HC Deb 31 October 1916 vol 86 cc1633-47

Order for Second reading read.

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Herbert Samuel)

I beg to move, "That the Bill be now read a second time."

This Bill is designed to strengthen the law against corruption. Public attention was drawn to this matter recently by the case against officials of the Royal Army Clothing Department, who were charged with corruption and receiving bribes from contractors to induce them to pass certain goods which it was their duty to inspect. In passing sentence upon those offenders, the learned judge who tried the case used these words: I should like to add this, as a respectful suggestion to the Legislature, that it is high time that a short measure should be passed giving power to the Courts, at all events during the continuance of the War, to inflict on persons convicted of bribery or attempting to bribe Government employé's a long period of penal servitude, because the penalties provided by the Corruption Act are absolutely useless and inadequate to deal with matters of this sort. The House will agree that these offences are of a kind most dangerous to the State. If corruption in any degree spreads among Government officials, the body politic is affected with weakness in all forms of its activities. We are very happy to think that hitherto our public service has been in the main remarkably free from corruption, and this House will desire to take any measures that may be necessary and well devised to ensure the continuance of that state of things, and to penalise individuals here and there who may have acted on a lower standard of honesty and public duty than the rest. In time of war it is clear that if officials corruptly passed goods presented to them for inspection, if those articles which are passed are munitions of war, the effect on the efficiency of our arms may be very great; but it is a matter which cannot be dealt with only in regard to war conditions, and the Government have thought, in adopting the suggestion of the learned judge, that we ought not to limit our Bill to war times, but that the offence of corruption in the public service is so grave that the penalties ought to extend also to the time of peace. The offence is one which it is most difficult to discover, because both parties to it always have every interest in concealing the facts. All the more necessary therefore is it, when discovery is made, that severe penalties should be inflicted. The matter has been dealt with by Parliament in the Prevention of Corruption Act, 1906, which provides that if any employé, not in the public service only, but generally, corruptly accepts or obtains, or agrees to accept, or attempts to obtain, for himself or for any other person, any gift or consideration by way of a bribe, he shall be subjected to a penalty; and similarly, if any person corruptly gives, or agrees to give, or offers any gift or consideration to any employé he is liable to penalty. So that the law strikes both at the man who gives or offers and at the man who receives or expresses willingness to receive. The law also regards as a bribe not only money, but valuable consideration of any kind.

So the ground is well covered in that respect, and the only manner in which we propose to ask Parliament to amend the law is in relation to the penalties imposed for these offences. The Prevention of Corruption Act, 1906, limits the penalty to two years imprisonment with or without hard labour, or a fine of £500 or both. In the case of Asseling, it is true he was in fact sentenced to penal servitude for five years, but that was because it happened that the facts were such as to support a charge of obtaining money by false pretences. He was therefore sentenced under the Larceny Act, 1861, to the heavier penalty. If such evidence had not been forthcoming, as might easily have been the case, the offence would have been just as bad, but he could have been proceeded against only under the Prevention of Corruption Act, which I have cited, or for conspiracy, and in either of those cases the maximum penalty would have been two years imprisonment. The Bill is not intended to repeal the power to inflict imprisonment or fine. That still remains under the Act of 1906, but the Bill proposes to raise the maximum penalty and to allow penal servitude to be imposed with the usual minimum of three years-which is the least term of penal servitude that can be inflicted under our penal law-and we propose a maximum of seven years.

The Bill applies to cases in which there are contracts or sub-contracts with His Majesty's Government or with any Government Department. There is another Act which deals with these matters—the Public Bodies (Corrupt Practices) Act, 1889—which imposes penalties upon members, officials, or servants of local bodies who receive bribes, or persons who endeavour to induce them to accept bribes, or who succeed in inducing them to accept bribes. That Act contains similar provisions to those in the Prevention of Corruption Act, 1906. It penalises both the briber and the bribed, and it includes valuable consideration as well as money in the definition of bribery. It imposes also the same penalties as the Act of 1906, with the addition of disqualification for office in the case of members of local authorities, and some other additional penalties which I need not detail. We thought when we were dealing with the case of Government contractors we ought not to put on a different footing the officers or members of local bodies, otherwise it would appear as if Parliament regarded as a much more venial offence bribery connected with a local authority than bribery connected with a Government Department. Consequently the Bill adds to the maximum penalty both under the Act of 1906 and under the Public Bodies (Corrupt Practices) Act, 1889.

