HC Deb 27 October 1909 vol 12 cc1078-89

(1) Where it is shown to the Commissioners that the amount of any annual payments to be made, or of any capital sum which has been paid, in pursuance of conditions attached to the grant of a new on-licence for securing to the public monopoly value under Section four of the Licensing Act, 1904, exceeds the amount which should reasonably be required having regard to the increase in the duty on the licence under this Act, the Commissioners shall, after giving the justices by whom the conditions have been attached to the licence an opportunity of reporting to them on the matter, reduce in such manner as shall be just the amount of any payment to be so made, or in cases where a capital sum has been paid allow such a reduction from the duty to be paid for the licence as shall be just, having regard to the decrease of the monopoly value owing to the increase of the duty on the licence, but any decision of the Commissioners as to the reduction to be made under this provision shall be subject to the like appeal as that to which the determination by the Inland Revenue Commission of the amount to be paid for compensation under Sub-section (2) of Section two of the Licensing Act, 1904, is subject under that Act.

(2) Any amount by which the duty on the licence is reduced under this Section shall be deducted, in accordance with directions of the Treasury, from the next payment made out of the local taxation account to the council of the county or county borough who have had the benefit of the original capital sum paid, and the amount to be paid into the local taxation account on account of the proceeds of the duties on the licences for the sale of intoxicating liquor shall be reduced accordingly.

Mr. GRETTON (on behalf of Mr. Clavell Salter) moved, after the word "paid" ["capital sum which has been paid in pursuance of conditions"], to insert the words "or the value of any licence or licences which has or have been surrendered."

The purpose of this Clause is to enable the Commissioners to take account of capital payments or annual payments for monopoly value. The object of the Amendment is that account shall be taken of those cases where licences have been surrendered on obtaining the grant of a new licence. Since the Act of 1904 some justices made it a condition of granting new licences that certain old licences should be surrendered. There was some doubt about the legality of that course, and I believe the matter was several times appealed, but the action of these justices has not been upset. I think it is important that the Government should adopt the words of the Amendment or similar words in order that these licences which are surendered may be treated as valuable considerations.


I beg to second the Amendment. There are three ways in which consideration has bean given for monopoly value under the Act of 1904. It has been given either in the way of a capital sum down, or an annual payment, or a surrender of old licences, or perhaps partly one and partly another. I have got here a list of houses for which new licences were granted, and the conditions which the justices laid down varied very much indeed. The Government in this Clause have included two ways in which monopoly value has to be paid, namely, by way of a capital sum or by way of annual payments, but they have neglected to take into account the surrender of old houses, which really are as valuable as the payment of money. The object of this Amendment is to say that the value of surrendered houses is every bit the same as a capital payment. The Government ought to make this allowance, because in some cases there has been no money paid at all. I have got a list of a good many houses where the surrender of several old beerhouses has been given and no consideration of money has been paid for the new licence. I think it is a very valuable practice for the justices. I have had the honour myself of adjudicating in some of these cases, and we valued the ability to say to the applicants with these old beerhouses in a congested district, and some of them not needed, and to lay down as a condition to granting a new licence where an on-licence is needed, that the applicant should surrender one or more of those old licences. Surely this House ought to encourage a practice of that kind because it is a practice which is useful and convenient to the public. In some cases there has been the surrender of those old licences and a money payment as well. Other conditions have been laid down also. My Amendment only covers cases of the surrender of licences, but justices have made other conditions in granting new licences, and there is another Amendment which will cover those cases. It is a very useful practice, and one which has been followed by the justices, to enable them to do away with licences in districts where they are not needed, and give one in a district where the new licence is needed.


