§ Order of the Day for the Second Reading read.
§ 5.10 p.m.
§ THE MARQUESS OF ZETLAND
My Lords, it is perhaps not surprising, in the case of an Act of the length and the complexity of the Government of India Act, 1935, that experience of its actual working should bring to life a certain number of defects calling for correction. May I remind your Lordships that the Government of India Act and the Government of Burma Act contain together some 480 sections and 16 schedules? The Bill for which I am about to seek a Second Reading this afternoon consists only of seventeen clauses and one schedule, and it will effect, broadly speaking, some twenty disconnected Amendments in the original Acts. These Amendments are, of course, primarily of interest to the Governments which are functioning in India itself, and I accordingly re- 725 quested the Viceroy to submit these proposals to the Ministries in the different Provinces in India for their comment. While the Ministers in three of the Provinces felt themselves unable, for reasons upon which I need not enlarge, to express any opinion with regard to them, I have given careful consideration to the views put forward by the Ministers in the remaining Provinces, and I am glad to say that I have found it possible to give effect to some at least of the suggestions which they have made. I should like, therefore, to take this opportunity of expressing my gratitude for the time and thought which they have devoted to the matter. And, if it be not thought to be invidious to make mention of particular Governments, I would express my special thanks to the Bengal Ministry for the thoroughness with which they have dealt with the various provisions of this Bill, and to the Punjab Ministry for the spirit of cordial co-operation in which they have met my requests for their assistance.
The Amendments to the various sections and schedules of the original Act are, as I have said, disconnected, and I have therefore issued for the convenience of your Lordships a White Paper in which is shown the wording of the different sections of the original Act as it will come if this Bill becomes law. The greater number of the Amendments are designed merely to give clear expression to what was quite obviously the intention of Parliament when the Acts were originally passed, or to make good deficiencies which experience in the working of the Constitution has shown to exist. So far as Amendments of this kind are concerned, I need not perhaps do more than refer your Lordships to one or two typical examples.
Take, for example, the first subsection of the first clause of the Bill. It was always the intention that while Corporation Tax—and by Corporation Tax I mean the Super-tax paid by the companies—should be a Federal source of revenue, the Income Tax paid by companies, as distinct from the Super-tax paid by them, should find its way into a pool from which the Provinces as well as the Federal Government are entitled to draw. The existing definition of Corporation Tax in Section 311 of the Government of India Act has, however, been found to be faulty, in that it embraces both the Super-tax and the ordinary In- 726 come Tax paid by companies, thus depriving the Provinces of revenue to which they are entitled. The purpose, therefore, of subsection (1) of Clause 1 is to amend the definition so as to give effect to the original intention of Parliament.
Then, again, take subsection (2) of Clause 2, which provides for the insertion of two additional items in the Provincial legislative list contained in the Seventh Schedule to the Government of India Act. It was never intended to deprive Provincial Governments of the right which they have hitherto enjoyed of taxing both motor vehicles and the consumption of electric current. With the passing of the Act, however, doubts arose as to the competence of the Provincial Governments to continue to levy these taxes. In the case of motor cars the doubt arose because, while the item "mechanically propelled vehicles" appears in the concurrent legislative list, there is no specific mention of the taxation of those vehicles, and in any case it would clearly be inconvenient that they should be liable to taxation by two different authorities. The doubt which has arisen in the case of the tax on the consumption of electric current has been due to a different cause. Duties of Excise are included in the Federal legislative list, and with the passing of the Act it was thought that a tax upon the consumption of electricity might be said to be an Excise, in which case the right of levying it would be vested in the Federal Government and not in the Provincial Governments. The purpose, therefore, of the clause is to lay these doubts at rest and to make it clear beyond possibility of dispute that the levying of these taxes is a Provincial and not a Federal right.
Clause 3 is in a somewhat different category, and may be stated to raise a question of principle in that its effect will be to give the Federal Government power to levy Customs duties and to impose export and import control on the frontier of any unit of the Federation itself. It is to be hoped, of course, that little occasion will arise for the use of this power. It is important, nevertheless, that the Federal Government should be in possession of it, and I will explain to your Lordships why. When the Federation comes into existence, the control which the Federal Government will exercise in the Federated States over such matters as the subsidising 727 of industries and the conditions of labour will be but slight. It would be possible, therefore, for a State to embark upon a policy of unfair competition against other units of the Federation, and it is to protect itself against this development that the power is required. I may point out to your Lordships that, as a safeguard against the abuse of the power, it is provided that legislation to give effect to it shall not be introduced without the previous sanction of the Governor-General acting in his discretion.
Then I come to Clause 4 of the Bill, to which I admit some exception has been taken by the Provincial Ministries in India. Its purpose is, in a word, to furnish the Central Government, in the event of war, with executive authority throughout the country. It was, of course, realised when the Government of India Act was being framed that in circumstances constituting a grave emergency a large measure of central control might be necessary, and provision was made, in Section 102 of the Act, whereby the Federal Legislature would be empowered in certain circumstances to legislate on matters which normally fall within the legislative field of the Provinces. But the fact was overlooked that the power to make rules under an Act is an exercise not of legislative but of executive authority, with the result that under the Act as it stands the Central Government would not be competent to include, in any Act relating to subjects lying normally in the Provincial field, provision to enable the Central Executive to make rules on the subject-matter of the Act in question; nor would the Central Government be competent to confer upon its own officials, as, for example, military officers, executive powers in relation to Provincial subjects.