This Bill consists of only two Clauses. The first is of the character I have described. The second Clause proposes to remedy an obvious defect in the law. A case has recently arisen in which an officer of a Government Department was under suspicion of having been bribed. He was found to be in possession of certain bank-notes. These bank-notes were traced to have been previously in the possession of the contractor who was suspected of having bribed this official. Therefore you had apparently a clear case an officer of a Government Department whose duty it was to inspect certain goods, a contractor whose goods were to be passed by that official, and bank-notes which had passed from one to the other and yet, as the contractor denied all knowledge of the matter, as he naturally would, and as it was impossible to prove that the bank notes had been given for a corrupt purpose it was impossible to take proceedings, and the ends of justice were clearly defeated. I am sure the House will agree that it is both reasonable and equitable in such a case as that to put the burden of proof on the person charged. If the payment was innocently made in respect of some matter wholly apart from the contract, and having nothing to do with the official's duties, it would be easy to prove in Court when proceedings were taken in respect of what purpose the payment was in fact made, and there would be no risk of innocent men being unjustly convicted. But if there is, on the one hand, a Government official having certain duties of inspection, and, on the other hand, a contractor whose interest it is to secure that his goods shall be passed by that official, and if it can be proved that money has passed from one to the other, surely the Court ought to be entitled to infer bribery unless the contrary is proved. That is the purpose of the second Clause. We do not engage in a general review of the law of corruption in ordinary business. The House is desirous of limiting legislation to matters arising directly from the War, or closely related to war conditions, and for this reason our Bill is of moderate scope.


As I have been rather closely connected with a society which has been doing a good deal in support of a movement of this kind for some years, I am thankful to the Government for producing this measure. I am glad to notice that it is for the prevention of corruption, and not simply for the prevention of corruption in connection with Government Departments. After all, corruption in commerce is one of those insidious temptations which are constantly creeping in, very often in unknown and unsuspected quarters, and we business; men want all the support we can get in trying to eradicate what is such a great evil, not only in public work, but in business and in private houses. There is a great deal of it which it takes a good deal of moral courage to oppose and defeat. I am extremely glad that the Government have brought in this Bill, and I shall support the Second Reading very heartily, although I hope that when we get into Committee we may be able to improve the measure in some respects. One point is in connection with the penalty. I have nothing to say against the seven years, but in regard to the three years it will be a question whether we ought not to leave the Court at liberty to decide. It seems to me that if you keep the comparatively high term of three years you may defeat the object you have in view.


As I explained, you cannot have less than three years' penal servitude. But the Court can impose imprisonment.


I suppose that that might be altered slightly? At any rate, it can be looked at. The Bill applies to those holding contracts. I think it needs to be enlarged, so as to include those who are seeking to obtain contracts. That is, after all, a dangerous point. The danger of corruption comes in just as much when a person is trying to obtain a contract as when he has obtained one. Further, I hope it may be possible in Committee so to enlarge the Bill as to do away with what we think is a real weakness in the Act of 1908—the fait of the Law Officer of the Crown. That has been a hindrance. I do not think it has worked in the way intended when the Act of 1906 was passed. Same of the highest authorities—judges who have occupied the position of Attorney-General—have been against this fiat, and I hope we shall be able to abolish it.


