BANKING AND FINANCIAL DEALINGS BILL (Hansard, 9 December 1971)

§ LORD DRUMALBYN
My Lords, I beg to move that this Bill be now read a second time. It is remarkably fitting that we are considering to-day the Banking and Financial Dealings Bill which is concerned with, among other matters, bank holidays. For exactly a hundred years ago the then Sir John Lubbock, who was later to become the first Lord Avebury, was responsible in another place for seeing on to the Statute Book the first Bank Holidays Act. As noble Lords may know, this measure laid the basis for our modern bank holiday legislation. Like his successor, whom we have recently welcomed to this House (and I am sorry that he is not in his place at the moment), the first Lord Avebury had a career of great distinction in the other place. He was a man of great achievement. Not only was he a man active in public affairs, but he was also a scientist of note and a banker. Not the least of his achievements was the Act relating to bank holildays to which I referred a moment or so ago. This proved to have consequences not only for bank clerks but also for a great number of other people. Noble Lords may find it helpful to the understanding of the Bill now before the House if I briefly explain how this came about.
Before 1871, there were only two days in the year, apart from Sundays, which were recognised under English Common Law as days on which the banks did not do business. They were Good Friday and Christmas Day. Sir John Lubbock wanted to ensure that bank employees would have more opportunities for relaxation than these two days afforded. He did that by providing in his 1871 bank holidays legislation that certain days should be kept as close holidays in all banks. Although there was nothing in the Bank Holidays Act about this, the days prescribed in that Act gradually came to be fairly generally observed as public holidays in England and Wales, though not in Scotland. And thus there came to be established the institution of bank holidays, which for a great number of people in England and Wales denotes a day off from work. The 1871 Act was slightly amended and extended by subsequent 906 legislation; but its main provisions have remained virtually unchanged. And it is, I think, a tribute to Sir John Lubbock that in the Bill now before this House we are proposing no change in the principles of his legislation. In essence all that the Banking and Financial Dealings Bill does is to bring up to date existing law. It does this in three main ways. First, it consolidates and makes some minor amendments to the enactments relating to bank holidays. Secondly, it provides for the closure of banks and other financial institutions in the national interest on days not bank holidays. And, thirdly, it makes certain amendments to the Bills of Exchange Act 1882 to bring that Act into line with present-day conditions.
May I now explain the Bill in a little more detail, as it is a somewhat technical one. Clause 1 and Schedule 1 restate the main essentials of the existing law relating to bank holidays and make just three changes in that law. The first is that the Bill makes permanent provision for the Spring and Summer Bank Holidays in England, Wales and Northern Ireland to be on the last Mondays in May and August. Your Lordships may recall that, following the publication in 1963 of the White Paper on Staggered Holidays, the last Conservative Administration decided, after full consultation with the interests concerned, that the August Bank Holiday in the years 1965 and 1966 should be changed, on an experimental basis, from the first Monday in August to the last. The previous Administration continued the experiment by changing the dates of both the May and the August Bank Holidays in the ensuing years with slight variations. The experiment has now continued for several years, and the change of the Spring and Summer Bank Holidays to the last Mondays in May and August has been found to be generally acceptable in England and Wales. It has already been announced that the holidays will be on those days in 1972, 1973 and 1974, and we consider that the time has come to fix the dates on a permanent basis. The Bill does this and removes uncertainty about the dates of these two holidays in future years.
Your Lordships will note that these changes do not apply to Scotland. I ought to explain that bank holidays are not generally observed as public holidays 907 in Scotland, as they are in England and Wales. To meet the wishes of Scottish banking interests, the bank holidays in Scotland have now reverted to the existing statutory dates—the first Mondays in May and August. The second change made by Clause 1 and Schedule 1 of the Bill is the addition to the list of bank holidays in England and Wales of December 27 in years when December 25 is on a Sunday. This merely recognises a long-standing tradition. It has for many years been the practice, when Christmas Day has fallen on a Sunday, to use the powers in the Bank Holidays Act 1871 to proclaim Tuesday, December 27, a bank holiday by Royal Proclamation. The Bill removes the need for a Royal Proclamation by making statutory provision for a bank holiday in these circumstances. Your Lordships will be aware that there is already statutory provision—in the Holidays Extension Act 1875—for a bank holiday on December 27 when December 26 falls on a Sunday. This provision is retained in the present Bill.
