HC Deb 26 August 1914 vol 66 cc104-16

I beg to move, "That leave be given to bring in a Bill to give, in connection with the present War, further powers to Courts in relation to and remedies for the recovery of money, and in relation to other similar matters."

6.0 P.M.

This is an essential preliminary to bringing the moratorium to an end. Before the moratorium is determined, I think it is essential that during the period of the War there should be some provision against the harsh exercise of legal powers by creditors under certain conditions. First of all take the case where a judgment has already been obtained for a debt before the War, and a warrant of execution is asked for to sell up a man's goods and property. Another case is the case of a warrant for distress for rent. Another is the case of hire agreements and temporary failure to pay instalments. Another case has been pressed upon us by builders in respect of mortgages. In all these cases, with the exception of the first, the creditor can, without intervention of the Court, put into operation very considerable powers to break up a man's position altogether, sell his goods and his property, and practically ruin him. It is very necessary in a case of this kind that you should not give protection to a man who is really a bad payer. The proposal in this case is that these very summary powers should not be exercised without the intervention of the Court. Take the case of a mortgage. Before a man sells up his property he should apply to the Court, which means in this case either a registrar or a master. It does not mean that he should in every case go to the High Court. There should be a summary process by which a man applies to a registrar or a master. There may be a case to be referred to the judge if it is of sufficient importance, but the Court, in its absolute discretion, should decide whether it is a case where summary execution ought to be levied in the circumstances, there is power of that kind vested in the County Court judges now in regard to judgment summonses. Another case I ought to mention is that of ejectment. It is true that the masters now have certain very limited powers to withhold a warrant of ejectment. On the whole, the powers of the masters are of an administrative and not of a judicial kind. I propose that the masters in those cases should have wider discretion. Supposing a warrant of distress is issued against a man who has been a good payer of rent all his life, but who, owing to the War, finds himself in a condition that he cannot possibly pay his rent, I think it is a hard case that powers to sell up a man of that kind should be exercised. I do not think any Court would issue execution under these conditions, but it is a case where the Court ought to have statutory discretion in the matter. The provision made by this Bill is purely temporary during the period of the War. The vast majority of the mortgagees will, I think, act fairly and indulgently, but you may have occasionally a person who for his own interest—I do not wish to suggest that there are many such persons—will exercise his power in order to force the sale of a property, knowing that at that period it would not fetch a very high price. I do not think there are many who would do it, but at the same time an honest person ought not to be in the position of being absolutely ruined by summary powers of that kind when conditions are so exceptional as they are at present.

The same remark applies to hire-purchase agreements where non-payment of instalments is not due to any question as to a man's honesty, but purely owing to the circumstances of the moment. I ask leave to introduce this Bill, which provides that before one can exercise these drastic powers application should be made either to a master or a registrar. In very important matters he would no doubt refer the cases to a judge, but I think that in most cases he will be competent to adjudicate. Masters and registrars are generally solicitors of considerable experience of business and affairs in their districts, and I am sure they will exercise the power very fairly.


I am very glad that the Chancellor of the Exchequer has decided to bring in a Bill of this character. I think it will be generally felt by those who have looked into the matter that such a Bill is necessary. I, of course, have not seen the terms of the Bill which the Chancellor of the Exchequer proposes to introduce, but I think its objects have been sufficiently defined by what the right hon. Gentleman has said. It is to give equitable jurisdiction in those cases, and to prevent the harsh exercise of legal forms or legal process. Legislation of that kind is needed. The number of cases in which it may be used will not, I hope, be very great. The number of cases in which abuse would really take place, if we did not have this legislation, would not, I hope, be very great, but there would be cases where people getting into a wholly unnecessary panic—cruel or unconscionable people—would take advantage of a man's necessities to extort a profit to which they were not entitled, and which under ordinary circumstances they could not expect. That might work real harm unless there was some provision of ibis kind. The Bill, as I understand it, is to prevent that.

It cannot be stated too clearly at first that, as the Chancellor of the Exchequer has said, the object of the measure is not to protect people who could pay against the obligation to pay. There is always a danger when you give relief in cases of real hardship that people who are not in circumstances of real hardship will try to take advantage, will think that they are as much entitled to share in the relief, and that when there is something going they may as well have a share of it. It is really no kindness to encourage them in that view, or to give them relief they do not need. Take the case of a man who has to pay instalments under a hire-purchase agreement. Suppose that he is not only at this moment working full time, but perhaps may even be working overtime in a trade which is particularly brisk, there is no object in encouraging him to fall into arrears of rent, or of instalments under a hire-purchase agreement, or anything of that kind. That man can pay, and even if it involves a little sacrifice it is better that he should pay. But there will be cases where a man cannot pay, and where great hardship may be caused if the power given by the present law were exercised. I support the proposal of the Chancellor of the Exchequer, subject always to its being clearly understood that this is intended for the relief of those who need relief, and not to encourage in any way a bad payer.


