Davies Investments

– in the House of Commons at 12:00 am on 23rd January 1967.

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Photo of David Winnick David Winnick , Croydon South 12:00 am, 23rd January 1967

asked the President of the Board of Trade if he will make a statement on the failure of the banking firm Davies Investments which has now ceased business.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

The Board of Trade is urgently investigating the situation, using its powers under Section 18 of the Protection of Depositors Act, 1963.

Photo of David Winnick David Winnick , Croydon South

Would not my right hon. Friend agree that this whole matter needs the most thorough investigation and that a great deal of the activities of this group, which have come to light in the last day or two, certainly smell? What can be done to assist the many small depositors who are in danger of losing their money? Would he investigate the state of properties, spotlighted in a number of daily newspapers today, where obviously Rachman-like conditions have existed for some time?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

We are investigating this now, and I promise my hon. Friend that this investigation will be thorough. When we have ascertained the facts, we will use such powers as we have and which seem to be necessary. Any question on housing must, of course, be addressed to my right hon. Friend the Minister of Housing and Local Government.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Is it not fantastic that our laws should allow some 5,000 small depositors to have their money at risk while shareholders and directors of this description have only modest sums of their own at risk? Will he consider amending the Companies Bill in another place so to arrange our laws as to prevent this sort of completely ridiculous ratio of risk between the small depositors and the shareholders of a company?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

We are at present operating under an Act which was passed by the Conservative Government in 1963. However, I think that it would be better, before taking any final decision about amending the law, fully to ascertain the facts in this case.

Photo of Mr Charles Doughty Mr Charles Doughty , East Surrey

Would the right hon. Gentleman draw the attention of his right hon. Friend the Home Secretary to the necessity for increasing the strength of the Fraud Squad of Scotland Yard to enable it to make more investigations into the affairs of companies which are suspected of having been carried out not carelessly but fraudulently?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

I am sure that my right hon. Friend has paid due attention to that suggestion.

Photo of Mr Anthony Barber Mr Anthony Barber , Altrincham and Sale

Does the right hon. Gentleman take the view that he already has sufficient power to deal with a case such as this, and will the provisions of the Companies Bill, when it becomes law, have any bearing on a case like this?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

The Companies Bill would, as it now stands, not affect this particular type of company, except in so far as it affects all companies. I have powers at present, if I thought it necessary, either to appoint inspectors or to petition for a compulsory winding-up of a company of this kind; but I think that it would be unwise to take a decision until I have ascertained all the facts.

Photo of Mr Emanuel Shinwell Mr Emanuel Shinwell , Easington

Has my right hon. Friend taken note of the frequent failure of private insurance and investment companies, which seems to indicate a failure of private enterprise? Will he have a general inquiry made into the subject in order to prevent innocent and unsuspecting people from being defrauded by private interests?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

That aspect, concerning insurance companies and so on, is another question, but it seems to show that in many cases there is need for Government control over private enterprise. [Interruption.] As my right hon. Friend knows, we are proposing some drastic powers in the matter of insurance in the Companies Bill.