The changes which I have so far mentioned relate only to bank holidays in England, Wales and Northern Ireland. The third change relates only to Scotland. Your Lordships will see that the bank holidays listed in Schedule 1 of the Bill include an additional bank holiday in Scotland, to be held on January 2, or, when that day or January 1 falls on a Sunday, on January 3. Clause 1 provides that the first of these additional bank holidays in Scotland will be in 1973. This change will bring the number of Scottish bank holidays up to six, the same as the number of bank and Common Law holidays in England and Wales. This additional holiday in the Scottish banks should not affect holidays among the general public in Scotland since public holidays in Scotland are, for the most part, arranged on a local rather than a national basis and do not, on the whole, coincide with bank holidays.
As I have said, these are the only three changes which the Bill makes in the existing bank holiday arrangements. It has been suggested in another place that we should take the opportunity of the Bill to appoint additional bank holidays. Christmas Eve, New Year's Day, May 1, the Queen's Birthday, Europe Day and United Nations Day have all 908 been suggested as suitable dates for additional bank holidays. To support the case for additional bank holidays, it has been argued that there are fewer so-called public holidays in this country (and I am glad to see that the noble Baroness, Lady Phillips, is in her place) than there are in the member States of the European Community, and that therefore the number of bank holidays should be increased in this country. We have considered these requests for additional bank holidays very carefully but have come to the conclusion that additional public holidays are not a suitable subject for legislation. Additional public holidays are a matter for negotiation between the parties concerned, between employer and employee, as part of the normal bargaining processes. In this way those concerned can take account of the needs of individual undertakings, local custom, the preference of employees, and other local circumstances in a way that would not be possible if additional bank holidays were declared.
I turn now to Clause 2. This clause confers a power on the Treasury to close in the national interest, either wholly or in respect of particular types of transaction, banks and a number of other financial institutions such as authorised dealers in gold and foreign exchange. the commodity futures markets, the National Giro and stock exchanges. Your Lordships will recall that the previous Administration found it necessary to close the banks at the time of devaluation in 1967 and during the gold speculation in 1968 by means of the proclamation of a special bank holiday under the Bank Holidays Act 1871. Noble Lords will probably remember that this procedure had some inconvenient side effects. For example, was the special bank holiday to be kept as a bank holiday for the purposes of wage agreements or for the purposes of parking meter restrictions; or for the purposes of bus and Underground timetables or, for that matter, for the purposes of the collection of mail? These points were all eventually sorted out, but they demonstrated the inconveniences which could arise when there was recourse to the bank holiday legislation in such circumstances. The powers conferred by Clause 2 enable such inconveniences to be avoided and allow the Treasury to close the banks without having recourse 909 to the bank holiday legislation. They also provide for the closure, in the national interest, of a number of other financial institutions.
The third main objective of the Bill is contained in Clause 3, which brings up to date certain of the rather technical provisions of the Bills of Exchange Act 1882. First, the clause takes account of the fact that the banks now close on Saturdays by defining Saturday as a "non-business day" for the purpose of Section 92 of the Act. This section provides that where the Act limits the time for doing any act or thing to less than three days, non-business days are to be excluded from the reckoning time. The second change which Clause 3 makes in the 1882 Act is to abolish the three "days of grace" which Section 14(1) of that Act allows in the case of all bills not payable on demand to be added to the time of payment as fixed by the bill. This brings practice in this country into line with general international practice.
The third and final change which Clause 3 makes is to tidy up the provisions about the payment of bills falling due on non-business clays. It does this by providing that all such bills shall be payable on the succeeding business day. Your Lordships may remember (and those who have passed legal or accountancy examinations will certainly do so) that Section 14(1) of the Bills of Exchange Act 1882 differentiates between bills falling due on Common Law holidays, which it makes payable on the preceding business day, and bills falling due on statutory bank holidays, which it makes payable on the succeeding business day. The reason for this distinction is far from clear, and Clause 3 of the Bill puts the law on a more consistent basis. My Lords, I have attempted to outline the main provisions and objectives of the Bill, and, as you will have observed, much of it is pretty technical. But I hope that your Lordships will agree that it is a useful measure and that you will give it your support. My Lords, I beg to move.

