MONEY RESOLUTIONS (GOVERNMENT PROPOSALS). (Hansard, 9 November 1937)

§ 45. Mr. Lambert
asked the Prime Minister what action the Government propose to take with regard to the report of the Committee on Money Resolutions?

§ The Prime Minister (Mr. Chamberlain)
His Majesty's Government have very carefully considered the recommendations of the Select Committee. They have been impressed by the amount of interest which has on several occasions been displayed by the House in connection with the drafting of Financial Resolutions, and, while not accepting all the criticisms directed against the present practice as well-founded, they have approached the question with every desire to remedy, so far as this may be consistent with their responsibilities, any features in the present position which appear to hon. Members to be unsatisfactory. The Select Committee in their report make two main recommendations 1594 which may be summarised shortly as follow:
First, the passing of a declaratory resolution by the House to be enforced by the authority of the Chair indicating certain general lines upon which Financial Resolutions should be drawn.
Secondly, the alteration of Standing Orders so as to allow the Second Reading of Money Bills (other than those originating in Committee of Ways and Means) to be taken before consideration of the relevant Financial Resolutions in Committee.
The Government, for their part, are prepared to accept in substance the second recommendation, as enabling hon. Members to express their views on the detailed provisions of the Bill at an early stage, and as meeting the criticism that the House should not be required to examine and discuss the terms of the financial provisions as set out in the Financial Resolution before being fully informed of the Government's intentions as detailed in the clauses of the Bill. The Government note that the new procedure proposed by the Select Committee is permissive and not mandatory, and, as was the case with the similar recommendation made by the Select Committee on Procedure in 1932, the right of the Government to proceed by way of preliminary resolution would be left unimpaired. It is not, however, contemplated that the exercise of this right would be other than exceptional.
While appreciating the considerations upon which the resolution included in the first recommendation is founded, the Government cannot feel that the directions set out therein are compatible with the fundamental principle embodied in Standing Order No. 63, namely, that of the Crown's initiative in regard to expenditure, a principle the wisdom of which the Committee recognised. Apart from this point of principle, which the Government regard as of supreme importance, there are certain practical difficulties which would render the operation of the arrangement outlined in the resolution unsatisfactory and inequitable. In this connection I would refer, if I may, to the evidence tendered to the Committee by you, Sir, in which you questioned the wisdom of placing upon you the duty of giving decisions from time to time on 1595 highly controversial matters involving the consideration of the relative financial importance of various suggested alternatives.
Although unable to subscribe to the proposed declaratory resolution, His Majesty's Government, as already stated, are in sympathy with the desire of hon. Members to be in a position to offer constructive criticism of financial measures, and they therefore welcome the opportunity of declaring that it is their definite intention to secure that Financial Resolutions in respect of Bills shall be so framed as not to restrict the scope within which the Committee on the Bills may consider amendments further than is necessary to enable His Majesty's Government to discharge their responsibilities in regard to public expenditure and to leave to the Committee the utmost freedom for discussion and amendment of details which is compatible with the discharge of those responsibilities.
Accordingly, written instructions are being given to Departments and to the Parliamentary Counsel's Office drawing attention to the Report of the Select Committee on Procedure relating to Money Resolutions and to the statement which I am now making and requiring that in future the terms of any Financial Resolution, for the drafting of which they are responsible, shall not be so drawn as to involve undue restrictions and that this declaration shall be complied with. The House may wish to hear the actual terms of the instructions. They are as follow:

§ Colonel Sir Charles MacAndrew
May I ask the Prime Minister now that Second Readings are to be taken before Financial Resolutions, whether it is intended, when the main purpose of a Bill is to incur expenditure, that the Clauses containing expenditure are to be printed in italics?

§ The Prime Minister
I should like to consider that question.

§ Mr. Attlee
May I ask the Prime Minister whether any alteration will be needed in the Standing Orders?

§ The Prime Minister
Yes, Sir. The Standing Orders will have to be altered in order to comply with our intention to accept the second recommendation.

§ Mr. Attlee
As this is a matter relating to the procedure of the House, may I ask, Mr. Speaker, whether you would care to express an opinion on these suggestions?

