HL Deb 28 November 1963 vol 253 cc820-30

6.33 p.m.

Order of the Day for the Second Reading read.


My Lords, I have it in command from Her Majesty the Queen to signify to the House that Her Majesty, having been informed of the purport of the Bahama Islands (Constitution) Bill, has consented to place Her Majesty's prerogative and interests so far as they are affected by the Bill at the disposal of Parliament for the purpose of the Bill.


My Lords, the purpose of this short Bill is to enable Her Majesty in Council to make provision for a new Constitution for the Bahamas. It is necessary in order to give effect to the decisions which were reached at the Constitutional Conference held in London last May. The present Constitution of the Bahamas is both complicated and archaic. It is in fact very much the same as the Constitutions of the North American Colonies before the War of Independence. The object of the Bill is to provide for a a new form of Constitution in line with modern practice. I am sure that noble Lords on all sides of the House will welcome this step forward.

It may perhaps be helpful to your Lordships if I say a few words about the historical background which, I hope, will explain the reason for the present Bill. When the Crown granted the Bahamas the existing Constitution, it did not reserve to itself the right to legislate generally by Order in Council. The right therefore lapsed. This Bill seeks to revive it. It was agreed by the Constitutional Conference in London that the best way of establishing the new Constitution for the Bahamas would be to embody it in an Order in Council. If and when this Bill is passed, a draft Order, embodying the Constitution as agreed at the Conference, will be presented to Her Majesty in Council and then laid before Parliament.

I will not trouble your Lordships today with the provisions that it is proposed to include in the Order in Council. The Report of the Constitutional Conference, which as your Lordships will remember was published in June this year, described the proposed Constitution in some detail. It will provide for internal self-government with a Premier and Cabinet responsible to the elected Legislature. The decision to take this step forward was the result of a combined approach by all Parties in the Bahamas to my right honourable friend when he visited the Colony last year. This request followed on a General Election in 1962, in which both major Parties advocated a measure of constitutional advance. My right honourable friend therefore convened the Constitutional Conference last May.

The Conference was both friendly and constructive, and though there were naturally differences of view between the Parties, there was also a willingness to compromise. Because of this the representatives of all the political Parties were able to reach agreement on all the main features of the new Constitution. I should like to take this opportunity of paying a tribute to all the representatives of the Bahamas for their statesmanlike approach to the problems with which they had to deal at the Conference. This seems to me to augur well for the future.

I hope that after these brief remarks your Lordships will accord this Bill a unanimous Second Reading. I feel sure that noble Lords in all parts of the House will wish every success to the new Constitution of the Bahamas. I beg to move.

Moved, That the Bill be now read 2a.—(The Duke of Devonshire.)


My Lords, as my last speech was limited to one sentence, I hope, that for the purposes of the debate, I shall be regarded by the House as making my second speech this afternoon. The noble Duke has undertaken a very difficult task which he has discharged extremely well, but I am not going to ask him questions and expect replies this afternoon. I shall be most indebted to the noble Duke, however, if he will be good enough to answer, possibly in writing, before the next stages of the Bill next week, one or two questions I wish to ask.

We welcome this Bill very warmly because it will enable the Government to vary the present Constitution of the Bahamas by Order in Council. This Constitution is, as the noble Duke pointed out, an 18th century Constitution, based on the idea of the division of power, for a watertight compartment between the Executive and Legislative arms of Government, with an Executive not responsible to the Legislature. I believe that Bermuda is the only other Colony with this 18th-century type of Constitution at the present time. I may be wrong, and I hope I shall be corrected if I am. This is certainly not a good system of government and I am very glad that the new Constitution, as proposed, will give the Bahamas a Cabinet responsible to Parliament. I remember that when I was at the Colonial Office just over fifteen years ago we wanted very much to revise the Constitution of the Bahamas, but we could not get agreement with the political leaders and we did not want to impose a solution on them. I am glad that patience has at last been rewarded and that the political Parties in the Bahamas agreed at the May Conference about this new Constitution.

I should like to make a few comments and ask one or two questions about the proposed Constitution, though I am not, of course, suggesting for a moment, that the settlement arrived at in May, should be disturbed. I notice that the salary of the Governor of the Bahamas will be paid out of the Consolidated Fund; that is to say, out of the revenue of the Colony. That, of course, is the normal practice. It would also be normal practice for the amount of the Governor's salary to be decided by Her Majesty's Government. What I should like to know is whether this will be the case for the Bahamas. The reason why I ask this question is that for many years the Bahamas Legislature was, no doubt for good reasons, unable to vote enough money to cover the Governor's expenditure. It was essential for the Governor of the Bahamas to be a man with private means. He was the only Colonial Governor, I believe, for whom private means was an essential qualification. This may have stopped some time ago—I have no doubt that the noble Duke will make enquiries—in which case my question is unnecessary. It was certainly the situation in my day. I think everyone will agree that it is undesirable for the choice of a Governor to be limited in this way, and I hope that the noble Duke will be able to make it perfectly clear that there is no longer this limitation.