The Amendment now before the House is very much narrower in its scope than the Amendment which was moved in Committee dealing with the same matter. This Amendment, of course, is as to cases where there have been surrenders of licences since the operation of the Act of 1904. The Clause to which the Amendment is moved is one which deals only with the mitigation of the hardship which might arise where mono- poly value has been fixed, either by way of annual payment or, as sometimes has been done, by way of capital sum in respect of the grant of a new licence since 1st January, 1905. This matter may be dealt with in or two ways, either the Commissioners may make a suitable and just reduction from the annual payment or else they may make a reduction from the duty which is to be paid. If the capital sum has been fixed, bearing in mind that this deals with the case of monopoly value, I think I shall be able to show the hon. Member who seconded the Amendment and the House that the surrender of licences does not touch the question of monopoly value at all. The hon. Member who seconded the Amendment said that the practice had been followed by benches of justices of insisting or, at any rate, making it some sort of condition that there should be a surrender of one or two or more old licences, before the granting of a new licence, and that it was a very valuable practice. I entirely agree with him. The justices no doubt look at the circumstances of the whole locality, and, although in some cases within my own knowledge they sometimes accepted the surrender of a house far away from, and which had nothing to do with the immediate locality, in most cases, no doubt, they, looking at the needs of the locality, said, "We think that before a new licence is granted here, some of these old licences ought to be extinguished." That practice, valuable as it was, was invoked long before the Act of 1904, and long before there was any question of monopoly value.

We knew nothing of monopoly value in legislation until the Act of 1904. Indeed, before the Act of 1904 it had been decided in the courts of law that the justices could not exact a sum of money as a condition for the grant of a new licence. It never was doubted that they had a perfect legal right to ask for the surrender of other houses, but it was distinctly held that it was illegal for the justices to say, "If you will give us £1,000"—that is the sum mentioned in the Newport case—"for public purposes we shall grant this licence." Therefore there could be nothing in the nature of monopoly value until the Act of 1904. When the Act of 1904 came in it secured to the public for the first time in respect of these new licences the monopoly value, and really the reason why we are making an adjustment in this Clause now is that because the very foundation of those increased duties is that the people themselves have granted certain privileges which are worth so much. Then, they are not entitled to have, as we say, so much of the increased duties. The other was done since the Act of 1904, and it means the monopoly value, so that we think it would be a hardship, having secured it within the last year or two, that the whole of the new duties should be charged, and that, therefore, some such adjustment is necessary. The hon. Member said that the surrender of old licences was the surrender of something valuable; that it was a valuable consideration, and was as much part of the consideration of monopoly value as the payment of money itself. He is there under an entirely wrong impression. I pointed out that before the Act of 1904 it would be illegal to exact money. And he is under a wrong impression for this reason, that it is not the case under the Act of 1904 that the justices may fix the monopoly value partly in money and partly in the value of surrender licences. Supposing the justices said that the monopoly value is £5,000, and that the surrender of the licences which they asked to have surrendered was of a value of £2,000, and that, therefore, they would only ask £3,000, they could not do that under the Act of 1904. They can still insert as a, condition, amongst many others, the surrender of licences. But they must, in addition to every other condition, secure for the public the monopoly value of the new licence. [An HON. MEMBER: "In money?"] Yes, in money.


I know of cases.


I cannot say what justices have done, but the Act off Parliament clearly says that in addition to all the other conditions they may make they must attach a condition which is to secure to the public the fair monopoly value of the new licensed premises in respect of which the licence is to be granted. That clearly shows, I think, that it is not correct to say that the value of the surrender of the licence is part of the monopoly value at all, or that it can be discharged in any way or in part by the surrender of existing licences. I have had many cases of this kind in my own professional experience before the Act of 1904. I have never in those days, nor have I ever heard since 1st January, 1905, that the justices took any value at all in figures of the surrender of licences. People who wanted a new licence before the Act of 1904, with convenient premises, sought to induce the justices to give the licence by saying that they would surrender other licences. I have appeared on behalf of applicants for licences, and agreed to surrender licences before I could induce the justices to grant a new licence. I have never in any case that I appeared in, nor have I heard from anybody else, that the justices have taken any evidence of the value of the old licences, or that they have ever, when the offer was made of the surrender of a licence, asked what is the value of the house. They regard the matter solely from the public point of view, and to see if they can secure the closing of what perhaps may be undesirable houses. Therefore, the value of the surrender of licences does not come into the question of monopoly value at all. I agree it is quite clear under the Act of 1904, whatever the conditions as to surrender or as to early closing, so far as other conditions which may be laid down, the justices are bound, if they are complying strictly with the Act of 1904, to secure the monopoly value of the new licence itself apart from those other considerations.


I am rather surprised at the argument of the learned Solicitor-General, who did not adopt that view when the matter was in Committee. In Committee he rested his case upon this, that it would be very difficult to ascertain the value of the beerhouses which have been surrendered.

