§ 2.35 p.m.
§ LORD SILKINMy Lords, I beg to ask the Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether they are aware of a growing practice among tradesmen not to give stamped receipts on account of the alleged operation of the Cheques Act, and what steps they propose to take to stop this loss of revenue to the Exchequer.]
§ THE MARQUESS OF LANSDOWNEMy Lords, in general, the recipient of a payment is under no obligation to give a receipt if none is demanded, but he must give a stamped receipt for a payment of £2 or more if the payer asks for it. This has always been the position and nothing in the Cheques Act has altered it. But that Act contains a provision to the effect that an unendorsed cheque which appears to have been paid by the banker on whom it is drawn is evidence of the receipt of the sum payable. This, again, has always been the position so far as endorsed cheques are concerned, but the Act now makes it clear that the same thing applies to unendorsed cheques. As your Lordships are aware, the Cheques Act was based on the Report of the Mocatta Committee, and that Report drew attention to the fact that a paid endorsed cheque is as good evidence of payment as is a simple receipt.
As the noble Lord suggests, this will no doubt lead to a reduction in the number of receipts and some loss of stamp duty by the Exchequer, but I am afraid that no precise estimate of the amount of the loss can be made at present. The Mocatta Committee recognised that their proposals would be likely to cause some loss of revenue, but expressed the view 956 that such a loss would not be unreasonable in relation to the benefits to the community from the changes taken as a whole. My right honourable friend the Chancellor of the Exchequer is aware of all these matters.
I should like to thank the noble Lord, Lord Silkin, for putting this Question, because it is evident that there is a degree of confusion, and I hope that the answer that I have been able to Rive to the noble Lord will help to dispel any confusion that at present exists.
§ LORD SILKINMy Lords, is the noble Marquess aware that his Answer will not dispel any confusion? On the contrary, it sems to me that it will create more confusion. Is he further aware (I am sure he is not) that, in my own case out of thirty payments that I made recently, only one person sent a stamped receipt, whereas previously I should have had thirty? Is not that a serious state of affairs, both from the point of view of the person who pays the bills but has no real evidence that the money has been received, and also from the point of view of getting accounts properly audited? One is not in a position to give the accountants all the receipts, and this causes infinitely more work than previously. Would not the noble Marquess ask his right honourable friend the Chancellor of the Exchequer not to be so complacent about the loss of revenue and even more about the inconvenience that is being caused over this matter?
LORD SALTOUNMy Lords, may I ask one question? Is not the meaning of the noble Marquess's Answer just this: that a receipt, whether stamped properly or not, is evidence of payment of money in respect of goods and services as shown by the receipt, but that a cheque, whether it has been endorsed or not, which has been duly encashed, is merely evidence that money has been paid in exchange for that cheque, without any reference to the reason for payment, whether for goods or services, by the receiver?
§ THE MARQUESS OF LANSDOWNEMy Lords, if I may take Lord Silkin's question first, I think that it is not proper to suggest that there is any complacency on the part of my right honourable friend the Chancellor of the Exchequer. The thought is that there is a considerable 957 benefit to the community as a whole. I am in agreement with the noble Lord. Lord Silkin, that it is possible that there may be personal inconvenience on what I may call a domestic scale, but, despite what he has said, I think, with all due respect, that it is conceivable that the Answer I have given may help to dispel a certain amount of confusion, which I believe exists, quite unnecessarily, in the public mind.
I can give your Lordships an example of this confusion. This morning I received a note (I have picked it up out of my own wastepaper basket, so it is rather crumpled) which reads in this way:
Cheques Act, 1957.—In view of the provisions of the above Act in regard to evidence of payment, this Company has decided that as from October 17, 1957, no receipts will be issued against payment by cheque unless a specific request for a receipt accompanies the cheque.What the note says is perfectly in order, but, of course, it is a complete non sequitur, because the Cheques Act has no bearing on the situation whatsoever.
§ LORD SILKINMy Lords, may I ask whether the noble Marquess is aware that I have received a statement in identical terms, and that it seems to be the widespread practice to-day to send out something of this kind, which obviously originates from one source?
§ LORD LUCAS OF CHILWORTHMy Lords, do I understand the noble Marquess correctly as saying that refusal to give a stamped receipt for payment is an illegal act only if a demand has been made for it? May I ask him to confirm whether the matter could not be cleared up by asking business houses, every time they make payment by cheque, either against an invoice or statement, to type at the bottom of the invoice or statement, "Please return this, together with a properly stamped receipt." That would prevent all the happenings that have been pointed out by my noble friend and by the writer of an excellent letter in The Times of this morning.
§ THE MARQUESS OF LANSDOWNEMy Lords, I think that perhaps there is a slight confusion. Receipts for payments of £2 or more can be demanded, and if a receipt is sent it must be stamped. That is the law. If the receipt is not stamped when it is sent, the payee is liable to a fine of £10. If you ask 958 for a receipt and the receipt is refused, then, again, a fine of £10 may be incurred,
§ THE EARL OF SWINTONMy Lords, I should like to ask two questions of the noble Marquess. First of all, was not the whole purpose of the Mocatta Committee's Report and of the Cheques Act to facilitate the paying of cheques into the bank, which was a great con, venience both to bankers and to firms? I would ask whether there was anything in the Act which gave anybody the faintest impression that this was going to affect the ordinary custom of sending a receipt when anybody paid a bill. I quite understand the law, that if you send a receipt for a sum over £2 it must have a stamp on it. But this is a great inconvenience, not only to domestic people—and, after all, the mere voter is entitled to some consideration—who now have to get the cheques back from their bank and file a cheque with every bill that has been paid (and very often the bill is not sent back), but also from the point of view of firms. In the ordinary way, a firm has receipted bills; the accountant goes through them, and the auditors take a check on a certain number of things. If you have to hunt up cheques, which may or may not be endorsed, and marry them up to some account, it will make things twice as hard for the accountant in any business, and for the auditors; and I suppose that our auditors' fees will go up. If the noble Marquess wishes to keep—
§ THE EARL OF SWINTONI beg your Lordships' pardon. Would the noble Marquess consider this suggestion: that it should be lawful for a firm, when an account of over £2 is being paid, to send back a simple receipt without the 2d stamp upon it?
LORD SALTOUNMy Loris, may I repeat my question in another form? Is it not the case that if I pay my tailor his bill by cheque, and he does not send me a receipt, and sends me the bill again, and I have to go to court, then he is able to say that he cashed me a cheque as a favour? There is nothing to show that I paid him the £15, or whatever it may be, in payment of his bill. Unless I have a proper receipt I cannot say that I have 959 paid that £15 to settle the account. Is that not still the position, as it always has been?
§ THE MARQUESS OF LANSDOWNEMy Lords, I think it would be inappropriate for me to be led into the realms of the law, but I will certainly take careful note of the question put by the noble Lord. As regards the question (I think it was a question) put to me by the noble Earl. Lord Swinton, I can only repeat that there is nothing whatever in the Cheques Act which changes the arrangements for stamped receipts. So far as the suggestion of the noble Earl is concerned. I should like to be allowed to consider that, and to refer it to those concerned.