HC Deb 12 July 1955 vol 543 cc1879-91

9.57 p.m.

Mr. Ede (South Shields)

I beg to move, in page 4, line 43, to leave out from "and" to the end of line 7 on page 5 and insert: any repayment by them to the Bank in respect of redemption moneys under subsection (4) of this section or under paragraph 6 of the Third Schedule to the Finance Act, 1921, shall be made out of the investments for the time being representing sums paid to them under this section or under that paragraph in respect of unclaimed redemption moneys or if those investments are insufficient out of the Commissioners' account of unclaimed dividends.

Resolved, That the application of such sums be sanctioned.—[Mr. H. Brooke.] (7) The dividends received by the National Debt Commisioners on those investments shall be placed to the Commissioners' account of unclaimed dividends.

It would be for the convenience of the House, I think, Mr. Deputy-Speaker, if we discussed together all the Amendments on the Order Paper, for they all raise the same point.

Mr. Deputy-Speaker

If that course commends itself to the House, it seems to be the most convenient course to be taken.

Mr. Ede

The Bill deals with a variety of subjects. The only subject that excited any great interest in Committee was that raised in Clause 5. On Second Reading the Financial Secretary said: … Clause 5, which is the longest Clause, deals with perhaps the simplest matter of all."—[OFFICIAL REPORT, 1st July, 1955; Vol. 543, c. 668.] However, when we reached the Committee stage we were faced with a number of very complicated Amendments which virtually recast the Clause in respect of one of its most important objectives. That was the way with which certain unclaimed balances that existed in the Dublin branch of the Bank of Ireland should be dealt.

10.0 p.m.

My hon. Friend the Member for Islington, East (Mr. E. Fletcher) asked a number of questions about that, and he received from the Financial Secretary a series of answers that were very verbose, but were eminent proof of the old adage that words were given us to conceal our thoughts. At the end of the right hon. Gentleman's explanations no answer had in fact been given to the two questions that my hon. Friend had put to him.

It would appear that at some time between the Second Reading and the Committee stage of the Bill the Financial Secretary discovered that, as drafted, the Bill would have involved him in giving orders to the Dublin branch of the Bank of Ireland about the way in which it was to keep its accounts in Ireland, where it is under the jurisdiction of the Government of the Irish Republic. He admitted in an explanation that he gave, as shown in c. 1356 of the OFFICIAL REPORT, 7th July, 1955, that that would involve problems of extra-territoriality. I think we ought to know at what stage it was discovered that those issues would be raised. Were they known to the right hon. Gentleman on the day of the Second Reading debate? How did they come to his attention?

The right hon. Gentleman was rather proud of the fact that he had discovered this problem. When my right hon. Friend the Member for Battersea, North (Mr. Jay) said that this seemed a very desirable sort of Clause to have and asked why, if it was so sensible and innocuous, it had never been done before, he replied The right hon. Gentleman is asking me about the Clause as a whole. I cannot say why it was not done in the time of the right hon. Gentleman's Government. I can say that it has now come to my notice, and that it seems to me a very desirable action to take…"—[OFFICIAL REPORT, 7th July, 1955; Vol. 543, c. 1356] At what stage did this very desirable action, which the right hon. Gentleman during the Second Reading debate said was so simple, come to his notice as involving this problem of extraterritoriality? When he did discover it, what action did he take? The answer which he gave my hon. Friend the Member for Islington, East took a lot of words but, as I have already said, gave no information.

The right hon. Gentleman was asked whether he had consulted either the Bank of Ireland or the Government of the Irish Republic. He said: In so far as it affected the Dublin Office of the Bank of Ireland, the Clause, as it stood, had extra-territorial effects. As a matter of ordinary courtesy, we have been in touch with the Government of Ireland on this point."—[OFFICIAL REPORT, 7th July, 1955; Vol. 543, c. 1360.] At what stage did the right hon. Gentleman get in touch with the Government of Ireland? Was it before the Bill was drafted in its original form, just before the Second Reading debate, after it had been read the First time, or at some stage after the Second Reading?

