BORROWING (CONTROL AND GUARANTEES) BILL. (Hansard, 4 June 1946)

LORD PAKENHAM
My Lords, I beg to move that this Bill be read a third time.

LORD PAKENHAM
My Lords, the noble Lord, Lord Meston, has set out the effects of his Amendment so clearly that perhaps you will allow me to deal with the matter very briefly. Against the noble Lord's Amendment is the fact, to which he has alluded, that there are not many instances in our law of statutory limitation on prosecution by way of indictment. In favour of his Amendment is the undoubted fact that the Government were content with the time limit in the Bill, as long as all proceedings had to be taken summarily. There does not appear to be any strong reason why we should alter that arrangement when we offer alternative methods of proceeding. Therefore, although I cannot pretend that the Government feel violently partisan one way or the other, I would like on their behalf to express gratitude to the noble Lord for bringing forward this Amendment, and to say that we have pleasure in accepting it.

LORD PAKENHAM
My Lords, I have pleasure in accepting that Amendment also.

LORD PAKENHAM
My Lords, I beg to move that this Bill do now pass.

§ VISCOUNT SIMON
My Lords, before we finally pass the Bill, and before it goes back to another place with the Amendments which we have introduced, I should like, with the permission of the House, to express in a very few words the fundamental objection that I, and I think many of us, fed to the form of legislation which is illustrated in this Bill. It is, of course, a Bill which gives a power to the Treasury to make orders and regulations. I am not one of those who object to that form of legislation in appropriate cases, and within appropriate limits. The criticism that Acts of Parliament under modern conditions not infrequently content themselves with conferring powers upon a Department or upon a Minister to make regulations is, I think, inevitable. Within proper limits it is quite natural and justifiable. Indeed, I do not know how you would carry into operation a complicated Act like, say, the Education Act or the Social Insurance Acts unless there was power to make regulations authorized by the Act.
The objection which I wish to state in a very few words, is this. The Bill itself, which we in Parliament are asked to pass, confers enormously wide powers upon a Minister or Department which I am quite certain he will never attempt to use in their full width. In fact the sort of regulations he will make are of a very much more moderate and reasonable character. As this Bill stands—I leave out the Amendment for the moment—it provides that the Treasury may make Orders for regulating, subject to such exceptions 695 as may be specified in the Orders, the borrowing of money in Great Britain. Unquestionably, as far as power is conferred, that power is wide enough to authorize the making of a regulation to prevent anybody borrowing anything from anyone else, anybody from mortgaging his house, or any private person from going to his Bank and asking for an advance in return for securities. Although a little later in the clause a proviso occurs that this "shall not apply to the borrowing of money by any person (other than a local authority) in the ordinary course of his business from a person carrying on a banking undertaking," that proviso does not in the least exempt the case with which some of your Lordships may not be unfamiliar, of going to your bank and asking the bank for an advance. That, therefore, is the nature of the power which Parliament is by this Bill invited to confer on a Minister.
Of course, as we have been most frankly assured by the noble Lord opposite, who was in charge of the Bill, there is not the slightest intention of using those powers in this wide form at all. I recall that the noble Lord, in moving the Second Reading of the Bill, said that he wished to make it quite plain beyond any shadow of doubt that there is no intention of using the control under Clause 1 for any but exceptional dealings, and in substance the intention is to use this power in cases of great transactions which it is considered would, or might, otherwise prejudice the prospect of employment or interfere with the wise conduct of exchange, or have other substantial consequences upon our national and financial economy. That may be quite right. At any rate, it is quite reasonable for a government that thinks such a purpose is quite right to promote a Bill for that purpose and to use its majority to carry it into law. But with great respect I do wish to protest—and I do not think I am the only one who feels like this—that it is, in my humble judgment, quite wrong for Parliament to fall into the habit of giving enormously wide and quite unrestricted powers to a Minister to make regulations in a way which is out of all proportion to what he really means to do.
It would have made a great difference to some of us if for example this Bill, 696 whilst conferring these powers, had said what was the purpose for which they were to be used. There is nothing in the Bill about that at all. It would have made a great difference if the Bill itself had said that such power was to be exercised in transactions of over £50,000, which was the figure the noble Lord mentioned as the sort of limit with which it was thought necessary to deal. Of course it would be quite impracticable for the Treasury to make any regulations to interfere with the numberless cases of borrowing—it would be too ridiculous. No committee that was ever set up could possibly deal with it and I quite understand that it is not the Government's intention to do that. My respectful submission to your Lordships is this, that it is wrong for Parliament to confer powers of perfectly unlimited width on a Government Department to make regulations when it is avowed, and is of course officially recognized, that they will never exercise such powers but will only use them in a certain important class of case, which is capable of being defined by setting a lower limit.
There is only one excuse that could even be suggested for it, and that is that those Orders will have to be laid on the tables of both Houses, and may then be challenged by negative resolution. I agree that that is something, and I have not the least doubt that if an absurd Order were made under this Bill it would be suppressed by that procedure. But that is no excuse, in my submission, for treating Parliament as simply authorizing in advance a rubber stamp and saying, "Oh, well, it will be all right in the end, because by means of this negative resolution cases which are really quite improper may be suppressed." Without wanting in the least to raise a quarrel or indeed to do anything more about this Bill—we cannot do more now than pass it and send it on its way—I hope the moment is not thought to be inopportune for me very earnestly, as a sincere supporter of our constitutional methods and as one who recognizes that new methods have to be adopted within reason to meet a new situation, to submit to His Majesty's Government that it will be a bad day for Parliament and for this country when we regard it as a natural course of legislative procedure to confer upon a Minister or upon a Department immensely wider powers than they themselves admit they ever intend to use, and in effect therefore offer 697 a blank cheque which might be used for most improper purposes. That would mean removing from Parliament what I venture to think is the proper exercise of its duties. Such delegated legislation should be restricted to the class of case with which it is really intended to deal.
In war-time you have to go further. I am conscious that I was to a certain extent one of the originators of the Defence of the Realm Act. D.O.R.A. constantly haunts my unhappy and sleepless nights, but in war-time you are bound to have power of that kind. Under D.O.R.A. all that was needed to do was to say that a regulation was to be made for the defence of the realm, which is wide enough, Heaven knows. But there is no excuse for following that process, I venture to submit, in peace-time or even in times like the present, which are not normal times of peace. It is possible now to say at what point you really mean these powers to be exercised. My submission to the Government (which I think will not be disapproved of by many of your Lordships) is that we really ought not to drop into the habit of passing through Parliament powers of absolutely unlimited scope without the slightest attempt to say for what purpose they are to be used, and then simply trust to the assurance that they will only be used in extreme cases and for a modified purpose. I hope your Lordships will forgive me for making these observations. It seemed to me that it was not an inappropriate time to make them, do most sincerely think we are in danger of changing the real character of our Parliamentary enactments if we allow this case to be a precedent.

