed sale of the unit would be in a position to use the property in which the transferred interests subsisted with other assets used in association therewith before the transfer, or to be estimated in accordance with other rules prescribed for securing that the said amount shall not be diminished by disregard of any factor appearing to the Minister to be relevant."

It might be useful if I reminded the Committee of the background leading up to this Amendment. The object of Clause 12 is to lay down the principles which are to govern the manner in which values are to be determined for compensation purposes, and the terms of the Clause operate, as soon as may be after a compensation unit has been allocated to a valuation district. Further, it has been decided under Clause 10 that there is in that unit both a coal industry value and a value for subsidiary purposes. Those ingredients being present, this Clause empowers the district valuation board to split and determine these two separate values. All relevant particulars will, by this time, have been sent to the district valuation board by the Minister of Fuel and Power. The Subsection to which this Amendment relates provides that the value of a compensation unit shall be taken as the amount which it might have been expected to realise if it had been sold at the primary vesting date to a willing buyer by a willing seller in the open market, and at that time have been valued as a whole, even after it is known that those values have to be split as between the coal industry value, and the value for subsidiary purposes.

This Amendment is intended primarily to meet representations which were made when we discussed this matter in Standing Committee. We accept the view then put forward that it is desirable that units consisting of all parts of the assets of an undertaking comprising a colliery concern and its subsidiaries, should be valued in the light of the value of the assets as a whole. Those who have read this Amendment will see that although we have accepted the view there put forward, we have couched the Amendment in much wider terms than those which were then proposed. Instead of inserting this in the Bill itself, which would have been difficult because of the technicalities of the question, we have made the terms much wider and put it in such a form that it can be done by regulation. It will then be possible to discuss this matter with the district valuation boards, and we hope, where justice demands it, to take into account quite a number of matters and considerations which could not be done if we limited it, as we would otherwise have to do, by making provision in the Bill itself. As this Amendment meets the wishes expressed in Standing Committee, and is, if anything, drawn in much wider terms than those who expressed those wishes perhaps expected, I hope the Committee will see their way to accept it.

I hope that at the opening of what might be called the second innings of this long-drawn match, I shall not be bowled by you, Major Milner, if I welcome the new Minister who takes his place on the Front Bench today. As I understand it, the former Minister resigned because he was not in sympathy with the Bill as it was before us in Committee. I have no doubt that by the time we complete the Report stage, the new Minister will be inclined to follow his example. However, we are glad to congratulate him upon an appointment and a promotion which the whole Committee feel he thoroughly deserves.

This Amendment, as I understand it—though these are rather difficult com plicated subjects—has the effect that the parts of an asset of an undertaking which comprises a colliery concern and its subsidiaries, will be allowed for in the light of the value of the assets of the undertaking as a whole. This meets a point which was raised in Committee. On principle, we naturally prefer that this should be laid down in the Bill rather than provided for by regulation. Nevertheless, on this point, the Financial Secretary has made a good case. It is wiser to give the power by regulation because of the intricate number of points that might be raised, and with all of which it might not be possible to deal in the Bill. For these rather special purposes we feel that this Amendment is a necessary addition to, and an improvement of the system laid down in the Bill.

I beg to move, in page 21, line 39, to leave out from the beginning, to the end of line 30, on page 22, and to insert:

"(2)Subject to the provisions of Subsections (3) and (4) of this Section as to the revenue payments therein mentioned,—

the said right conferred by Subsection (2) of Section 18 of this Act shall be satisfied, so far as regards interim income for the period between the primary vesting date and the time when any amount of compensation in respect of a transfer of transferred interests or of an overhead expenses increase is satisfied, by making, in addition to the issue of the stock then issued in satisfaction of that amount of compensation or to the making of the money payment then made in satisfaction of that amount of compensation, as the case may be, a money payment of an amount equal to interest for that period on that amount of compensation at such rate or rates as may be prescribed as respects that period or different parts thereof by order of the Treasury; and

the provisions of Section 19 of this Act as to the legal and beneficial title to compensation shall have effect in relation to additions to compensation under this Subsection, with the substitution for references therein to the compensation of references to the additions thereto.

(3) The following provisions of this Subsection shall have effect as to the making to colliery concerns, and to subsidiaries within the meaning of the First Schedule to this Act of such concerns, of payments in respect of each of the two years beginning with the primary vesting date and the first anniversary thereof respectively, that is to say,—

a colliery concern or such a subsidiary shall be entitled in respect of each of the said two years to a payment of an amount equal to one half of the comparable ascertained revenue of the concern, or of the subsidiary, as the case may be, attributable to activities thereof for which the transferred interests thereof were used or owned;

the payments to be made under the last preceding paragraph are in this Section referred to as 'revenue payments,' and shall be money payments."

I do not know, Major Milner, whether there is to be a discussion on this Amendment alone, or whether it is intended to take all the other Amendments to the Clause, together with this Amendment.

I shall have to rule out of Order, as going beyond the Financial Resolution, the Amendment to the Amendment, which stands in the name of the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan)—in line 29, at the end, to add:

"(4) Where on or before the second anniversary of the primary vesting date a colliery concern so notifies in writing to the Board, that colliery concern may exercise an option to continue to receive a payment calculated as mentioned in paragraph (a) of the foregoing Subsection for each of the years or any part of a year following upon the said second anniversary of the primary vesting date until the date of issue of compensation stock in satisfaction of the compensation due under Section 18 of this Act in lieu of receiving the money payment specified in Subsection (2) of this Section."

The other Amendments on the Paper to Clause 21 appear to be in Order, and I propose to call them as they are reached.

Would I be in Order, on the Question, "That the Clause stand part of the Bill," in bringing to the notice of the Committee certain aspects which might be dealt with in the Clause, even though an actual Amendment on those points has been ruled out of Order?

It would be out of Order to deal with the subject matter of an Amendment which, I understand, is not on the Order Paper.

Since we are again in Committee, there can be a Debate on the Question "That the Clause stand part of the Bill"?

Yes, certainly.

As I understand it, we are dealing now only with the Amendment which I moved. Clause 21 deals with interim income, the right to which is recognised in Clause 18 of the Bill. We think it essential that the assets that are to be transferred should be vested in the Board as soon as possible. The period during which the colliery owners are in control, without any serious incentive to operate the mines efficiently, still less to embark on anything in the shape of expansion, may be a considerable time. That being so, in fairness both to shareholders and debenture holders and proprietors of collieries, it is laid down in the Bill that, for a period, interim income should be paid.

The method chosen to make these payments has reference to the revenues earned by the concern in question during previous years, and the Bill provides that for the first two years of vesting there shall be a right to revenue payments, made by reference to the revenues formerly received, and such revenue payments shall be in lieu of interest on the compensation which, except in special cases, has commenced to accrue before two years after the primary vesting date has arrived. In Committee, when Debates took place, on the question whether such payments should be treated as income, or as a capital payment, we undertook to look into the matter. We then took the view quite definitely that these were income payments, that whether paid in actual cash or in the shape of stock, they were nevertheless payments for income and not for capital, and, therefore, it was essential under the law that Income Tax should be deducted.

The hon. Member for South Hendon (Sir H. Lucas-Tooth) moved an Amendment on this matter, and during the diccussion on it we undertook to consider, together with the Law Officers, whether that was, in fact, the case, and whether, if there was any injustice to shareholders or debenture holders who received as they might, after the lapse of the two years in question, stock instead of cash, anything could be done to prevent their having to pay Income Tax on what might appear to them to be a capital payment. The right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) also made this point. He asked whether it was possible for the Government so to alter the present arrangements as laid down in the Bill to make it possible for stock and debenture holders to receive cash, not only during the first two years but during any subsequent period, if such a period did arise during which the settlement in regard to a particular colliery had not taken place. I am glad to say that my right hon. Friend the Minister has found himself able to meet the criticisms that were made.

The effect of this Amendment is to provide not only that cash will be paid in respect of revenue payments during the first two years, but if settlement has not then been reached, cash will be paid during such period thereafter as may be necessary in respect of interim income payments. Instead of an individual receiving interim income in the form of stock, which he may not be able to transfer at that time, he will receive cash throughout, so far as these payments are concerned. I think that covers the two main points that were made in Committee. Apart from meeting hon. and right hon. Gentlemen opposite on that point, we are unable to meet them—and I have here, I think, the support of the right hon. Gentleman the Member for Bromley (Mr. Macmillan)—by making any change in the Bill which would ensure that they did not have to pay Income Tax on these payments. They will have to pay Income Tax. We have assured ourselves with the Inland Revenue that Income Tax is properly due, and most certainly should be paid. We think that any objection to Income Tax being paid can now be nullified, in view of the fact that we are to pay cash not only during the first two years, but also during any subsequent period.

First, I must thank the hon. Gentleman for the very lucid explanation he has given of a rather complicated point which arose in Committee. I would like to call attention to his opening phrase. He said it was in the national interest that, the matter having been decided, the vesting date should be as soon as possible. Is that because the longer it was put off, the less incentive there would be to owners and managements to develop their businesses and to carry on the normal expansion? I would mention, in passing, what an extraordinary light is here thrown upon other Government proposals which are to hold other industries for years in suspension. It is exactly that effect which the hon. Gentleman wants to avoid in this Bill. The hon. Gentleman presented a formidable case, but I venture to ask one or two questions on the technical aspect of this Amendment.

We are very grateful that our point has to this extent been met. As I understand it, if the period goes on for more than two years, instead of no payment being made during years 3, 4 and 5, cash payments will be made. I think that is correct. I think I said in Committee that I thought Income Tax should be paid on these payments since they were income. During the time I have had to study the actual wording of the Amendment, I found it difficult to decide an important point. Will the Income Tax be paid in the years to which it relates? That is important, particularly in view of any possible Surtax. Suppose somebody received income in one year, which was really the income for two years. That would enormously increase the rate of Income Tax and Surtax which would be payable. I take it that would be counted to the year to which it properly related. If I could have an assurance on that point, it would clear up a matter, to which the hon. Gentleman did not refer.

