HC Deb 01 July 1927 vol 208 cc821-7
Lieut.-Colonel WATTS-MORGAN

I beg to move, in page 11, line 33, to leave out the words "of a moneylender," and to insert instead thereof the words in respect of money lent after the commencement of this Act. We have here an instance of the retrospective effect of this legislation. I cannot say what will be the effect of the Clause if it passes in the way in which it now stands, because nowhere in the Bill is there any mention made of what is to happen in the event of a licence being endorsed in consequence of the reopening of a transaction made long before the passing of this Act.


On a point of Order. Has my Amendment in page 11, line 32, at the end, to insert the words: Provided that in respect of money lent, when the contract provides for repayment by weekly instalments, a sum not exceeding the rate of twelve per cent. per annum shall be allowed to be charged to cover the costs of collection"— been passed over? I thought that was the most important Amendment on the Paper.


Yes. I have not selected that Amendment.

Lieut.-Colonel WATTS-MORGAN

If the endorsement can be adduced as a reason for refusing the certificate, it will be most unjust that transactions entered into by all the parties concerned can be re-opened in the way this Clause permits. Just because a Judge does not happen to think the same as a moneylender as to what is a proper amount of interest to be charged, the moneylender has to run the risk of losing his licence in any proceedings on a case which has been reopened. If this is the intention of the Bill it will be very unfair to the moneylender, because he cannot know the mind of the Judge. It amounts almost to blackmail in all cases which may be reopened by the borrower. I have realised from the beginning that this is a borrowers' Bill not a moneylenders' Bill. Hon. Members may look upon moneylending as a sin, but there are other ways of taking people's money which are just as bad. Both should be avoided. It must also be remembered that the moneylender enters into this transaction on the representations of the borrower. This retrospective effect in the Bill will be very injurious. It is dishonest, and it is introduced here with an amount of vengeance which reminds one of the middle ages. The moneylender has no right of appeal. I hope the promoters will accept the Amendment.


I beg to second the Amendment.


I do not think there is any serious grievance here. Under the Moneylenders Act 1900, a transaction can be re-opened on the ground that it is harsh and unconscionable, and if when the transaction is re-opened and comes before the Court and it is proved against the moneylender that it is harsh and unconscionable surely it is fair that a record should be made of that transaction on the certificate. It is a record of the fact that he did something dishonest or unsatisfactory before this Bill was passed, and as the transaction is not re-opened under this Bill but under the Act of 1900, I do not think we are doing the moneylenders any injustice.

Lieut.-Colonel WATTS-MORGAN

He may lose his licence.


I quite agree that follows. If he is proved to have been guilty of harsh and unconscionable conduct there is no reason why that should not be recorded on the certificate.

Lieut.-Colonel WATTS-MORGAN

It is agreed that it will be unfair for a moneylender to lose his licence for a retrospective action. I am asking that the 1900 Act shall be continued and that a moneylender shall not lose his licence under this Bill.


He must take the consesequences.


We are passing a new Bill; I hope it gets through and becomes law, but I do not wish it to be unfair. A moneylender did something years ago which he was quite entitled to do. We are now altering the law and saying that something he did some time ago is now wrong. The promoters of the Bill propose to punish him for doing a thing which was not wrong when it was done.


Oh, no.


It was perfectly legal when it was done. I do not think this House should pass retrospective punishment in the form of new legislation. Hon. Members who sat on the Committee upstairs agreed that this provision is unfair although the majority of the Committee considered otherwise. I want to enter my protest against passing legislation which will have the effect of inflicting retrospective punishment upon men for acts which are declared by the Bill to be wrong but which were perfectly legal when they were done.


I have no love for the moneylender, but I can see that some injustice may be done by the Clause if it is passed in its present form. It would be extremely unfair to penalise a moneylender for something which occurred years ago, if that transaction is reopened after this Bill becomes law, and that he should have his licence endorsed with that particular offence. That is wrong. I think we should start from the time the Bill comes into operation and any offence which a moneylender permits after the passing of this Bill should be endorsed on his licence.


