§ Order for Second Reading read.
§ The SOLICITOR-GENERAL (Sir Gordon Hewart)
I beg to move, "That the Bill be now read a second time."
This Bill is closely connected with the War, and is framed to meet certain practical difficulties which experience has shown have arisen during and from the War. It so far resembles ancient Gaul, or a contemporary dinner, that it can be divided into three parts. The first part, which is quite the dullest, and probably the best, has to do with certain kinds of contract. In March, 1915, relief was given by Statute in certain cases where the fulfilment of a contract was interfered with by the necessity of compliance with a requirement or a Regulation of the Admiralty or the Army Council under the Defence of the Realm Act. That relief 2066 was given by Section 1, Sub-section (2), of the Defence of the Realm (Amendment) (No. 2) Act of 1915, which provided that in such cases the necessity arising from compliance with the Regulations or requirements of the Department should afford a good defence to any action against the contractor in default. Experience has proved that that protection, valuable as it is within its limits and based as it is upon grounds which cannot be challenged, does not go far enough. It leaves untouched the legal position of many persons who before the War entered into contracts for the construction of buildings and for works of a similar kind and found after the War, and by reason of circumstances attributable to the War, although they were not able to point in their own case to a requirement or Regulation of the kind which I have mentioned, that it was impossible for them without serious hardship to perform their contracts within the stipulated time. There has been shown, of course, in many cases of the kind, an excellent spirit of voluntary accommodation, but there have also been, and there are, far too many hard cases, cases, that is to say, where the other parties to the contract either would not, or because of their special position—for example, the position of trustees or the position of local authorities—could not relax the stipulations of the contract. It is proposed, therefore—and this is the first Clause of the Bill—to empower the Court, in a proper case, to suspend or to annul the contract.
I should like to add one word as to the condition without which relief in such cases will not be granted, and also as to the nature of the relief itself. The necessary condition is that the Court is to be satisfied that the performance of the contract according to its terms is prevented or is rendered gravely onerous by difficulties due to the War, either as to material or as to labour. The applicant, that is, may show that by reason of the War his supply or delivery of material is prevented or restricted or delayed, or he may show' that the War has occasioned diversion or insufficiency in his supply of labour. In either event the Court, if it is satisfied, may suspend or annul the contract upon suitable conditions which will be within the discretion of the Court, regard being had to all the circumstances of the particular case, the position of the parties, and any offer which may have been 2067 made for a variation of the contract. The House will observe that the power of the Court is to suspend or to annul the existing contract. That, I need hardly say, is a very different thing from a power to make a new contract between the parties. That is the first matter in relation to which it is proposed in this Bill to deal with hardships which the War has created and experience has shown. There is a subsidiary matter closely related to it. I have already referred to the cases in which, by the legislation of two years ago, a man is provided with a good defence if his default is due to compliance on his part with a requirement or a Regulation under the Defence of the Realm Act, but as the law now stands the requirements or Regulations which will avail him in such a case must issue either from the Admiralty or from the Army Council, and what is proposed, and, as I submit, reasonably and rightly proposed, is to place in this respect the requirements and Regulations of all Government Departments whatsoever upon the same footing, so that for the future the question will not be Where did the requirement come from, but Did the necessity of compliance with its terms interfere with the fulfilment of the contract. So much for the first topic.
The second is a different and minor matter. In December, 1915, an Act of Parliament was passed for the purpose, among other things, of restricting since the commencement of the War the increase of rents in the case of small dwelling houses. I refer to the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915. One of the provisions of that Act prohibits the demand of a premium, or other similar sum, in consideration of the grant, renewal or continuance of a tenancy of any dwelling house to which the Act applies. Six months later, namely, in June, 1916, it was already found desirable to make an exception in the case of leases for a term of 21 years or upwards. In such cases it was accordingly provided by the Courts (Emergency Powers) (No. 2) Act, 1916, that application might be made to a County Court, and that the Court might authorise a premium. In other words, the later Act went a considerable way in the direction of taking these longer leases out of the provisions of the earlier Act. Experience has now shown that it is desirable to go somewhat further. The 2068 requirement of the sanction of the County Court is found in practice to interfere, and to interfere to no good purpose, with the bonâ fide sale of leases. It is proposed, therefore, in this Bill to take these longer leases wholly out of the earlier Act—a course which renders unnecessary, and so requires the repeal of, the corresponding provision of the later Act.
I pass from that question to the only remaining part of the Bill—a part which may be thought perhaps to come more nearly home to the businesses and bosoms of hon. Members. One of the quite minor incidents of the War, though by no means a common incident, has been that Members of this House have been required, for the purposes of the War, to dispose of some of their goods—timber, or hay or whatever the particular commodity may be—to a Government Department. Sometimes there has been compliance and sometimes not. Sometimes there has been requisition and sometimes not. Sometimes that which has begun in requisition has been continued after and without further requisition. Even in the cases where the transaction has ended as it began with requisition, there has sometimes been discussion about price, or about delivery and so forth. Nobody, I imagine, can be surprised that in the emergencies which have arisen in and from the War, such transactions have inevitably taken place. Nevertheless, in the circumstances it does not perhaps require a very ingenious or very captious mind to raise doubts or questions as to the application of the House of Commons (Disqualifications) Act, 1782, or the Act of 1801, which extended similar provisions to Ireland. In other words, it might conceivably be contended that the transactions I have indicated, or at any rate some of them, involved or implied a contract or an agreement made for and on account of the public service. What merit, if any, there would be in a contention of that kind, I need not at this moment consider; but the House will probably agree that it is prudent, as well as right and reasonable, in these matters which are clearly attributable to the imperious necessities of War, to set such doubts and questions at rest. That is what the fourth Clause of the Bill proposes to do. Hon. Members have no doubt observed that for a certain purpose a line is drawn at the day upon which the Bill was introduced. A contract or agreement entered into before that day is declared 2069 not to disqualify if it related to the supply of property to any Government Department for purposes connected with the War. With regard to matters subsequent to the introduction of the Bill, words of more restricted scope are deliberately employed.