I understand that the right hon. Gentleman the Member for Bromley (Mr. Macmillan) is asking that Where a payment is made, which covers two years, there should be an allocation to two distinctive years in order to avoid what might be a heavy cumulative payment of tax. That is exactly what occurs in every other case. In the case of a lawyer, for instance, if litigation is proceeding over two years, and fees are being earned which are paid to cover a period of two years, then the burden of tax has to be met on that. The lawyer certainly is not in a position to say to the Inland Revenue authorities, "Look here, these fees have been earned over two years; therefore you ought to distribute it, or allocate it, over two years." I hope the Minister will not accept this doctrine that some special treatment should be given in this case where, in my submission, very generous consideration is being given already. I hope the Minister will reject that point of view, and leave these payments of Income Tax to be dealt with in the normal way.

As I raised this point in Committee upstairs, I wish to say that I entirely accept the statement of the Financial Secretary that he has removed the difficulty which I felt would arise if the Bill stood as it was originally drafted. I am not altogether certain however that he has disposed of all our difficulties on this Clause. One difficulty that seems to me to remain is that although it is true that the interim income is now to be paid by way of cash payments and no part of it will be paid as stock, nevertheless, it is only over a very limited period that the cash payments will be made concurrently. After the end of the second year, as I understand it, payment will not be made until the final amount of compensation is decided. I apprehend that the position, so far as income is concerned, will be that those entitled to compensation will have no income at all over what may be quite an extensive period. Certainly there will be quite a number of cases in which two or three years may lapse. It is easy to point to the case of the comparatively well-to-do owner who has other resources to fall back upon, and who will ultimately get his money all right. On the other hand, there will be a lot of people who are interested in this compensation, and who may rely upon the income from their investments in the coal industry for their ordinary day-to-day needs. I do not see how this Amendment covers their position. They will have to subsist for a matter of two years without any income whatever. I do not feel altogether happy that we are treating these people fairly or adequately under this Bill.

Perhaps I might ask the Financial Secretary a question. It is true, of course, that the payments will not be stopped; the person will be due to receive a sum of money payable when the stock becomes payable, and I think there should be no doubt whatever that his future right to that sum of money will be inalienable when that stock with which it goes is alienable. I think this is a matter of some importance. It may be that, in the case of the individual concerned, at any rate, where there is obviously a fairly ample amount of compensation to be payable, they can legally borrow against their right to that money, in the expectation that it will be forthcoming, and that may be able to carry them over the period. I would like to have an assurance that this right to deferred income is there, and that it will not be alienable, no matter what we do in regard to Clause 22 of the Bill.

I hope the Committee will forgive me if I am unable to understand this Amendment, but I do not succeed in construing paragraph (a). I should be glad of a little advice from the Front Bench.

I cannot construe any of it.

I am fortified by that remark. As I understand the sentence, if we read the words, leaving out all the qualifications and modifications, it comes to this:

"the said right…shall be satisfied…by making a money payment."

I am not quite sure whether "satisfy a right" is a draftsman's technical term, but I should be dubious that "satisfy" was the proper verb. I should bow to superior advice upon that point, but what I found more difficult was that the right should be met, or satisfied, or whatever the verb may be, by "making a payment." I should have thought that a right should be met by receiving the payment. I do not in the least wish to cast aspersions upon either the draftsman or the Ministers. If we are to legislate at this pace, draftsmen, even if visited every night by angels from heaven, will not always succeed in writing with the clarity of the Koran. I think there is a special duty on hon. Members of the Committee not to pass sentences which we are unable to construe, and, with the best will in the world, or, if not the best, at least a very good will, I really cannot construe this sentence between lines 4 and 13, and I should be glad of some explanation.

I also am not able to understand this paragraph. I hope the Government will explain one thing which exercises my mind. In the original Clause, which was reasonably intelligible, it was provided that we should make a payment of the ascertainable revenue for the first two years, and thereafter pay interest at a rate fixed by the Treasury. In the Amendment, I do not know whether it is intended to pay both, or to pay them alternatively. If it is the intention to pay both, I would like to know why we are now paying both, and, if it is not the intention to pay both, I should be grateful to anyone who can say where the intention is made clear. I dissociate myself from the remarks of my hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels) on the Income Tax point. Industries are open to pay either on a revenue basis or on an earning basis, and they can elect with the inspectors whether they pay on money received or work done, and I do not think there is any point in that.

I want to make quite certain that I understand clearly what the Financial Secretary said. The hon. Gentleman used the words "cash throughout." So far as I can see, in the first two years, there will be half-yearly payments, and then there will be a gap until full compensation is paid, when another cash payment will be made. There would thus be another period, according to how long it took for the compensation to be worked out, during which shareholders would receive nothing.

I do not find the same difficulty about the Amendment as some hon. Members. I find it difficult to appreciate the troubles of the Senior Burgess for Cambridge University (Mr. Pickthorn), but, of course, the best dictionaries come from the other place. I suppose a right can be satisfied by a payment.

If the hon. and learned Gentleman is explaining the matter to me, may I say that I can understand a right being satisfied by a payment made, but not a right being satisfied by making a payment, which is what the Amendment says.

My short answer to that is "I can." I should have thought that a sufficient answer to the hon. Member for Oldham (Mr. Hale) is to indicate that a right, once satisfied, no longer exists to be dealt with by some other payment.

Surely, one can have a right to draw two payments? A man might draw rent, and compensation, and all sorts of things. Of course, we can have both, and it may be the Minister's intention to give both, but, before the Committee passes this Amendment, I think it would be better for the Minister to make clear whether that is his intention.

I do not wish to continue unduly this somewhat acrimonious discussion. [HON. MEMBERS: "No, no."] Obviously, a right to two payments cannot be satisfied with one. On the case which was put to the Committee, as regards Income Tax, there is the natural comparison with the case in which a man receives at one time, a payment due in respect of different periods, as, for instance, the case of a man who recovers in a court of law payments which should have been made in particular financial years let us say, as in this case, two successive financial years. It is clear beyond doubt that any tax is assessed at the rate and on the footing applicable in respect of the year in which the payment was recoverable and not of the year in which it was finally and actually made.

I am glad to hear that so many hon. Members fail to understand this Amendment, because, in doing my homework on Saturday night, I was completely in a fog on what it really did. I should like to be satisfied that the Financial Secretary now says that these payments are to continue for a period of two years, and that after that, there is to be a further payment. In Committee, the hon. Gentleman was very definite that he could not meet us on that point. If he has now given way, and means that a further payment will be made, I shall be satisfied. In regard to the Income Tax, I agree with the hon. and learned Member for Kettering (Mr. Mitchison). If the revenue authorities are approached in the right way, concerning these payments, they will be assessed for Income Tax for the years in which they are presumed to have been earned. I think the Income Tax point is fairly clear, and I think we could omit that point, if the Minister will agree.

Why not carry on paying the people concerned their interest until they get their capital sums? For the life of me, I cannot understand why that should not be done and why it should be said that, after two years, there is to be a break. It may be that two or three years afterwards the recipient will get a large sum in respect of two or three back years after receiving no payment for a year or two. I think it is most unfair and quite wrong.

There is also the question of the rate of interest. The rate of interest is to be such as is approved by the Treasury. But what rate of interest is it going to be? We are taking a man's capital from him. The idea of a "willing buyer and a willing seller" is mentioned which is a myth, because there is neither a "willing buyer" nor a "willing seller." A man is to be given a rate of interest, but he does not know what that rate is going to be. Imagine any willing buyer or willing seller disposing of his property on such terms. The rate of interest should be stated, so that everyone will know what rate is going to be received. The Amendment is far from clear and there is going to be a great deal of misunderstanding in connection with its wording, which will give employment to lawyers. I understand that three legal minds in this House are already differing on the subject, and I am sorry for the poor layman who wants to know what it means.

The point under discussion is a very narrow one. We have now reached the stage when we are dealing, so it seems to me, with the question of tax, so far as most hon. Members are concerned. The majority of the speeches have centred in this question of the payment of Income Tax. It has been asked, if a colliery concerned is paid what is due to it in one year and that payment covers several years, what will be the effect as regards Income Tax? I believe that is the point which is mainly worrying the Committee and, therefore, I deal with it first.

The right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) raised this matter in Committee and he then agreed that interim income payments should certainly attract tax, but he did say that, when there was any arrangement for a period over the two years and when the collieries concerned received inalienable stock at that juncture, it was rather unfair to make them pay Income Tax on it. We met that criticism, and payments of all kinds under this Clause will now be made in cash. So far as the first two years are concerned, we have always agreed that payments should be made in cash, and this Amendment, in spite of what the hon. Member for Cambridge University (Mr. Pickthorn) says, does provide that all interim income payments will now be made in cash. The hon. Member for South Hendon (Sir H. Lucas-Tooth) seemed to think that there would inevitably be a long wait after the first two years. It is our hope that a very large number of claims will have been settled within the first two years.

Not inevitably.

It is our hope that a large number will have reached the settlement stage in the first two years, but we have to make arrangements for concerns which take longer to wind up and that is why we have this arrangement about the period in excess of two years, but payments will not run on indefinitely and settlement will take place fairly soon, even if it takes more than two years. Under Clause 18 (3) it will be found that payment can be made by regulations. The Subsection reads:

"Provision may be made by regulations for authorising the partial satisfaction of such compensation before the determination of the amount thereof has been completed."

Therefore, if there is a case, such as that envisaged by the hon. Member for South Hendon, where people want their money and cannot get it, it will be possible, under the terms of this Bill, for an advance or advances to be made.

Can the hon. Gentleman say what such advances would be in respect of?

They would be advances of the interim interest or income whichever it may be.

Does the right to make "partial satisfaction" mean payment of some of the capital stock, or does it mean payment of some of the cash income, which might be said to have accrued during the third, fourth or fifth year? That is the point.

