I beg to move, in page 51, line 11, to leave out from "concern," to "to," in line 12.
It might be for the convenience of the Committee if we took this Amendment together with the five other Amendments to this Clause, because they all deal with the same point. The Committee may remember that during the Committee stage the wording of Clause 45 was subjected to considerable criticism by the right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice) and the hon. Member for Stechford (Mr. Roy Jenkins), who contended that the words
transferred, as a going concern and without substantial alteration in the character thereof
might be taken to mean that there should not be any substantial alteration at the moment of transfer. Our object—and I do not think there was any disagreement about the object of the Clause—was to stop the purchase and transfer of a business just for the purpose of acquiring its standard so that the purchaser might avoid or reduce his E.P.L. liability. At the same time we did not want to stop bona fidecommercial transactions where this right of standard should pass.
On the Committee stage I promised that I would look at the wording again. I thought it was a matter of drafting, because our object is the same. This Amendment is intended, and I think succeeds, in removing any ambiguity that existed. If there is any substantial alteration in the trade or character of the business within 12 months, the standard does not pass, whereas if there is no such substantial alteration then the standard will pass. This meets the point which was raised in Committee.
I should like to thank the Solicitor-General for making this Amendment. I know that my right hon. and learned Friend was much concerned at the wording of this Clause. We discussed it ourselves at considerable length and we think that his point has been fully met and that the Clause is now in satisfactory form.
I want to ask my hon. and learned Friend a question about the Amendment to line 38, which is part of the Clause we are now discussing. I appreciate very much the concessions which my right hon. Friend has made and which will he appreciated on both sides of the Committee, for they are very valuable, but there is a point in that connection about which I am not quite sure and do not understand what it really means. My right hon. Friend knows that I am not as clever as he is in understanding the intricacies of these very technical points.
I should like to know if he or the Solicitor-General can inform me whether this transfer refers to a company controlled by the people specified in paragraphs (a) (b), (c), and (d)? Does it mean a company which has been controlled by members of a family and close associates at the point of time when the business was transferred from the partnership to the company? This is a very important point which has not been covered by the Solictor-General's remarks. If this is so, then the new company—for it will be a new company— will continue to enjoy the benefits of the subsection even if the transfer has been made within a short time and the company has passed out of the hands of the persons listed in these three paragraphs.
The other question is this. If one must look at the control and, therefore, at the point of time that a business is transferred to a new company, many transfers which should benefit under subsection (3) may be deprived of their rights on technical grounds. I will not delay the Committee by describing the possibilities of that, but my right hon. Friend will appreciate the point I am making. It would not be right that these transfers, which otherwise would be satisfactory, should be delayed on purely technical grounds of which there might be many. Common justice would dictate that my point should be considered by my right hon. Friend. I hope he will understand my amateurish way of expressing it. This is a point on which many people who know more about this matter than I do feel strongly, and I would urge my right hon. Friend and the Solicitor-General to give consideration to it and perhaps give me a favourable reply.
With regard to the first point raised by my hon. and gallant Friend, as I understand the Clause, for subsection (3) to operate the body corporate to which the business is transferred must be a body corporate over which one or more of the persons described in that subsection is at the time of transfer in control. That, I think, is the answer to the first point.
The second point put to me by my hon. and gallant Friend was, if I understood him correctly, whether that provision might possibly effect a delay in the transfer. I appreciate that in certain circumstances it might cause a slight delay, but I do not think it is possible in a Bill of this character to make any further provision to benefit the company which is acquiring a business from an individual.