§ Sir GORDON HEWART
My right hon. friend asks why. For this reason, that once the Bill is introduced, attention is pointedly called to the matter and there is with submission therefore from that time no such reason as there was before for any person to continue to make the kind of contract to which the earlier part of the Clause refers. Disqualification after the introduction of the Bill is declared not to apply, not indeed to War contracts as a whole, but to agreements as to price or to agreements as to compensation, or to agreements as to some other term upon which the property in question is handed over or supplied. The House I am sure will appreciate, and I trust it will approve, that discrimination. Nothing, I need hardly say, is further from the object of this Bill, or from the intention of the Government, than to modify or to relax the salutary and wholesome provisions of the existing law. But the necessities and the emergencies of an unexampled War give rise to difficulties of their own, and the modest aim of this Bill in all its Clauses is to deal—and, as I hope, to deal fairly—with some of the difficulties of that kind.
§ Mr. PETO
I want to point out one or two particulars in which this Bill does not wholly meet the case which was put before the present Home Secretary when he was Solicitor-General by the Institute of Master Builders, the London Master Builders' Association, and other bodies of that kind. I was glad that the present Solicitor-General did not throw upon the building trade the onus of having asked for special legislation to relieve them of contractual obligations. That would have been an unfortunate impression to get about, and would have led even to opposition in this House to the passage of any Bill. It is the War which has caused the difficulties, and the necessary Government action is consequent upon the state of war, which has already interfered with the performance of contracts. Therefore, it is not a question of any section of people wanting or Asking for special legislation in their own 2070 interest. The Solicitor-General referred throughout his remarks to contracts entered into before the War, and in Clause 1 we have the date as the 4th day of August, 1914. That is the first point to which I desire to call attention. So far as the building trade is concerned, nothing particular happened on the 4th of August, 1914. The policy of the Government at that time was "Business as usual." It was anticipated that what we had to fear was scarcity of employment. We can hardly carry our minds back at the present moment, when all our difficulties arise from too much employment, and too much demand for the attenuated amount of labour which we have, to the time when it was seriously thought that lack of employment would be the great thing we had to fight against. At that time builders and everybody else were encouraged to go ahead and to enter into contracts. The date when the most important event took place in regard to building contracts was the 17th July, 1916, when the Restriction of Buildings Order was made at the instance of the Ministry of Munitions. There are certain contracts still in existence which were entered into before the War, but a very much larger number of contracts that were entered into after the War had been in progress for some months. That Order was subsequent to the date on which the master builders laid their case before the present Home Secretary, when he took the view that any legislation that was introduced should be confined to pre-war contracts, because nothing particular had happened to make it necessary to fix any other date. Almost immediately after that decision had been given, and that view had been put forward, the whole basis of the right hon. Gentleman's view was altered by the Restriction of Buildings Order. Therefore, I must call the Solicitor-General's attention to the fact that when we get into Committee I shall have to press him to alter the date, because the number of subsisting contracts at the present time, entered into before the 4th August, 1914, is very small, while there are a very much larger number of contracts entered into at a later date which have been directly interfered with by the action of the Government and by conditions of all sorts arising out of the War.
It may be said that Clause 2 is going to render the alteration of the date in Clause 1 unnecessary. I do not agree 2071 with that, because Clause 2 provides that Sub-section (2) of Section 1 of the Defence of the Realm Act (No. 2), 1915, shall be extended to cover Regulations made by any Department of State in the case of any action which is taken by a party to a contract. That Section provides that it is a good defence to any action or proceeding taken against a person in respect of non-fulfilment of a contract that it is due to interference. There is no limitation there to a contract entered into before the 4th August, 1914. Therefore, I cannot see why this arbitrary date—and it is an arbitrary date, so far as the building trade is concerned—should be fixed in Clause 1, whereas Clause 2 very properly deals with other contracts entered into at any date. I do not think that that can be held to obviate the necessity of fixing an appropriate date in Clause 1, because it specially presupposes litigation to compel the fulfilment of the contract. I hope that when the provisions of Clause 1 are enforced as an Act of Parliament litigation will be diminished, because the local authorities and the trustees will have their hands free, and they will not be forced to take the present position they occupy, and the general public will see that they have got to settle on reasonable terms, and that it will be very much cheaper to come to terms without appealing to the. Courts in the first instance.
I do not like the wording of Section 1. The Solicitor-General said the relief given by that Clause is limited to difficulties which arise with regard to the delivery of material or insufficiency of labour. That is presupposing that we in passing this legislation can foresee all the hardships that may arise in respect of building contracts out of the state of war, and that there cannot be any of them which are not connected with the insufficiency of labour or deficiency of material. I think that that ought to be altered in this respect, that it should be that relief is given in all circumstances caused by the present War, including the restriction of labour and the difficulties in the supply of material. I do not see why we should tell the Court in advance that they will not have to deal with any question that does not refer to those specific parts of a building, namely, the material of which it is composed and the labour to put it together. I may give the House a brief idea of the 2072 sort of difficulties that arise if we do not have this legislation, and, as I think, amended to a certain extent. It is usual in all building contracts to have retention money of from 10 to 25 per cent., which is held in suspense, and in the case of a contract for £100,000 there may be a sum of anything from £10,000 to £25,000 in the hands of the employer. I do not think that it would be fair not to give the Courts the power to vary a specific clause of a contract which is operating in a way that places a large sum of money belonging to one party in the hands of the other party, so that it is given to them for their use to be invested in War Loan or anything else for whatever time the War may go on, as well as the contemplated time which it would have taken to execute the contract.