Largely, of course, the advances will be made towards final compensation, and the Minister is empowered under Clause 18 (3), if the circumstances are such as to warrant it, to make advances towards the payment of final compensation.

Stock?

Yes.

On reading Clause 18, it looks as if the natural construction of the word "compensation" in Subsection (3) is "capital." If some words were added to make it clear that there was an express power to amend, then, I think, it would cover the point.

Surely, the hon. Gentleman does not understand what is involved here. What I am now telling him is that, in circumstances such as have been described, it will be possible for a colliery concern to receive partial compensation which will include the interest due to it at that particular time. I do not know what more a colliery concern could want. It is going to get a considerable slice of the compensation due to it together with interest thereon, and I do not think that there is anything unjust or unfair about that.

I was in process of saying, in reply to the hon. Member for Cambridge University, that this Amendment, although it may appear obscure, means, no more and no less, than that payments which, up to now have been limited to the first two years, so far as cash is concerned, may now be extended to a period beyond two years, so that no inalienable stock will be paid at all so far as interim revenue is concerned. Throughout the whole period, whether two years or longer, people will get a payment in cash. That, I am informed, is what the words mean and that is how we hope they will be construed when the Bill becomes an Act.

Is the Financial Secretary going to answer the question I put earlier which was, Are there to be two payments or only one?

There is a Government Amendment on that, which will be dealt with later.

One appreciates that we would be out of Order in discussing any Amendment in advance, but the matter is of importance, because the Amendment to which the hon. Gentleman refers, mentions the preceding Subsection, and the preceding Subsection will still be Subsection (6), which has nothing to do with this.

I take it that I would be out of Order if I were now to deal with a subsequent Amendment, and I think my hon. Friend will find that when we reach the Amendment he will not have lost anything by not receiving a full reply now. In fact, I think I am precluded from replying to him on that point. This intervention reminds me that there was another point raised dealing with the payment of Surtax. I was asked whether a payment made after the end of the first two years, if paid in one lump sum, will be subject to Surtax, because the fact that it has been paid altogether may bring the recipient into the Surtax region. The short answer is that the Act of 1927 will apply to these payments. I think it is Section 34 of the Finance Act, 1927, which, as hon. Members may remember, gives relief from Surtax where income attributable to a period exceeding one year is received in one year. Under the terms of the Section, it is possible for those liable to tax to spread it over the years to which it is attributable, instead of having to pay it as though it had been definitely earned and received within one particular year. I think that answers the only question outstanding, and, that being so, I hope we may now be allowed to have this Amendment.

I think the only thing which has emerged quite clearly from the Financial Secretary's speech is that the hon. and learned Member for Gloucester (Mr. Turner-Samuels) is wrong in his interpretation of Income Tax law.

I understand that my hon. Friend's last point dealt merely with Surtax. Reference has been made to Income Tax.

I do not think it makes very much difference, unless the Income Tax comes into the Surtax ranges. If there is this difference of opinion between lawyers opposite it is regrettable that we have not a Law Officer here. We have had three different interpretations, but, knowing the resources which the Financial Secretary has at his disposal, I think he is probably right, and the critics behind him are wrong. On the point which has just been dealt with, the Surtax position is adequately covered by the existing law. The only thing I really wanted to point out on this Amendment is that so long as we have the Bill here, and there are Members present who were on the Standing Committee, they must not be misled by something to which the Financial Secretary quite unintentionally referred. He kept talking about this being interim income, and compensation for a colliery undertaking. It is far wider than that. This is not concerned with colliery undertakings. It deals with transferred interests, and if hon. Members who have not had the opportunity or the necessity for studying the Bill will look at Clause 5 (1) they will see that the transferred assets are those of the subsidiaries referred to in the first part of the First Schedule. Therefore, we are dealing with something far bigger than merely coal.

I would like to ask the Financial Secretary why he did not deal with the point about continuing to pay interest over the two years. He never attempted to answer that question. What is to prevent the Bill stating that interest shall be paid for one, two, three or four years until compensation is paid? That would be the fair and proper thing to do. Why stop at two years and then say, "I will give you a bulk sum"? The other point on which he did not satisfy me was the rate of interest which the Treasury is likely to fix.

It would be unfair if I stated the rate of interest.

To whom?

We dealt with this point in Committee upstairs at considerable length. It arose not only on this question but at various stages of our discussions there. The short reply to the hon. Gentleman is that it would be unfair now to lay down a rate of interest which might be completely inappropriate at the time these payments are made. The rate at which the Government can borrow money varies from time to time, and it will be for the Treasury to decide as and when these payments are made. In the case of the Bank of England Bill the matter was comparatively simple; it was being taken over on a given date. In this case we are dealing with a complicated industry very widely spread, not confined entirely to mining coal but engaged in all sorts of ancillary undertakings. The Minister will fix the vesting date, but it will take some time thereafter for the whole thing to be completely wound up.

One reason for fixing the two years, as the hon. Gentleman knows very well, is that we are anxious that the whole matter should be speeded up and, therefore, no one should be given the impression that he can take his time and be leisurely about it. We want this thing settled and out of the way. That is why two years is fixed. We are trying to be as fair as we can about the extra time allowed by ensuring that where it is not the fault of the people engaged in the industry, or their shareholders or debenture holders, some income shall go on accruing to them until the matter is finally wound up. I think those reasons are sufficient, and the Committee generally will agree that they are just. I have stated the reason why it is not possible for us to fix the rate of interest and put it in the Bill. It will have to be fixed by the Treasury at the time and in the light of circumstances then existing.

It seems to emerge from what the hon. Gentleman has said that there is a possibility of people spinning out the proceedings. The existing owners have no particular interest in spinning them out. They do not have any income in the interim period. Secondly, it does not rest with them. The complicated valuation Clauses in the Bill do not rest on the action of the present owners. It depends on how soon and how quickly the district valuation boards can do their work, and how soon and quickly the Minister can decide on what are the compensation units to be valued. I hope, therefore, the Minister will not take what appears to me to be a rather unfair line and try to put the onus on the existing owners and complain that they may be delaying the proceedings. Once the vesting date has been fixed, it cannot be to their interests to do anything of the kind. If there is a hold up, it will not be the result of their inaction so much as the slowness of the compensation machinery procedure.

I would like to raise a small point concerning the elucidation of paragraph 2 (b) of the Amendment. I would like to know what it means. I have read it carefully several times, and I have obtained at least three possible meanings from it. I admit I have been rather out of touch, as I was not a Member of the Standing Committee. The wording is:

"The provisions of section nineteen of this Act as to the legal and beneficial title to compensation shall have effect in relation to additions to compensation under this subsection, with the substitution for references therein to the compensation of references to the additions thereto."

I have not decided whether "therein" refers to the Subsection or to "Section nineteen of this Act." Reading it through with the greatest care one has great difficulty in deciding what it refers to. The last part of this paragraph,

"with the substitution for references therein to the compensation of references to the additions thereto "

simply makes nonsense.

May I ask the Financial Secretary to clear up a point for me? I gather that at some stage of these proceedings some compensation will be paid to an individual. Suppose between now and then the individual dies. On what basis is he to be assessed for Death Duties? That does seem to me to be a very vital point. He may be assessed on this or that basis. He may wish to clear off his debt to the State. Under those circumstances, if he does not know quite when, how and on what basis he is to be paid, how can the State assess him for Death Duties Perhaps I might, with great respect, make a suggestion to the Government. It might get over the difficulty quite easily if the Government would make all these payments by the individual immediately available for the provisional payment of Death Duties. Otherwise, I cannot see how he can humanly pay any Death Duties at all. That being the case, might it not be advisable for the Government to make some such provision? I would like that looked into. The Committee ought to know about these matters. I am sure my suggestion is practical, that they should allow these debts to the State to be used by the Government for the burdens which are imposed on the individual by the State.

It is provided that the rates of interest shall be prescribed by order of the Treasury. I want to ask the Financial Secretary whether such orders will lie upon the Table and be under the control of Parliament. As the Bill is now drafted, Clause 57 merely provides that regulations made under this Bill shall be laid before Parliament. In the interpretation Clause "regulations" are defined as "regulations made by the Minister." There is no reference to orders made by the Treasury being laid before Parliament. Can the Financial Secretary give any assurance that such orders made by the Treasury prescribing rates of interest will be laid before Parliament?

I hope very much that the Financial Secretary will give short shrift to the attempt from the benches opposite to get the rate of interest fixed in advance when the rate of interest is falling. As I understand it, cheaper money is part of the policy of the Government. No doubt it might very well suit hon. Gentlemen opposite and those whom they represent to have the rates of interest fixed in advance with a falling market, but it would not be for the benefit of the public Exchequer.

I hope the Financial Secretary will make some attempt to reply to the important point which was so ably propounded by my hon. Friend the Member for Torquay (Mr. C. Williams), namely, what is to be the position of the heirs and legatees of an individual largely interested in a coal mining undertaking who may die, pending the negotiations of the compensation which may be due to him? There can be no question that that is a substantial point.

On a point of Order. May I suggest, with all due respect, that this is hardly the Clause upon which to discuss this matter?

I was very doubtful whether the hon. Member for Torquay (Mr. C. Williams) was quite in Order when he raised this matter. Perhaps the Financial Secretary may be able to give an early answer to the query in order that we may leave the point

May I say, Major Milner, that I very much regret if by any chance I was out of Order, but it seemed to me that this was a point which we would have to consider at some time, and it was so nearly on the points which were being raised. I thought it would be to the general advantage, in the very reasonable atmosphere in which we are dealing with these matters, if it was dealt with now. I am sorry if I was out of Order.