Sir SAMUEL EVANS expressed dissent.


I have practically a quotation as to the argument adopted by the learned Gentleman, and then the Government fell back on saying that it would be impossible to estimate the value of the licences surrendered.


That may have been stated, but that was not the only argument I used.


I do not remember myself the particular argument, but I understand now the argument is that under the Act of 1904 the justices, in granting new licences, take the monopoly value in money, and in nothing else. What we have contended, and still contend, is that they can take monopoly value, not only in money, but in other things, such as the surrender of other licences, or, in other words, that they can take monopoly value "in meal or in malt." The Solicitor-General said there were no such cases. I have here a case from Blackburn, which was quoted in the licensing statistics of 1907. This was a case of a fully licensed house and a beerhouse. The justices wanted to get rid of the beerhouse and to alter the situation of the fully licensed house. The lessee of the fully licensed house undertook to buy out all interests in the beerhouse and all interests except his own, in the fully licensed house. Then he built a new house on a site selected by the justices, and both the other licences were extinguished. There is a case distinctly of the extinguishing of a licence where no money really passes, and where the new licence was granted in consideration of the extinguishing of the licence of the beerhouse and the full licence. In face of those cases, since 1904, I hardly think that the hon. and learned Gentleman is entitled or can, in fact, maintain the argument he has put forward just now. It would be against commonsense, and, after all, commonsense will rule us in this matter, or ought to. All the magistrates have got to do since the Act of 1904 in granting new licences is to see that they get proper consideration. Money is not the only consideration. I can well imagine a much more valuable consideration might be secured through the extinguishing of an old licence, which would be a public advantage, and to the advantage of the locality. It do not think that the hon. Member has satisfied me that it is no according to law to adopt such a course. Here, if we are right, the consideration will have taken the shape of extinguished licences, and yet now, in the face of that, the Government propose to exact a much higher form of Licence Duty based upon monopoly value, having already received full value in kind for that very monoply value.


This is a point with which I must have been extremly familiar when I was conducting the Act of 1904 through the House; but I admit that my recollection of it now is somewhat rusty, and therefore I should have liked the assistance of my right hon. Friend the Solicitor-General in the late Unionist Government, who would have given me advice upon what I admit to be a rather difficult point. But I find it very hard to believe, on the statement of the Solicitor-General himself, that he has really presented to the House an accurate or adequate review of what has gone on since 1904. He says that the magistrates are bound to get for the public the full monopoly value of the house. That, no doubt, is the case. But he interprets that general proposition to mean that they must have in actual rent or in a lump sum for the lease, seven years or whatever it may be, the full equivalent of the monopoly value. If we are to take the Solicitor-General's interpretation of the Act in its literal sense, evidently the magistrates have robbed the licensees in the cases mentioned by my hon. Friend. It appears from those cases that the magistrates have acted certainly according to the spirit of the Act when, as a substitute for a cash payment or a consideration in rent, they have taken certain licences which had themselves a monetary value. The example just given by my hon. Friend is a case in point. There the magistrates said to the licence holder, "You must pay us such and such a rent, or such and such a lump sum down." That would have been in the strictest accordance of the Act of 1904. But the magistrates said something more. They said, "You must put your hand into your pocket, and provide the necessary sum to buy out two other licences"—which had evidently a value in hard cash. That was an additional charge to the amount already imposed on the applicant for the licence. Either that was counted as part of the monopoly value, or else, if it is in addition to the monopoly value, they robbed this unfortunate man of something over and above the monopoly value. I have rather forgotten the details of the prolonged controversy of 1904, but I should have said that the magistrates were acting in the spirit of the Act when they said "We insist that the public shall have the whole of the monopoly value, but we think it is expedient that it should be taken in the form partly of cash or rent and partly of licences which have themselves a cash value." If I am right in that broad contention, there is substance in the proposal made by my hon. Friend that that should be taken into account. The essence of the Act of 1904 was that the public should be in a position in regard to new licences to say, "We make certain terms which will secure that when your lease comes to an end you will have no claim for compensation or anything else." That is taking care that no new claim for compensation should grow up. That has been secured in all these cases. My hon. Friend points out that there is nothing in the Act stating that the payment should be in money. I do not wish to enter into controversy on a matter of law regarding a statute as to the details of which I have not refreshed my mind for some years. But I think, on the broad lines of equity and policy which I have endeavoured to expain to the House, that my hon. Friend's Amendment is one of substance, and it has not been fully met by the statement of the Solicitor-General.