Then there is the question of plant, which, in the case of Metropolitan Water Board contracts, and I believe in others also, is the property of the employer until the building is completed. We have the case of Dick, Kerr and Company versus the Metropolitan Water Board, which the Solicitor-General knows well, in which it was decided that they were to continue to leave all the plant on the site of a reservoir, no matter how long the War went on, no matter if it were to reach such a state as to be worthless at the end of the War. There was no power whatever to remove it. In one ease the Ministry of Munitions actually requisitioned a large quantity, amounting to £5,000, of contractor's plant and paid for it, very properly, but the contractor did not get a penny. The employer took the £5,000. He holds it under the clause of the contract which empowers him to have the use of the whole of the plant and makes it his property until the contract is completed. There is another class of case which operates very harshly—that is, as to the protection of buildings. Very often the duty is imposed on the contractor to protect all works, no matter Low long the period. That is all right in the ordinary course, but not where we have a suspension of work for three years owing to the War. I have one case in which the contractors have spent over £3,000, quite uncontemplated by the contract, on the protection of buildings, and I think that they should be able to get relief from that specific Clause from the Court.
The learned Solicitor-General says that this Bill proposes only to suspend or annul contracts, and that that is a very different 2073 thing from varying a contract, or, as he puts it, making a new contract. I agree, but I do not think that to suspend or annul the contract meets the case at all. At present the War has suspended the contracts, but contractors do not want further suspension. They would be very glad to go on and complete the work. In certain circumstances it may be necessary to annul the contract, but there are a great many contracts which the contractor does not want annulled, and in which the equity of the case requires that the Court should have power to vary certain specific agreements which are, in consequence of the War, operating in a manner never contemplated by either party. I might give one instance. In nearly every contract the contractor has to keep the buildings and other works insured against fire. When he makes a tender he inquires the rate of insurance, how much it would cost, and adds it to the total of his tender, so that in effect it is the employer who pays. Then you get anti-aircraft policies, and the fire insurance policies are liable to be vitiated if the further policies are not taken out. So that you get 7s. or 8s. per cent, of the total value of the work in many cases imposed as an additional charge on the contractor as a result of the War. These are very good grounds not for annulling the contract, but for altering that particular provision.
I have many cases here with which I will not trouble the House, but I may give one extreme case where contractors, named J. and B. Thompson, entered into a contract for £100,000 with the Belfast Corporation, where the Treasury refused permission to go on with the work, and the contractors was not allowed to obtain further supplies of steel—which was a proper thing for the Government to do, in view of the War—and the Belfast Corporation hold that all those intereferences with the contract do not affect the contract, or the position of the contractors, in the slightest degree, and they inform the contractors that they will have to go on and complete, at contract price, the sewer outfall works as soon as the War is over and the restrictions are removed. That is what I think the Solicitor-General should have dealt with and did not. I want to know broadly what is the position with regard to all these contracts after the War? The Board of Trade arbitrators have in many cases fixed rates of wages in the building trade over the heads of the local arrangements which had already 2074 been entered into between the local branches of the trade union and the builders in the neighbourhood, always, of course, raising the wages and entirely altering the rates. That has taken place altogether owing to the War, which has caused an enormous increase in the cost of living that has necessitated the interference of the Board of Trade arbitrators in the matter.
There is another thing which is much more serious. The War will have caused an entirely new range of values in the prices of raw material. We cannot forecast how many years it will last. There may be a gradual reduction of prices of timber and other articles which stand at present at something like five or six times their pre-war value and are still rising. There may be a gradual diminution to a more or less reasonable level, but these contracts in present conditions, in the absence of any legislation, will have to go on and be finished as soon as the War is over. I do not think that that is a possible position, and that is why I beg especially to press for words being put in at the end of Clause 1, line 16, enabling the Court to vary or rescind any provisions of the contract. I believe that unless powers of the kind are given to the Court we really do not deal with the situation as it is. It may be said that if you put such words into your legislation it would practically be enabling the Court to make new contracts. I believe that that is so, but I think that is by far the best way of settling the matter. I have been told that if we do that we should throw such a burden on the Courts that they could not possibly undertake it, but I believe that if we put those conditions in operation the parties would realise that they had got to make reasonable terms between themselves. That is the cheapest and easiest way out of the difficulty. If they do not do so the Courts can appoint ad hoc Commissioners to deal with the special cases of all these contracts still in force at the end of the War. Therefore, I hope to receive the very sympathetic consideration of the learned Solicitor-General in favour of the Amendment, of which I have given him private notice, when we reach the Committee stage of the Bill.
§ Mr. BOOTH
I thank the Solicitor-General for his lucid explanation of this Bill. This was one of the rare occasions on which I think an ordinary layman could follow a legal statement intelli- 2075 gently. I commend the Government for bringing in this Bill. My only regret is that it does not go far enough. I hope that the learned Solicitor-General will give his mind to one or two of these grievances, which perhaps it would be out of order for me to name or discuss, that will be found to ensue from the hasty legislation in the early days of the War. There are still large inconveniences suffered by insurance companies through some of that legislation. I would like the Law Officers of the Crown to direct their attention to it, because I think that improvement can be effected without any harm resulting to the national interest. I hope, therefore, that the learned Solicitor-General will review this legislation so that we may have measures of relief similar to that which I believe this to be. I give this measure my hearty support.