As you have indicated to the Committee, Major Milner, it would be wise if we were to refrain from discussing that. I must bow to your Ruling. I was very disturbed at the way in which the hon. and learned Member for Kettering (Mr. Mitchison) made hi., plea to the Financial Secretary to give short shrift to all those hon. Members on this side of the Committee who have been pressing, and I think very rightly pressing, that the rate of interest should be named, or that we should, at all events, be given some indication in the Committee of the line on which the Government propose to act in this direction. Of course, the hon. and learned Member for Kettering attempted to read into our vary reasonable pleas and fears some sinister motive and intention. That is always the kind of attitude which is adopted by hon. Gentlemen opposite it we on this side of the Committee express any fear about any very reasonable matter such as the fear that has been expressed from these benches this afternoon. I, and I am sure all my hon. Friends who sit on these benches, have no desire to see the man or the colliery undertaking to whom compensation is due benefiting in this way by having the rate of interest fixed in advance, with a falling market. I hope that on more mature reflection and consideration he will bring his keen mental faculties to bear and to see that on this occasion at all events we are to be fully acquitted of having any sinister motive.

I should like to support the plea that has been made by my hon. Friend the Member for Hallam (Mr. Jennings) with regard to the cessation of the interim payments after the two years. He thinks, and I think, and I am sure all hon. Members on these benches agree, that this is a very unsatisfactory way of doing business. As my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) pointed out, in many cases, just as with the land, this may be the only source of income the individual may have, and he is to be deprived of it through no fault of his own. He may be deprived for some consider able period—I would not like to put a period on it—of any income at all. It seems that right hon. Gentlemen on the other side of the Committee are unable to distinguish between what is really capital and what is really income. The Financial Secretary has already commiserated with himself this afternoon. He says he realises he is not on the same secure ground with regard to this nationalisation proposal as the Chancellor of the Exchequer was when he nationalised the Bank of England some months ago. Although, of course, I do not agree with the hon. Gentleman, I sympathise with him. I take it that this is the kind of insecure ground upon which all spokesmen from the Treasury bench will find themselves increasingly thrown as the months and years of this Parliament elapse.

May I have an answer from the Financial Secretary to the question whether the Treasury orders prescribing rates of interest will be laid before Parliament, so that Parliament will have control, or whether it is to be a purely arbitrary decision on the part of the Treasury?

They will not be laid before Parliament; there is no reason why they should be. These things have been done before, though perhaps not in a Bill of this kind, and so far as I know it has never been suggested that the Treasury should come to this House for permission to do it and lay the Regulations on the Table for a given time. That is not laid down in the Bill, and my right hon. Friend the Minister has no intention, if he can help it, of embodying it in the Bill. That is the short answer.

I should be very grateful if paragraph (b) of Subsection (2) of the Amendment could be explained.

I have been up and down quite a lot this afternoon and I think the Committee will agree that I have done my best, in spite of the fact that this is a complicated Measure, to meet the criticisms that have been made. The real answer to the hon. Member for Montrose Burghs (Mr. Maclay) is a remark that was made by the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) when he pointed out that I, earlier on, had used colliery companies by way of illustration. He said that it was not only colliery companies, but that, under Clause 5, the net was spread a good deal wider. Paragraph (b) of Subsection 2 in the Amendment brings in those other beneficial owners or concerns which may be interested in this matter.

May I have an answer also?.

Death Duties are not included here and there is no intention of including them. I do not think the question arises of the handing in of this stock in payment of Death Duties. There will be no question of a large block of transferable stock—because that is what it would be—in the hands of an individual, and companies do not die and pay Death Duties. If an individual were to die, by that time he would have received transferable stock. [An HON. MEMBER: "If he died before it was settled?"] Even then it would not arise, because his estate, later on, would get his share of the transferable stock to which he was entitled as shareholder or debenture holder in whatever concern it might be. Therefore, the point surely does not arise. By the time duty was payable, executors or administrators of the will of the person who has died would have transferable Government stock negotiable in the open market. There would, therefore, be no point in handing it in for the payment of Death Duties.

But we do not really know what this amount is going to be nor at what figure it will stand, say, a year and a half after the death. On what basis will it be valued for Death Duties, or will the estate have to pay on a nominal sum with the prospect of having to pay again later?

The Estate Duties authorities do not ask the payment of Death Duties immediately where estates are not in hand and cannot be immediately realised.

But they might charge a much higher rate of interest.

I only want to ask the Financial Secretary about one very small point. He said just now that paragraph (b) brings in other beneficial owners. It does not seem to me to do that at all, as I understand it; all it does is to say that the people who are entitled to compensation are now entitled to the additional compensation.

That is right.

The Financial Secretary has given no reasons whatever for the Minister's refusal to make these Treasury orders subject to Parliamentary control. He merely said that the Minister was not going to do it; there was no purpose in it, and he did not explain himself at all. I cannot see any objection from any point of view. No delay would be involved; the orders would be laid before Parliament and would be subject to annulment by Resolution of the House. Meanwhile there would be no delay, and if the orders were annulled nothing that had been done previously would be invalidated. Surely orders of this character ought to be classified as Statutory Instruments, and we have all understood that in future——

On a point of Order. With all respect, I do not see that this has anything to do with any part of this Amendment.

The Amendment does refer to money paid by way of interest by order of the Treasury. As I understand it, the hon. Member is asking that such orders should be subject to Parliamentary approval. Whether that should be so or not is a matter which it seems to me it is quite proper to discuss.

I feel that it is very important that these orders made by the Treasury should not be made in a purely arbitrary manner, as would be possible here. I am not suggesting that the Treasury are likely to do anything unfair, but at least it would give a greater measure of public confidence and a greater feeling of security if these orders had to be laid before Parliament and were subject to annulment by Prayer, so that complete Parliamentary control would be maintained. I really think the Financial Secretary ought to give some better reason than merely to say that the Minister is not prepared to do it. He really owes the Committee a better explanation than that.

Could the hon. Gentleman give a precedent for the wildly revolutionary suggestion he is making? There are abundant instances of the Treasury fixing the rate of interest in somewhat similar cases, but I am not aware that the orders fixing such rates of interest have to be laid before this House.

It is quite possible that this House may occasionally have lacked vigilance and have allowed such provisions to get into Acts, but that is no reason why we should do so on this occasion. I think this matter ought to be dealt with on its merits, and I am astonished that the Financial Secretary still shows no inclination whatever to give any sort of reasoned answer.

We have now been told twice, once from the Front Bench and now by the hon. and learned Gentleman behind, that there are ample precedents for this being done. We have also heard cheers from the other side for the view that it is quite proper for a Minister simply to say that it is not going to be done, without giving any reasons. I therefore think it is now incumbent upon the Committee to ask that we should have some of these precedents submitted, so that we may be able to judge how far they are precedents or not. I do not think that this is a matter which ought to be wholly decided by precedent, but it is perfectly clear that, once precedent becomes the only argumentative basis on the Government side, that precedent should be adduced so that it can be examined.

On a point of Order. May I ask the Front Bench to impress upon our hon. Friends opposite that we are nationalising—[Interruption].

That is not a point of Order.

A highly provocative and controversial statement has been made by the hon. Gentleman on the back Benches opposite. Many of us have been rather stirred up. We were told by the Financial Secretary that it was customary for the Government on these occasions to have a reasonable intention to see that these matters are laid before the House. We then have the hon. Gentleman behind, who may or may not know anything about this—I have no means of knowing—telling us that there are any number of instances We have not been told those instances. The Government dislike the Committee having any say on the matter. That has been made abundantly clear by the Financial Secretary. As a Member of the House I say that that is not in the best interests of the House, and because of that, and because of the deliberately provocative speeches from behind the Government, I see no reason why we should allow the position of Members of Parliament to be weakened either by the Government or their provocative supporters sitting behind them who, I notice, speak on these matters, although they do not allow any coalminer to do so.

Do these orders made by the Treasury go before the Select Committee?

No.

Amendment agreed to.

I beg to move, in page 22, line 31, to leave out from the beginning, to "comparable," in line 32, and to insert:

"(c)for the purposes of paragraph (a) of this subsection a concern's or subsidiary's."

This, and most of the Amendments that immediately follow, are consequential on the Amendment that has just been agreed to.

Amendment agreed to.

Further Amendment made: In page 22, line 34, after "concern," insert "or subsidiary."—[Mr. Glenvil Hall.]

I beg to move, in page 22, line 36, after "principles," to insert:

"subject to such adaptations as may be prescribed."

This also is a drafting Amendment. The Inland Revenue Department called our attention to difficulties that might arise in the application of Income Tax principles, in the computation of profits, in relation, particularly, to depreciation allowances, which may not be taken fully into account, and interest payments. The phrase "subject to such adaptations as may be prescribed" has been introduced to permit of difficulties being dealt with by regulation.

I hope that the Committee will realise what is meant by the word "prescribed." Hon. Members not very familiar with the Bill will find it defined on page 42. It means "prescribed by regulations." That means that either the Treasury or the Minister, as the case may be, may introduce regulations. In order to do what? If this Amendment is made—and I should have thought it was considerably more than a drafting Amendment, in view of what the Financial Secretary has said—it will permit alteration of Income Tax principles as mentioned in the Clause in line 35 in the words:

"the amount of its profits and gains so attributable computed on Income Tax principles."

"Income Tax principles" means something fixed in law and practice. The hon. and learned Gentleman the Member for Gloucester (Mr. Turner-Samuels) is not here and so cannot help me, hut, perhaps, his colleague will. I think these principles are established, either by law, or by such law and custom that everybody knows what they are.

The only suggestion I can give is from my own knowledge and personal experience, and I have always taken the view that there are no principles attached to it at all.

We must blame our predecessors in this House for what they have done. Income Tax principles, whatever they may be, must in this connection be already established and defined. If we accept this Amendment it will be up to the Minister or the Treasury, as the case may be, to make adaptations of those principles by regulations. I do not think that that, as a general principle, is good, because Income Tax problems should be kept for this House to deal with. I am very doubtful whether we should, even in this modified form, leave it to any Minister to introduce regulations—which may or may not have to go before the House, according to the particular procedure adopted—which make alterations in the Income Tax principles. I should have thought that, if the Government have something quite clear in mind, they should introduce it in words here. They are very reluctant throughout the Bill to introduce words. They much prefer to do things by regulations, which are apt in many cases; but in the case of Income Tax principles there should be proper legislation, and words should be introduced here.