The right hon. Gentleman has referred to the Act of which he was the parent. I dealt with the other arguments in Committee, and I need not repeat them. I have to-day put quite clearly the position before the Act of 1904 and the position since. The practice with regard to calling for the surrender of licences has continued for many years, and was not varied by the passing of that Act. The right hon. Gentleman says that surely you can secure to the public the monopoly value either in money or in some other form—for instance, by the surrender of licences. This is the difference. The monopoly value must be secured to the public. The surrender of licences does not secure anything to the public at all by way of monopoly value. Since the Act of 1904 it costs a man something to surrender the licences, just as it cost him something to do so before. But that is not securing as monopoly value to the public the value of the old licences. This is not the only ground on which I opposed the Amendment; but I think there is no doubt that I am right in my construction of the Act. It is, perhaps, hardly worth following the controversy, but I think the right hon. Gentleman will find that there was a difference between his Bill as introduced and the Bill as it became law in regard to this very matter. I think the surrender of licences was put in originally in the draft, but struck out after discussion in this House. Whether that is so or not as a point in the history of legislation upon this question, I think it is abundantly clear that the monopoly value must be secured to the public in addition to any other conditions such as those to which I have referred, including the condition of calling for the surrender of old licences.


The real question is not whether the monopoly value was or was not to be secured to the public, but whether the Act of 1904 precluded the possibility of the value being secured to the public in a form other than money. It is obvious, on the face of Section 4 of the Act of 1904, that Parliament intended that that should be possible, for the Sub-section imposing on the justices the duty of securing the monopoly value to the public does not use the word "money," but the words "such conditions." Later on it provides that the amount of any payments—thereby contemplating that the monopoly value might not consist wholly of sums of money—imposed under this provision should not exceed the total amount of the monopoly value. That shows that Parliament contemplated that the public might receive the value in a form other than money, and that the moral benefit of the suppression of licences should be taken into consideration by the justices and be held to form a part of the monopoly value which the statute requires to be secured.


What the Section says, before you come to monopoly value at all, is: "The justices on the grant of a new on-licence may attach to the grant of the licence such conditions, both as to payments to be made and the tenure of the licence, and as to any other matters, as they think proper in the interests of the public."


But shall in any case secure the monopoly value.


Yes, but they may attach any other conditions which they think proper in the interests of the public. Among those conditions is the surrender of licences. It is suggested that that is not in the interests of the public.


I never said that.


I understood so.


I said it was very much in the interests of the public.


If it is in the interests of the public, surely it is within the express words of Section 4 (2) of the Act of 1904. There is no answer to that. The Solicitor-General says that it does not secure money to the public. I agree; but it is very much

in the interests of the public. It enables the county committee in confirming licences to take a view over the whole of the county and to say, "There are too many licences here and too few there. If you give up some in the place where there are too many, we will give you one where there are too few." It is very much even in the money interests of the public, because one effect is to spare the Compensation Fund. You save money which but for this arrangement would have come out of the Compensation Fund for the purpose of compensating the licences surrendered. It is in the interests of the public, because it liberates so much money, very often a large sum, and enables that money to be applied in refusing other licences in other parts of the county. In that way the public gains at once by the early suppression of unnecessary licences, or of licences which are to some extent redundant, and also by saving the Compensation Fund, thereby enabling other licences to be suppressed. The action of the Government in this matter is a very severe blow to the system hitherto pursued, which surely has been a wise system, very much to the benefit of the public. It is a great pity that, where men have been encouraged, to some extent almost coerced, to spend money in buying up licences in order to get a new licence, they should find that men who have paid money directly are considered, but that men who have paid money indirectly are to receive no consideration at all. I am confident that the construction we put on the statute is correct, and that the Solicitor-General is mistaken.

Question put, "That the proposed words be there inserted in the Bill."

The House divided: Ayes, 67; Noes, 168.

Drafting Amendments made.