I do not think there will foe in any part of the House opposition to this measure, but it is right that we should understand exactly what is the genesis of the Bill. The Government are bringing it forward to-day as a sort of indication of absolute virtue in regard to the recent case which was so prominently before the public. The Home Secretary says, "We must secure the ends of justice." It is rather curious that while the Government are so keen to secure the ends of justice, the counsel who prosecuted in the recent case" stated in Court that it was with the greatest difficulty he could get any assistance at all in presenting the evidence on behalf of the Government. I know that that was not in the Department of my right hon. Friend. I think it is a scandalous position indeed when, in a case of admitted corruption, the prosecuting counsel apologises and says that it has been with the greatest difficulty that he has presented the evidence or got any assistance at all. In view of such a statement, I do not think the Government ought to come forward and declare that they are so anxious to secure the ends of justice. The origin of this Bill is very simple. It is to cover loose and imperfect management on the part of the Government. All the bribery that has been going on could never have gone on in a private firm. [HON. MEMBERS: "Oh!"] It could not go on to such an extent in a properly managed private firm. No two persons, buyer and seller, would have the opportunity of doing it without proper supervision on behalf of the firm. Otherwise the firm would soon go into bankruptcy. The Government are bringing forward this Bill to try to kill these practices by a threat of long imprisonment, which, with great respect, I do not think will have the effect to the extent that they themselves anticipate. What the Government ought to do is so to fashion their business that these things could not happen. [An HON. MEMBER: "It cannot be done!"] Oh yes; it might be done perfectly well. It is only crass neglect and mismanagement that allows it to exist at the present moment. It has been going on for years. We have been hinting at it, but have been unable to get the Government to take any action.

What did I propose some time ago, without, as far as I know, anything being done yet. I asked the Government to compel every war contractor, or every contractor doing business with the Government, to state through what other channels they were doing business, not in their own names, but through small middlemen, who were obviously able to get orders which they themselves could not get. Only within the last few days I have sent to a Government Department the names of large manufacturers who are doing enormous contracts for the Government in a certain class of goods, but who cannot get the direct order. It is got by someone of no financial standing at all and that they would not trust with a £20 note. What I asked the Government to do, as I have said, was to make the man on the list give a return of the channels through which he was doing business; not directly himself. They do not do anything of the kind. All they do is to increase the earlier penalties. I say that the penalties are large enough at the present time if the Government had proper supervision. I do not object to the increase, because I think the offence is a very serious one indeed. It may have some good result. I doubt very much whether it will have the proper result. The real way to stop this is to have real supervision and proper business methods. So long as the slackness prevails that does prevail, you will never be able to put a stop to what is going on. Therefore there are one or two Amendments which I shall certainly bring up in Committee. I think there is something to be said for the Attorney-General having a monopoly, if I may say so, of taking action in regard to this matter. I think that is the case for the whole Bill. I remember we had that point debated previously. I think the fear was that blackmail of a kind might be levied unless there was proper supervision. I should like to hear from the Government, when the time comes in Committee, if they think the public interest is served by keeping the initiative entirely in the hands of the Attorney-General.

There is one legal point I should like to put to my right hon. Friend the Attorney-General who, I hope, is going to take part in this Debate. As I read this Bill, any Government employé who accepts money for the purpose of a bribe, or to see that an undertaking is carried out, comes within the scope of the measure? What I want to know-only for information—is this: Supposing anyone desired to say to any Government Department—and I suppose there are some people to-day who take such an exalted view of the Government that they might, for the sake of argument, say it—we should like to present, say, the Whips Department with £40,000 or £50,000. Would that come within this Bill, because the Whip is at the head of a Government Department, and is an employé of the Government? The man who gave the gift might say, "I wish you to spend this money in carrying out a public purpose"—it might be the propagation or support of Free Trade or Protection, or he might think there was some defect in the law, or it might be any other purpose of the kind. Would, therefore, the person who received the money—


Try it on the Labour party!


I am afraid it would not be that channel through which I would give it. The Labour party are able to get anything they want without pecuniary considerations. All I want to say is this: Supposing anyone was so high-minded as to say to the Whips Department that they would give such a gift, would that prevent that man for the rest of his life receiving any honour from the Government? I think that is a point upon which my right hon. Friend the Attorney-General might be able to give us some sort of information. As I read the Bill, it would be absolutely impossible for that gentleman to be rewarded in any way for his public philanthropy and purpose. Therefore I would suggest that the right hon. and learned Gentleman should give us a clear definition on this point.


