HC Deb 24 July 1860 vol 160 cc136-44

in rising to move Resolutions with the view of bringing packet and telegraphic contracts under the more effectual control of the House, referred to the recommendations of the Committee which had been appointed to inquire into the subject, and to the importance of the considerations which the question involved, inasmuch as no less a sum than £1,000,000 a year was now expended under the head of packet contracts. One subsidy alone amounted to £268,000 a year; and one of the telegraphic contracts was for so long a period as fifty years. The Committee which had just concluded its sittings were of opinion that these contracts should be brought more immediately under the control of Parliament than they had hitherto been, and it was the object of his Resolutions to carry that recommendation into effect. Now, it might be contended that a sufficient check for the provident expenditure of so large a sum was to be found in the fact that the various items were set down in the Estimates which annually came before the House; but then it should be borne in mind that the Votes taken for contracts furnished no intimation as to their renewal in those instances in which they were renewed; and thus the first Vote for a renewed contract to subsist for an additional term of years was taken, and the new contract held to be thereby confirmed by Parliament without any notice to the House that the Vote was not for the service under the previously subsisting and unexpired contracts, the renewals often being made by anticipation, and before the subsisting contract had expired. Then, again, even as to services entirely new, these frequently did not come into operation for a year and a-half or two years after they had been entered into—and consequently the Votes were not laid before the House until some time after the contracts had been executed, the contractors having, in the meantime, gone on building vessels and making the other necessary preparations for the performance of new engagements; so that it was almost impossible for the House to exercise with respect to Votes so submitted to its notice a fair and deliberate control. To such an extent, indeed, was that the case that it was only in those instances in which there had been some alleged misconduct on the part of persons in obtaining a contract that the House hesitated as to whether it should or should not be carried into effect, the mere question of the providence or improvidence of the contract itself being scarcely ever brought under the consideration of Parliament with any practical result. Now, the object with which the Committee had been appointed was to provide a remedy for that state of things. Two suggestions had been made on the subject, one was that before any contract was entered into a Vote for the proposed service should be laid before the House, and, that Vote having been agreed to, the Government should then be at liberty to conclude the contract. To that suggestion, however, arose the objections, that its adoption would lead to two distinct discussions, the one on the Vote for the service and the other on the contract when made, and that by fixing by anticipation the sum to be voted for the performance of the contemplated service the advantage of that competition, by which the real market price of the work to be done might be ascertained, would be lost. The Committee had under those circumstances adopted the second course suggested, namely, to leave as now the Government the full responsibility of making the contract accompanied by the condition that the terms of that contract should forthwith, if Parliament happened to be sitting, be laid on the table of the House, and that it should not be binding until it had lain for a certain period on the table of the House or been specially confirmed by vote. The result of acting on that recommendation would be that an efficient control over the expenditure of the public money in those cases would be established, for no Government would be disposed to incur the unpopularity to which the immediate exposure consequent upon the conclusion of a careless or improvident contract must, under these circumstances, inevitably lead. In dealing with the subject he did not wish to allude to any special contract, but he might nevertheless be permitted to glance for a moment at the case of the Cunard contract in support of the views which he entertained. That contract, which was, he believed, carried out in the most admirable and successful manner, had been renewed in 1858; so that, instead of expiring in 1862, as it would have done if it had been allowed to run its regular course, it would not come to an end until 1867. Now, without entering into the question as to the expediency of renewing the contract four years before its term would have run out, he should contend that there were important circumstances overlooked in the matter, which, if the contracts had been laid on the table of the House in the way which he proposed, must have been taken into consideration. There was, for instance, the correspondence with Canada with reference to the postal question, in the course of which correspondence the Government of Canada represented to our own that an injury was being done to them by the operation of the contract; the consequence being that an understanding was arrived at that matters should remain on the footing on which they stood at the time, until the Cunard contract had expired, the Government of Canada looking upon that as a pledge that their complaints should be considered before the contract was renewed. Then, again, when the question of the Galway service was first started, it was obvious that in the event of its being adopted, a part of the mails transmitted by the Cunard line would necessarily be transferred for conveyance by the Gal way line at the expiration of the contract of the former in 1862, and a portion of the expense of the Galway service be met by a corresponding diminution of the Cunard subsidy. The possibility of effecting such an arrangement, however, was completely excluded by the renewal, by anticipation, of the Cunard contract four years before its termination; and till the renewed contract expired in 1867 this country will be paying twice, and in both cases at a most extravagant rate, for the conveyance of the same letters. Nor is any security given to the public by the course adopted in some of the telegraphic contracts, which require the confirmation of Parliament, but allow it to be given in the form of a private Act. In the case of the Red Sea and Indian telegraph the agreement had been confirmed by private Bill; but the agreement itself was not recited either in the Bill or in the Schedule, and was not added till it reached the House of Lords; yet this was a contract involving a charge of 4½ per cent on a capital of £600,000 for a period of fifty years. The Acts of Parliament passed in the case of the Atlantic Telegraph Company contained clauses enabling the Government to enter into agreements unfettered by any limitation whatever; and, being private Bills, these unusual powers passed without attracting the attention of the House. The Propositions recommended by the Committee, which were embodied in the Resolutions that he had now the honour to submit to the House, wore calculated to secure greater care and providence in taking these large contracts, which ought not to be left to the discretion of the Executive Government without that control which the Constitution required that Parliament should exercise. The hon. Member concluded by moving the following Resolutions:— That in all contracts extending over a period of years, and creating a Public Charge, actual or prospective, entered into by the Government for the Conveyance of Mails by Sea, or for the purpose of Telegraphic Communications beyond Sea, there should be inserted the condition that the Contract shall not be binding until it has lain upon the Table of the House of Commons for one month without disapproval, unless, previous to the lapse of that period, it has been approved of by a Resolution of the House. That every such contract when executed should forthwith, if Parliament be then sitting, or, if Parliament be not then sitting, within fourteen days after it assembles, be laid upon the Table of the House, accompanied by a Minute of the Lords of the Treasury setting forth the grounds on which they have proceeded in authorizing it. That in cases where any such Contract requires to be confirmed by Act of Parliament the Bill for that purpose should not be introduced and dealt with as a Private Bill; and that power to the Government to enter into agreements by which obligations at the Public Charge shall be undertaken should not be given in any Private Act.