It is rather important to appreciate exactly the situation which arises. There is a transaction which, under Section 1 of the 1900 Act, may be brought into Court and may be characterised as harsh and unconscionable by the Court. It may be a transaction of 10 or 12 years ago, but it is perfectly open to the moneylender, who may have repented of his ways and desires no longer to trade on harsh and unconscionable lines, to himself reopen the transaction. There is no need for the matter to come into Court at all. It is only on his refusal to reopen the transaction, on his insisting on sticking to a harsh and unconscionable transaction, that the matter comes into Court at all. That seems to me to characterise and affect his present method of trading. It does directly affect his present methods of trading if it is brought into Court. If he has changed his methods it will not be harsh and unconscionable. That is the whole basis of the argument. If he insists on sticking to that harsh and unconscionable transaction, then it is a relevant factor to consider whether he is a man who should be allowed to get a certificate at the present time. For that reason the Bill is not unjust and is one which will carry out the object which everyone has in view.


The Lord Advocate, by reason of his clear statement, points the injustice of this Clause. What the Government have in view this. After this Act is passed, if a moneylender is brought into Court a Judge may say to him, "Long before this Act was passed you made a bargain which then you were allowed to make, though we now say it is harsh and unconscionable." It is a transaction which was made under the 1900 Act. The Act did not limit at all the amount of interest, and the transaction made under that Act was one, so far as he knew, in accordance with the law. Now the Judge is to be empowered to say, "Produce your certificate, and we will endorse on it that you were a bad boy, not since the Act told you to be a good boy, but years before." You now have an Act of Parliament which says a moneylender must have a certificate and that certificate shall be used to carry an endorsement as to how he conducted himself since he got that certificate. This Clause says you can put on the back of that certificate what you regard as misconduct, not since he got the certificate, but long before it. [HON. MEMBERS: "No."] I may be wrong, but here are the words— Where a Court re-opens a transaction of a moneylender under the said Section 1 of the Moneylenders Act, 1900"— it is agreed that the Court can re-open in 1928 a transaction which took place 10 or 15 years ago— the Court may require the moneylender to produce any certificate granted to him in accordance with the provisions of this Act. The moneylender is bound to produce the certificate granted under this Act. What can be put on the back of the certificate? The Judge— may cause such particulars as the Court thinks desirable to be endorsed on any such certificate, i.e., as arises out of the proceedings regarding a transction which has been reopened and which happened years ago.


For what was wrong under the 1900 Act?


That may be, but what I am pointing out is you are now laying down a new Clause. Henceforth, moneylenders shall have a, certificate, and the fact of that certificate shall be a record of how they conducted themselves since they got their certificate. This Clause enables you to put on the back how they conducted themselves before it.


I cannot help thinking that there is an extraordinary confusion of ideas in the minds of those who oppose the Clause. The persons who grant the certificate are bound to take evidence of good conduct and the endorsement of the Judge is part of the material for forming a judgment which is placed at the disposal of the licensing authority. All the evidence of competent witnesses is relevant, and, when you say it is retrospective, you might just as well claim that any species of bad conduct that a moneylender committed before in years past should not count when the licensing authority is considering whether he is a person of good conduct. What hon. Members are asking, logically, is that there should be a wiping out of every offence that a, moneylender may have committed during his life, so that he may, from the moment this Act is passed, appear before any licensing authority in a perfectly clean sheet. I desire to say, speaking generally, that the difficulty of all licensing authorities is always that of obtaining sufficient and reliable evidence, and that there are many cases where there is such a divorce between the Court and the licensing authorities that very important and reliable evidence is not obtainable. For instance, there are the provisions of the Act for the protection of infants, where one authority is charged with the oversight of such infants and the coroner is charged with holding a special inquiry in case the child dies, but where there is no obligatory communication of any kind between the Court and the registrar. I say that is wrong in itself. These licensing authorities ought to be in possession of the fullest possible information. The endorsement of the Judge on the certificate is not in the nature of a judgment, but of information which can be taken into due consideration when the question of character comes up. If you admit testimony as to a man's personal character during a long and blameless life before the licensing authority, equally it is right to admit evidence with regard to any misdemeanours. I hope, therefore, that the House will dismiss this proposal.


The hon. and learned Member for South Shields (Mr. Harney) said that this Clause was punishing the moneylenders for some offence committed before this Act comes into force. I submit that what it is intended to punish him for is not offences committed after the Act, but, for having failed to make restitution for them. At any time after he committed an offence it would have been open to him to have said, "This bargain was harsh and unconscionable, and I have no wish to stand by it." If after the Act comes into force, he still stands by that bad act and bargain, it is in effect repeating the crime, and to that extent I think we are perfectly entitled to punish him. If I may put it very briefly, in scriptural language, we may say to the moneylender in such a case that if he will repent he shall be saved, but if he fails to repent we are entitled to damn him on his certificate.

Question, "That the words proposed to be left out stand part of the Clause," put, and agreed to.