§ Mr. KING
The speech to which we listened makes it quite clear that there are very important and useful provisions in this Bill. I do not intend to discuss the first three Clauses. I rise to offer some observations on the fourth Clause, which is extremely important, and, in view of the history of the position in this House, is a Clause that ought not to be passed without some consideration. That Clause refers to the Disqualification Acts of 1782 and 1801. These Acts sum up and keep in force still provisions which Parliament has for centuries gloriously guarded, that the independence and integrity of its Members must be above suspicion, and that any Government contract taken or received by any Member shall disqualify him from continuing to be a Member of this House. To go back to the first of these Acts, the Bill was brought in on the 22nd February, 1781, under the blessing of and with speeches by both Fox and Pitt, The Bill then introduced was called the Contractors Bill. It was introduced by Sir Philip Jennings Clarke, and I think it will be interesting to you personally to know that among those whose names are on the back of the Bill are Sir James Lowther and Mr. William Lowther and a number of other names, some of which are still familiar in this House. That Bill is the basis of the legislation which is still in force which prevents any Member of this House from having any interest whatever in any Government payment or contract directly, unless it is a payment which is notorious by being put up to public auction.
2076 5.0. P.M.
Only a short time ago, during the life of the present Parliament, we had this question raised in a very acute form in the case of Sir Stuart Samuel, who was then a Member of this House. He ceased for a time to be a Member, but was re-elected and only resigned his position as a Member a few days ago. The fact was that in 1912 Sir Stuart Samuel, Member for White-chapel, was a member of a firm which undertook large contracts for the purchase of silver for the Government, Sir Stuart Samuel himself had no knowledge whatever of the contract, and it is undertook that the firm, and certainly Sir Stuart Samuel himself, made either no profit at all or a very small profit. He was attacked by he common informer. He was also attacked by questions in this House, and it was evident that he was liable to very heavy penalties. The Government of the day introduced a Bill, the Sir Stuart Samuel Indemnity Bill, which was brought in on the 8th of May, 1913, and it was kept on the Order Paper for about three months. Various attempts were made to pass that Bill, but owing to the opposition of a very large number of Members, and owing to the fact that the Members of the party supporting the Government had really very lukewarm enthusiasm for the measure, it was never proceeded with. Moreover, we were told by the then Prime Minister (Mr. Asquith), on the 7th August, that communications had passed between himself and the Leader of the Opposition, and it was found impossible to carry the Bill through. It is worth while calling attention to that, because it makes it quite clear that Parliament itself, before the War, attached great, importance and manifested the greatest insistency against any Member having any portion of profit in any Government contract. The House is probably aware that Sir Stuart Samuel was proceeded against in the Law Courts, and was very heavily fined. It is understood, though I have no personal ground at all for saying so, that the case also cost Sir Stuart many thousands of pounds. That was the feeling and the position before the War. When the War broke out, as the Solicitor-General showed, a great number of persons, including Members of this House, had to give up various things they were doing for the purposes of the-Government. Quite rightly, they gave them up at once, and there ought certainly to be no difficulty or danger in doing so; but, during this time—I am taking a single 2077 case, the case of Sir Stuart Samuel—during this time, Sir Stuart Samuel was engaged on behalf of the Government in very large financial transactions, and when he resigned his seat, only a very few months ago, he publicly announced that he was obliged to resign his seat, his firm being engaged in so many contracts for the Government that he did not feel able to continue as a Member of this House or to undergo the risk of a further penalty, being uncertain of his position. That is the reason Sir Stuart Samuel resigned his position in the House. Possibly he was very anxious, for, once bitten, twice shy.
There were possibly many other Members of the House who might have been in the same position. I certainly know of one instance, that of an hon. Member of this House, a large merchant, whose stock was commandeered by the Government, and he steadily refused for months to go into the Division Lobby of this House. He was in constant attendance here, yet he felt that under all the circumstances it would be unwise on his part to risk the danger of attacks by the common informer and subject himself to the penalty of £500 a day for every day he voted. That was the position, a position which certainly wanted regularising, until a few weeks ago. I understand that on certain occasions the Law Officers of the Crown, before the present Solicitor-General came to his office, were consulted in connection with the payments for wool taken over by the Government, and the Law Officers gave a decision, which was actually communicated to the House in answer to one of the questions that were asked, to the effect that the payments made by the War Office for wool which the Department had taken over certainly did not subject any Member to any liability or disqualification. As the Solicitor-General has said, there is a good deal of difference between goods that are taken by requisition or commandeered and goods of the same class which, the next day, may not be actually and formally requisitioned, but may be handed over in continuation of some contract. Obviously there is here a case which wants to be put quite clearly. I understand that the effect of this Bill will be, in most cases that may arise, to make the law quite clear.
There are one or two other considerations which ought to be brought to the mind of the Solicitor-General and to the attention of the House. There is to my knowledge one case, at any rate, in the Law Courts arising out of the position as 2078 it is at the present time. There may be more cases, but there is certainly one; and I am quite certain, of course, that this legislation has not been introduced to stop a case already before the Courts. Of that I am quite sure, but I think the attention of the Solicitor-General ought to be given to the point. Will it stop cases already initiated? I do not say whether it ought or ought not, for that is a matter on which I am not competent to judge, but I think that fact ought to be borne in mind. There is another consideration, too, and it is that this Bill and some of its Clauses, in fact, the whole Bill has effect only for the period of the War. But in paragraph (a) of Clause 4, I find the words, "for purposes connected with the present War." Contracts may have been entered into, as this Clause says, before the 21st day of February in this year for purposes connected with the present War, but they might continue, for these purposes, many years after the War. They might be continuing contracts which would have effect long after the War had passed, and I think that contracts of that nature ought to be outside the provisions of this Clause. I shall possibly put down some Amendments which will raise these points in Committee, and I believe that they will receive the attention of the Solicitor-General.