Sir, before you put the Question I have to say one word on the part of Her Majesty's Government. I need not detain the House more than two or three minutes after the clear and dispassionate statement of my hon. Friend, but there is one duty from which the Government cannot be dispensed, and that is the agreeable duty of tendering its warm thanks to the Committee in general, and particularly to my hon. Friend, who, during the most important and laborious periods of the sittings of the Committee, has fulfilled the very difficult office of Chairman, I think, in a manner entirely worthy of his high character and ability. I think the circumstances of one of the cases mentioned were such as to make it eminently desirable that the House of Commons should give particular attention, by some organ of its own, to the system on which our packet and telegraphic contracts are concluded. It is not, however, necessary to enter into the merits of particular cases. One such has recently been discussed on its own merits before the House, and another may possibly come shortly under discussion. Nor, in point of fact, did the appointment of the Committee rest on any one case exclusively. I do not speak in any sense with respect to any single Administration, or to either side of the House exclusively, when I say that it is undoubtedly clear that there has been an excess of discretion, or rather an excess of power exercised by the Executive Government, which is felt on all hands to require limitation. With that subject my hon. Friend and the Committee had to deal; and they have dealt with it with great judgment and discretion. The Resolutions they have proposed are, on the one hand, well calculated to prevent a repetition of former errors on the part of any Government; while, on the other hand, they avoid a difficulty equally serious and involving perhaps as much danger—namely, that which would be caused by the interference of the House of Commons in duties which do not enter into its functions. I have endeavoured to look on the Resolutions proposed by my hon. Friend with a critical eye, because I think it was a duty, in the first effort made to lay down rules for the Government, of a system of this kind, to see whether it was possible to detect a flaw in I them, with a view to their amendment. Without pretending that these Resolutions will prove in every way applicable to the purpose, or will bring these transactions into a state entirely satisfactory—for experience alone can demonstrate that—I must say that the Committee have well I steered their course between opposite dangers, and adopted the very best expedient I of which the case admits. There is only one point of expression in which I think it well that at any rate the sense and intention of the House should be made I clearer. The first Resolution says that in all contracts extending over a period of years and creating a public charge there should be inserted the condition that the contract shall not be binding until it has lain upon the table of the House of Commons for a certain time. Now, by the term "contract" I apprehend my hon. Friend j and the Committee cannot mean to con I fine themselves to the original formation of the contract, but must likewise intend to include renewals. There is no doubt that when the matter is looked at accurately the renewal of a contract is itself a contract; and, being so, it certainly comes within the legitimate scope of these words. On the other hand, there is a sense of the words in which it might perhaps be held that these renewals might not be included; and I think it is well that the public and all parties interested should understand that renewals, modifications, or alterations in the construction of contracts, which may in themselves be said to constitute new contracts—that is to say, where something is given and taken—must be subject to the order which this Resolution provides. I also think that Resolution a very wise one which provides against the dealing with cases of this kind by Private Rills. I dare say it is in the recollection of the House that during last year there was a Bill relating to the Red Sea Telegraphic Contract, which passed through this House, I believe, without any particular attention being drawn to it, and attached to it was an agreement which pledged the public credit and resources to private parties. That Bill went up to the House of Lords, and was read a third time, and in the House of Lords the agreement of the Government was inserted in the Bill, setting out the whole of the circumstances in a way to draw attention to it. When the Bill came down to this House, the right hon. Baronet the Member for Carlisle took notice of the wide powers given by the Bill, and drew the attention of the House to them, claiming that they should be considered and examined; but the general opinion of the House was that the matter had proceeded too far, the Bill having been read a third time in the House of Lords, for the Commons to interfere. It was thought to be an undue exercise of discretion that we should avail ourselves of the official information we had acquired, and although, if there had been a general knowledge of the circumstances previously, the House would certainly have taken time to consider the measure; yet under the circumstances it was thought that our hands were tied. But, inasmuch as it was only by the accident of the moment that the House of Lords became acquainted with the real nature of the Bill, it is a clear proof how necessarily and essentially unsatisfactory and insufficient the forms of a Private Bill are with respect to undertakings between the public and private individuals, and how desirable it is that we should adopt such a Resolution as is proposed by my hon. Friend. I think my hon. Friend is right in saying that it is much better to leave the power of interference with the House of Commons rather than to call upon them for a positive approbation. If we had been dealing with the question of a vote of money the case would have been different. If it was a question of an absolute grant of money, then of course we could not have sanctioned any arrangement which passed by the positive interference of the House of Commons; but as this is only a question of contracts, premonitory of a vote of money, and as the formation of such contracts is a matter entirely belonging to the Executive Government, and to which only the machinery of an Executive Government can be suited, I think my hon. Friend and the Committee have exercised a wise discretion in defining the functions of the House, and limiting it to conditions of openly and directly objecting to an undue exercise of power by the Government, and not placing the positive power of authorizing these contracts by a direct Resolution at the hands of the House itself. The Resolutions do not call for any further comment. They seem to be wisely adapted to the purpose; and again I thank my hon. Friend and. the Committee for the valuable service which I think they have rendered.


