HC Deb 28 July 1927 vol 209 cc1614-8

Lords Amendment:

In page 8, line 20, leave out the Clause and insert new Clause.

Form of moneylenders' contracts.

(1) No contract for the repayment by a borrower of money lent to him or to any agent on his behalf by a moneylender after the commencement of this Act or for the payment by him of interest on money so lent and no security given by the borrower or by any such agent as aforesaid in respect of any such contract shall be enforceable, unless a note or memorandum in writing of the contract be made and signed personally by the borrower, and unless a copy thereof be delivered or sent to the borrower within seven days of the making of the contract; and no such contract or security shall he enforceable if it is proved that the note or memorandum aforesaid was not signed by the borrower before the money was lent or before the security was given as the case may be. (2) The note or memorandum aforesaid shall contain all the terms of the contract and in particular shall show the date on which the loan is made, the amount of the principal of the loan, and either the interest charged on the loan expressed in terms of a rate per cent. per annum, or the rate per cent. per annum represented by the interest charged as calculated in accordance with the provisions of the First Schedule to this Act.


I beg to move, "That this House doth agree, with the Lords in the said Amendment."

I think it is only right that I should give the House some explanation of this proposed new Clause. May I first of all say that Sub-section (2) of the new Clause is similar to Sub-section (2) of the old Clause. Sub-section (1) of the new Clause really brings together Sub-sections (1) and (3) of the old Clause. The new matter is contained in Sub-section (1) of the new Clause. The Clause, as it stood in the Bill, was considered open to objection on three grounds; first of all that although it touches the original transaction for a loan, it does not touch transactions for security on a loan or affect the interest on a loan. They must equally be touched and affected in regard to the information that is to be given to the borrowers. The second point on which objection was suggested—and I remember there was some discussion about this in this House—is that the note or memorandum may be signed after the making of the contract, and, indeed, after the lending of the money. If you are going to see that the borrower is to be supplied with information on which le may properly judge as to whether it is a contract to be entered into or not, surely it is right to suggest that he should have that information before he makes the transaction and it is not enough to give him a copy of these things afterwards. The third point is this, that the Clause, as drafted, may he read so as to affect guarantors. I do not think it was the intention of the House to include guarantors, the reason being that the opening words are general, because the words are: No contract for the repayment of money lent by a moneylender, and the substituted clause proposes to make the matter clear by substituting for that the words No contract for the repayment by a borrower of money lent to him or any agent on his behalf by a moneylender …. Those words are inserted in order that it may be made clear that they do not affect a collateral guarantee.


The Lord Advocate has been no more clear in explaining this new Clause than he has been on previous Amendments, and, if I may say so, I imagine that the new Clause does not clarify the position very much. I only want to put two points to the Lord Advocate. They are these. What is the meaning of inserting the word "agent"? Can a borrower send another person on his behalf to borrow money? Then, further, in the Committee upstairs we were confronted with the problem of suing a husband for the money borrowed by his wife. It seems to me that we ought to get these two points cleared up before we leave this Clause. Then, in the new Clause, I notice that the words "signed personally" are substituted, and I should be very glad if the Lord Advocate would make these points clear.

Lieut.-Colonel WATTS-MORGAN

I notice that hon. Members on the other side are very hilarious and delighted. I do not suppose that they took very much time to consider the evidence from the Select Committee or anything else in connection with this matter. [Interruption.] I do not think the explanation of the Lord Advocate is a very clear one. It brings my protest, which I made at the beginning of the Debate, that here we are in this Amendment taking out one Clause entirely and substituting a new Clause which we have had no time to consider at all. The Lord Advocate has explained that Sub-section (2) remains the same, but that certain changes have been made with respect to Sub-section (1) and Sub-section (3). I dare say hon. Members would be interested to know—

Lieut.-Colonel HENEAGE

On a point of Order. Ought not all Members to address their remarks to you, Mr. Speaker?


Lieut.-Colonel Watts-Morgan—

Lieut.-Colonel WATTS-MORGAN

I was addressing myself to you, Mr. Speaker, but I might have turned round in order to make my point quite clear to all the Members of the House, and to the hon. and gallant Gentleman who has intervened. I noticed that in the Committee upstairs the hon. and gallant Member—


We have nothing to do with the proceedings in the Committee.

Lieut.-Colonel WATTS-MORGAN

I apologise, Sir. I was going to draw attention to the fact that a Clause, in the framing of which we spent nearly two days in Committee upstairs, has been dismissed in another place and there has been substituted for it merely 12 lines, or about 50 words, with no explanation at all from the Noble Lord who moved the Amendment. To-night, for the first time, we hear two or three of the reasons why the new Clause has been substituted for the original Clause 6—[Interruption.] If hon. Members will only be patient I will state my view very briefly. I do not propose to weary them because I know they are anxious to get away. The hon. and gallant Member might make himself intelligible—[Interruption.] Well, if you want to lengthen the proceedings—


The fact that the hon. and gallant Member is not addressing me leads to interruptions from the other side. He should put his arguments through me.

Lieut.-Colonel WATTS-MORGAN

For the second time I sincerely apologise. I suppose it is my failing as a Welshman that I am drawn aside from my argument by these interruptions. I do not think the explanation of this Amendment which has been given to us is sufficient and I sincerely regret the action taken in another place. It has forced upon this House at this late hour a proposal which could not be carried through the Select Committee when we fought the matter out there.


In the case of a Bill like this, on which there is a large degree of unanimity, it is not as necessary to discuss Amendments in detail, as it may be on other Bills, but that does not excuse the kind of statement which the Lord Advocate made when he said that Sub-section (2) as proposed in the Lords Amendment, was identical with Sub-section (2) of the original Clause. That hardly does justice to another place where in my opinion Sub-section (2) has been considerably improved. A distinction between the two Sub-sections is that one is 8½ lines and the other was only six lines, and I do not think they can be described as identical. Though these Amendments may not be controversial, I hope that the explanations forthcoming on them will be accurate and complete.


There is one important difference between the proposal in this Amendment and the proposal in the Bill when it left this House. The Committee which considered the Bill originally took account of the case of the man who wished to borrow in a hurry and who required the money in order to meet an emergency. This Amendment rules out such a case.

Subsequent Lords Amendments down to page 13, line 10, agreed to.