Cheques (Scotland) Bill (Hansard, 19 March 1999)

§ Mr. John Swinney (North Tayside)
I beg to move, That the Bill be now read a Second time.
I have pleasure in introducing this Bill to the House for its Second Reading. It tackles an historical anomaly created by the Bills of Exchange Act 1882, through the applications of the funds-attached principle, which affects the customers of Scottish banks.
I thank the Committee of Scottish Clearing Bankers for its assistance in the preparation of the Bill and for raising this important issue in the banking sector. I also thank the Economic Secretary and her officials, who have assisted in the preparation of the Bill.
The funds-attached principle means that a cheque operates as an assignation of the sum for which it is drawn in favour of the owner of the cheque. If there are insufficient funds to meet a cheque when it is presented, whatever sums are available are attached and suspended, to be passed over eventually to the owner of the cheque, should he or she fail to get full value for it by other means. That is a cumbersome administrative procedure. The banks estimate that it involves the operation of 100,000 accounts in any year and that the measure would save the Scottish clearing banks approximately £250,000 a year in administrative costs.
The operation of that principle was considered by the Review Committee on Banking Services Law, chaired by Professor Jack under the previous Government, who accepted the recommendations of the Jack committee subject to consultation. That consultation indicated that there was support for the measure.

§ Mr. Eric Forth (Bromley and Chislehurst)
Will the hon. Gentleman give way?

§ Mr. Swinney
No, I am short of time.
The Jack committee's recommendations were that the principle be abolished so that administrative savings and administrative convenience could be assisted within the banking sector. The Bill has the support of the four Scottish clearing banks and I hope that it will command the support of the House.

§ Mr. Eric Forth (Bromley and Chislehurst)
The hon. Gentleman scarcely did justice to the Bill, which has implications that go beyond the rather narrow definition that he gave, although I understand why, at a time such as this, he did that. I wanted to ask him several questions, but he was not prepared to answer them, so I will have to go into them in a little detail. That is the way these things happen.

§ Mr. Robert Maclennan (Caithness, Sutherland and Easter Ross)
It will be taken unkindly in Scotland if the right hon. Gentleman obstructs the passage of the Bill by speaking at great length when it enjoys such widespread support.

§ Mr. Forth
At 2.25 pm, I leave the right hon. Gentleman to consider what great length might be. 1455 Perhaps we could discuss it another time. If he is suggesting that the people of Scotland expect legislation to go through without proper scrutiny, it reflects badly on them if not on him. I hope that he is not.

§ Mr. David Maclean (Penrith and The Border)
The hon. Member for Hendon (Mr. Dismore) spoke for more than an hour on the Referendums Bill—

§ Mr. Deputy Speaker (Mr. Michael J. Martin)
Order. We are not going to discuss what happened in a previous debate. We must keep to the terms of the Bill.

§ Mr. Forth
I am grateful for that guidance, Mr. Deputy Speaker.
One of the issues properly raised by the Bill is whether this is a matter for the House of Commons and the Westminster procedure.

§ The Economic Secretary to the Treasury (Ms Patricia Hewitt)
Does the right hon. Gentleman accept that the previous Government, following the recommendations of the Jack committee, and the subsequent favourable consultation, were minded to introduce the measure but unfortunately did not have the time? Will he therefore support the Bill?

§ Mr. Forth
It appears that this Government cannot find the time either. It appears that the measure is so important that neither Government could find time for it.

§ Mr. Nick Gibb (Bognor Regis and Littlehampton)
To put the record straight, the Opposition support this eminently sensible Bill. The funds attached rule is absurd. I hope that the Bill progresses this afternoon.

§ Mr. Forth
I am grateful to my hon. Friend. I assume that, in the best traditions of the House, he will wish to explain at greater length why he and his colleagues favour the Bill. I am sure that you, Mr. Deputy Speaker, agree that it is an essential part of the legislative process, that any measure however small or narrow, must be properly 1456 considered in the House of Commons. All views must be heard, both those of Front Benchers and those of Back Benchers. I welcome the opportunity that my hon. Friend will no doubt seek to set out his position in some detail. He might then answer the question to which the Minister's comments give rise—namely, why the previous Government failed to find time for the measure when they are alleged to have supported it. The same seems to apply to this Government. However excellent they may say they find the measure, they have not yet found time for it in their programme. We are therefore here today, following the private Members' procedure, rightly considering the principle of the Bill on Second Reading.

§ Mr. Maclean
Does not my right hon. Friend find outrageous the suggestion that, as we have had a two-minute speech by the Bill's promoter and declarations in favour, although no speeches, from the Front-Bench spokesmen, the Bill must be bounced through without discussion?

§ Mr. Forth
I agree with my right hon. Friend. It would be very much in tune with the contempt in which the Government normally hold the House for them to expect a measure such as this to be shoved through without proper debate.

§ Ms Bridget Prentice (Lewisham, East)
Does the right hon. Gentleman recognise the irony of two Scottish Conservative Members opposing a measure that will benefit Scots and Scotland? Admittedly, like me, they represent English seats.

§ Mr. Forth
That brings me to the first question of substance. I am grateful to the hon. Lady for leading me in the direction that I wanted to follow. She has rightly pointed out that there is an irony in the fact that it is this House, with Members such as me considering this measure at this stage—the hon. Lady might, if she were to catch—