There are so many anxieties just now that one hesitates to make any suggestion, but I would point out that in regard to Bills which are sometimes introduced that the draftsman seems to forget the existence of parts of the United Kingdom other than England. The result was that we had words in Bills which did not meet the case of Ireland. The right hon. Gentleman has just used the word "registrar," which would be unsuitable for parts of the United Kingdom other than England. I trust that the draftsman in this emergency legislation will bear in mind the difference in conditions in different parts of the United Kingdom. Another thing is very desirable, and that is not to pass the Bill so that it will remain in force "during the War." I think in a case of this kind an emergency Bill should be passed for six months, or for a period, whatever the period may be, so that after the experience we gain during that time, we may, if necessary, bring in an amending Bill. I think it is most undesirable that in passing legislation of this kind we should bring in a Bill on Monday and amend it on Tuesday because we had not thought of some point which should have been dealt with in the original Bill. I therefore think the Bill should not be for the period of the War, but for a definite period. Perhaps I may take the opportunity, as one who has occasionally differed from the Chancellor of the Exchequer, to say how glad I was to hear the compliment paid to him to-night by the right hon. Member for West Birmingham (Mr. Chamberlain).


I think this Bill should also confer similar powers on the Courts in Scotland, and I would ask the Chancellor of the Exchequer to make provision for that being done.


I wish to ask the Chancellor of the Exchequer one question. Does this Bill include rents? The right hon. Gentleman is no doubt aware that many large companies own thousands of houses, and they have the right to deduct rent from the wages of their workers. In a case where works are working short time, say two or three days a week, are the companies to have the right to deduct the full amount of the rent in cases of that kind? It would cause very great hardship if they did. I think companies should fix a scale under which rent should be charged in proportion to the wages earned. If men are working only two or three days a week they are making a great sacrifice, and they should not be in the position of having to pay the whole rent.


May I ask the Chancellor of the Exchequer to have this Bill sent round with the papers in the morning? Some of the Bills which were introduced last night were not sent out with the papers in the morning. In the case of a Bill of this kind, details are exceedingly important. You may make a Bill of this kind, desirable in itself, simply a gigantic engine of oppression unless you have it correctly drafted in details. It is desirable that as many as possible should have an opportunity of reading the Bill before it is brought forward for discussion in the House.


I heard the Chancellor of the Exchequer refer just now to the rights of mortgagees, and I was very sorry to hear that he proposed to make any statutory interference with the enormous amount of money involved in mortgages, or with any of the rights which mortgagees possess. Mortgagees' rights are fairly well understood. If interest is a long time in arrear, the mortgagee can sell the property. Of course, he must sell it in a proper manner. If he has given notice in the statutory period that the money is not paid, he can sell. These are the only rights that could be used oppressively, and I cannot imagine any mortgagee under existing circumstances attempting to work the ruin of a poor man who is unable to pay. What I am so afraid of is that, if we include mortgagees and mortgage interest in the moratorium, or in a Bill of this description, you will have the mortgagors all over the country declining to pay their interest, and that would be a very serious matter indeed. Some day that interest will have to be paid, even if it is not paid when the instalments are due. It seems to me that this is one of those Bills that we should have full opportunity of considering as regards its exact terms, because it touches the community on most important points. They are not matters with respect to which legislation should be rushed through without full consideration, and without knowing exactly what it is intended to pass into law.


I should like to support the suggestion that this Bill should not be proceeded with further to-day, and that we should have an opportunity of making ourselves familiar with the details. There are scores of thousands of holders of small houses which are held as investments by working men and widows—[An HON. MEMBER: "And societies"]—and by societies. There are many people who are getting out of these houses a small existence upon a low and narrow margin. If a man is able to make an appeal which would justify him in sitting down as a tenant withholding rent, I can easily imagine that many very thrifty people in the population would suffer enormous harm. I know that the Chancellor of the Exchequer has carefully safeguarded one thing, and that is foreclosure by the mortgagee. That, however, does not answer the whole of the difficulty. I wish to see something done by which a tenant who cannot find money for rent should, not under compulsion of distress, be required to quit the tenancy, so that the person to whom the property belongs may be able to say, "I will let you go, take your goods with you, but I, at any rate, shall enter into possession of my property, and so be able to meet my obligations to mortgagees, and to meet the payments required for the maintenance of my own home out of this property."


