The rights of the executive and the responsibility of the National Assembly over financial charges and debts
Stabroek News, April 20, 2008
By Ralph Ramkarran, Speaker of the National Assembly
In March 2008, Minister of Finance Dr Ashni Singh objected to a motion moved in the National Assembly by Mr Winston Murray, the Shadow Finance Minister, which sought to impose a limit of $10 million on the aggregate of debt obligations that may be forgiven, postponed or reduced by the minister without the approval of the National Assembly in any fiscal year. Dr Singh argued that consent of the cabinet was required for a motion of this kind and that the Speaker should not have accepted the motion. He sought to make a speech in Parliament to this effect (the text of which was published in the Guyana Chronicle on March 28, 2008) but which was disallowed by the Speaker.
In this article Mr Ralph Ramkarran, the Speaker of the National Assembly, argues the case for accepting the motion which he submits does not fall within the contemplation of Article 171 of the Constitution which was relied on by Dr Singh.
The struggle for parliamentary supremacy
The struggle for parliamentary supremacy over the sovereign in England was long and bitter and cost nine speakers their lives by beheading. The background to this history was the clamour of the rising classes for more power in decision-making and to displace a class already exercising power. The Magna Carta of 1215 resulted from a struggle between the barons and King John over his unilateral attempt to impose taxes to raise much needed funds to pay for the war with France in which he had been defeated. Apart from its other provisions, the most famous being the writ of habeas corpus which survives to this day, the Magna Carta established a committee of barons with certain powers over the King, this being the first attempt at establishing something akin to a parliament.
The best known period in this history is the Cromwellian revolution in the first half of the 17th century during which Charles 1 was beheaded. The dispute arose as a result of differences between the King and Parliament about their respective rights to impose taxation. As in 1215, the issue of taxation masked a far deeper struggle, on this occasion between the emerging mercantile class and the aristocracy. This revolutionary period in British history gave rise to one of the most famous incidents in parliamentary history, which has inspired speakers down the centuries. Parliament had passed a law in 1642 giving its members control over ministers. Charles ordered the arrest of five members who promptly escaped. When Charles enquired of the whereabouts of the men from Speaker William Lenthall, he famously replied: “May it please Your Majesty, I have neither eyes to see nor tongue to speak in this place but as this House is pleased to direct me, whose servant I am here; and humbly beg Your Majesty’s pardon that I cannot give any other answer than this to what Your Majesty is pleased to demand of me.” After this loss of control of parliament, Charles began to make preparation for war against the parliament which resulted in the Civil War. William Lenthall continued as Speaker, participated in the Civil War, and died of natural causes in 1662.
Parliament’s power over spending
These historic struggles from those early times arising from parliament’s attempts to reduce or limit the power of the sovereign, have resulted today in democratic control being acquired by the elected representatives of the people over the imposition of taxes, spending and remission of debt. The position in the United Kingdom is expressed in Erskine May’s Parliamentary Practice (22nd edition) at page 732 as follows: “The development of responsible government and the assumption by the government of the day of the traditional role and powers of the Crown in relation to public finance have not altered this basic constitutional principle: the Crown demands money, the Commons grants it, and the Lords assent to the grant.”
Speaker of the National Assembly Ralph Ramkarran (right) and President Bharrat Jagdeo at the ceremonial opening of the House in September 2006. (Stabroek News file photo)
Major works on parliamentary practice and procedure confirm the fundamental principle relating to the role and powers of the executive and legislature. Erskine May confirms that the power of the executive relates to ‘charges.’ It states at page 733: ‘As has been indicated, financial procedure is primarily concerned with the authorization of public expenditure (sometimes referred to as ‘charges upon the public revenue or upon public funds’) and of taxation (sometimes referred to as ‘charges upon the people’)… In relation to expenditure, financial procedure is, with one exception exclusively concerned with payments made out of the two Funds.” The exception referred to is set out at note 2 as: “the releasing or compounding of any sum of money owing to the Crown (ie the writing off of any portion of a debt owed to the consolidated Fund) is also treated as a charge upon public funds.” This exception, which is provided for by the Standing Orders of the House of Commons, is almost exactly replicated by article 171 (2) (iv) of the Guyana Constitution.
The position is the same or similar in many Commonwealth countries. These include Canada (see House of Commons Procedure and Practice edited by Robert Marleau and Camille Montpetit at pages 712-13); Australia (see House of Representatives Practice edited by IC Harris (4th edition) at pages 401-02); New Zealand (see Parliamentary Practice in New Zealand by David McGee (2nd edition) at page 339) and India (see Parliamentary Procedure by Subhash C Kashyap at pages 1418-21). In none of the above countries does a proposed limitation on the aggregate debt which may be forgiven, or anything remotely resembling such a proposition, require the approval of the Crown, the government or the cabinet. In every single instance, it is only when “charges,” as defined by Erskine May, are sought to be imposed that such approval is required, and, in addition, in the case of Great Britain and Guyana, actual remission of a specific debt.
In Guyana, the legal position has been enshrined in the Constitution. Article 171 provides that any member may introduce a bill or propose a motion. It goes on to provide that except with the recommendation or consent of the cabinet the Assembly shall not proceed with any bill or motion for imposing or increasing any tax, for imposing any charge upon the Consolidated Fund, for withdrawal from the Consolidated Fund or for compounding or remitting any debt due to Guyana. These provisions closely resemble those by which the House of Commons is bound under its Standing Orders. They are simple and easy to read, understand and interpret.