There is another matter in connection with the same sort of point, arising under paragraph (b) of the Clause, "a contract or agreement entered into on or after the said date," and so on. That would be excluded form the operations of the Disqualifications Act; but here, again, I think it ought to be "contracts entered into before the end of the present War." They might be entered into after the War for purposes that had already preceded such contracts; for instance, a contract to pay a certain amount in respect of wool which had been provided beforehand. I think, possibly, some modification of that ought to be introduced into the provision. On the general question of these disqualifications and their being practically swept away for the purposes of this War, and for the period of this War, I am not against the course taken by the Government, but I think it ought to be carefully guarded and watched. I hope we shall have a full discussion on it in Committee and that the-Solicitor-General will consider these various points. I will only add this in conclusion, that the Government at the 2079 present time is of course in a position of extraordinary power, because practically there is no organised opposition against it, and that is the desire and feeling of the great majority of Members, and also of the country, at any rate in regard to their aims and objects. But there can be no doubt about it that the Government have a great number of Ministers already, and there might possibly be contracts attaching to themselves, not corruptly, but contracts which might gradually attach to themselves, and with a large number of Members of this House connected with the Government they would not be so free and so independent, or, at any rate, would not have that clear and independent position in the eyes of the public which they otherwise would have. I do hope that this Clause to which I have referred, if it passes, will not make the Government any more ready to enter into contracts recklessly, or to any large extent, with Members of this House. I hope I may have some kind of an answer.
§ Sir F. BANBURY
I want to ask the Solicitor-General one or two questions, in dealing with Clause 4, to which the hon. Member has just alluded. The Solicitor-General told us that the two paragraphs of this Clause were drafted in a different manner, and that the reason of that was that, after this Bill became law, the attention of Members would probably be drawn to the circumstance that they could not enter into a contract with the Government without undergoing certain penalties. That, I think, is what the hon. and learned Gentleman said. May I point out that the attention of Members was very forcibly drawn to the law as it stands in 1913, when Sir Stuart Samuel was proceeded against and had, I believe, to pay something like £50,000. A Bill was introduced into this House which raised considerable controversy, and was afterwards withdrawn. Therefore, it cannot be said that the attention of hon. Members is not fully alive to the penalties which they will suffer under the existing law if they enter into contracts with the Government. Paragraph (a) of Clause 4 is drafted with different words, and the Solicitor-General said it is much wider in its application than paragraph (b). Paragraph (a) is, first of all, retrospective, and that in my opinion is a bad principle. I do not like retrospective legislation. The Solicitor-General did not say why it was retrospective, but here must be some reason, and also some 2080 reason for its being drawn in a way different from paragraph (b). I myself do not object to paragraph (b), because the paragraph limits the alteration of the law to cases where property is requisitioned by the Government. It would be very hard on a Member of Parliament, if besides having his property requisitioned and taken over by the Government, he should be subjected to the risk of certain penalties. Paragraph (a) is totally different. It gives relief to any hon. Member who, prior to this date, had voluntarily entered into any contract with the Government—not requisitioned or taken over—voluntarily entered into a contract with the Government.
The hon. Member who has just spoken said ho did not believe that this was being done in order to avoid any case which might be before the Law Courts at present. I am afraid I am not, quite so confiding as the hon. Member. My nature is a little more suspicious, and I cannot help thinking that this has been done by a side wind to relieve—I do not know who it is—a certain person, or possibly persons, of liabilities which they have knowingly entered into and which they ought not to have entered into. There can be no doubt that there were very good reasons for passing these ancient laws. Nothing could be more dangerous than that a Government should have the opportunity of going to any Member and entering into a contract with him by which he was to make a large sum of money. That saps the independence both of the Government and of the Member. At the present time, when enormous contracts are being entered into without that due care and regard for economy which ought to distinguish the Members of the Government who make those contracts to pass a Sub-section like this, unless the explanation is much more satisfactory than that we have already had, would, I venture to say, be very injurious to the true interests of the nation. If it is necessary to pass a retrospective Clause at all, that Clause ought to be in the same terms as the Clause which is going to apply after the passing of this Act. There is no earthly reason why a man who has contravened the law before the passing of this Act should be exempted while he will not be exempted after the passing of the Act. If there is a case—and I cannot help thinking there can be no doubt there must be a case, or else this would not have been brought in—if there is a case of any hardship, then the proper way is to bring in a Bill of 2081 Indemnity. That was done in the case of Sir Stuart Samuel, but that Bill was not proceeded with. This is one of those small things which the House of Commons does not look into. There is hardly anybody in the House at present, and very few in it who have read the Bill or who are aware that it contains this very important Clause. I shall certainly move the omission of Paragraph (a) of Clause 4, in Committee. I trust we shall have some really proper explanation and full explanation of the reasons why this paragraph was put in.
§ Mr. WATT
I do not intend in any way to oppose the passing of the Second Reading of this measure. I simply rise to make an inquiry with reference to the fourth Clause. The importance of this measure lies in that Clause. For 150 years, as the Clause indicates, it has been impossible for a Member of Parliament to make a contract with the Government, and that, I venture to think, is a good principle. This particular fourth Clause is violating that principle and changing the rule which has held for so long as 150 years. We have had no full explanation from the Solicitor-General as to why this change has been made. I agree with the right hon. Baronet (Sir F. Banbury) that the House should look for a better explanation before it allows this measure to pass the Second Reading. I suggest that the Clause ought to be limited to the duration of the War. There is nothing in it which in any way indicates that at the end of the War we shall revert to the good principle which precludes Members from making contracts with the Government. That preclusion applied to Members of Parliament is one of the rights of the people. The right they have is that the man they send to Parliament shall not make use of his position to get contracts and shall not make money out of Government contracts. Why is no limitation of time put upon the overriding of that good principle? The Preamble of the measure says something about the duration of the War, but the Clause does not. Unless something of that sort is done I shall consider it my duty in Committee to move that the fourth Clause be in some way limited to the period while the War lasts.