I think that a number of people have been rather distressed in their minds by what has happened in connection with this Amendment. We were first told that this Amendment was almost, if not entirely, consequential. Then the Financial Secretary himself made a considerable explanation, which was the beginning of my doubts about the Amendment, the beginning of my doubts as to what really was happening Now we have heard the right hon. and gallant Member for Gainsborough (Captain Crookshank), who points out that the words of the Amendment "subject to such adaptations as may be prescribed" are affected by something which is in the Bill elsewhere. Apparently we are going to have changes in taxation made by regulations made by the Treasury, or whoever it may be. It has always seemed to me a cardinal principle that the finances of this country and taxation should be ordered and laid down only by the House of Commons. Here, by this very harmless seeming Amendment, moved from the Front Bench opposite, we are to have backstairs legislation, and alterations made in taxation without the House of Commons knowing. Will the regulations be laid before the House or not? We do not know. I am amazed that at such a time as this an Amendment of this kind should be moved by the Government. The Committee does not know and the House will riot know whether taxation is put up or reduced. The House of Commons is the only taxing authority, and we cannot allow Ministers to get away with regulations of which we know nothing. We may be wrong, and it may not be so, but it is wrong that, by regulation the Minister should be able to vary the amounts up or down. I am amazed there are no Members of the Liberal Party here to get up and protest against this iniquitous procedure which allows the Government to do what they like with the taxpayer.

I am sorry if I led the Committee to believe that this Amendment was consequential and drafting in the sense in which we frequently use those words. It is difficult, with all these Amendments on the Order Paper, to sort them out, but as soon as I commenced to deal with the Amendment, I realised that there was a little substance in it. I apologise to the Committee if I misled hon. Members, although hon. Members on the other side should be throwing bouquets at us, and not criticising this Amendment, which will help colliery owners and those other concerns.

I think the Financial Secretary should bear in mind that some of us represent the taxpayer.

Criticisms have been directed by hon. Members opposite towards improving the Bill in the direction of fairer compensation for the concern; which are being taken over. I am simply pointing out that this Amendment helps a colliery concern, a subsidiary concern and an undertaking which come under the Bill perhaps to obtain a fairer crack of the whip than they might otherwise have got if we did not insert this Amendment. Inland revenue regulations being what they are, it may happen that they are not applicable, or in certain circumstances that they cannot be taken into account because of their limitations. It will be permissible here to go outside these regulations. That is why we propose after "principles" to insert the words "subject to such adaptations as may be prescribed." These adaptations will be in the direction of making them more elastic, and will enable them to act more justly towards the concerns.

I think that the Financial Secretary has helped us, because he has now told us that the purpose of this Amendment is to make more flexible what might otherwise have operated with undue rigidity. I think that it would have been easier if the Financial Secretary had given us some examples when he moved the Amendment. As I understand it, owing to the working of this Clause, there might be unfairness upon the taxpayer which the regulations would be calculated to assist. If the hon. Gentleman had given an example, it would have made it easier for us to understand precisely what is in his mind.

The Financial Secretary said something about compensation for the owner of a mine. The bulk of my remarks were not addressed to the question of whether it was fair or not to the coalowner, but to this principle which he seems to be inserting in regard to taxation by regulation. The basis of my objection was that this was being done by regulation—I think I have already said that I objected whether the variation was to be up or down. I think that we are entitled to know on what basis the hon. Gentleman has done this.

It is allowed for in the Bill. Regulations will be made, and the House will know what regulations have been promulgated. If hon. Members are aggrieved about them, there are ways and means of raising the matter, either on the Adjournment or by a Prayer.

I was not clear under what precedent this was being introduced, or what precedent gives the Government these powers.

This is the first time we have had a Labour Government with an absolute majority, and if we went on precedents, a great deal of legislation would never reach the Statute Book.

That really alters the whole position. The Financial Secretary has admitted that precedents mean nothing, and that the Government are now laying down something which goes against the principles of taxation. Seldom, if ever, have I heard it more directly put across that by regulation the Government are going to do what they like, and that they are going to do some things which have not even been agreed to by the House. I think that the Financial Secretary has given away a great deal. I am very glad that I had the good fortune to see this point and get that very clear definition, that the Government have every intention of taking away the rights of the taxpayers' representatives in regard to the imposition of taxation.

Amendment agreed to.

I beg to move, in page 22, line 37, to leave out "thirtieth day of June," and to insert "first day of July."

This is a drafting Amendment. In view of the fact that the accounting period of many firms ends on 30th June, it was felt that these words should be inserted as being the best date for the purpose.

I must be careful not to help the Government too much. I think that my hon. Friends can accept this Amendment, but I must protest against this continual increase in the use in our proceedings of the words "This is a drafting Amendment." The words "drafting Amendment" are used when there is a mistake of a comma, a mistake in spelling, or because the words do not read. This is not a drafting Amendment. It makes a change. It is not an important Amendment, but, as I understand it, the majority of companies end their financial year on 30th June, and, therefore, it is obviously right to make the date 1st July. It is becoming a very frequent practice to say that an Amendment is drafting. This is not a drafting Amendment, but a minor Amendment, as it affects a change. As I say, we accept it.

Amendment agreed to.

I beg to move, in page 22, line 40, to leave out "thirtieth day of June," and to insert "first day of July."

This is a minor Amendment. I should like to point out that the use of the words "drafting Amendment" goes back much further than August last, when this Government took office. I agree with the right hon. Gentleman that "drafting" is the wrong word to use, although I think we all know what we mean when we say that.

Amendment agreed to.

Further Amendments made: In page 22, line 45, leave out "the concern," and insert "a colliery concern."

In page 23, line 1, leave out "Subsection (2) of this Section," and insert "this Subsection."

In line 3, leave out from "ascertainments," to end of line 4.—[Mr. Glenvil Hall.]

I beg to move, in page 23, line 5, to leave out "twopence," and to insert "fourpence."

This is really a drafting Amendment to correct a slip, and I think that "drafting" is the correct word. In the Second Reading print of the Bill it was quite clearly laid down that one of the alternatives open to a colliery concern for interim income was an amount equal to twopence per ton on the concerns output of commercially disposable coal. This part of the Clause was recast in Committee, as some hon. Members will recollect, and, by a mistake in a rather involved Clause, the half profit provision was applied also to the twopence, thereby reducing the amount payable to one penny per ton. By substituting "fourpence" for "twopence" this is corrected, and the amount payable will be, as my right hon. Friend intended, twopence per ton.

There are so many propositions coming from the hon. Gentleman and his friends, which we find it difficult to accept, that it is with pleasure that we accept the proposition that one half of fourpence is twopence.

Amendment agreed to.

I beg to move, in page 23, line 6, to leave out from "for," to "those," in line 8, and to insert "that period."

This Amendment is consequential on what we have already done.

I do not think it is consequential. This is an Amendment for which I, personally, am very grateful, because it covers a point which I raised on the Committee stage. As the Bill is drafted, it lays down a

"period of 12 months before the primary vesting date as may be prescribed for the purposes of this proviso"

and I pointed out that it would be within the Minister's powers to select any 12 months at any time, I asked him to bring it down to something more definite. The result is that he has proposed this Amendment, which is exactly what I asked for, and for which I thank him very much,

Amendment agreed to.

I beg to move, in page 23, line II, to leave out "subsection," and to insert "paragraph."

A note which I have here says that the Amendment is "purely drafting and consequential." Therefore, it is pure, drafting, and consequential, and I am sure that the right hon. and gallant Gentleman opposite will have nothing further to say.

Amendment agreed to.

I beg to move, in page 23, line 12, after "concern," to insert "or subsidiary."

This will have to be changed, at a later stage, because there is no such thing as "concern" in the Bill. It is "colliery concern." If the hon. Gentleman will look back three or four Amendments, he will see that we solemnly inserted the words "colliery concern" instead of "concern."

Amendment agreed to.

Further Amendment made: In page 23, line 15, after "a," insert "colliery."—[Mr. Glenvil Hall.]

I beg to move, in page 23, line 16, to leave out "the period prescribed thereunder," and to insert "any period."

I am prepared to let this one go, but I suspect that it ought to be "that period "and not "any period."

Amendment agreed to.

I beg to move, in page 23, line 21, to leave out Subsection (7), and to insert:

"(7) The provision made by the last preceding Subsection shall be deemed, in the case of any colliery concern or of any such subsidiary, to be in substitution for the provisions of Subsection (2) of this Section so far as regards additions thereunder for the said two years or any part thereof to compensation for a transfer of transferred interests, being compensation attributable to transferred interests of that concern or subsidiary, except as to any excess of the aggregate amount of such additions over the aggregate amount of the revenue payments of that concern or subsidiary.

(8) The Minister may by regulations make such provision supplementary to or consequential on the provisions of this Section, as appears to him to be necessary or expedient, and in particular, but without prejudice to the generality of this Subsection, provision may be made by regulations made thereunder for making adjustments requisite for giving effect to the last preceding Subsection and for making goad any underpayment or overpayment to a colliery concern or such a subsidiary which may occur in consequence of the making of additions or revenue payments under this Section before all the facts relevant for giving effect to the last preceding Subsection have become ascertainable."

Here, apparently, there has been a misprint in the Order Paper. Perhaps this is what misled my hon. Friend for Oldham (Mr. Leslie Hale). It is proposed to insert the words on the Order Paper with this change, if the Committee and you, Mr. Beaumont, will agree to it: Instead of "(7)" read "(4)" and instead of "(8)" read "(5)". It makes no difference to the wording or to the intention. This is consequential to the main Amendment which was passed earlier on this Clause, and upon which there was fairly considerable discussion.

The Financial Secretary said that this Amendment was purely consequential. I am not certain that that is so. It may be that it does not alter what was originally in the Bill. It seems to me there is a difference in this respect, that in the Amendment as it stands on the Paper the words used are:

"except as to any excess of the aggregate amount of such additions over the aggregate amount of the revenue payments of that concern or subsidiary."

