HC Deb 13 July 1931 vol 255 cc88-98
Sir J. LAMB

I beg to move, in page 7, line 11, at the end, to insert the words: (e) for removing from the list of registered producers the name of any producer who has ceased to produce the regulated product and has made application to have his name so removed, and for relieving such a producer from all financial liability with respect to the scheme from the date on which his name is so removed. Under the Bill as it stands, a registered producer would incur certain liabilities by virtue of being such, with regard to dealing with the products of which he is the producer and also certain financial liabilities. Those liabilities may be voluntary on his part, but if he happens to be in a minority, they may be liabilities to which he has himself not agreed and which have been compulsorily placed upon him. There is no provision that I can find in the Bill by which he could obtain relief from the liabilities which he had incurred when he ceased himself to be a registered producer, and I think it only right and just that in such a case he should obtain relief. I understand that the Minister is accepting the Amendment very largely, and so I need not make any further statement in regard to it at the moment.

Mr. R. W. SMITH

I beg to second the Amendment.

The SOLICITOR-GENERAL

My right hon. Friend is prepared to accept in substance the first part of this Amendment, and to insert it in the Third Schedule, which seems to be the more appropriate place for it. One of the matters for which a scheme must provide, therefore, will be for the removal from the register of producers of the names of persons who have ceased to be producers or are exempted from registration. The last part of the Amendment as to relieving such a producer from all financial liability from the date when his name is removed, obviously cannot be accepted. The result of accepting it will be that although a person has been on the register and has obtained all the benefits of a scheme up to a certain date, and although the board incurs debts on his behalf as well as on behalf of other registered producers, he can, the moment he takes his name off, be relieved from all liability for past debts as well as for future debts. Clearly that would be just neither to the other registered producers nor to the debtors, who would naturally look to him, among other people, to make a contribution in the winding-up, if there were a winding-up. The point of the assessment of his liability is dealt with in the Second Schedule, in paragraphs 7 and 8. Paragraph 7 says: In the event of the winding up of a board, every person who, at any time during the relevant period. In paragraph 8 "relevant period" is defined as meaning: (a) in a case where, before the commencement of the winding up, the scheme has been revoked, the year immediately before the revocation of the scheme; (b) in any other case, the year immediately before the commencement of the winding up. So that it would read in the event of the winding up of a board, every person who, at any time during the preceding year, was a registered producer, shall be liable to contribute to the payment of the debts and liabilities of the board"— and so on. That means that after his removal from the register, he will remain liable during a year up to the winding-up, and in that period one assumes that all the debts which had been incurred during the time he was a registered pro- ducer and all the liabilities which had been incurred will have been settled. Then he will get complete freedom.

Sir J. LAMB

That applies only in the case of winding-up, but suppose a man leaves a district and goes right away, does he incur liabilities for which he has not received benefit?

The SOLICITOR-GENERAL

Not as regards the future. There will be no fresh liabilities on him. Once he ceases to be a registered producer and ceases to be on the register, he can incur no further liabilities, but he cannot get out of any liabilities which may have been incurred during the time he was a registered producer. The question of drawing the dividing line will only arise if there is a winding-up shortly after he ceases to be a registered producer. Only in that case is any difficulty likely to arise, and that case has been dealt with by making him still liable for a period of 12 months, roughly, after he has ceased to be a registered producer, provided a winding-up takes place during that period. I think the hon. Member will see that that is the only fair way from all points of view of dealing with it.

Viscount WOLMER

The point raised by my hon. Friend is important. I am glad that the Government will meet the first part of the Amendment by their own Amendment in the Schedules. In regard to the second part of the Amendment, as I understand the contention of the Solicitor-General, the words proposed would not be fair, because a man might get his name removed from the register when he knew, or had reason to know, that the board was hopelessly insolvent, and, because, although he had been a large participator in the transactions of the board during the previous months, his liability would be ended and it would be passed on to his friends. I think that there is something in that, although I would remind the hon. and learned Gentleman that it is exactly the same in regard to a limited liability company. If a man sells his shares, he gets rid of his liability, but people who do not sell their shares retain their liability.