Is cabinet permission required for a motion to limit the aggregate debt which can be forgiven?
Recently, Dr Ashni Singh, Minister of Finance, in an article in the Guyana Chronicle on March 28, 2008, purporting to be a speech he intended to deliver in the National Assembly but which was disallowed, sought to apply the provisions outlined above to a motion moved in the National Assembly by Mr Winston Murray. He argued that the consent of the cabinet would be required for the motion. It invoked section 81(3) of the Fiscal and Accountability Act 2003 (the act) which provides that: “The National Assembly may set a limit on the aggregate amount of debt obligations that may be forgiven, postponed or reduced by the Minister without the approval of the National Assembly in any fiscal year.” Mr Murray’s motion sought to impose a limit of $10M.
To establish his case Dr Singh had to prove that the above Section 81(3) of the act falls within the contemplation of Article 171 of the Constitution. The first hint that it does not is that no reference is made in the section to the Constitution. If the draughtsman or draughtswoman were of the view that Article 171 applied to Section 81(3), the latter would have started with the following phrase: “Subject to the provisions of the constitution…” The telling omission of this or a similar prefix (contained in many legislative enactments including article 171 which starts off with the words “subject to the …rules of procedure of the National Assembly”) to the section is the clearest indication that the draughtsman or draughtswoman understood that the section did not fall within the parameters of Article 171 of the Constitution and, therefore, any bill or motion seeking to actualise it, would not require the consent of the cabinet.
The view of the draughtsman or draughtswoman is confirmed by Section 81(3) itself. It provides for “[setting] a limit on the aggregate amount of debt obligations… in any one year.” There is nothing in Article 171, or in any of the passages cited by Dr Singh, which requires cabinet approval or the Crown’s permission for a bill or motion setting a limit on the aggregate amount of debt obligations. In his extensive quotations from Erskine May, Dr Singh did not cite a single passage or sentence which states that cabinet approval is required for such a motion to proceed. Instead, he relies on two false premises leading to artificial and unsustainable conclusions, which is now demonstrated.
‘Financial matters’ v ‘financial charges’
Early on in his dissertation on parliamentary procedure Dr Singh states at paragraphs 5 and 6: “Mr Murray violates a cardinal principle enshrined in the provisions of Article 171 of the Constitution… The cardinal principle to which I refer is one that dictates that ‘financial matters’ can only be introduced into the legislature by, and with the consent of, the government.” There is no such principle set out in Article 171, cardinal or otherwise. The passages relied on by Dr Singh, and in fact all the extensive passages quoted from Erskine May, refer only to “financial charges” and not to “financial matters.” Dr Singh seeks to justify his tenuous conclusion by substituting the phrase “financial matters” for the phrase “financial charges.” The word matters suggests a limitless range of financial issues which can indeed include “[setting] a limit on the aggregate amount of debt obligations” while the word charges relates only to charges to the Consolidated Fund and taxes and has nothing to do with limiting the aggregate amount of debt obligations. By a subtle transposition of phrases, Dr Singh leaps to an insupportable conclusion.
When the National Assembly approves the estimates it gives authority to spend; since the government cannot spend more than is authorised, then in that sense only is a ceiling on expenditure set.
At paragraph 8 Dr Singh suggests that “the budget estimates motion (accompanied by the associated Appropriation Bill) prescribes the ceiling on the amount of money that can be issued or paid from the Consolidated Fund.” Based on this premise, he argues and concludes in the same paragraph as follows: “In like manner, the current motion seeks to prescribe a ceiling on the amount of debts that may be forgiven in any fiscal year and should therefore only be submitted to this Honourable House by a minister with the consent, or on the recommendation, of the cabinet.”
It is important to note that the word “ceiling” is Dr Singh’s. With some resourcefulness, he employs it in relation to estimates, then applies it to the purpose of section 81(3) and argues that since setting a ceiling is common to both, they are equally prohibited.
It is highly irregular and a non sequitur to conclude from the fact that because the ceiling on spending incidentally approved by the National Assembly cannot be exceeded, that a motion to set a ceiling on the debt which can be forgiven must be approved by cabinet. The purpose of presenting estimates to the National Assembly is to seek and obtain authority to spend money from the Consolidated Fund. This requires cabinet approval. Once approved, this amount cannot be exceeded. Thus, the purpose of the estimates is to secure authority to spend, not to set a ceiling on expenditure, which is merely incidental to the approval by the National Assembly. This issue is settled by David McGee in Parliamentary Practice in New Zealand where he states at page 333: “Authority to expend public money or to incur expenses is obtained by Parliament making an appropriation for specified purposes. An appropriation authorises the spending of public money or the incurring of expenses or liabilities for those purposes.” There is no reference to a ceiling but clearly, there is no authority to spend more than the amount approved. Dr Singh’s argument elevates the setting of the ceiling as the primary objective of the estimates (which are formally approved by an Appropriation Act), and concludes that because this is so, a motion to set a ceiling on aggregate debt that can be forgiven requires cabinet approval. Such argumentation, commencing with a contrived premise, cannot but collapse into a contrived conclusion.
In a situation where many of these issues are arising for the first time because of our short history of parliamentary democracy, interrupted by many years of stultifying stagnation, it is expected that the executive will zealously guard its perceived rights under Article 171 and otherwise. But unless the court intervenes the Speaker is the sole arbiter of those rights and his or her decision is final unless the National Assembly by motion determines otherwise.