I am a little surprised at only the excess being excepted. As I understand the Amendment as it now runs, if a colliery concern receives a revenue payment in respect of its first two years and that payment is larger than what is ultimately decided upon, then an adjustment will have to be made. In other words, a colliery concern which receives its compensation at say three years after the primary vesting date will only receive three years' interest; and if, in fact, during the first two years the revenue payments are in excess of the interest attributable to those years, then in respect of the third year, it will receive a lesser amount. I do not quarrel with this result, but it seems to me that if there is an adjustment in the case of an excess equally an adjustment should be made the other way round. If the colliery receives during the first two years a smaller amount than the interest due, then an addition should be made in respect of the last year so as to bring the amount up to the grand total that it would have received if it received interest throughout the period.

I hope that the difficult point I am trying to make is clear to the Financial Secretary. I think it is necessary here to cater not only for the possibility of excess but also for the possibility of deficit. It may be that, on the point I am making he has some information, some power to make regulations, which power is hidden in this Bill. I should like some explanation from the Government as to the meaning of these words, and an assurance that the point is being looked after.

I should like to say at once that the point is being looked after, and if the annual interest does exceed the amount of the revenue payment there will be no attempt to adjust, and we should not reclaim either way. If there is a greater income accruing, that will be to the benefit of the person who gets it, because there will be no attempt to make an adjustment. A man, a woman or a colliery concern will benefit by any increase in the income even on the interest income.

I am afraid the Financial Secretary has not answered the point I was making, but he has answered another point. I must give a concrete case. Suppose to take a simple case compensation works out so as to give an annual income of £1,000 a year, and suppose, in fact, that compensation becomes payable three years after the vesting date: the concern in that case would be entitled to £3,000 by way of compensation. But it may happen that during the first two years the revenue payment works out at £1,200 a year. What would happen is that the concern will receive £2,400 during the first two years, and by virtue of the provision of this Amendment it will only receive a further £600 during the last period. All that the Financial Secretary has told the Committee is this: supposing, in fact, that the revenue payment had been at the rate of £1,800 during each of the first two years so that the concern receives £3,600 then no attempt will be made to recover the £600 excess payment.

I can quite appreciate that, and I should think it is likely to be a comparatively rare occurrence. I do not quarrel about the proposal to enable a final adjustment to be made, so that those concerns which get more income than they should have got during the two years have their accounts properly adjusted by a deduction during the last year. However take the example which I gave. Supposing that instead of receiving £1,200 during each of the first two years this concern is only entitled to £800 a year by way of revenue payment; then as this Clause provides that the two kinds of payment are alternative to one another, and as this Subsection only refers to excess and not to a deficit, what will happen is that the concern will only receive £1,000 during the third year or a grand total of £2,600. There is nothing to make good the deficit of £400. The Government stand to gain in one type of case, but make no payment in the other type of case. I think it is essential that fair treatment should be meted out in both cases.

We intend that fair treatment should be meted out. In parentheses, I might say that the hon. Member is not now speaking for the taxpayer, but is seeking to see that justice is done to the owner. I have made it clear that, either way, the amount will be made up. In one case it will not be necessary, because already the colliery owner will have got more than he was entitled to, and that amount will not be reclaimed, but in the other case where there is a difference between revenue and interest payments, the difference will be made up, so that in the end it will even out all transactions.

I only want to say that the alteration in this Clause deals with the point I raised a little earlier in the afternoon. It now makes intelligible what was completely unintelligible before. I am sorry that the hon. and learned Member for Kettering (Mr. Mitchison) is not here because he deserves the congratulations of the Committee on securing the lucidity which is now made.

Amendment agreed to.

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

This Clause, to reconsider which we have to recommit this Bill, has now been moulded and shaped by the joint efforts of the Committee over a period of time which is very long, but not excessive for so important a matter. I think it has proved to some hon. Members, who appear to have the idea that the Committee stages of some Bills are not important, even from the Government point of view, how delicate and difficult a thing of this kind can be, and how necessary it is that each stage of our proceedings should be deliberate and clear. In this case we have not yet been able to start the Report stage of this Bill. I think we ought to pay tribute to the Financial Secretary to the Treasury for the good humour and patience with which, as always, he has explained to us the very complicated series of Amendments which he has had to move this afternoon. Of course, we have been assisted by a number of professional speakers from both sides of the Committee, who have shown, I am delighted to say, as an amateur, that the animosity which they have against each other as professionals, far outweighs any party division. The only people we have not had here to assist us from a professional angle, are those whom the House of Commons normally expects to be present on an occasion of this kind—those specially appointed as Law Officers of the Crown. But I realise that there are other aspirants who, if they are negligent of their duties——

I find it difficult to discover, in this Clause, the subject to which the right hon. Gentleman is now referring.

This Clause, from the point of view of myself and my hon. Friends who have studied this matter, is an improvement on that which left the Committee upstairs. I am grateful to the Minister for having met many of the points we raised. The Clause is an improvement in two important respects. It clarifies the Surtax situation, and it ensures that the interim payments, whether paid during the first two years, or paid en bloc at the end of the final assessment, shall be cash payments if they are not payments in stock. Those are two important concessions, but this Clause is still open, as it is drawn, to an objection. The Clause is entitled, "Interim income pending satisfaction of compensation." But what it does is to provide interim payments during two years and nothing else. The Minister must not think that we are moved by any consideration other than the old-fashioned consideration of justice and equity as between the taxpayer on the one hand, and the claimant on the other. Therefore we are left with the possibility, indeed, the considerable probability, that a large number of people will have no income during a period which may last for five or six years. The Parliamentary Secretary said, "We want to stimulate people to get on with the valuations. They should not deal with valuation in a leisurely way." But it is not the people who will get the receipts who will hold it up. It is the necessarily long and complicated machinery of valuation, which we have seen operating in connection with a much less difficult subject—mining royalties. That took a great deal more than two years. It is more than likely, having regard to the difficulties of the system of valuation, which we think unnecessarily complicated, that the global, regional and individual valuation, with the business of scaling it up and down, will mean that the lawyers, accountants and experts, between them, will keep it running for a great deal more than two years. During that time there will be no actual cash income for the shareholders, large or small, of the companies concerned.

I know it is not fashionable to take much regard of individual rights these days, but a large number of people will be almost entirely dependent upon the income which they receive from small holdings in colliery undertakings. The Committee should not forget the very wide range of industry which the Bill now covers. The Board could enter into an immense range of industries, and I do not think it is right that there should be a situation—quite apart from whether it is a good or bad thing to have national ownership—where, having accepted the principle of compensation, a number of harmless people, who may have invested their savings in these undertakings, should be without income. I hope the Minister will be able to satisfy our anxieties. He may tell us that by Clause 18 (3) something might be done in that regard, but I am not sure how far that really goes and what use is intended to be made of it. The Subsection states:

"Provision may be made by regulations for authorising the partial satisfaction of such compensation before the determination of the amount thereof has been completed."

Therefore, it is arguable that if it takes a long time, some of the capital compensation would be payable to the undertaker, and that in respect of the interest payable on that capital it could distribute some form of income to its shareholders. I take it that that is intended to deal only with capital repayment, not interim income. Therefore, that does not deal with the question of interim income. In that case, it is true that if a considerable proportion of the capital were given ahead of time, so to speak, that would itself produce income which could be distributed to the shareholders. That, to some extent, would meet my point, but if we are to rely on that we shall be still more confused. I thought that was meant to deal with the rather exceptional case. If, over a wide field, it becomes clear that valuations will not be carried through in two years then it would be very disturbing to the whole machinery to use that Clause to make a large number of partial distributions to every individual firm. I feel that we should register our view that conditions should not arise in any industry, large or small, which the Government elects to put under national ownership, where people are left without any possibility of obtaining any income at all. If the Minister can tell us that that cannot arise we shall feel more satisfied. We readily admit that very considerable improvement has been made to the Clause as it has been redrawn, but we still wish to raise this major point of principle.

The right hon. Gentleman opposite has expressed satisfaction with the amended form of the Clause and agrees that it is consistent with the assurance I gave during the Committee proceedings, that we should take account of the submissions made by Members opposite. That we have done. On the whole it is my view that while we cannot expect right hon. and hon. Members opposite, or persons who are to be recipients of compensation, to be wholly satisfied, we have gone a long way to appease those who sought compensation, in respect of interim payments, on a higher and extended scale. It was my intention from the outset to treat the colliery owners and the owners of subsidiary undertakings as fairly and as reasonably as the circumstances permitted. That we have sought to do.

I am particularly in agreement with the right hon. Gentleman opposite in what he said about my hon. Friend the Financial Secretary. It was by no means an easy task to pilot the financial Clauses through the Committee, and it was far from easy to deal with what are called the drafting and consequential minor Amendments. We are indebted to my hon. Friend for his patience—he has much more patience than I have—and in particular his lucidity in explaining highly complex Amendments. But the fact is that the Bill is highly complex in character. That is in the nature of the case. As I informed the Committee frequently during the 18 days of its proceedings, this Bill is of an experimental character, and I doubt whether the Parliamentary Draftsmen have ever encountered such heavy weather as on this particular occasion. It was, therefore, necessary to recast the Bill in many particulars. I make no apology for that. It is a common Parliamentary practice; certainly, it has been a common practice during the years I have been a Member of the House. The right hon. Gentleman opposite commented on the absence of the Law Officers. There is a reason for that. Both the Attorney-General and the Solicitor-General are engaged in legal cases of considerable importance. My hon. and learned Friend the Attorney-General gave me an assur- ance that he would try to be here at about six o'clock, but in any event, we did not anticipate any serious legal argument, and so far there has been none.

What about the contradictions?