I agree with my right hon. Friend who has just sat down that no one can say anything against the provisions of this Bill. But I, for my part, would like to warn the House that this is the third attempt we have made by severe penal legislation to deal with these evils. In 1899 we passed a most severe Act, which is referred to in this Bill. Then we had the Prevention of Corruption Act in 1906, which the judge in the recent case said was altogether inoperative. Now we have the Home Secretary coming down once more and just quoting one passage from the severe strictures which the judge made on the general work of the Government and the general conduct of Government business. The right hon. Gentleman mentioned one observation only of the judge. Now we have this very severe Bill put forward. In my belief it will not check the evil. No one can have read the recent painful case without seeing that the source of the evil was the unbusinesslike management of the whole matter by the Government officials. The judge said a great deal on this point which has not been quoted to us to-day. He told us, in one sentence in particular that remains in my mind, that the honest contractor got no fair play from the Government and was almost afraid to come forward, and that it was shady people who were selected for a contract. He told us that there was such a system of checking observed as could not exist in any business firm. The judge spoke of a document which was initialled by twenty-five persons. The judge also brought out, and animadverted upon the fact, that 387 firms were asked to tender for a certain contract—I believe for razors and finally that the contract was given to some firm in Stoke Newington who had never made a razor before. It is useless for us to deal with a grave evil of this kind by passing a Bill which embraces severe penalties and not taking the least notice of what the judge said.


No, no—


Well, that is so far as the speech of my right hon. Friend is concerned. We have heard of no notice being taken of the very severe criticisms which the judge made on the unbusinesslike conduct of the whole affair from beginning to end. I think the moral of the whole affair-and I trust that the Attorney-General when he comes to speak will agree with me-for this House is, that there is no business system at all in the conduct of many of these affairs. No business could stand it. What opportunity is there for putting things on a better footing when the most extraordinary people, who know nothing at all about the matter they are handling, are put into control, as the judge said, of vast contracts. I quite agree with what has been said, that we do not find in any well-conducted business any necessity for these severe measures. In a long business experience I have found very little of this robbery or corruption. I only remember, in fact, one case. The judge said the Bill of 1908 was inoperative. Why is it inoperative? We made it a strong Bill—as strong a Bill as we could. Then there is the Bill of 1899. That appears also to be inoperative. Now we are bringing in a huge measure of the same kind. No one can take any exception to it. But I do say the moral of the whole proceeding is, if the Government will not, in its organisation of the business of the country, and especially in its dealing with contracts, deal with them on a more businesslike basis, Bills of this kind will not put them right.


I am sorry to say that through a great number of years I have seen a great many instances of direct and indirect corruption, not by the Government, but more in connection with public works and private firms. I, therefore, do not feel justified in giving simply a silent vote in favour of this Bill. I entirely agree with the right hon. Gentleman the Member for Kirkcaldy who said that you will not stop this kind of thing by severity of punishment. What you must aim at is certainty of detection and punishment if you can get that detection. Then my right hon. Friend opposite (Mr. Lough), referring to the other Acts, said that the real difficulty was to bring the case home and convict; to get evidence, and to get people to disclose what has been going on. One way in which something effective might be done by the Government would be by, so far as possible, a discontinuance of the habit of giving contracts through middlemen, and employing one man, and so, as the right hon. Gentleman said, you might have a list of those employed, and then the Government or the Department would know exactly with whom they are dealing. They would know the manufacturers and would be able to form some clearer idea as to where to look for any corruption. I do not agree with the right hon. Gentleman opposite that this sort of thing could not happen in private establishments.


I did not say that.