The point that my hon. Friend has most in mind is in regard to a man who merely ceases to produce, and has his name taken off the register. My hon. Friend wants to know how long that man's liability is to continue, and the reply of the Government is that it is to continue for 12 months. For 12 months that man still has a share of liability, but the Second Schedule says that that liability must only be in proportion to the amount of trade he has done. Therefore, if he has been a big trader, he will have heavy liability, and if he has been a small trader he will have less liability. Every month his liability will decrease, because in the first month it will be in respect of 11 months' trading, and at the end of the second month in respect of 10 months' trading, and so on, until at the end of 12 months his liability will be extinguished. That, I understand, is the position under the Bill. It is not a very satisfactory position, and I would like to see some method by which, when a man leaves the scheme, he can sever all liabilities, if necessary, by putting up a certain sum. He ought to be able to understand what his liability is, and the arrangement in the Bill does not seem to be very satisfactory. If the hon. and learned Gentleman could find a better one, it would be a distinct improvement in the Bill, because the mere fact that farmers would still have a liability continuing for 12 months after they had ceased to have anything to do with the board would be a source of great anxiety to many of them.

Mr. HASLAM

We have come to a point of some complexity. I do not altogether agree with my right hon. Friend's reading of the Solicitor-General's statement. I understand the Solicitor-General to say that the liability would cease after one year only in cases where there was a winding-up. That is a point which ought to be made clear. Supposing a man had been connected with certain schemes and had drawn certain profits for five years, or even longer, and then gave one year's notice, he might well be liable in strict justice for some proportionate share of the liabilities of those schemes. There would have to be some system of auditing in order to apportion his liability. I support the suggestion of my right hon. Friend the Member for Aldershot (Viscount Wolmer) that in such cases it should be possible for a man when he withdraws to ascertain definitely what his liability would be if he ceased to be a member, and he should be allowed by a certain money payment to be scot free when he withdraws. It must necessarily be determined by accountancy, and, in order to avoid injustice, this point ought to be cleared up before the Bill becomes law.

The SOLICITOR-GENERAL

I did not deal before with other liabilities apart from winding-up, because I did not quite appreciate that this Amendment was linked with that as well. The position is that there are only two ways of making a person liable to contribute. The first is under Clause 6, which enables the board to recover from every registered producer a contribution; and, secondly, under the Second Schedule in the case of a winding-up. As regards Clause 6, the liability there ceases immediately upon the cessation of registration, because once a person ceases to be a registered producer, no claim for a contribution can be made upon him at all. As regards winding-up, however, there is a provision that you can look back 12 months, just as you can now under the Companies' Act, in order to see who has to contribute to the winding-up. If during that 12 months a man has been registered, then, according to the rule in paragraph 7 of the Second Schedule, he will have to make some contribution towards the winding-up, if any contribution under that rule is due from him. Apart from that liability in a winding-up, he has no liability to contribute the moment he ceases to be registered.

Viscount WOLMER

At the end of 12 months he knows he is clear?

The SOLICITOR-GENERAL

Yes.

Amendment, by leave, withdrawn.

Sir J. LAMB

I beg to move, in page 7, line 11, at the end, to insert the words: (e) for requiring the register of producers to be open for inspection at such times as may be specified by the scheme, and for requiring the board to furnish a copy of the register or any part thereof to any person demanding it on payment of such fee as may be specified by the scheme. This Amendment deals with the question of the register. It is desirable that the register should be open for inspection, and that it should be possible for any individuals concerned to obtain a copy of it. The importance of the register cannot be overstated, because only by the register would it be possible to ascertain who are the registered producers, what are their liabilities as such, and who are exempt from being registered. It is, too, to be the register on which the poll is taken, and it is desirable that it should be available not only to those who are supporting a scheme, but to those who have legitimate objections to a scheme. They should have the facilities for obtaining a copy so that they may communicate their views to the producers concerned in order to ensure that the case for or against a scheme is fully considered.

Captain DUGDALE

I beg to second the Amendment.

Dr. ADDISON

This is a very fair way of meeting the point which we considered in Committee, and I have pleasure in accepting the Amendment.

Amendment agreed to.

Further Amendment made: In page 7, line 14, after the word "that," insert the words: except in the case of a substitutional scheme."—[Major Muirhead.]