Contradictions are not peculiar to the legal fraternity. There are laymen in the Committee who frequently contradict one another. We have got to make the best of a bad job. [Interruption.] When I say we have got to make the best of a bad job, I would remind hon. Members opposite that during the Committee stage the Government had to make the best of the bad job which presented itself to the minds of hon. Members opposite, sometimes quite wrongly. When points have been clarified, hon. Members have been ready to respond; they have seen the light. We have on the whole managed successfully, without the presence of the Law Officers, but later on, when we reach intricate points of legal complexity, no doubt we shall appreciate the assistance of the Attorney-General and the Solicitor-General.

Let me come now to the substance of the Clause, and deal briefly with the observations made by the right hon. Gentleman. The gravamen of the charge against the Government in respect of Clause 21 is that, although we are providing for interim payments over a period of two years—which, by the way, are cash payments, to which no objection can be raised—and have now decided, in the amended form of the Clause, to provide interest payments in cash to those who prefer to await the interest payments accompanied by the compensation, hon. Members opposite think this is insufficient for the purpose. I understand it is the desire of hon. Members opposite that we should, in this Clause, provide for interim payments until the final completion of compensation. I think we have gone a long way in providing the interim payments over a period of two years. If we had decided, as hon. Members opposite wish us to do, to provide interim payments in cash without any specified limits, it would have been a stimulus to the recipients of compensation to haggle and bargain at great length over a long period of years, well knowing that they were receiving cash payments. I will come to the question of haggling and bargaining in a moment or two. I am very certain that would have happened.

It is our desire to expedite the valuation proceedings. Hon. Members opposite have not raised the matter on this Clause, but during the Committee stage they suggested frequently that the valuation proceedings would be prolonged, and indeed, I think the right hon. Gentleman did make some reference to it in his speech. They based that allegation on the experience with regard to the royalties valuation boards. We have derived much experience from the proceedings of the valuation boards responsible for royalties, and it is by no means improbable that the valuation proceedings will be expedited because of the experience so gained, and because we shall afford every encouragement to the valuation boards to reach a final conclusion. One of the difficulties that presents itself is not that the Government will seek to impede the proceedings of the valuation boards—the Government would derive no advantage from that process—but that the colliery undertakings in a particular area, who are to be the ultimate recipients of the compensation and who will be subject to decisions of the local valuation boards, may be at variance on the terms of the allocations, bargaining against each other. I understand that the most distinguished members of the legal fraternity in this country—no doubt many of them in the House—have been briefed already for proceedings that are in contemplation.

This will present a difficulty. In order to avoid the prolongation of valuation proceedings, we have decided that the interim payments should not be extended beyond the period of two years. This imposes no severe hardship on the majority of colliery undertakings. They have reserves; many of them have huge reserves. It is alleged frequently that they are in a parlous financial condition, but in fact many of the colliery undertakings are well-to-do. I would observe, in passing, that so well-to-do are they, in the opinion of speculators, that the shares of colliery undertakings are on the rise, which, by the way, does not justify the connotation, in respect of the nationalisation project, that nationalisation has the effect of depreciating the value of the shares of colliery undertakings. Only last week I noticed that colliery shares had increased, which is very satisfactory from the standpoint of certain individuals, but at any rate it does not denote that the colliery undertakings are without substantial reserves, which, in addition to the interim payment over the period of two years, will enable them to tide themselves over any difficulties. If such a difficulty should emerge, as the right hon. Gentleman envisaged, I would direct his attention, as my hon. Friend the Financial Secretary to the Treasury has already done, to Clause 18 (3) which, in our view, provides the solution.

The right hon. Gentleman has asked whether this is not wedded to the ultimate amount of compensation. It is wedded to the ultimate determination of the amount of compensation to be paid, but if a colliery undertaking or a subsidiary undertaking becomes involved in difficulties or, perhaps, is subject to pressure by shareholders as may well be the case—although in parentheses I would say that pressure on the part of the shareholders may help to expedite the valuation proceedings—if they come to the Treasury and ask for some immediate payment on account, that can be provided, so that the position of the colliery undertakings and the subsidiary undertakings has been safeguarded In the circumstances, I cannot see that the right hon. Gentleman has any substantial ground for complaint. We have sought to be fair in this matter. I have been under pressure from certain quarters not to afford compensation at all. Hon. Members opposite must not be under any illusion; there is a substantial body of opinion in this country which is opposed to compensation.

Confiscation.

Surely that is the obvious implication, and indeed there was a time in the Labour Movement when compensation was regarded as a mistaken policy. We are much more reasonable nowadays, but we must not be too generous with public money. An hon. Member who is no longer in his place but who waxes eloquent on the legal aspect of this Bill gave us two speeches in the course of our Debate. In one of them he said we must safeguard the interests of the taxpayer and then, not long afterwards, conveniently forgetting all he had said, he put up a case for the colliery undertakings. This is very difficult to understand. I think on the whole we have been reasonable—I will not say more reasonable than we should have been— and we were anxious to be so from the start. The right hon. Gentleman did indicate that we had become more reasonable, more amenable, more responsive, more resilient, more flexible and so on—he did not use all those words, but I heard them in the Committee proceedings from one side or the other—because of the arguments advanced by his hon. friends.

Because of the Government's growing difficulties.

The right hon. Gentleman ejaculates, "Because of the Government's growing difficulties" Right hon. Members opposite talk about us losing a Minister, but they lost a Government. In all the circumstances we have effected a much more reasonable Clause and one that will, I think, placate the colliery interests outside and which is, I fancy, appreciated by hon. Members opposite. We have gone much farther than any of them in the heat of the proceedings on the Committee stage expected we would go. Having gone so far I hope hon. Members will extend a vote of thanks to the Government for their conciliatory attitude, whatever the confiscators may care to say.

I should like to register a protest against this Clause for a variety of reasons. After listening to the right hon. Gentleman's discussion of confiscation, I think it is rather staggering talk, because confiscation may lead to a great many other difficulties. I would advise the right hon. Gentleman and those behind him who are in favour of such a principle to go very carefully along that line. Otherwise, grave difficulties might exist for more people than they at present think. The right hon. Gentleman is quite right: a certain amount of good has been put into this Bill, and some small Amendments have been made since this Clause was in Committee, but these have not done a great deal. There are many points on which criticism of this Clause can be brought forward. I was very much alarmed to hear the Minister say this afternoon that he is not prepared to place the regulations on the Table of the House of Commons.

With great respect, no Minister could possibly say such a thing. Regulations in this or any other Bill must be laid before the House of Commons.

I am sorry, I should have said Treasury orders.

They are another matter.

The House is entitled to know exactly what is taking place in that respect. In addition, we have had no answer, except in an offhanded way, as to why interest is not being paid right up to the date of the payment of full compensation. It has been suggested—and I remember the hon. Gentleman from the Treasury bringing it forward as a reason in Committee—that we must fix a date, and he put two years as a fair date. When he was pressed why he suggested two years, he replied that it was in order to bring the right sort of pressure—he was careful not to say "wrongful" pressure—on the negotiators to hurry up with the negotiations and have the compensation settled. It seems to me that the people who will have least to do with the negotiations will be the owners themselves. They will employ professional people and the Government will have their representatives, and the pressure that is brought to bear on those people will not affect the owners because the matter will be out of their hands. The only way they will be affected is that they are to lose an interim payment after a period of two years. It does seem to me, therefore, that it is a somewhat "catch as catch can" business so far as the owners are concerned, except that they are not in the contest at all and are being squeezed out of this interim payment after a period of two years.

There is another thing that strikes me about this. The Government have claimed that they are trying to be fair and are giving this interim payment. They are taking over property and they propose to give colliery companies one half of the annual value of the property over a period. On what basis do they propose to give the owners one half as an interim payment? Why not give the whole value of their undertaking? It is their undertaking which is earning the money. For the life of me I cannot see why the Government cut the income of the colliery undertakings exactly by a half. There cannot be any fairness in that. The Clause tries to do the almost impossible thing. It is badly drafted and it has been badly subjected to a great deal of Amendment. It is trying to whitewash a position which is thoroughly unfair in order to bolster up a proceeding which will react on the country at a later stage.

I intervene on only two small points. The first is that I gather that the real reason why payment cannot go on after the first two years is that that might complicate the negotiations. That was the answer given to our questions. Are we to understand that those negotiations will not take place for two years? What is to happen during the first two years? If the payments complicate negotiations at all, surely they will do so as much during the first two years as afterwards. The second point is that I think this is a matter of being hard not only upon colliery undertakings but upon small shareholders. One hesitates to bring up the poor widow as an illustration, but it is a fact that with colliery concerns, as with other businesses, there are people who work in them and live near them, and have watched them grow. They see those undertakings every day, and they put their savings into them. When they retire, practically all their savings are wrapped up in one concern. Upon those savings they depend for supplementing their old age or other pension. In this case, for two years they are to suffer hardship, and after that they get nothing in income. Those people will be placed in a very awkward position. I brought these arguments up in the Committee, and am sorry to have to repeat them. If the Committee stage had been down here, it would not have been necessary to repeat them. I should like to have an answer to these points: What is to happen in the first two years? Will there not be hardship to the small shareholder?

I wish to raise three points. The first is on the question of stimulation, to which the Minister referred upstairs and again this afternoon. I consider it entirely fallacious to say that there will be a lag in settling compensation matters. I can say quite frankly that the stimulus will be provided by those who want to get their money, because of their fear of inflation under the present economic regime Every serious minded person will say that if there is some money coming to him the sooner it comes the better. That in itself will be quite sufficient stimulus to make people hurry up. The point arises very much. The suggestion of the Minister is that there will be prolongation. My answer is that there will not.

Surely the hon. and gallant Member realises what he is saying. He says that there will be such a desire to have the money that people will hurry up. Very well. If at the end of two years they have hurried up so successfully that the matter has been disposed of, his argument no longer applies.

I was merely answering the question that the Minister raised. He said there was likely to be delay in the payment of compensation. The second point that the Minister mentioned related to our experience in the valuation of royalties. I seriously suggest to him that the experience will be of standard tonnage arbitration. He may recall that everybody had to go in and try to get money out of the pool. That process went on for a very long time. I think that the method of putting so much into the pool and then letting everybody get what he can is most unreasonable.

