[BILL 7.] SECOND READING. (Hansard, 17 March 1875)

MR. FORTESCUE HARRISON
, in moving that the Bill be now read a second time, said, Sir, the Bill which I ask leave to read a second time is by no means pretentious. Its dimensions, its object, and those persons whose interests its provisions are intended to affect are alike humble; and although it is described as a Bill to amend the Law of Bankruptcy in Scotland, the contemplated changes are not of a character to alarm the most timid of law reformers. The Bill begins and ends with an amendment of a short section of that Act. In point of fact, it extends only to the substitution of a single cipher in a section of the present Act. Yet, Sir, unpretending as it is, and small and slight as is the concession I seek, I venture to say that more interest is at this moment excited amongst thousands of working men in Scotland on my present humble efforts to amend the law, than would probably be evoked by more ambitious legislative propositions. The working men in Scotland believe—and in my judgment justly believe—that they are unfairly treated in one particular provision of the Scotch Bankruptcy Act. To explain how that section works injuriously to these men—to show that it is in Scotland only, as compared with England and Ireland, that the grievance exists, and to ask the House to sanction a remedy, is what I now propose briefly to do. The principle has long been conceded that certain claims should rank preferentially on bankrupt estates, and amongst these are 1963 included the wages of working men. Under the provisions of the 122nd section of the existing Bankruptcy Act for Scotland—namely, the 19 & 20 Vict., cap. 79—the wages of workmen, and of clerks, shopmen, and servants, have a preferential claim on the bankrupt estate to the extent of a month's wages, provided that such wages or salary does not exceed £60 a-year. Should it be that any of the persons here described are paid at a rate above that limit, they have no preferential claim whatever, and must prove their debts in the ordinary manner, and rank with other creditors. The Act which so limits claims of this nature was passed in 1856, now nearly 20 years ago, and I have no doubt that at that time £60 a-year was considered a sufficiently limited amount to save the average working man from losing by the bankruptcy of his employer. Wages in those days were considerably less than they now are, and the means of living proportionately cheaper. From 20s. to 25s. a-week was the ordinary average wages of working men in Scotland at that time, and the limit of £60 a-year provided fairly enough for that calculation. But, Sir, things have changed very much since that period, and the average wages of working men have nearly doubled, while all the necessaries of life have risen in an equal proportion; so that I question much if working men are better off now, so far as a margin between expenditure and receipt is concerned, than they were 20 years ago. That this is so, is to a certain extent proved by the way this question of preferential payment to workmen has been treated by subsequent Bankruptcy Acts. By the Irish Bankruptcy Act, passed after the Scotch Act of 1856, provision was made to protect the wages of workmen to the extent of £5, without reference to any particular rate of wages. That arrangement gave workmen an opportunity of protecting themselves from loss by insisting on fortnightly, or even weekly, payments of wages. By the English Bankruptcy Act of 1869, Section 32, it is provided— That all wages or salary of any clerk or servant in the employment of the bankrupt at the date of adjudication, not exceeding four months' wages and not exceeding £50, and all wages of any labourer or workman not exceeding two months' wages, shall have priority of payment. 1964 Taking quarterly payments as the rule in regard to salary of clerks and shopmen, this would give priority to the extent of a rate equal to £150 a-year for this class of persons, while for workmen no specific rate in wages is named; and thus, whatever the annual rate may be, a workman of England is entitled to priority for two months' wages. This is a fair and liberal interpretation of the preference intended by all Bankruptcy legislation in favour of working men. If the wages of workmen are to be protected at all, there is no reason why there should be any limit beyond that period at which it is the local custom to pay wages. In Scotland, it is the rule to pay fortnightly, and I should have preferred to introduce a measure securing a fortnight's wages to working men in cases of the bankruptcy of their employers, irrespective of any rate of wages. But being most desirous to see a speedy change in the present system, and anxious to avoid an opposition which would have been fatal to my desires, I thought it best to follow in the track of the existing law, only extending its operation. By the Bill which I now submit to the consideration of the House, I propose to extend the annual rate of salary or wages from £60 to £100. I feel that, looking either to the Irish or the English Bankruptcy laws, skilled working men in Scotland will still be placed in a worse position in this respect than their fellow-workers in the rest of the United Kingdom, inasmuch as the enlarged rate of £100 a-year protects working men only up to 36s. a-week, the actual average rate of