§ Mr. Speaker
Anticipating that a question would be put to me by the Leader of the Opposition, inviting me to express my opinion on this matter, I have written down a statement which I should like to read to the House if they will bear with me:
1597 1. I have been asked for my opinion on a very difficult matter. In the first place the problem itself is of a highly technical and complicated character, the full bearing of which is difficult to grasp and still more so to express in simple language. And, secondly, the real questions at issue, namely, the amount of latitude which should properly be allowed to private Members in proposing amendments which involve expenditure, and how Financial Resolutions should be drawn so as not to restrict unduly the scope of such amendments, are questions of degree, which admit of an almost infinite variety of opinion as to where the line should be drawn, and for which it is almost impossible to lay down rules of general application in advance of particular cases. Every particular case must be judged upon its merits, but a right judgment is not possible without some guiding principle. It is a reasonable guiding principle for such cases which the Government and the House, with the help of its Select Committee, have alike been trying to find.
2. Now the whole matter has been very thoroughly investigated by the Select Committee appointed for this purpose. Their report and the minutes of evidence taken by them, which have been quite recently published, have thrown much new light upon the problem, and with their careful analysis of the factors involved I find myself in considerable agreement. I did not, however, agree with an essential condition of their main recommendation, to which I will refer again later, namely, that the conformity of Money Resolutions to the standard which the report laid down should be subjected to the decision of the Speaker. My objections to this proposal were stated by me in a memorandum which I submitted to the Committee, and I need not repeat them here except to say that, while as the servant of the House I was always willing to undertake duties put upon me by the House, I questioned the wisdom of imposing upon the Speaker a duty which, in my opinion, would have the effect of involving the Speaker in party controversy, with the risk that he might be accused of having favoured one side or the other in the controversy.
3. In these circumstances the Government have put forward a solution of their own. They have accepted the second recommendation of the Select Committee, and rejected the first, for which they have 1598 substituted another proposal, designed, in their view, to achieve the same purpose in a more acceptable manner. I do not propose in this statement to do more than refer to the second recommendation of the Committee and the Government's acceptance of it, because, of whatever value in itself, it is subsidiary to the main point at issue.
4. Let me now examine the Government's proposal, in lieu of the first recommendation of the Committee, the substance of which is contained in the instruction they are prepared to issue to the Departments and the Parliamentary draftsmen. I note first of all that the mere issuing of this instruction, and the formal placing of it on record is a considerable advance, and is more favourable to the claims of the House than the situation that previously existed. I note secondly, when I consider the terms of the instruction, that they are inspired by the same objects as the declaratory Resolution of the Select Committee. There is, of course, a considerable difference in the machinery proposed respectively by the committee and the Government. Under the Government's proposals the direct responsibility will not be laid upon the Speaker. Under the recommendations of the Committee this duty would have been laid upon me. I have referred to this matter before, and only mention it here because, while fully recognising its importance, I regard it as the sole real difference between the Government and the Committee.
5. I think this conclusion will be admitted if a dispassionate comparison is made of the respective terms of the Government's instructions and the declaratory resolution proposed by the Committee. The latter seems to me to have been somewhat misunderstood. I agree with the statement in the report, in which the Committee describe their own intentions, that the Resolution, so far from proposing any "innovation" in practice, aims at no more than maintaining what has long been (and still is except in rare instances) the established Parliamentary practice in the authorisation of expenditure." (Report, paragraph II.) This is borne out by the terms of the declaratory Resolution which prescribes that any detailed provisions which define or limit the objects and conditions of expenditure contained in a Bill should, if and so far as they are set out in a Financial Resolution, be expressed in wider terms than in the Bill so as 1599 to permit amendments to the Bill, which have for their object the extension or relaxation of such provisions, and which do not materially increase the charge. Put shortly, I take this to mean that the details of expenditure should be expressed more widely in a Financial Resolution than in a Bill in order to make it possible to amend such details.
6. Now compare with this the standard laid down in the Government's instructions. Financial Resolutions should be so framed as not to restrict the scope within which the committee on a Bill may consider amendments further than is necessary to enable the Government to discharge their responsibilities in regard to public expenditure, and to leave to the committee the utmost freedom for discussion and amendment of detail which is compatible with the discharge of these responsibilities. This seems to me to mean that Financial Resolutions should be so drawn as to enable the details of expenditure to be amended in Bills. And I would remind you that they cannot he so amended unless they are expressed more widely (or, if you like, with less particularity) in the Financial Resolution than in the Bill. Nor is this the only similarity. Both the declaratory resolution and the instructions lay down an upper limit for such amendments of detail. According to the former, such amendments "must not materially increase the charge." According to the latter they must be "compatible with the discharge by the Government of their financial responsibilities."
7. In conclusion, I would only say that it is not for me to express an opinion as to the efficacy of the machinery by which under the Government's plan the standard for Financial Resolutions will be enforced, especially as I am doubtful, for the reasons which I have stated, of the suitability of the only other possible machinery which has been suggested, namely, its enforcement by the Speaker. But I think it would be a mistake for any section of the House to belittle the extent of the advance which the Government have made in their desire to meet the wishes of Members. The instructions which the Government have undertaken to issue for the drafting of Financial Resolutions will remain upon record, and every future case can be judged with reference to the standard therein laid down.

§ Mr. Stephen
Will the Prime Minister say when the new Standing Orders dealing with this matter will be put before the House, and will he also arrange an opportunity for general discussion of the Government's proposal in this connection?

§ The Prime Minister
I do not think I can give that assurance in that form. When the Standing Order is proposed to be amended there will be an opportunity for debate. It is not for me to lay down how far debate should be restricted.

§ Mr. Stephen
In view of the importance of this subject, will the Prime Minister make arrangements so that the House will have au opportunity of discussing the Government's proposals in connection with the whole question?

§ The Prime Minister
I think that is a matter which would be best discussed through the usual channels.

§ Mr. Attlee
On behalf of the Opposition I would echo what the Prime Minister has said with regard to the debt that the House is under to the Select Committee, and also I would thank the Government for the effort they have made to meet the situation in regard to this proposal.