Dr. ADDISON

I beg to move, in page 7, line 28, after the word "or" to insert the words: on conviction on indictment to a fine not exceeding two hundred pounds, and in either case to an additional fine not exceeding half. This Amendment, which tries to carry out in a fair way what was the subject of a long discussion in Committee, ought to be read in conjunction with the following Amendment in my name which appears later on the Paper—In page 7, line 29, to leave out the words "whichever is the greater," and to insert instead thereof the words: Provided that the fines imposed on summary conviction for any offence under this Sub-section shall not exceed in the aggregate one hundred pounds. The effect of those two Amendments would be this: In case of conviction the maximum fine which could be imposed by a court of summary jurisdiction would be £5 plus half of the cost of the product, provided the total amount did not exceed £100. A heavier penalty could only be imposed by a higher court. These penalties are designed to deal with cases where somebody has tried to torpedo a whole scheme by deliberately selling produce below the price fixed. It is clear that a large producer of milk might sell, say, 10,000 gallons at 1d. per gallon less than the arranged price, and so break down the system over an extensive district, and in a case of that kind a penalty of £5 would be neither here nor there. As the Bill was originally drawn, the offender might have been fined the whole cost of the produce which he had so sold, and that would have been a very heavy penalty, although it is generally agreed that there must be drastic penalties to prevent the spoliation of a scheme in this way. The maximum penalty possible in a court of summary jurisdiction will, as I say, be £100. Other cases will have to be dealt with at the assizes on indictment.

By these Amendments I think I have removed the two main objections which were advanced in Committee to this scheme of penalties. First, I have limited very effectually the penalty which may be imposed by a court of summary jurisdiction, and, secondly, I have defined more precisely the character of the fine itself and the court which is to deal with the case. As to the need for substantial penalties, I do not think that was in question at all in Committee. It is evident that one single large transaction may spoil the whole scheme over a district, and it must be prevented.

Colonel ASHLEY

So far as I have been able to understand the right hon. Gentleman's speech, I entirely concur with the penalties proposed on summary conviction, but he has not explained to us what happens on indictment. The Amendment states that an offender shall be liable on conviction on indictment to a fine not exceeding £200, but then we get the words: and in either case to an additional fine not exceeding half. What is the "either case" referred to there, and when it says "not exceeding half," what does it mean—half of what?

Dr. ADDISON

The question is perfectly justified. I am afraid that I assumed that my two Amendments were quite clear. A court of summary jurisdiction will be able to impose a fine not exceeding £5, and on indictment an offender will be liable to a fine not exceeding £200, and in either case an addi- tional fine not exceeding half the price for which the product was sold may be imposed, providing that the fine on summary conviction shall not exceed £100.

Mr. HASLAM

I would like a little further assurance regarding the cases in which these severe penalties will be imposed. The Minister has referred to persons whose object it was to break a scheme, and has asked for a strong penalty as a deterrent, but the Clause would apply also to a producer who sold produce at other than the arranged price by a mistake. He might be a small producer. I gather that a man who sold half-a-dozen apples at a price below that which the scheme said was a proper price would have infringed the Act and would find himself liable to this gigantic penalty. I suggest that the word "knowingly" or some similar word ought to be introduced to indicate that this penalty is intended to apply to people who wilfully defy the regulations. All the Clause says at present is that penalties may be recovered from any registered producer who contravenes any provision of the scheme. In rural districts there may be many persons who are producers and who are even taking part in the scheme, who may not fully apprehend all its provisions and may very well make a mistake in the selling of produce, especially small amounts of produce. Before we agree to such drastic penalties, we should be a little more explicit in defining the practices against which we are legislating.

Lieut.-Colonel ACLAND-TROYTE

The Minister tells us that this punishment is designed to prevent anyone torpedoing a scheme by selling produce at a price below that which was arranged under the scheme. As I read the Bill, however, it would not have that effect at all. By paragraph (a) of Sub-section (1) of the Clause these penalties are made to apply to sales by a person who is not a registered producer, and therefore these penalties would not affect the registered producer who sold below the agreed price but only a man who was not registered. If I bought an egg from a man who was not a registered producer, whatever the price I paid he would be liable.