The Bill which the Chancellor of the Exchequer has outlined is a general one, but the moratorium was not altogether general, because in answer to a question put to him at the time the moratorium was passed—he said he did not propose to include rent—meaning, I think, by the observation which he made, industrial rents. I want to know whether or not, industrial rents not being included in the moratorium, there is any necessity to apply this Bill to anything that was excluded, so far as the powers of enforcing judgment by the operation of the moratorium is concerned? A judgment always concludes a period of time, from the taking of the proceedings under which it is signed. Therefore the creditor before the War had endeavoured to insist upon his rights. There had been an actual pressure of the creditor to the extent of obtaining his judgment. Therefore, in that case, there has been an opportunity over and over again, under that pressure, for the debtor to have paid, if he could have paid, before ever the War arose to embarrass him or cause him difficulty. I assume that the Chancellor of the Exchequer has thought those matters over. It may be that the registrar or master, as the case may be, will take those facts into consideration, but I think that that is a case in which the War has not been responsible for non-payment. I think that this Bill should be confined to those matters which were within the moratorium where the creditors' rights have been suspended.


I would like to ask the Chancellor of the Exchequer whether he has considered another class of payments by working people—the payments of instalments on life policies? I did not gather from the terms of the Bill whether it would extend so far, but it is not only in the interests of any institution, but in the general public interest, that the Government should take it into account. I heard, to my great horror, that in one barrack alone last week over seventy life policies lapsed for one company. Anyone can see that if that goes on to any-large extent it will affect recruiting. Already I have had representations from several places that the point must be considered, in making an appeal for recruits, of including also the insurance payments, or possibly policies of some value may be lost. I am not ready at present with any suggestion. My own view is that the societies and the companies concerned will have to make some sacrifice and be prepared to make it. But it may be that a suggestion from the Government to them, suggesting united action on their part, might secure a substantial concession from them in the interests of the very poor policy holders.


I trust that the Chancellor of the Exchequer in drafting the terms of this Bill will remember that the moratorium already adopted does not oblige those who have been bad payers to go before the registrar. Although some registrars at a time like this would undoubtedly take into consideration the exceptional circumstances, there may be others who would be rather hard. I would further point out, although a workman may have been a good payer, still the exceptional circumstances might tell on him in such a way that however good a payer he had been, he would still have recourse to whatever arrangements might be made under this Bill, and that he is perfectly entitled to the benefits of whatever measure may be passed. I do not think that there is any more equity in examining into the past of a working man who applies for some consideration at such a time as the present than there is in the case of the commercial man, whose case is not inquired into, but whose immediate needs only are considered.


I would like to know whether it is intended that the Bill shall be limited, as the moratorium was, to debts incurred before the War, or whether it is intended to apply to debts which accrued after the War? I would also ask whether it is intended to put in the Bill the same provision that an applicant must show that the inability to pay-was in consequence of the condition of things arising out of the state of war?


I would ask the Chancellor of the Exchequer whether he has in view the largo section of the community whose rates and taxes are included in their rents? In big cities there is a large number of flats the rents of which include rates and taxes. Under the moratorium there would be no moratorium in respect of rates and taxes, and the landlord, while receiving no rent, would be liable for rates and Imperial taxation, while the tenant on the other hand would not be liable for his proportion of the rates and taxes.


In answer to the last question, this—lies to rates and taxes as well as to every other debt if there is any enforcement by means of execution. In reply to the hon. Member for Cork City (Mr. M. Healy), it is not confined to pre-moratorium debts. It applies to all debts including the period when the Act was in operation. The second point was made quite clear, that inability must be attributable to circumstances created by the War. That is so, and the words which I propose to insert provide that if on any such application the Court is of opinion that time should be given to the person liable to make a payment on the ground that he is unable to meet his liability by reason of circumstances attributable, directly or indirectly, to the present. War, the Court may, at its discretion, defer the operation of execution for such time, or subject to such conditions as the Court may think fit. That is answering the point raised by the hon. Member for Bradford (Mr. Jowett). It must be shown that circumstances arising under the present condition has deprived him of the means of paying the debt. Then he can make an application, though I have no doubt that the fact of his previous payments would be taken into consideration. Suppose the mortgagor is a person who had never paid his interest, and he comes in and says, "owing to the War, I have not been able to pay," I think that the person to whom the money is due has the right to ask, "whenever did you pay I and the registrar I have no doubt would take this into account, and very properly take it into account. The hon. Member for Liverpool (Mr. Watson Rutherford) seems to assume that this Bill proposes to suspend the payment of interest or the rights of mortgagees. It does nothing of the kind; it simply says that you cannot execute summary distress, but it shall not be put into operation except by order of the Court. That is all, and I think that that is fair. In some of the cases to which he has referred the securities are for the moment quite unmarketable. Excellent securities though they are, you cannot sell them. And I think that in such a case it would be very hard for persons to take advantage of this fact and to sacrifice the security.