§ Mr. PRINGLE
I desire to ask for some further explanation in regard to paragraph (a) of Clause 4. I think this is a matter of the most extreme importance for the House of Commons. The Bill is equivalent 2082 to an Act of Indemnity to relieve Members who have possibly incurred penalties and disqualification under the Act of 1782. Personally I think it is rather a strange thing that provision of so great importance should be found placed in an innocent looking measure described as "The Courts (Emergency Powers) Bill." I have some doubts as to whether such a title covers a provision so far-reaching as that. After all, this matter is not simply confined to the Courts. The penalties and disqualifications are not matters which only come before the Courts. Members who come under the Statutes are disqualified from sitting in this House, It is only when a common informer goes to the Courts and seeks to exact penalties from offending Members that the subject comes before the Courts at all. Clause 4 states: "That none of the provisions of the House of Commons (Disqualifications) Act, 1782, or of the House of Commons (Disqualifications) Act, 1801, shall be construed," and so on. I suggest that this is a provision which extends much further than anything that could be described as coming in Courts Emergency Legislation. I do not know whether it is convenient at this stage to ask you, Sir, whether this provison is in order in a Bill with such a title and whether I may now ask your ruling on the point?
§ Mr. SPEAKER
The hon. Member has rather taken me by surprise in this matter and I should like a little time in which to consider it.
§ Mr. PRINGLE
I am sorry, but it was only after the Sitting of the House that this Clause was brought to my attention. I only put the point now so that I should not lose the right of having the matter decided at the proper time. To resume my argument. The hon Member for North Somerset (Mr. King) suggested that there are already Court proceedings affecting one, or it may be more, Members of this House owing to contracts or agreements entered into. If that be so, Clause 4 (a) undoubtedly has the effect of an Act of Indemnity. If that is so, I think it is a very large order to endeavour to pass an Act of Indemnity in a measure masquerading as a Courts Emergency Bill, and should the Clause be held to be in order I shall subsequently move the omission of the paragraph. I submit that we should be told the reasons exactly for such a paragraph. It is retrospective and therefore the Government must know of certain 2083 cases it is meant to cover. If there are cases which it is meant to cover the Government should disclose them to the House so that the House in giving indemnity should clearly know the Members to whom the indemnity is being given and the contracts or agreements in respect of which the indemnity is claimed. We are all familiar with the case of Sir Stuart Samuel and we know that it was a very doubtful point in connection with the contract into which his firm entered with the India Office. It was so doubtful that the matter involved a very large amount of research by a highly learned and competent Committee of this House, and after much investigation that Committee had a great deal of doubt as to the exact position of Sir Stuart Samuel. Nevertheless, although it was a matter of great doubt, this House refused to pass a Bill of Indemnity to Sir Stuart Samuel. It was not suggested that he had made any personal profit out of the transaction, and there was no suggestion that there was any corruption either on the part of the India Office or on the part of Sir Stuart Samuel, or that he had obtained any illicit gain. In spite of all those things and of the acknowledged innocent character of the transaction, the House on that occasion refused indemnity. Here, by this particular Clause, we are being asked to give an indemnity to Members unknown in respect of transactions as to which we have not the slightest information. It seems to me that this is a thing which the House of Commons cannot grant without full information and without having its eyes open. I do not know, Sir, whether it would now be convenient for you to give a ruling on the point of Order, but if it is, I think it would be very desirable to have your ruling.
§ Mr. SPEAKER
I think Clause 4 is covered by the title of the Bill. The title of the Bill is not Courts (Emergency Powers). That is only the short title. The Bill is a Bill to "Amend the Courts (Emergency Powers) Acts, 1914 to 1915, and the Increase of Rent and Mortgage Interest (War Restrictions) Act, 1915, and to grant relief in connection with the present War from liabilities and disqualifications arising out of certain contracts." This would be a case of disqualification owing to liabilities arising out of contracts, and the Clause, therefore, I think is covered by the title.
§ Sir G. HEWART
By leave of the House I desire to say a word or two with reference to matters raised during the Debate. I should like to say at once that this Bill does not profess to deal with any difficulty that does not arise out of the present War. But, on the other hand, it by no means professes to deal with all the difficulties that do arise out of the present War. The hon. Member for Wiltshire (Mr. Peto) mentioned the fact that he has already communicated to me certain Amendments which he proposes to move on the Committee stage. I do not think that it would be convenient to anticipate a discussion of those Amendments, and I shall certainly not say at this stage anything which might prejudice hereafter the consideration which will be given to them. But there does appear to me to be a clear difference between the case of a building contractor who entered into a contract before the War broke out, and afterwards found himself in difficulties by reason of circumstances connected with the War and, on the other hand, the case of a contractor who is in difficulties in relation to a contract which with his eves open he entered into after the War had broken out. However that may be, it will be time enough perhaps to consider in detail the proposals of the hon. Member when the Committee stage is reached.