When I repeated the questions, on behalf of my hon. Friend the Member for Islington, East, the right hon. Gentleman failed to give any specific reply to the definite points that were put. He said: I suggest to the Committee that it would be far better not to go further on this extraterritorial ground in this Bill but rather to withdraw from it, as is the aim of these Amendments, and then, at a later stage, to pursue with the Government of the Irish Republic the much larger question of what should be done about the National Debt Acts which, as the right hon. Gentleman knows, date back very many years.—[OFFICIAL REPORT, 7th July, 1955; Vol. 543, c. 1361.] As the National Debt orginated, I understand, from the activities of William of Orange I cannot imagine that it would be regarded as a subject on which the right hon. Gentleman could have very pleasant conversations with the Government of the Irish Republic, who hold views about William of Orange very different from those which I hold, and which I believe the right hon. Gentleman himself holds.

Why is it not possible for the right hon. Gentleman to answer specifically the two questions that were put clearly to him? Can he now tell us what course it is proposed to pursue with the Government of the Irish Republic over future dealings with these balances? That is one of the things one imagines were rather lost sight of at the time of the partition of Ireland.

It is desirable that we should know exactly what is proposed, because this is the sort of subject that gives rise to very considerable difficulties from time to time between Her Majesty's Government and the Government of the Irish Republic. It is desirable that these differences should be kept within the smallest possible limits.

Will the right hon. Gentleman now therefore please give us an account of what happened in the drafting of the Bill, when this problem was discovered, and what steps were actually taken with both the Bank of Ireland and the Government of Ireland, the Government of Ireland not being consulted but kept in touch with? When one deals with problems of government in Ireland one generally comes across very difficult and amazing methods of trying to get solutions; but how one can keep in touch with a Government, yet avoid consulting them, and, as a result, withdraw from a Bill a transaction which might have involved some breach of that Government's territorial sovereignty, is a matter on which the House should be informed.

Mr. Eric Fletcher (Islington, East)

I beg to support the Amendment by my right hon. Friend the Member for South Shields (Mr. Ede) and should like, if I may, to pursue the matter by asking one or two further questions. I am sure that you will realise, Mr. Speaker, that now the House has had an opportunity to consider the explanation given by the right hon. Gentleman in Committee, various aspects of this Bill become more puzzling than before. I do not think that anybody who reads what the Financial Secretary said in Committee can fail to be struck by what I would venture to call a lack of candour on this subject.

We know that the Financial Secretary is a relatively new Minister and, as he says, he has had conversations of a very obscure nature with the Government of Ireland—whether he has been in touch with them or whether they were aware of them is somewhat ambiguous. I hope, however, that he will have learnt by now that, whatever may be his duty in connection with conversations with other Governments, whether Irish or any other, his first duty is to the House, and his first duty when he puts forward complicated Amendments of this kind is to give a full, complete and candid explanation to this House. I am sure, Mr. Speaker, that you will agree that, contrary to what the Government planned, it is fortunate that we have had this interval between the Committee and the Report stages so that we can perform our duty and probe this matter a little further.

The group of Amendments which we are discussing and which are similar—though, of course, in a contrariwise sense—to those which the Financial Secretary moved in Committee, and those, indeed, are very striking the more one analyses them. I want to refer to what the right hon. Gentleman said in explanation of his Amendments, as reported in c. 1355 of the OFFICIAL REPORT. He then pointed out: The five Amendments can be divided into two groups. The second and the fifth hang together, and also the first, third and fourth. The effect of the second and fifth Amendments will be that unclaimed redemption moneys derived from stock on the Dublin Register will be put in the same position as will apply, pending the making of regulations, to unclaimed redemption moneys on the Post Office Register. He continued: The effect of the first, third and fourth Amendments will be to make unnecessary this separate accounting for Post Office Register stock."—[OFFICIAL REPORT, 7th July, 1955; Vol. 543, c. 1355.] He explained that the object of those Amendments was to effect simplification and to enable the Treasury to introduce certain Regulations. I do not pretend fully to understand how, until we have had a more complete explanation from the Financial Secretary, but, putting the best interpretation we can on his words, they mean, if they mean anything, that the object of his first, third and fourth Amendments was to simplify the procedure as regards Post Office registered stock and that Regulations will in due course be introduced to that effect.