skilled workmen's wages in Scotland being much in excess of that amount. But anxious to obtain some relief for those I sympathize with, I have preferred to name a low sum, with a fair chance of success for the measure, rather than, by attempting more, to fail altogether. If, however, the Bill is, by your favour, permitted to go into Committee, I shall be happy to accept any suggestion to increase the limit beyond the sum I have named in it. Recent occurrences in one of the burghs I have the honour of representing have awakened a strong feeling in this matter not only there, but throughout Scotland, and a sense of injury is felt by the classes affected that their position is inferior to that of working men under similar conditions in other 1965 parts of the Kingdom. They urge with justice, that while they are told they should improve their technical education, and fit themselves to rival and excel the highly skilled labour of foreign competitors, they, by the very act of improving their position as skilled, and consequently as more highly-paid workmen, are placed, by the operation of the Act I am endeavouring to amend, upon the footing of unskilled labourers. I hope I have shown the House a sufficient justification for my attempt at legislation so early in my Parliamentary experience. The duty was cast upon me, and I should have been unworthy of the great industrial burghs I represent in this House if I had evaded it. I have only to thank the House for the patient attention it has given me, and to ask it to do an act of justice to working men in Scotland by the passing of the Bill, the second reading of which I have now the honour to move.

§ MR. FARLEY LEITH
Sir, I entirely approve of the principle of this Bill, but I wish to make a few observations, as I consider it is too limited in its object and provisions. It can neither remedy the acknowledged defects of the Bankruptcy Law of Scotland, nor satisfy the reasonable demands of the mercantile community in respect to it. The Bill proposes to deal with one section of the Bankruptcy Act of Scotland, and with only a portion of that section. Indeed, I am of opinion, it leaves untouched the most objectionable part of that section. The hon. Member for the Kilmarnock Burghs (Mr. Fortescue Harrison) seeks to raise or extend the pecuniary limit mentioned in that section from £60 to £100. Now, I consider that the most objectionable part of the section is the latter part of it, which limits the wages to be allowed in cases of bankruptcy to the clerks, shopmen, labourers, and workmen, to one month's wages. That, I think, is, in itself, indefensible. It is objectionable and unjust to those hard-working, meritorious persons whose benefit we all have in view. The limit of one month's wages is unjust in principle, and certainty may be shown to be so by reference to the Act which the hon. Member for Kilmarnock referred to 1966 as the English Bankruptcy Act of 1869. On reference to that Act, it will be found that it distinguishes between clerks and shopmen on the one hand and labourers and workmen on the other. It provides that, as regards the former of these, the allowance of salaries shall be for four months, limited only by the provision which accompanies it—namely, that such amount as shall be awarded shall not exceed the sum of £50. With respect to the other class and division—namely, the labourers and workmen—the provision in the statute is, that they shall be allowed wages for two months. Now I ask, why should the clerks, shopmen, workmen, and labourers in Scotland be placed in a worse position than those of the sister Kingdoms of England and Ireland? Justice requires that the hon. Member for Kilmarnock should have further sought to amend that section of the Bill to which his attention has been particularly directed, by incorporating into his measure the four months and the two months which are given by the Act of 1869 in England. There is absolutely no reason for distinguishing between the circumstances, the position, and I may say the rights of the workmen in Scotland, and of those in England. I have no objection to this Bill, considered by itself, other than that which arises out of what I have just stated to the House. The mercantile community of the largo city which I represent has, however, expressed its views in the Chamber of Commerce, and it desires a much more comprehensive alteration of the Bankruptcy Law of Scotland. It requires that it should be brought into harmony with the Bankruptcy Law of England generally, and that the two systems of law should be assimilated. I have proof, also, that this is what is demanded by the mercantile communities both of England and Scotland. At a meeting of the Associated Chambers of Commerce of the United Kingdom, held in February, 1873, a resolution was passed which embodies the suggestions and the reasoning which I have just brought under the notice of the House. That Resolution is in these terms— That it is expedient and desirable that there should be one Bankruptcy statute for the United Kingdom, and that the Government be memorialised to instruct the Law Officers of the Crown to prepare and introduce such a measure. Now, that resolution was acted upon, 1967 and a memorial was presented to the late Prime Minister. The right hon. Gentleman handed the memorial to the Lord Advocate for the time being. "We have