I am fully satisfied that the successful prosecution of a war in present day circumstances requires some measure of unified control, not only of policy but of its execution; and for this reason, and for this reason only, Clause 4 provides both for the rule-making power, to which I have referred, and for the exercise by the Central Government of general powers of superintendence, direction and control, similar to those which it has enjoyed in the past. Examples of the sort of case in which the necessity for the exercise of 728 such powers is likely to arise will no doubt very readily occur to your Lordships. The control of lighting in connection with air-raid precautions provides an example. Or, again, the regulation of supplies, not merely for the armed forces but for the civilian population also, and the prevention of profiteering or of the withholding of supplies from the market.
It is true, of course, that the conferment of these powers on the Central Government may be represented as an invasion by the Centre of the sphere of authority conferred by the Act on the Provinces, and I can appreciate the objection which has been raised to it by some at least of the Provincial Ministries in India on this score. Let me, therefore, say categorically that I should be the last person to approve of any such extension of central powers in normal circumstances, or for the purposes of day-to-day administration. It is to meet the emergency of war only that these powers are sought, and it will be realised, I hope, that while the Viceroy and I consider it essential to provide in case of necessity for a measure of unity of direction and control, we have no wish whatsoever to undermine the authority of the Provincial Governments, but, on the contrary, our aim is the closest co-operation, in the interests of India as a whole, between the Central and the Provincial Governments.
The remaining clauses of the Bill deal for the most part with technical defects which the actual working of the Constitution has brought to light, and I do not think I need trouble your Lordships with any explanation of them; but I need hardly say that should any one of your Lordships desire information with regard to any one of these rather technical Amendments I shall, of course, be only too willing to do my best to provide it. The last of the operative clauses of the Bill—namely, Clause 16—is a printing clause, the effect of which will be to secure that every officially printed edition of the Government of India Act, and of the Government of Burma Act, which is issued after the passing of this Bill, will contain the text as amended by this Bill. I hope that this will meet with the approval of those, in particular, who dislike what is known as legislation by reference. With these words I beg to move that the Bill be read a second time.
729 Moved, That the Bill be now read 2a.—(The Marquess of Zetland.)
§ 5.28 p.m.
§ LORD SNELL
My Lords, it was always in the minds of those who were responsible for the framing of the Report out of which the Government of India Act came that whatever Act was passed would probably, in the light of experience, reveal certain defects. It was a long and very complicated measure, and although endless time and thought were given to it none of those associated with that work dreamed, for a moment, that what they were doing would be perfect. On the whole the work of the Provincial Governments has gone on so smoothly and so hopefully that I should be very sorry indeed to see any subsequent legislation that would appear to the people of India to invade the rights which that Act conferred upon them.
The noble Marquess, in moving the Second Reading of this Bill, did not, I think, clearly inform us—if he did I did not clearly understand him—that, apart from Clause 4, the Bill was on the whole an agreed Bill apart from Bengal and the Punjab, that the Provincial Governments assented to the main principles. If they have done so, and this Clause 4 quite clearly relates only to war emergencies, then I think the House should consent to the Second Reading, with the right always of looking at it more closely before the Third Reading takes place. I do not personally like at all this proposed invasion of the rights of the Provincial Governments, and I should like to know, if the noble Marquess feels he can properly tell us, how many of the Provincial Governments have protested against the proposed clause as it now stands. I do not think I want to discuss the matter further at this stage, but express only those doubts about the possible effect that the Bill may have upon the working of the major Act.
§ 5.32 p.m.
§ THE MARQUESS OF ZETLAND
My Lords, I am very grateful to the noble Lord for the words that he has used. I think, broadly speaking, I may say that, with the exception of Clause 4, this may be regarded as an agreed Bill. There are one or two of the provisions of the Bill upon which different Provincial Governments have held different views, but that, I think, is inevitable, and the Bill fulfils, I think, the greatest measure of agreement 730 that is possible in the circumstances. Then, with regard to the question which the noble Lord asked me, as to how many of the Provincial Governments expressed dissent from Clause 4, I cannot tell him the exact number, but I think I may safely say that the majority expressed apprehension at the inclusion of this particular clause, though not all of them.
I would like to remind noble Lords of what I touched upon in passing when I was moving the Second Reading, and that is this, that the original Act does contain a clause, Clause 102, which gives to the Central Government and Legislature the power in a grave emergency to legislate in respect of subjects which lie normally in the Provincial field. This, therefore, is not introducing a new principle. It is only to make good an omission which was made at the time as the result of an oversight in Clause 102, that Clause 4 is included in this Bill. As I explained, the present position is really an anomaly, because while in the case of war the Central Government could legislate in respect of Provincial subjects, where that was considered necessary in the interests of the safety of the country as a whole, it cannot make the rules which in the case of legislation of that kind are so often an essential part of the legislation, and it is in order to give the Central Government that additional power that this clause is incorporated in the Bill. But I would like to repeat what I said, that I should be the last person in the world to wish to bring about an invasion of this kind so far as day-to-day administration is concerned, or so far as normal circumstances are concerned. It is simply and solely a war measure and nothing more.
§ On Question, Bill read 2a and committed to a Committee of the Whole House.