The other Amendments had a totally different effect. Their object was to preserve the existing situation with regard to unclaimed redemption moneys derived from stock on the Dublin Register, because there was no possibility of any Regulations being made in regard to them. I hope the Financial Secretary will correct me if I am wrong in my interpretation of what he said.

We are, therefore, faced with the problem that, as the Bill now stands, there is, for some quite unexplained reason, an entirely different arrangement—something different from the ideal, something less than the ideal and contrary to the ideal—with regard to the unclaimed redemption moneys derived from stock on the Dublin Register. It is those words which our Amendments are designed to probe because they are now contained in Clause 5 (11) of the Bill.

10.15 p.m.

The first question I want to ask is this. Why should there be a difference with regard to unclaimed redemption moneys derived from stock on the Dublin Register? We find, in this obnoxious subsection (11), introduced in such very mysterious circumstances, that it applies only to entries in the books of the Bank of Ireland kept in the office of their Accountant-General at Dublin or moneys due on any such stock… What about unclaimed redemption moneys entered in the books of the Bank of Ireland kept at other offices? What other branches has the Bank of Ireland? Has it a branch in Belfast or in Cork? Why should this provision be limited to the entries made in the books of the Bank of Ireland in Dublin?

There is a second question I wish to ask. Is this curious exception intended to apply to all unclaimed redemption moneys derived from stock on the Dublin register, whether they belong to persons of English domicile or domiciled in the Irish Free State? It may be that persons domiciled in this country ought not to have undisclosed assets in Ireland. The Regulations under the Exchange Control Act are very strict. We do know that some people try to evade them. We know that there have been some transactions between people in this country and banks in Ireland which ought to invite the attention of the Government and ought not to be the subject-matter of a mysterious covering up. What do the Government of Ireland say about this?

I want to put in a more pertinent and direct form some of the questions which my right hon. Friend asked. How did it come about that in the very short interval of only four or five days between the Second Reading and Committee stage of the Bill, the Financial Secretary suddenly found it necessary to introduce these Amendments in Committee? The procedure which he is now seeking to change has been in operation for several years without any complaint or criticism. Now a Bill is introduced with miscellaneous financial provisions, the first four Clauses of which relate to the retention of an unnecessarily large petty cash item by the Government, and then there comes Clause 5, perhaps the longest Clause, which the Financial Secretary said on Second Reading was the simplest Clause. It has now turned out to be not the simplest but the most complicated and the most obscure.

I am sure that the one thing that this House cannot sanction is any attempt by the Government to try to put through this House controversial legislation without proper explanation to the House of what it is about. That is why I am so aggrieved with the Financial Secretary. Who was the author of these changes? What went on between the Government and the Government of the Irish Free State? Who first thought that the Bill as presented on Second Reading had tome extra-territorial effect? Did the Government of Ireland object? Were there discussions between the Financial Secretary and the Government of Ireland?

Mr. Speaker

I am not quite certain of the drift of the hon. Member's argument. We are not discussing the Clause, but the right hon. Gentleman's Amendment. It does not seem to me that what the hon. Member was saying was strictly relevant to that Amendment.

Mr. Fletcher

Our Amendment seeks to delete Clause 5 (11). That subsection is an Amendment introduced at a very late stage in the Bill in order to give effect to some curious arrangement, which, according to the Financial Secretary, has been made with the Government of Ireland. He said the Government of Ireland were not the authors of it but were aware of it. He said that he had been in touch with them but that he took full responsibility for the change. He refused, however, to answer my question about whether there had been any consultations.