was anxious that the Resolutions should not be adopted by the House without a word of warning. It seemed to him that the Resolutions mixed up two distinct offices belonging to two distinct authorities. The Government had an administrative power, for the due exercise of which it was responsible; but the: moment the House of Commons was called upon, broadly and distinctly, to give its sanction to an act of the Government, a great portion of the responsibility of the Executive was taken away. Suppose a contract were entered into by the Government and laid upon the table for a month; after that interval the House would have approved the contract. It might, indeed, be said that the House was not asked to give its direct approval; but then, by keeping back its disapproval, it would practically I give its approval. The House could not I afterwards turn round on the Executive, and say, "You have entered into an improvident contract." The Executive might answer, "You have taken from us our responsibility. The contract lay on the table for a month, and you never found ' fault with it. All we have to do is to make the contract and submit it to you when you have given it your approval, we are no longer answerable for it. "Nothing that had been said in that debate had I caused him annoyance or displeasure. He only wished humbly to point out to the House the danger of the course they were about to take. They might depend upon it, if they mixed up two distinct classes of duties, one of which belonged to the Administration, and the other to the House of Commons, they would relieve the Executive of its responsibility, and thereby introduce serious mischief.


did not think the circumstance of these contracts having I been laid on the table, would deprive the Executive Government of their motives for caution. In a vast number of cases it would be impossible to submit the contracts made by the Executive to Parliament. I Nobody proposed, for example, that when the Admiralty bought timber, coal, or other stores for the navy, they should come down and ask the House by Resolution to authorize them to enter into a contract, There was another set of contracts, fortu- nately of not very frequent occurrence—namely, contracts for public loans; with respect to which it was absolutely necessary to obtain the express sanction of that House. Yet he believed he would be borne out when he said that there was no class of contracts which were entered into with greater care on the part of the Government, with greater publicity, or a greater desire evinced by the Executive to secure the most favourable terms possible for the public, than contracts for loans. The peculiarity of the contracts now under consideration was that they were prospective; namely, for the conveyance of the mails for a considerable term of years, and he much questioned whether the Executive would not exceed its powers, if it entered into such a contract without the express sanction of Parliament. Now, it was with regard to the class of contracts intermediate between the ordinary contracts to which he had referred, and contracts for loans, that the machinery at present proposed was to be introduced. They were not contracts merely for the delivery of a specific quantity of goods, but contracts which pledged the national faith to the payment of large sums of money for services to be performed for a term of years. There was no reason to believe that the publicity and the check of Parliamentary control, which these Resolutions suggested, should in any way diminish the caution of the Government; but on the contrary, they appeared to him calculated to render the Executive still more circumspect in its proceedings.


said, he wished to suggest that in future so large a question as that of the East India Telegraph should not be disposed of in a Private Act of Parliament. There should, he thought, be some authority in Parliament to provide that business extending prospectively over a period of fifty years, should be brought before it in some shape. He only threw out this suggestion in the event of such a matter recurring.

Resolutions agreed to.