How could they?


Laws of this kind are intended to protect people against such eases. I think that it would be grossly unfair that a man should sell out these securities for practically nothing where a man is not in a position to meet him, not because of anything which he himself has done, but because of the circumstances of the War.


He could not do that, war or no war.


He could. I suppose that the hon. Gentleman knows that many mortgagees can sell the securities if their interest is not paid.


They cannot sell them for nothing.


They can sell them for what they can get. It is a common form of mortgage in which they can sell for arrears of interest. All we provide in this case is, not as the hon. Member assumes, that the mortgagor need not pay any interest, but that, if a man is to be sold out because he is in arrear with his interest, or because his notice has expired, then the person wishing to sell the security must go to the registrar or master and ask leave to do so. The hon. and learned Member for Cork (Mr. T. M. Healy) asked about the application of the Bill. It is true that it is not at the present moment in such a form as not to require Amendment in order to be applicable to Ireland. I am not in a position to state the necessary words which should be inserted, but we do not use the word "registrar" or the word "master." There is a provision that things of that kind may be provided for by rules under the Judicature Act. All matters of the kind are provided by the rules, and it is very much better and makes the Bill much more effective in its operation. The same thing applies in reference to Scotland. I have no doubt that there will be certain words, which I shall see for the first time when I read the Bill, which will make the thing workable in Scotland. Scottish law in this respect, as is usual, is superior to the law of the inferior people south of the Tweed. I believe that you cannot sell for rent in Scotland without some sort of legal process. That shows that we are only going to get for a time the benefit of these benign conditions under which Scotsmen always live, and that some of the sunshine of Scottish law will shine upon this benighted land during this very exceptional period of great emergency, for it is quite clear, from some of the observations which I hear, that some people prefer to go back to their native darkness when that period is over. With regard to the question put by my hon. Friend the Member for Mansfield, this Bill has nothing to do with such deductions: it is purely a question of process. To any arrangement which has been made with regard to deductions the Bill does not apply at all. It simply deals with summary process where the putting in of an execution involves the breaking up of a man's home, or selling his property at a time when it has practically no market value.


Could the right hon. Gentleman not introduce into the Bill a provision dealing with those deductions?


They have actually nothing to do with the object we have in view in this Bill, which simply deals with the process of execution, and that is a very different question from the question of whether it is a good thing or a bad thing to permit those deductions. With regard to life policies, this Bill has nothing whatever to do with them, for the simple reason that you have there no legal process to put into operation. Whether something should be done to cover that is a point on which I do not express any opinion at the present moment. The hon. Member for North-East Cork suggested that the Bill should be passed for a definite period. Our suggestion is that instead of making it for a definite period, it should be for a time determined by Order in Council. Should it become necessary to make a variation in the conditions, we think it would be much better that it should be done in that way rather than by coming to Parliament for an alteration of the law. The Bill gives certain powers to alter or modify the conditions from time to time. If Parliament sees fit to give these powers to His Majesty in Council, I think it would be better than to come here for an Amendment of the law on particular points. I think I have dealt with all the points, and I understand from a quarter outside the House that the Bill will probably be circulated to-morrow. I quite understand that in a matter of this kind it is right and proper that the House should have full opportunity of considering it.


May I ask the right hon. Gentleman to answer the point which I put to him?


The hon. Gentleman is asking now to put certain additional powers into a Bill which is to protect people against a harsh exercise of rights. I do not know whether that would be desirable or not, but we do not propose to give additional powers to landowners in those conditions. I should say that there are already powers to give notice to quit under those conditions. The powers under this Bill can only be exercised on application to the Court.

Question put, and agreed to.

Bill ordered to be brought in by Mr. Lloyd George and Sir John Simon. Presented accordingly, and read the first time; to be read a second time To-morrow, and to be printed. [Bill 392.]