It seems to me that before it passes the subsection the House is entitled to the fullest knowledge and explanation from the Financial Secretary. Our Amendment seeks to omit the subsection. The Financial Secretary told us that looming up in the not-distant future are some very complicated questions relating to the National Debt, the National Debt of Ireland, and what the proportions should be. All that is very interesting, and it may be that some very important negotiations will take place between the Government of Ireland and the Financial Secretary. If so, the House should be informed of them. We do not want legislation brought to the House in this hole-and-corner manner. We want the fullest disclosure.

The Financial Secretary gave his explanation in Committee, and because it was unsatisfactory my right hon. Friend and I are seeking to delete the subsection. We shall not be content that it should remain in the Bill until the mystery has been cleared up. I therefore hope that the Financial Secretary will tell us what he meant when he answered our direct question on whether there had been consultation. First, he did not answer at all—and I acquit him of any intention of discourtesy because I am bound to say that if a Minister cannot answer a question there is some merit in him remaining silent. He has now had three or four days to consider the question and we want to repeat it.

Were there any consultations, either with the Government of the Irish Republic or with the Irish Ambassador? Who first detected that there was possibly some question of extra-territoriality involved? If the Government of Ireland do not carry any responsibility for the change, do they approve of it? Do they wish to see it carried further? Have there been any other discussions?

Without some explanation, there is a prima facie case that the Bill was more reasonable as it stood originally. If there are English depositors with dividends in the Bank of Ireland, whether claimed or unclaimed—and it may perfectly well suit them not to claim the money for a number of years—that is something about which we ought to know. It is the business and duty of the House to see that such matters are properly dealt with.

Those are some of the reasons for which my right hon. Friend and I feel that before the Report stage is concluded we must have a much more complete explanation from the Financial Secretary of these very mysterious last-minute innovations.

The Financial Secretary to the Treasury (Mr. Henry Brooke)

I always want to show complete courtesy and candour to the House. I have been asked to give a full, complete and candid explanation. But we are debating Opposition Amendments, and if any hon. Member who has not studied this Bill deeply could gather from the speeches which so far have been made the effect which these Opposition Amendments now commended to the House would have on the Bill, he must be an extremely clever man. Perhaps I had better see if I can explain the effect of the Amendments. The right hon. Member for South Shields (Mr. Ede) asked me to be perfectly frank with the House, but he did not mention himself that the Amendments would affect stock on the Post Office Register; he only spoke of the Bank of Ireland. But I assure the right hon. Gentleman and the hon. Member for Islington, East (Mr. Fletcher) that I will endeavour to answer all the questions they have put to me. May I say, in passing, that I have never attempted to mislead the House into thinking that this is a simple Clause. What is simple is the purpose of the Clause, but the wording of it is highly technical.

When the Bill was presented to the House about a fortnight ago, two points came to my notice. One was that there was going to be an awkward time between the moment when the Bill receives Royal Assent and the moment when regulations are made regarding stocks on the Post Office Register. It was clear in the Bill in its original form that until new regulations were made for the stock on the Post Office Register the National Debt Office would continue to have to deal with unclaimed moneys from there in the old way, whereas it would be dealing with all unclaimed moneys from other sources in the new and much simpler way laid down by the Bill.

Secondly, there was the point about the Bank of Ireland and the Dublin Branch thereof. In answer to the hon. Member for Islington, East, there are branches of the Bank of Ireland in Belfast and in Dublin. I realised that the Bill as drafted might be deemed to have extra-territorial effect, and that raised a very big question in my mind. The Government of the Irish Republic made no approach to us about it, but we felt the right thing to do, before the Committee stage of the Bill was reached, was to have conversations with the Government of the Irish Republic. We took the initiative and said that on consideration we felt it would be a mistake to ask the Parliament here to pass a Bill which could well have extra-territorial effect as far as the Dublin office of the Bank of Ireland was concerned.