lost his services in this House in consequence of his promotion, and of another event which has happened in the change of Government; but I trust we have not at the same time lost any assistance in carrying that object out by the change of Lord Advocate. Therefore I appeal to my right hon. and learned Friend the present Lord Advocate to give effect to the memorial so presented. We had the promise of the late Lord Advocate that he would give effect to it. What are the objections to the present systems of bankruptcy in the Three Kingdoms? They appear on the face of those systems, and may be summed up in a few words without going into detail. First, there are three distinct and several statutes on the Bankruptcy Laws of the Three Kingdoms; one for England, one for Scotland, and one for Ireland. Now, hon. Members can easily imagine the inconveniences, the difficulties, and the evils which must arise from these widely differing systems of bankruptcy. The creditors in one country are at a loss to know the peculiar proceedings which are required to be followed in order to enforce rights in the other country, the principles and procedure in those other countries being diametrically opposed to each other. There are different rules concerning the marshalling the assets of the bankrupt's estate, and there is a difficulty, which has led to much litigation and delay, in ascertaining to which Bankruptcy Court's jurisdiction, of the Three Kingdoms a case ought to be referred. Is this not a scandal to the three countries, or at least to the two countries of England and Scotland, which are so closely united, and where the ramifications of commerce and trade are so extensive that we ought to have the same law to govern commercial transactions in both countries. I feel sure my right hon. and learned Friend will agree with me that there is no difficulty in having one statute for the Three Kingdoms, and we have precedents for it in the General Shipping Act, and the Revenue Act, which govern alike England, Scotland, and Ireland. The present Bill deals with only an infinitesimal part of the subject—the Bankruptcy 1968 Laws—and although I am reluctant to vote against the Bill, I doubt whether in Committee we could so alter and amend it as to meet the reasonable demands and wishes of the mercantile community of England. However, having expressed these opinions on the general question, I shall vote in favour of the Bill, the subject-matter of which I hope will receive favourable consideration at the hands of the Government.

§ GENERAL SIR GEORGE BALFOUR
said, he should record his Vote with great pleasure in favour of the Bill, because the hon. Member who introduced it had hit an undoubted defect in the Scotch Act, and at the same time had very properly refrained from touching upon the much greater question which the hon. and learned Member for Aberdeen (Mr. Leith) had referred to. The complete general question of a good law of bankruptcy ought, in his judgment, to be dealt with by the Government of the day, and was of too serious a nature to be dealt with by any private Member. He would suggest that if they did so, and introduced a Bill upon the subject, there should be a clause to the effect that no bankrupt should receive his certificate if he had not kept a set of books of account. As the Bill before the House only changed one item in the existing Act—namely, the amount which might be claimed for wages—and as it was an alteration needed from the changes in wages, he hoped the House would pass it in its limited shape.

§ THE LORD ADVOCATE
I do not intend, Sir, to make any objection to the second reading of the Bill. The object of the hon. Gentleman who has introduced it is to assimilate as far as possible the law of Scotland to the law of England, in reference to the payment of preferential claims to clerks and workmen. I think it is quite right that that should be carried out by legislation, but I venture to think that the Bill is capable of some improvement in Committee, and I shall be most happy to put myself into communication with the promoters of it with a view to consider the question. As to the much larger question introduced by the hon. and learned Member for Aberdeen (Mr. Leith), I must say I do not look forward with very great composure to a Bill for the assimilation of the Bankruptcy Laws of the three countries. In Scotland I am not aware 1969 that there is any great dissatisfaction in regard to the working of our own system. Of course, there will always be dissatisfaction regarding bankruptcy; but as far as the forms in use in Scotland exist, I do not think there is much dissatisfaction. On the contrary, the attempt of the trainers of the last Bankruptcy Act which was passed for England was to assimilate as much as possible the law of England to the law of Scotland, and therefore I apprehend that if there be any faults in the English system, they arise from some departure from our Scotch system. I was not aware that any pledge was given by the late Government in this matter, or that the late Lord Advocate had given any pledge in regard to the reconstruction of the Bankruptcy Law. But it is a large question, demanding grave consideration, less, perhaps, by me, than by the people of Scotland, in reference to a change of the system, and the opinion held in England concerning the assimilation of their system to ours.