I cannot, of course, mention names, though some of whom I might speak are dead and gone, and they enjoyed, some of them, a great reputation. These bribes—or shall I call them inducements?—are not given directly and are not generally given in a way that it is easy to define or to find out. I have known cases of this sort. I want a contract from an engineer to a railway company. That gentleman takes out a patent. Now is my chance! Then it is all right. I put things in his way, and naturally he is friendly to me. I do not really need his patent. There are other cases, actual cases, in my knowledge. A large firm wants orders from a railway company. They take the son of the engineer into partnership. That is the sort of thing that goes on: "You help me and I will help you." I could mention some very comical instances that recollect, though, of course, they are not the thing to elaborate here. I only want to note the small scope of the Bill, and to ask that if possible it should be extended and made more perfect in its operation. One thing I should like to point out, and that is that it does not touch one of the most dangerous, most common, and most insidious methods of obtaining benefit through corrupt methods. It is not so much in the placing of contracts as in the acceptance or rejection of goods that these things occur. A very well-known Member of this House who died a decade ago—I think a very large manufacturer—told me that he found out what went on through his travellers. His people told him, "We must have a lot of money to give away at Christmas time." He replied, "I do not like it, and I will not have such a system going on." He did not allow it. What was the consequence? He was always getting reports that material that he supplied was defective, and would not do. His reply was that it was cut from the same samples that had been sent forward months before. Nevertheless, foreman and workmen came forward and said that they would not have it, and they influenced their firm in favour of some other manufacturer. I therefore ask the Committee that they should extend the Bill to cover not only cases where people are applying for contracts, but others. I agree with the right hon. Gentleman that you must not make liability dependent upon whether those concerned do or do not get the contract. It is a question of whether they did these acts for the purpose of getting the contracts. The question is whether any inducement, bribe, or consideration is given to a man in such a way that it may influence him in accepting or rejecting goods under a contract; if so, that man shall fall under the same penalty. Effective as I think the Bill is and must be, yet so far as the Bill will have operation or be operative, I want it extended to cases such as I have mentioned, as well as to the cases at which it is primarily aimed, where money or inducement are given in order to obtain a contract.

7.0 P.M.


(indistinctly heard): The Bill which has been recommended to the House by my right hon. Friend has not met with much opposition in any quarter of the House. All those who have spoken have said that they approved of the object, although some of those who have spoken have expressed themselves as doubtful whether this Bill covers the whole ground which, in the public interest, it is desirable to cover. The House would do well, I think, to remember that this Bill is, and only purports to be, the fruit of the suggestion made by one of His Majesty's learned judges, who tried a recent case which is within the recollection of the House. His experience was that there was a lacuna in the criminal law. I would like, said the judge, to add this: It is high time that a short measure was passed giving power to the Courts to inflict upon persons convicted of bribery or attempting to bribe Government employés a long period of penal servitude, because the penalties provided by the Corruption Act are inadequate to deal with matters of this sort. I would remind my right hon. Friend opposite (Mr. Lough) that it is not quite accurate to say that the learned judge said the Act was inoperative. The learned judge is far too experienced to have made such an insupportable statement. The Act has not been inoperative. On the contrary, it has been operative. The criticism that was passed by the learned judge was that the penalties were inadequate. To have dealt with the whole subject would have required a much more complicated and complex measure than this, but the Government had to consider whether or not the suggestion made by the learned judge to deal with a definite gap was one that ought to be adopted by the Legislature. The Government decided—and, I think, rightly decided—that the learned judge made an admirable suggestion which ought to be accepted, and this Bill is only with the object of giving effect to that suggestion. I said "only with the object of giving effect to that suggestion," but I ought to add, as the Home Secretary has pointed out, in Clause 2 we introduce what I certainly recommend to the House as a valuable reinforcement of the law of evidence, which is applicable in these cases. At the present time it may be true, as has happened in one or two cases, that a person in the employ of His Majesty or any Government Department or public body has received certain pecuniary payments from a contractor. As the House is well aware, the principle of our criminal law in these matters, consecrated by centuries of tradition, is that the whole onus is thrown upon the prosecution, and, even supposing the prosecution is in a position to establish that moneys have found their way from a contractor to a public servant, it is necessary, as the law stands at present, in order that the prosecution should succeed, that they should not only show there is a ground for suspicion, but that they should also show that the payment of the moneys was in itself improper and dishonest. What we propose in Section 2 of this Bill is to shift the onus by a provision which the House will consider moderate, but, I hope, not inadequate for the case which has arisen. In other words, supposing hereafter it is found that a person, whom I may shortly describe as a public functionary, has received money from a contractor, the person who has received that money will be put in the position that the prosecution has the right to say to him, "Why did you receive that money? Show that the receipt of that money was consistent with your honesty and integrity."