§ LORD BESWICK
My Lords, we are obliged to the noble Lord, Lord Drumalbyn, for the careful way in which he has explained the purposes of this Bill.
910 The changes in procedure for which the Bill provides are sensible, and so far as I am concerned I do not propose to delay unduly the time taken on this Bill, either at this stage or at later stages, for I know that there is some pressure on the legislative timetable. I do not propose, either, to put in a wholesale bid for more holidays. There is something in the case the noble Lord makes about local considerations and discussion between employers and employees, but it does not dispose of the argument for an additional public holiday in parts of the United Kingdom. I refer of course to New Year's Day. I believe there is a case for looking again at the possibility of having New Year's Day as a public holiday. I leave the general case of more holidays, as I say, although we have always maintained that the impact of automation should mean that we have greater leisure and more holidays as one way of spreading available work. I am speaking here about one particular day. In certain parts of the United Kingdom New Year's Day is a public holiday. The noble Lord has already told us of the provision that is being made so far as Scotland is concerned. Some companies already accept the inevitable and do not work on New Year's Day. Some individuals also declare to themselves that the day should be a holiday. I should have thought it would be just as well if we accepted this trend and made a national holiday of that day. After all, it is better, more efficient and more economic if on certain occasions, on certain days, there is a national decision rather than leaving it to local agreement or company agreement.
I understand that one of the arguments against this is the inconvenience that would follow if there were no banking facilities available for possibly two weekends consecutively. I cannot believe that in the modern world, with the facilities that now exist for transacting banking business, we shall find our commercial and industrial life dislocated if banks are closed for just one more day. The situation we shall find, if we are not careful, is that the banks are open and there is no other commercial or industrial work transacted on that day, and there is as a result no call at all for the banking facilities. Therefore, I suggest to the noble Lord that here is a special case, and he would do well to have it re-examined.

§ LORD DRUMALBYN
My Lords, I am grateful to the noble Lord for the way in which he has received this Bill and also for saying that he does not propose to delay unduly its passage. I would say only this in regard to his special plea for New Year's Day. Obviously, this suggestion was considered, with other proposals; but the main point here is, as I said in my speech, that there is nothing to prevent employers and employees from agreeing to New Year's Day being taken off from work. As the noble Lord says, apart from Scotland, this already happens in parts of the country. I understand that on Tyneside and Tees-side New Year's Day is customarily observed as a holiday. In parts of the country where New Year's Day is customarily recognised as a holiday it is, I am told, not necessarily an additional holiday; it may be substituted for some other more generally recognised holiday. But this simply demonstrates that the present arrangements are flexible, and we do not see any need to alter them.
With regard to the noble Lord's fear that only the banks and nothing else would be open on New Year's Day, I would point out that there is nothing to prevent banks from closing as well without its being a bank holiday—as they did, for example, on Saturday mornings; but in that case they must, of course, give due notice to their customers, because I understand that if they do not do so an element of breach of contract may be involved. But if everybody agreed that New Year's Day should be a holiday, and if this was agreed between employers and employees, I think the question would tend to resolve itself without the necessity for legislation. Our view is that, on the whole, because of the legal implications of bank holidays it is better to keep their number to a minimum.

§ LORD BESWICK
My Lords, I accept the nub of the point which the noble Lord has made, but he has not answered the particular case I made. I have myself said that there are company agreements and local practices providing for a holiday on New Year's Day, but it is inefficient for me to go into my office and telephone to factories on Tees-side when they are closed on that day. Would not 912 the noble Lord therefore undertake to look again at this point?

§ LORD DRUMALBYN
My Lords, I will certainly undertake to look at it again between this stage and the next. It would be extremely churlish of me to say that I would not; but I cannot give any assurances that we shall be able to change our mind. I appreciate the spirit in which the noble Lord has put forward this suggestion, and I hope that the House will now be prepared to give the Bill a Second Reading.