Mr. ATTLEE

I think the hon. Member for Horncastle (Mr. Haslam) has overlooked the fact that the penalties named are the limits of the fines to be imposed. It cannot be supposed that every person who was brought before the magistrate would be fined up to the limit. Allowance would be made for a man who had acted by a mistake or by omission. The object of these Amendments is really to say that the penalties shall be limited, and that a court of summary jurisdiction shall not have power to inflict greater penalties than are specified. With reference to the speech of the hon. and gallant Member for Tiverton (Lieut.-Colonel Acland-Troyte) I do not think he has quite got the point. A producer is defined in the Bill as meaning the producer of the regulated products.

Mr. BIRKETT

With very great respect, I do not think the point which was raised by the hon. Member for Horncastle (Mr. Haslam) has been met. As I apprehend it the point was not "Will the full penalty be imposed in any particular case?" but "Is it right that any penalty at all should be imposed if there was no mens rea in that case?" The House frequently passes legislation creating offences in which no mens rea is necessary at all; the interests of the State are such that in those cases the offence is made absolute, and it matters not that the offender has an innocent mind or that he has acted by inadvertence. It is enough to show that he has contravened the provisions of the law to prove that he has committed an offence. I do not quite apprehend that that is so here. If somebody in a rural area quite inadvertently offended against the provisions of a scheme I am quite certain it would not be the wish of the House that he should be subjected to any penalty, and it is customary in such cases to introduce such words as "wilfully or knowingly" which import the mens rea. What we say in this Clause is that every scheme shall provide for requiring that no sale of the regulated products shall be made by any producer who is not either a registered producer or exempted from registration, and that any producer who sells a regulated product in contravention of the provisions of the scheme shall be liable to these very severe penalties. We ought to be clear about two things. Is it the intent and desire that this offence should be made absolute? If not, ought not some qualifying words to be introduced?

Dr. ADDISON

I am sure the hon. and learned Gentleman the Member for East Nottingham (Mr. Birkett) knows better than I do that a court of summary jurisdiction would never dream of inflicting these heavy penalties in the type of case such as he mentions. If he reads paragraph (a) of Sub-section (1) he will see that a person is required to be a registered producer or to be exempt from registration. Therefore a producer will know whether he is registered or exempt, and the type of case which he mentioned is very unlikely to occur. A man living far away in the country who sells a sack of potatoes to his neighbour across the hedge would be an exempted person in any sensible scheme, and I am certain that in any small contravention of that nature a bench of magistrates would deal very leniently with the unfortunate person who was proceeded against. I will, however, look into the suggestion which the hon. and learned Member has made. I cannot say more for the present.

Viscount WOLMER

I hope the right hon. Gentleman will consider the advisability of introducing the words "wilfully or knowingly." I think that would meet our case. I understand that the Minister has undertaken that he will consider the putting in of those words, and if he could do that, it would meet a great deal of our criticism.

Dr. ADDISON

It must be understood that I have not given any definite promise.

Amendment agreed to.

Further Amendment made: In page 7, line 29, leave out the words "whichever is the greater," and insert instead thereof the words: Provided that the fines imposed on summary conviction for any offence under this Sub-section shall not exceed in the aggregate one hundred pounds."—[Dr. Addison.]

Lord STANLEY

I beg to move, in page 7, line 30, at the end, to add the words: ( ) Where any court imposes a fine for an offence under the last preceding Sub-section the court may, if it thinks fit, having regard to the prejudicial effect which the commission of the offence has had or is likely to have on the operation of the scheme, direct the whole or any part of the fine to be paid to the board. This Clause makes it a criminal offence to contravene the provisions of the scheme, and the Minister has added pro- visions by which fairly substantial fines may be imposed. The criminal offence which a registered producer may possibly commit under this scheme is not one against the general public, but against his fellow-producers, and I do not think it would give his fellow-producers very much satisfaction to find that fines which had been imposed for a contravention of the scheme had to be paid into an outside fund. It is obvious that the most satisfactory way would be for the boards to proceed against the individuals themselves. I understand that the Minister is sympathetically inclined to the idea that the boards themselves should receive some part at any rate of the fines which are imposed. It is in the hope that the Minister may accept a method by which the boards would receive the portion of fines which is justly due to them that I move this Amendment.

Mr. HASLAM

I beg to second the Amendment.

Dr. ADDISON

I congratulate the hon. and gallant Member upon the Amendment which he has moved in order to give effect to what, I am sure, is a general desire, and I have pleasure in accepting the Amendment.

Amendment agreed to.