With regard to the observation that was made by my hon. Friend the Member for Pontefract (Mr. Booth), no doubt there are other grievances which are well worthy of consideration. But I hope that this Bill is not going to be criticised on the ground that while it contains some things there are other things which it omits. As to what was said by the hon. Member for North Somerset (Mr. King), by the right hon. Baronet the Member for the City of London (Sir F. Banbury), by the hon. Member for the College Division of Glasgow (Mr. Watt) and by my hon. Friend the Member for Lanark (Mr. (Pringle) upon Clause 4 of the Bill, I cannot help thinking that there has been some little misunderstanding. Nobody, I hope it is unnecessary to say, need suppose that there is any mysterious attempt here to undermine what has been called the integrity and independence of Members of this House. But it was asked, "Is this Clause intended to be retrospective?" Of course it is. The very object of the first part of Clause 4 is to relate back to acts that have been done which may be of such a kind as to give rise to doubt. Now I am not 2085 saying for a moment that anything that has been done would give rise to an action that would succeed under one of these Acts of Parliament. That is not the point. The point is that in a time of emergency Members of this House, sometimes upon requisition, and sometimes, as I understand, not upon requisition, may have taken a course which might expose them, and as I submit, needlessly expose them, to the anxieties of litigation. The object of this Clause is, first of all, to draw a distinction between what took place before the Bill was introduced and what may take place afterwards. It was said by the right hon. Baronet that there was no reason why a discrimination should be made. I trust that upon reflection—
§ Sir G. HEWART
I trust that upon reflection the right hon. Baronet will see that there is a distinction. May I endeavour to make it plain? Let me take, first of all, the case of a requisition. In the first place, there might be a doubt whether the requirement of the Government Department amounted in law to a requisition. Even where there was an undoubted requisition there might be left over some question as to price, for example, or as to date of delivery, and when agreement was arrived at as to prices or delivery it might be contended that even that limited agreement was within the Act of 1782, because it had to do with a contract on account of the public service. On the other hand, there might be another class of case—a case of something which could not properly be called a requisition at all, a demand which might be made by a Government Department in such circumstances as that a Member of this House felt himself bound to comply with it, and unless a Clause of this kind were enacted he might be exposed, I do not say to a successful action, but to the risk of an action. Therefore the general policy of this Clause is that where acts have been done of that kind, perfectly innocently, arising out of the necessities and emergencies of the War, acts containing some element of agreement upon which an ingenious person might frame an action, such acts are excused.
The difference which is suggested between acts antecedent to the introduction of the Bill and acts subsequent to the introduction of the Bill is this, that 2086 from the moment this Bill is introduced it is made perfectly plain that the only thing which will henceforth be excused is some agreement in detail as to price, compensation, or some other particular term of the transaction, the transaction itself arising upon requisition. It was said, "Will the effect of this Clause be to defeat cases which already may have been commenced in the Courts of Law?" I do not know what cases are referred to. The hon. Member for North Somerset (Mr. King) told me last night of a case of which I myself had not previously heard, and I do not think that it is desirable to mention the name of the case. I am not prepared to say at the moment whether that case, of the circumstances of which I am not fully aware, would or would not come within the ambit of this Clause. But I do say this about the Clause, that it is undoubtedly intended to cure defects, if defects there be, in antecedent transactions of a certain kind. Whether the particular case which the hon. Member has in mind comes within the words of the Clause is a question upon which at this moment I am not prepared to express an opinion. But if the policy of the Clause is right, if the Clause itself is one which ought to be passed, then I submit that it matters not that some action has been started which this Clause would defeat.
§ Mr. KING
May I ask the Solicitor-General this question? Cannot he see that there is a great difference between a contract which follows on a requisition, for instance, and a contract of a totally different character, say a contract to do certain services which the hon. Member offers to do, and which come not from any exclusive Government demand or appeal, but from some free contract?
§ Sir G. HEWART
I do, indeed, see that there is a considerable difference, but Hi at is not the kind of difference which I, at any rate, have in mind. What I also see—and I hope that the hon. Member will see it also—is that the question whether a particular requirement amounted to a requisition in the technical sense of the term might easily prove a vexatious and difficult question, and the object of this Clause, while it is not to excuse something which ought not to have been done, is to lay at rest doubts or questions which might arise, however they might be resolved. Comparing Sub-clause (a) with Sub-clause (b), one might say that, whereas in the first case the 2087 whole agreement is excused, in the second case it is only the detailed agreement as to some particular element which is excused, and that only in cases where requisition is proved. I do not know that at this stage it is convenient that I should pursue the matter further, but the hon. Members who have taken part in this Debate may take it from me that there has been no intention here deliberately to relieve any person or persons from the consequences of liability into which they have knowingly fallen. That is not the object of the Clause. I am not-aware myself, subject to the case which the hon. Member for North Somerset brought to my notice last night, and to one other case which has been raised, of any particular cases. The object is rather to lay at rest doubts and questions which have arisen or which may hereafter arise.
§ Mr. PETO
May I ask one question with regard to the general matter that I raised—namely, when this Bill passes into an Act, assuming that it passes in its present form, what will be the position in regard to all the contracts which have been suspended owing to the War, and which would fall to be completed after the War?
§ Sir G. HEWART
I am not sure that I quite follow the question. I do not know whether the hon. Member is referring, when he speaks of suspended contracts, to contracts which have been supended by a Court within the meaning of Clause I of this Bill, or whether he is referring to contracts which are suspended through the operation of some War Clause or otherwise.
§ Mr. DILLON
We shall have a full opportunity, I assume, on the Committee stage to go into the question of the effect of Clause 4, and it is not therefore necessary to speak now at any length. I listened attentively to the Solicitor-General's explanation, and I must say that it did not carry conviction to my mind. He said it was not the purpose 2088 of the Clause at all to relieve all kinds of contracts or agreements which might have been entered into before the date of the introduction of this Bill, between Members of this House and the Government, against the law. That might not be the purpose, but is not that the effect? To ask the House of Commons to pass in the dark a general scheme of indemnity which may cover, for all we know, a hundred or two hundred cases without the slightest hint as to what is the nature of the transactions or the number of them, is asking for a great deal. Some transactions must have come to the notice of the Government or they would never have introduced a sweeping Act of Indemnity like this. I do not think it is a wise thing to do until the Government is in a position to give the House of Commons a more general idea of the scope of this measure. This War has brought forth a great many very strange things.