LORD PAKENHAM
My Lords, as the first Government speaker to take part in a debate to-day, I hope I shall not be assuming or taking too much upon myself if I say what no doubt is in all our hearts, and that is how very pleased we are to see the noble Viscount, the Leader of the Opposition, with us to-day. I feel sure that there will never come a time when it will be inopportune for the noble and learned Viscount, Lord Simon, to offer views on the form in which legislation is cast. With the permission of the House—I am as usual in your Lordships' hands—I do not propose to argue the case 698 at length to-day. I would simply call the attention of your Lordships to the character of his objection. It was, as I understood it, simply an objection to the constitutional form of this legislation. With regard to that, I feel that he is giving himself too many of those sleepless nights which we were so sorry to hear about just now. I feel that he need not worry. He has set out the position in his own speech so clearly that I need not go over the ground again but, quite frankly, as in the debate at the Committee stage so again to-day, I find it very difficult to appreciate the manner in which the very learned and very gifted noble Viscount passed over the provision, which is set out in a clause in the Bill, that no Order can be made by the Treasury unless it is submitted to Parliament.

§ VISCOUNT SIMON
I beg your pardon—I did not pass over it.

LORD PAKENHAM
The noble Viscount mentioned that particular point—

§ VISCOUNT SIMON
I did not pass over it.

LORD PAKENHAM
—but the noble Lord laid very little stress on it. He mentioned it. We attach great importance to that, because, as the noble Viscount has rightly said, an absurd Order can always be set aside by this House, even if—which I would not wish to assume—the other House passed it. So we are guaranteed against absurdity, and I venture to suggest against unwisdom of any kind. The noble Viscount is a great authority on the Constitution. His remarks, of course, will be noted, and we are grateful to him for expressing his views. I would simply record one other view which I hope will go alongside the remarks of the noble Viscount. Noble Lords opposite have given evidence of their strong feeling about this measure. I hope they will believe me when I say that we also feel very strongly. We are in favour of it, because we believe this measure is necessary if full employment is to be secured in this country and if the tragedy of the inter-war years is to be avoided.