We were therefore in touch with the Government of the Irish Republic on the proposition that the Bill should be amended—the proposition came from us, not from the other side—so as to leave the procedure of the Bank of Ireland in Dublin unaffected. I have been asked whether this amounted to consultation or not. I will be perfectly frank. The only reason I did not give a plain answer to the original question, last Thursday, of whether we had consulted the Government of the Irish Republic or not, was that the word "consult" can be used with different meanings. If I had said "yes" I might have been criticised, and if I had said "no" I might have been criticised. What we did was to inform the Government of the Irish Republic quite frankly about the effect of the Bill in the original form in which it was presented to this House. We informed them, further, of the Amendments which on consideration we had decided to move in order to ensure that this Bill had no application to the Dublin office of the Bank of Ireland.

The right hon. Member asked about our intentions for the future. The problem here—it must have been a problem dating from the time when the right hon. Member was himself in office—is that the National Debt Acts need consolidation. They date back to 1870, and indeed beyond. All this National Debt legislation was passed before the separation of the Irish Republic from the United Kingdom of Great Britain and Ireland. Now, therefore, a substantial question remains ahead of us. How we are to consolidate, and in the process of consolidating modernise and bring up to date, the National Debt Acts, when in fact their wording was framed in a time when Dublin itself was part of the United Kingdom?

10.30 p.m.

The main reason we felt it right to make sure that no question of extraterritoriality was raised by the Bill was that it seemed to us a mistaken approach to prejudge that larger question in any way by seeking now to put on the statute book something which, over a very small part of the larger field, affected the Bank of Ireland. If the House will reject the Amendments and pass the Bill in the form in which it was amended in Committee last Thursday, that will then clear the way for a much larger enterprise—I could not give any starting or completion date for it, but I think that hon. Members on both sides will agree that it is desirable, in due course—to modernise our National Debt Acts and to clear up the whole position. Then we should no longer have on our statute book Acts which appear to have an extra-territorial effect on an institution which is no longer in the United Kingdom.

That is the purpose that I have been seeking to achieve. I apologise most willingly if anything that I said last Thursday was obscure, but hon. and right hon. Gentlemen will perhaps sympathise with me because I think that those who have supported the Amendment had some difficulty in achieving complete clarity on the subject. I am extremely anxious to be as candid as posible with the House, and I most sincerely trust that I have now put the position beyond doubt.

Mr. Douglas Jay (Battersea, North)

I think that we are making progress, but, so that the position may be beyond doubt, may I ask one or two further questions? The Government made an attempt to shuffle through the Report stage before the House really had had time to know what it was doing. Therefore, we are entitled to be absolutely clear.

Is it now clear that the Bill, as it was originally introduced by the Government, would in fact have had these extraterritorial effects in Dublin? When the Financial Secretary introduced the Bill and made his Second Reading speech, was he then aware, or was he not, that it would have these further extraterritorial effects? Had he in fact had any of these consultations or contacts, or whatever he likes to call them, with the Irish authorities before he introduced the Bill? Might not it be that perhaps if he had had them he would have been a little more aware of what the Bill was doing—before the Second Reading and not after?

Finally, are we now absolutely clear that if the House rejects the Amendment and gives the Financial Secretary the Bill in the form in which he now wishes to have it, as opposed to the form in which he wanted it on Second Reading, it will not have any of these extra-territorial effects? Also, can we be sure that in that form it will not be in any way repugnant to the Irish Government or to the Bank of Ireland?

Mr. Brooke

I can assure the House that the Bill will have no extra-territorial effects. Everything will go on exactly as before so far as the Bank of Ireland is concerned. We had been in touch with the Government of the Irish Republic before the Second Reading of the Bill, but it would have been inappropriate, I think, to make any statement in the House while discussions were still going on.

Mr. Jay

But was the right hon. Gentleman aware when he introduced the Bill that in its original form it would have these effects to which he now objects?

Mr. Ede

In view of the explanation given by the right hon. Gentleman, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Speaker

I understand that it is not proposed to move the other Amendments, which are consequential.

Bill read the Third time and passed.