LEAVE. FIRST READING. (Hansard, 10 February 1862)

§ THE CHANCELLOR OF THE EXCHEQUER:

I have to ask for leave to bring in a Bill relating to two points, neither of which is altogether new, nor will the Bill create any difficulty in the practice of this House. The first provision is one to amend an Act of last year with respect to the issue or rather the reissue of what are termed Supply Exchequer bills. The necessity for this provision arose from the Act of last year. The principle on which these Exchequer bills are issued is this— that they are capable of reissue within the period of their currency, if they come hack into the hands of the Government. Formerly the period of currency was one year only, and consequently any reissue of Exchequer bills under the powers given by law only affected the finances of a single year, and was a matter only capable of being taken in view by the House at the time when the Bill for the annual issue of Exchequer bills was brought under the notice of the House. But last year we passed an Act of, I think, a very beneficial character, under which Exchequer bills are not renewed from year to year. Although the interest is, as before, paid annually, the instrument and the Bill itself will have a currency of five years. It was justly observed last year by the right hon. Gentleman (Mr. Henley) that the power of reissue under the old law ought not to be extended over a period of five years, because it might so happen that a very large number of Exchequer bills might be taken up and accumulate in the hands of the Government, and that it might be in the power of the Government, before the five years were expired, to make a large reissue of these instruments of public credit without the direct control or cognizance of Parliament. I propose to re-establish the provision of the old law, and to limit the power of reissue to the year within which the bills shall be issued or paid in. The effect will be to apply the principle of the old law to the amended law now in force. The other provision of the Bill relates to a subject 132 which has been often under the consideration of this House, namely, the power now possessed by the Government, through the medium of the Commissioners for the Reduction of the National Debt, of funding Exchequer bills of various descriptions. That power is, in point of fact, twofold. It applies to those Exchequer bills which are called Deficiency, or Consolidated Fund Bills, instruments of credit which only pass between the Treasury and the Bank, and never go into the hands of the public. The power of funding bills of that description is, in my judgment, altogether "abusive." Whether that power was originally intended to be given or not, or whether it came into the hands of the Government by the unforeseen operation of certain words in an Act of Parliament, is a question which it is not now necessary to examine. Suffice it to say that it is the universal opinion of the officers of the Government, and of those Members of this House who have applied their minds to this subject, that the power to which I have alluded is altogether "abusive" and mischievous. It has not been exercised for a great length of time, and I propose by this Bill to extinguish it altogether. There is another power which I will not describe in such strong terms—the power of funding Supply Exchequer bills—meaning those Exchequer bills which are in the hands of the. public. It has been found convenient, at periods of extended expenditure and of great financial pressure, that the Commissioners for the Reduction of the National Debt should themselves become possessed of certain amounts of Exchequer bills, and a power exists by law under which it is competent to these Commissioners, acting with the authority of the Treasury, to convert them at certain fixed rates into permanent stock. The effect is to enable the Executive Government to make additions to the funded debt of the country without the authority of Parliament. So far as I know the greater operations of the Executive Government in the exercise of this power have been useful and beneficial operations, and I, therefore, distinguish as broadly as possible between these operations and those which have taken place with regard to Deficiency and Consolidated Fund Bills which have been neither useful nor beneficial. I do not desire that the beneficial and useful powers to which I have adverted shall be brought to an end like the others, but the effect of the Bill will be to bring these operations 133 under the direct view and control of Parliament. It is not that the power is a bad power, but that it is not necessary to be in the hands of the Executive, and from its nature I doubt not that Parliament will give its approval to the principle that such measures ought not to be taken without the approval of the Legislature.