I do not at the present time want to allude to certain things that may be in the mind of every Member of the House, but there have been cases in which men, while making outward professions of keen patriotism—or, at least, the most noisy—have seemed to consider that attitude consistent with entering into transactions with the Government, which were extremely profitable to them—far too profitable—and which when they subsequently came into the light were condemned by public opinion. Are we to be asked to give a general blank cheque to cover all transactions, or any transactions of this kind? I assume the Government does not introduce a Clause of this character unless they have been made aware of some transactions to which the Clause applies. Is it, therefore, a fair and reasonable thing to ask the House of Commons to throw a cloak over something of winch they have not the faintest idea, or to pass an Act of Indemnity without knowing what exactly it is they are passing? This is a proposal entirely without precedent. I never heard or never dreamt that an Indemnity Act of this character would be asked for from this House. Whatever may be the purpose of the Government, it is a very sweeping Act of Indemnity. I never heard of any Government proposing an Indemnity Act without at least giving a general idea and explanation—I do not wish minute particulars of every case—of the nature and number of the cases and of such transactions as it is intended that 2089 this Clause should apply to. I do not suppose anybody has the slightest idea of dividing against the Second Reading, but it would be well in the general interest when we get into Committee that we should be given some further explanation—I think it is only fair to ask for that—than given to-day as to the need for this indemnity Clause. What is the idea present in the mind of the Solicitor-General as to the extent, number, and character of the transactions?
§ Sir G. RADFORD
I desire to say a few words on the Second Reading, particularly in regard to Clause 4. The marginal note of Clause 4 reads: "Relief from disqualification for Membership of House of Commons in certain cases." It appears from that, that there are certain cases in which it is desired to obtain relief. My right hon. Friend the Solicitor-General has in general terms explained what is the nature of those cases and the kind of relief proposed to confer upon Members of this House. The Solicitor-General was extremely ingenious in the reply that he made in general terms to criticisms made in general terms. He went far to persuade me, and I dare say to persuade other Members of this House, that the Clause was satisfactory both in its intention and in its probable operation. I could not help remembering the legal maxim, "that fraud lurks in generalities." Although in this case I make no suggestion whatever of fraud on the part of the Government, yet I think it is quite true that we may expect, if fraud does not lurk in generalities, that at any rate surprises and inconveniences may lurk in generalities. We want something more than generalities. May I remind the Solicitor-General that this is not a House of lawyers, although I confess they are rather numerous here. What the House desires is a statement of facts which they may appreciate, and which will enable them to form a judgment on the question raised by this Clause. If the Solicitor-General could see his way to enumerate certain of these eases, to tell us what they are and what they amount to, this House of Commons would rapidly come to a conclusion as to whether or not they could support the Bill. I rather imagine that this not being a house of lawyers, the enumeration of the particulars of cases sought to be provided for would be very much more interesting generally to hon. Members than some statement of the law on the 2090 subject. A general statement, if I may respectfully say so, would be imperfectly understood, whereas a recital of particular cases with the enumeration of details would come home to every man, who would thus be able to form a conclusion as to whether or not he could see his way to support the Government. I am not suggesting that this Clause is wrong. It may be and very likely is right. But I should like to know, and I think other hon. Members would be glad to know, what is the exact nature of the cases in which it is necessary apparently to apply to this House for relief from disqualification. If the Solicitor-General sees his way to give us this information, either now or at a later stage of the Bill, I feel that the later stages of the Bill will be very much facilitated. The more frank the right, hon. Gentleman is in his statement to the House the easier and more rapid will be the progress of the Bill.
§ Mr. J. M. HENDERSON
I quite agree with my hon. Friend opposite who has just sat down. I do not think the House ought to be asked to give this Bill a Second Reading without some sort of clear indication as to the sort of indemnity asked for, whom we are going to indemnify, and what for. To do what we are asked to do may be to find that we have indemnified something or somebody which the House does not know of now and which hon. Members, if they had known, never would have indemnified. The principle is wrong. When the Bill was introduced to relieve the right hon. Gentleman the Attorney-General from his liability under the old Acts the House was fully informed of the whole facts, and, quite rightly, the House, which is always quite generous in a matter of this sort, gave the indemnity. Let me suggest something. We know very well that the hon. Gentleman the Member for Hornsey has given a very great deal of service in the matter of advertising for the War Loan. He, gave this service—all honour to him—quite gratuitously, but do all the advertisers who may come to this House give their services gratuitously? The more I think of it, the more I am convinced that the House ought never to have been asked to pass such a Bill without, either now or on the Committee stage, having an undertaking or general statement of the cases which are proposed to need indemnification. I presume I am right in supposing that it may be necessary or desirable to 2091 introduce in Committee a condition as to the word "service." I do not know whether that would be beyond the scope of the Bill, but I think the Bill ought certainly to cover some services that some hon. Members may have given, and for which they have received, either directly or indirectly, some emoluments. Personally I do not know any such cases, but there may be. I would appeal to my right hon. Friend to press upon the Government to allow the House to have some indication of what we are going to do here, and let us not find hereafter that we have done something to-day that if we had known we would not have done.
§ Question put, and agreed to.
§ Bill read a second time, and committed to a Committee of the Whole House for To-morrow.—[Mr. Beck.]