If I may reply to the only criticisms—I hardly like to say "criticisms," because they were more in the direction of extending the Bill than criticism of the actual scope of the Bill—my hon. Friend has said this Bill is inadequate, and the same point was made a little more vehemently by the right hon. Member for Kirkcaldy (Sir H. Dalziel). I think the right hon. Gentleman the Member for Kirkcaldy will agree with the suggestion 1 will make that, where you are not dealing with grave fundamental cases, the more obvious instances of which will readily suggest themselves to the mind, the proper treatment is disciplinary by heads of Departments, and I am not sure he will dissent from the view that in the ordinary small cases the proper course to be taken is that those persons who are found guilty should be severely punished by those who are in authority over them. The right hon. Gentleman said that the Government, in introducing this Bill, are making a great claim to virtue in doing so. I am not aware that my right hon. Friend the Home Secretary made any great claim to virtue for himself or the Government, and certainly no one will say that I am doing so. I think the right hon. Gentleman, perhaps, did a little injustice to the Government and the authorities generally. After all, this prosecution was a Government prosecution. I myself ought to know, because the Director of Public Prosecutions is in my Department. If this prosecution was directed, as I believe is the case, by the Director of Public Prosecutions, he acts, of course, on the instructions of the Attorney-General. My recollection is that it was a prosecution ordered by the Director of Public Prosecutions, and I do not think the learned counsel who prosecuted would be content with the right hon. Gentleman's view of the delinquencies of the Royal Army Clothing Department. I find in the "Times" report, which is the only report available, that Mr. Muir said: He desired to make an explanation as to what he said in opening the case for the prosecution, as he might perhaps have been misunderstood. He had stated that the Royal Army Clothing Department did not view a prosecution with enthusiasm. He wished to say that those remarks did not apply to the heads of the department, and Army officers. I agree with my right hon. Friend that the mere making of that observation at any stage by counsel of Mr. Muir's position and responsibility, acting as prosecutor, is rather significant, and requires and deserves some inquiry. Apparently what Mr. Muir said was that the Royal Army Clothing Department did not view a prosecution with enthusiasm, and he expressly made it clear that, in making that observation, he was not referring to the heads of the Department or the Army officers who occupy responsible positions in connection with the Department.


To whom did he refer?


It was felt by those who are responsible for these matters, especially in a prosecution instituted, as I think this was instituted, by the Government, that these words, coming from a counsel appearing for them, certainly required examination, and I may perhaps answer my right hon. Friend at the same time, if I answer my right hon. Friend on the Front Bench opposite, by saying it was with the express object of instituting inquiries into this particular complaint, and complaints of this kind, that Lord Rothermere, who is a gentleman with very great business experience and force of character, was put at the head of this Department with a mandate and instructions to deal with these very matters, and to correct by any disciplinary or expulsory steps, faults, if there were faults.


Since the trial?


Really, I do not understand the point of the right hon. Gentleman. We are all admitting that it is in consequence of the trial, the lessons of the trial, and the judicial observations at the trial, that this Bill is being introduced. It is not a very helpful observation to say that these steps have been taken since the trial. I understood my right hon. Friend's complaint to be that this Bill, introduced since the trial, did not go far enough, and I reply to that by saying that the Government have put a business man at the head of the Department since the trial, and it is certainly the desire of the Government to take advantage of the lessons learnt from the trial, and the scandals disclosed as the result of the trial. I hope no one will make the mistake of supposing that the fiat of the Attorney-General or its retention in any particular ease is a personal privilege. I can only assure the House that the obligation is no inconsiderable addition to the labours of the Attorney-General. That is a matter which can be properly raised in Committee. In these cases, and many similar cases, the law has said that the fiat or the consent of the chief legal adviser of the Crown should be necessary. I have only to say on that point that I shall submit myself on this matter, when discussion arises in Committee, entirely to the judgment of the House. I have no official view other than this, that the House should consider this, not as an individual case, but should consider the whole question of the fiat of the Attorney-General, and if persuaded that it is desirable in certain cases that the fiat of the Attorney-General should be imposed, to ask themselves categorically whether there is sufficient reason for this class of case being proceeded with on the fiat of the Attorney-General.


I have not heard it said in Debate that the number of these crimes has increased of late, and I should like to ask one question as to whether it is necessary to increase so largely the amount of punishment to be inflicted, instead of adopting the method of more frequent prosecutions? I should like to know, before this Bill is passed, whether anything has been done in that direction. I think, before such a penalty is inflicted, some further reason should be given.

Question put, and agreed to.

Bill read a second time, and committed to a Committee of the Whole House for To-morrow.—[Mr. Rea.]