The second comment I should like to make is on the distinction between Money Bills and Taxation Bills in the White Paper setting out the conclusions of the Constitutional Conference. This distinction seems, I think, to any of us reading it, rather a strange one. The Senate, the Second Chamber, will be unable to delay or amend any Money Bill other than a Taxation Bill, and Taxation Bills include all Bills to impose income tax, estate duty, a capital gains tax or a capital levy. In the case of Money Bills other than these Taxation Bills the Parliamentary procedure in the Bahamas will be broadly the same as the Parliamentary procedure here. But in the case of Taxation Bills the Senate, which will be an entirely unrepresentative body, will have the power to delay for fifteen months a decision of the people's representatives in the House of Assembly to introduce income tax or estate duties.

My third comment is this. I think it is at any rate questionable whether a Second Chamber is really necessary in such a small Colony with a population of just over 100,000 persons, about the size of a lesser provincial town in this country. Your Lordships will remember that in some parts of the Commonwealth, New Zealand and some of the Australian States, Second Chambers have been done away with because they were regarded as unnecessary in dealing with the legislative requirements of a small population. And of course, for the same reason, generally most of the new Commonwealth countries in Africa have a single Chamber. As all your Lordships who have been to the Bahamas know, a great many of the inhabitants of the islands live in extreme poverty, and one cannot help thinking that the money saved by not having a Second Chamber might well be spent on the improvement of their conditions.

My fourth comment is perhaps less critical. I do not want to be unduly critical, and I am only picking out what occur to me as being the most important and salient points. I am very glad indeed to see that the Constitution in its final form will include safeguards for human rights. In a Colony where discrimination still exists, though it is diminishing—I mean social discrimination, not legal—such safeguards are very important. I believe the terms of these safeguards have not yet been agreed. When they are settled—and this is perhaps the most important question I wish to put to the noble Duke—I hope the Government will publish the new Constitution in full as a White Paper so that we can see it before the Order in Council is introduced.

As the noble Duke rightly said, the main thing is that the political Parties in the Bahamas have at last reached agreement about the broad outline of a new Constitution. They deserve our warmest congratulations on their success, and a word of congratulation should be given to the Under-Secretary at the Colonial Office, Mr. Fisher, who went to the Bahamas and proved himself an extremely competent diplomat. In passing—I do not think the noble Duke mentioned it—the Liberal and Labour Parties have made important exceptions in their acceptance of the new Constitution, but there is nothing to prevent these Parties later on from getting the Constitution amended in the way they want. In the meantime, let us wish all the Parties well in the working of this new Constitution in the Bahamas, and let us hope that it will bring better government to the people of that Colony.

6.45 p.m.


My Lords, I too, like the noble Earl, Lord Listowel, feel there is a great deal of harness on this very small horse, with a full panoply of government and two Chambers for an area which is 4,404 square miles, with a population of 105,000 people. They, too, are in the red, like so many other countries. In 1961 they had a revenue of £8,660,000 and an expenditure of £9,263,000, so they are in the fashion so far as that goes.

I wanted to raise a point that is the same sort of point as that raised by the noble Earl, Lord Listowel, although perhaps rather a different aspect. It is on this question of two types of Money Bill, the Taxation Bill and the other Money Bills. The ordinary Money Bill can only be held up for two months by the Senate, but the Taxation Bill can be held up for fifteen months by the Senate, and this means that an unrepresentative body of people, the Senators, have a great deal of power over these Taxation Bills. It so happens that there is no direct taxation at all, so far as I am aware, in the Bahamas. It is one of these "paradise islands" for escapees, where there is no income tax and no death duty.

In dealing with this matter in another place yesterday, Mr. Fisher, the Under-Secretary of State said [OFFICIAL REPORT, Commons, Vol. 685 (No. 12), col. 236]: They do not have any things like Income Tax or Estate Duty. They think that the exemption of these matters is the basis of their whole success in attracting outside investors, tourists and so on. It is true that the prosperity of the Bahamas, and indeed the livelihood of its people, rather depends on attracting this outside capital and on the tourists who go there. So it was argued, I think with some justice, that any measure to interfere with this miraculous state of affairs by introducing taxation measures of this kind would fall into the category of major policy decisions instead of into the category of Money Bills as we understand them here. It is rather surprising that if they have found in the Bahamas this miraculous way of attracting business, Her Majesty's Government do not follow it here—another case where they could follow the colonial system. But, in fact, as we know, it is not a good system. Direct taxation, with all its faults, falls pretty evenly on those who can best afford it—on the population as a whole. Indirect taxation falls very heavily indeed on the poor people. It attracts the rich people there because it is very much to their advantage to go. They go there, and do not pay anything like their fair share of taxation. A man who is a millionaire bachelor (if there is such a thing), or a millionaire with a wife and no children, or with children grown up, stands practically no taxation at all—certainly no direct taxation; whereas the poor labourer or small business man with a large number of children is burdened with a very heavy load of taxation. I feel that at a time when a new Constitution was being framed this point should have been borne in mind.