My third point has been well demonstrated. It is that the Clause has been very clumsily and hurriedly drafted. The Minister has addressed an argument upon the vital point of difference, which is how a colliery company will get its compensation after the two-year period has elapsed. I am now referring not to the colliery companies so much as to those who are in a needy position The answer which the Government give is that those people come under Clause 18 (3). That is the most clumsy way of doing it. In whatever way compensation is assessed, no heavy amount of compensation could possibly he paid by the Treasury. I doubt whether they can, in fairness, give half of what they think it might be. Therefore the only cash interest which will be available for the colliery companies is interest on about half the amount of compensation. In most cases the amount will be quite inconsequential. I suggest to the Minister that there are no political differences in this matter. There is a simple solution to the problem and he has only to look at the Order Paper to see what it is.

There is a difference between the payment to be made under Clause 21 and the income accruing after two years. The hon. and gallant Member opposite suggested that people who went into the second year might get no income, but income will accrue, and will be eventually paid.

Speak up.

I absolutely agree with the hon. Member, but what I am saying is that the poor person who is dependent upon it will not be able to get it.

The right hon. Member for Bromley (Mr. H. Macmillan) referred to payments of income, and I am trying to deal with that point. I think the Government have met the case which the right hon. Gentleman put forward, and that advances may be obtained both as capital and as income.

What is the poor shareholder to live on in between, if there is no other source of income?

I was just coming to that point. I have tried to demonstrate that the income will accrue. Therefore there is provision that an advance may be made under the Bill for the total accruing income or part of it. In my submission that argument does not apply. I recognise that the Government have fully met the point put forward by the Opposition.

Just now the Minister asked for a vote of thanks for some purpose or other, but I cannot possibly let the hon. Gentleman's speech go without saying how deeply I appreciate the fact that he has intervened in the Debate. After the complete lack of any form of coherence, I do appreciate the fact that he has come and given us a little light on the matter, and I only hope that, as the Government are so feeble on this matter, in future we shall have more help, which we shall all appreciate, from the back benchers behind them.

A gramophone record.

On a point of Order. Is it in Order for an hon. Member opposite to, compare the speech of my hon. Friend with a gramophone record?

Five thousand copies.

I beg to move, "That the Clause be read a Second time."

I should call the attention of the Committee to a misprint in line 4 on page 1458 of the Order Paper. Instead of the words "concerns and Class A subsidiaries", it should read "concerns and of Class A and Class B subsidiaries". The wording will then correspond with the same words which appear at the beginning of the Clause.

This new Clause is moved because paragraph 7 of the First Schedule, which automatically vests in the Board the interests of colliery concerns and Class A subsidiaries in patents and trade marks, was found to be defective. It did not, for example, include copyrights in registered designs. Its provisions, in the view of many, were too drastic with regard to patents, and it treated trade marks as much too important a matter. The whole subject has now been reviewed and, as a result I am in consequence, moving this new Clause on behalf of my right hon. Friend. On paper, I must admit the new Clause looks rather formidable but in actual fact the effect of it is small.

6.45 p.m.

To begin with, so far as the copyrights are concerned, it has now been decided to provide for vesting in the Board copyrights in registered designs, and as they are similar to patents and the same provisions should apply equally to both, both have been included in this New Clause. The Clause also provides that the interests of colliery concerns and of Class A and Class B subsidiaries in patents and in copyrights in registered designs are under the New Clause to be transferred at the option of either the Board or the owners of the interests, subject to arbitration should one or other of the parties object. If arbitration arises because objection is made to the exercise of its option by the Board, requiring a transfer to it of the proprietary interest in a patent or copyright, and as a result the arbitrator decides that the patent or copyright should not be vested in the Board but that nevertheless the Board ought to have certain rights over it, in order to use it, he may if he thinks fit allow the Board to use that copyright or patent under licence on such terms as he may, in his wisdom, lay down. As to terms, he must, under the New Clause, be guided by what, in his view, are likely to be the terms arrived at between a willing grantor to a willing grantee. This, in the view of my right hon. Friend, provides a halfway house between vesting the patent or copyright in the Board and leaving it with the colliery concern. It is a necessary provision since colliery concerns, and particularly composite concerns, may have a patent which could be used to great advantage in relation to other activities which do not pass to the the Board under the Bill.

The Clause is divided into Subsections. Subsections (1), (2) and (5) are, I will not say a rehash, but an amalgam of Subsections (2) and (3) of Clause 5 which deals with the transfer to the Board of assets generally. Subsection (4) of our New Clause is merely an ancilliary provision and deals with the effect of an award granting a licence under Subsection (3). Subsection (io), to which I should also call attention, provides that when a licence has been granted to the Board under a patent, the patentee shall not be precluded from making a request to the Comptroller General of Patents, Designs and Trade Marks for the patent to be endorsed "licences of right." Trade marks, which also are dealt with under this new Clause, are relatively unimportant and are in our view definitely more suitable for the option procedure than for automatic vesting, and provision is taken, as hon. Members will see, for the option machinery to be applied to the vesting of trade marks just as they are to be applied to copyrights in designs and patents. In conclusion, I think this Clause meets generally some of the criticisms which were made when we were dealing with this matter in Committee. We have done our best to meet those criticisms where we thought there was something in them, and, that being so, I hope that without too much discussion —as we have a great number of Amendments to get through—the Committee will allow us to have this Clause.

On a point of Order. Has a manuscript Amendment been moved to correct what the Financial Secretary described as a misprint in line 4 on page 1458 of the Amendment Paper?

No, the circumstances were mentioned by the Financial Secretary, who moved the new Clause in the amended, or correct, form.

I took occasion to indicate that there was this printer's error, and if hon. Members saw no objection, and the Chair saw no objection, I thought it would save time to move the new Clause in corrected form.

With regard to the minor point raised by the hon. Member for Sutton Coldfield (Sir J. Mellor), which was a perfectly good point, the Minister was kind enough to advise me beforehand that the mistake had been made, and I thought that it could be dealt with in this way. It is purely a printer's or a verbal error. I see that the Attorney-General is now with us.

Better late than never.

The Attorney-General is back from his weekend at Eastbourne where he described the Opposition as "reckless and hysterical." I think he will not regard it as hysterical on my part, or reckless, if I ask one or two questions on this new Clause. We have had no opportunity of discussing it, and it is part of the general scandal of the way in which proceedings are going on on this Bill. Here is a Clause which occupies two pages of printed matter. I challenge any hon. Member of the Committee clearly to understand it from the explanation given by the Financial Secretary. I would offer a small prize to hon. Members opposite to rise and take part in these proceedings. I am not blaming them, but we who are allowed to see these Amendments only a day or two before discussing them, find ourselves in difficulties. It is part of the reckless and hysterical rate of legislating.

I have tried to understand the Clause during the Saturday and Sunday we were given in which to study the matter. It takes out the particular class of asset from those transferred without option to the Board. Instead of being in Part I of the first Schedule, the patent copyright designs and trade marks are not automatically transferred to the Board. They fall out of that category of automatic transfer. That clearly is important and just. We welcome it, and thank the Government for making the alteration. It is clear that these patents, copyrights, trade marks and designs might be valuable to the concerns for many processes not transferred to the Board. Therefore it is obviously fair that they should retain the rights of their designs for use for other purposes which they are still allowed by a beneficent Government to carry on.

What I am not quite sure of are the first four Subsections of this Clause, which the Financial Secretary said was a "rehash" of Clause 5 which deals with the transfer of assets. I would not have ventured to use a word so derogatory, nor do I think it is quite accurate. What I think he meant was that they apply the rules laid down in Clause 5 which apply generally in the transfer of assets. Is that right?

indicated assent.

As I understand it the rights in these patents or copyrights will remain in the concern, that is the actual ownership of the rights, but the Board if it wishes to use them will have the right of going to arbitration?

That is if arbitration has gone against the Board.

It may be that under arbitration the whole will be transferred. What has to be settled is whether the sole right is given or whether it is transferred in toto to the Board. Suppos- ing the arbitration decides to leave the actual rights with the proprietor, then the designs can be given by the arbitrator to the Board to use. Can the sole licence to use, or licence to use be given? That is a distinction on which I would like an answer. There is in the ordinary patent or copyright a distinction between the sole right to reproduce, or the right to reproduce. I wish to know whether the arbitrator can give to the Board the sole right, or merely the right. I am not a lawyer, but I want to know whether these words mean that or not. There is a distinction which would allow the proprietors to use the right for themselves for other purposes, or to sublet it in the ordinary way to other users.

Subsection (10).

Is he given a choice of transferring? Can he transfer the sole right or not? I understand that the arbitrator can decide to transfer to the Board or can give the sole rights to the proprietor. If he decides to give the sole rights to the Board, can the original proprietors or anyone else through arbitration use the patent or design? Is it a two-way traffic? If the rights are left to the proprietors, can the Board have a licence or if the rights are transferred, can the Board have a licence to use them? We are grateful for the Clause as a whole because it meets the point raised in Committee that these rights ought to be taken out of the Schedule of automatic transfers without option, and put into a Schedule where the automatic transfer operates.

The right hon. Member for Bromley (Mr. H. Macmillan) has shown such a complete mastery of the provisions of this new Clause that his opening observations about the impossibility of dealing with these matters owing to the shortness of time was, perhaps, a little hysterical. The right hon. Gentleman has indicated exactly correctly the effect of the Clause. There is no power for the arbitrator to give an exclusive licence, indeed the patentee is entitled, if he so desires, to have the patent endorsed for licences as of right. The answer to the second question is that the arbitrator has no power to vest a patent in the Board and to provide that the Board must licence the old patentee.

I am grateful for that point. Would not that be possible in some cases, and a rather reasonable thing to do? Could the hon. and learned Gentleman look at it and see whether the counter position could be conveniently used?