I should like to make a short statement regarding the Capital Issues Committee, in reply to Question 97.
It will now be necessary to take account not only of the needs of those who require to raise capital in connection with the war in the Far East, but also of the large number of industrial and other borrowers who will require to borrow to finance reconstruction and development. To meet this changed situation, and to ensure that the policy governing the general control of capital issues conforms to the wider policies of the Government from time to time, it is necessary to issue revised instructions to the Capital Issues Committee. In order that the principles which will govern the grant of Treasury consent to new issues may be known as widely as possible, I have arranged that the Memorandum of Guidance to the Committee shall be published as a White Paper. It will be available in the Vote Office this afternoon. I would now only add that the present exemption in favour of cases where the amount to be borrowed does not exceed £10,000 in twelve months is being raised to £50,000 as from tomorrow.
As regards the market controls, I have decided that the ordinary market machinery shall be allowed to function again in respect of permitted issues: the restriction of issues to private placing or to offers to existing shareholders will accordingly lapse. The Treasury's control over permission to deal and the arrangement by which transactions in unquoted securities are submitted for Treasury approval will also cease.
As regards bank advances, the banks have during the war co-operated in our general financial policy by restricting advances to purposes which would assist the war effort or were otherwise designed to meet national needs. For the future and with a view to assisting essential civil production, I have now asked the banks to continue this co-operation in order that their policy in regard to advances may conform to the general policy of the Government. To that end I have asked that unduly large advances should not be made for personal needs; that no facilities should be given for the speculative buying or holding either of securities or stocks of commodities; and that generally the banks should be guided by the same principles as will apply to the grant of Treasury consent to new issues, special consideration being given in particular to advances for any form of export business.
I would like to ask the Chancellor of the Exchequer two questions with regard to that statement. The first question, which perhaps should be addressed to the Leader of the House, is—I am aware that the time at our disposal between now and the Dissolution is exceedingly short—Will there be any opportunity for the House to discuss the proposal? The second question is one that I would like to put to the Chancellor of the Exchequer. He will remember that in the Debate on the setting up of the two Finance Corporations he told us it would be unnecessary for those corporations to exercise any consideration other than financial, because the Capital Issues Committee decided on the question of the merits. As I understand the present proposal, there is to be no censorship on behalf of the Capital Issues Committee, up to £50,000, and, therefore, it would appear that, as far as the smaller amounts up to £50,000—which are the main subjects of the smaller Financial Corporation—are concerned, the issue will be decided solely on financial grounds and not on national grounds. Is that the case?
I think the right hon. Gentleman is aware that there has been an overriding exemption up to £10,000 in one year for issues by existing companies. All I have said is that that limit, which has been criticised, will be raised to £50,000. But I should like to make it clear that the working of the new arrangements will be kept under continuous review, and nothing I have said detracts from what I said on the previous occasion to which the right hon. Gentleman referred, that we should rely on the control of capital issues rather than on the detailed working of the new Corporations to ensure that the national interest is fully safeguarded in those matters.
Does that not mean that up to £50,000, a company whose objects are quite worthless from the national point of view can borrow money from one of these Corporations, when much more worthy objects are being ruled out by the shortage of money?
May I ask my right hon. Friend whether he cannot say that the Bank of England, the banks and all the principal financial institutions in this country have given the most loyal co-operation to the Government?
If no principle of priority is to be exercised over the raising of money up to £50,000, how will it be possible for the Government to direct labour and materials into those channels must useful to the community in the next few months or few years; and is this not creating a financial jungle once more for the bigger beasts of prey to try to get whatever results they can?
Can the right hon. Gentleman say whether this cessation of control comes into force immediately, and if it does, will he say what was the urgency that made that necessary, without waiting for the opinion of this House or of the country to be expressed?
This is an adjustment in the arrangements for the exercise of the control. It is not being abolished; it is merely being relaxed in order to meet the new conditions of the development period.
I would like to consider how most usefully we can do that. There are certain Supply days, and perhaps we can discuss the actual arrangement through the usual channels.