Furthermore, I do not know what part in all this the British taxpayer is supposed to play. One way and another, the British taxpayer does support these small territories, and again I think it is rather odd that the British taxpayer, who is already very heavily burdened—and, as we know, his burdens are not likely to get less—should have to pay considerable sums of money, it may be (I do not know what the sums are) under the Colonial Development and Welfare Act and things of that kind to a Colony which has no income tax and no estate duty. I do not necessarily agree this is a good basis for prosperity at all.

What I gather has happened in the Bahamas is this. Owing to the fact that it is attracting a large number of people who do not want to pay taxes—not necessarily the best type of citizen, anyway—the price of land has gone up tremendously, the price of houses has gone up, and certain foodstuffs have gone up. There has not been a great increase in employment, as in many cases the houses are only occupied for a short period in the year, and the poor in these islands are very little better off, whereas the country does not get the benefit of the tax that these wealthy people should be paying.

There is just one other point I want to make and it is this: that for many years past—the last ten years I suppose—I have raised in this House the future of these small territories. What is it? How do the Government see the future of these little islands scattered around the oceans of the world? I do not know. I put up a plan in a debate in this House on February 2, 1955, and it was replied to by the noble Lord, Lord Lloyd, for the Government, and also in several debates following on that on this same point.

Lord Lloyd, for the Government, said that my plan was not much good. But at least it was a plan. I said to Lord Lloyd, "If they do not think my plan is any good, perhaps the Government can put up a better plan of their own." But this has never been done. They have never responded to that invitation. We still have no plan. We still have a large number of these island States scattered about the world. They are not viable, and they will not be able properly to look after themselves for some considerable time. What do we propose to do? They naturally want self-government, which to some extent they have. To some extent, the Bahamas have that. But they may want a little more than that: they may want an association, a greater tie with this country and with other countries like themselves.

I do not ask the noble Duke to reply to this point to-day. The Government have not replied to it for eight or nine years, so I do not expect him to do it this evening, having come in to bat at quite short notice. But I do ask the Secretary of State, through the noble Duke, to look at this problem: because it is not getting any easier as the years go by. We shall have to face it sooner or later, and a good deal of thought ought, I feel, to be given to it now by the Departments concerned.

6.52 p.m.


My Lords, I am most grateful to the two noble Lords who have associated themselves with wishing the Bahamas well in this constitutional step forward. The noble Earl opposite was most kind in saying that he did not expect a reply to his questions this evening and that he would be quite happy if I were to give him the answer by letter shortly. Partly because of the time, and partly because I do not know the answers to three of the four questions he asked, I will accept his offer with gratitude. However, I should like to say a word or two about the difference between Taxation Bills and Money Bills, with which both the noble Earl and the noble Lord, Lord Ogmore, dealt.

This expression is of importance in connection with the powers of the Senate to delay legislation. I do not know whether noble Lords opposite are interested, but this matter is dealt with in paragraph 21 of the Report of the Conference. The Senate will be able to delay ordinary Bills for approximately fifteen months. In regard to Money Bills, however, they will be able to delay only by two months, unless the Money Bill is of a particular category known as "Taxation Bills". These can be delayed for fifteen months, in the same way as ordinary Bills. A "Taxation Bill" is a Bill which may contain provision for the imposition of income tax, a capital gains tax, a capital levy or estate duty. The Bahamas are in the happy position of having none of these types of taxation, and the view was taken by the Conference that the success of the Bahamas in attracting outside investors and wealthy residents to settle there is largely due to these exemptions.

I would say, in passing, that Her Majesty's Government have no control over the fiscal policy and system pertaining in the Bahamas. It is true that the prosperity of the Bahamas is based mainly on its attraction for visitors and investors; and one can see why any measure which might change this pattern and, by the imposition of major taxation of this kind, make the territory less attractive to tourists and outside capital is regarded as falling into the category of measures of policy rather than the category of Money Bills, as we understand them here. All the parties to the Conference agreed that there should be this differentiation between Taxation Bills and other Money Bills. I think the noble Earl will take the point that Taxation Bills are bound up with the general policy of the island, and that is why there is this differentiation.

Turning to the noble Lord, Lord Ogmore, I am glad, and not at all surprised, that he has again raised this question of what is to happen to these small units within our Commonwealth, because he is such a true friend of the Commonwealth and takes such a vital interest in its development. I should like to take this opportunity of paying a tribute to him for being what I might call such a good Commonwealth man, particularly as shown by the good work he has done as Trustee of the Commonwealth Institute. In our office it is nice to know that we have such friends and supporters as the noble Lords who have taken part in the debate to-day.

I would just say that I cannot give him a reasoned answer as to what is to happen; but I can tell him that he is not the only one who is anxious about this. There is in the Colonial Office a great deal of anxious thought about what can be done, now that our control over our major territories is coming to a close, and about how we are to deal with these small parts that are left over. Perhaps I may say that one day before long he may receive an answer to the question he asked back in 1955. As I have said, I am most grateful to the noble Earl for allowing me to give written answers to his questions. I will see that he has them without delay. Now for the third time to-day I ask your Lordships to give a Bill a Second Reading.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

House adjourned at four minutes before seven o'clock.