CLAUSE 84,ߞ(Application to Scotland) (Hansard, 25 February 1941)

§ The Lord Advocate (Mr. T. M. Cooper)
I beg to move, in page 64, line 7, to leave out "Section eleven" and to insert "Sections eleven, thirty-eight and forty-one."
The Clauses now numbered 38 and 41 were added at an earlier point in the Committee stage, but neither of them is required, or could reasonably be adapted for Scotland. The Amendment is put forward expressly to exclude them.

§ The Lord Advocate
I beg to move, in page 64, line 7, at the end, to insert: ( ) In arriving at the net assessment of any contributory property or of any farm under Section fifteen or Section fifty-five, there shall be deducted from the full annual value as ascertained for the purposes of an assessment under Schedule A, in addition to the sums directed by those sections to he deducted, the amount of the stipend payable in respect of the property or farm during the year for which such assessment was in force. The Financial Secretary to the Treasury has already referred to certain adjustments that were made for England, 451 in regard to an annuity, chargeable in lieu of tithe rent charge. The object of the Amendment, with which I am sure all Scotsmen will agree, is to ensure that the contributions of Scotland are no higher than the contributions in England for similar purposes.

§ The Lord Advocate
I beg to move, in page 64, line 16, at the end, to insert: ( ) Section twenty shall apply, in addition to the contributory properties specified in Subsection (5) thereof, to any contributory property which consists of a tenement comprising dwelling houses the rateable value of none of which exceeds thirty-five pounds. ( ) Where the interest of a direct or indirect contributor in respect of a contributory property to which Section twenty applies is at the relevant date subject to two more heritable securities to which the said Section applies, and which rank pari passu, those heritable securities shall for the purposes of the said Section be treated as one heritable security, and the amount of any indemnity to or in which the creditors in such heritable securities may be entitled or liable shall be divided among them in proportion to the respective amounts secured by their securities. The Sub-sections which it is now proposed to insert, although different, relate to the Clause, about which the Chancellor of the Exchequer said a good deal in his initial statement, dealing with the rights of mortgagors and mortgagees. This is one of the additional alterations, over and above those to which he referred, and I almost feel that I ought to apologise to those Members who wish that the Clause could be reprinted incorporating all the Amendments on the Paper, so that we might better appreciate how the matter stands. I confine myself to this alteration, but hon. Members should also give their minds to the alterations which have already been made 452 When this Bill was in Committee my hon. and gallant Friend the Member for East Renfrew (Major Lloyd) moved an Amendment which it was not possible to accept, but I then indicated the feeling shared by the Chancellor of the Exchequer and myself, that there was a special case for making some provision for the position which arises in certain parts of Scotland with regard to dwelling-houses, and particularly the poorer class of dwelling-houses, which are controlled under the Rent Restrictions Act. The provisions of that Act prevent owners recovering from the tenants increases in the owners' rates. As a result of that and other local causes, it is I am afraid only too notorious that a very considerable amount of property of that class is not only subject to a mortgage, or a bond we call it in Scotland, but is so depreciated in value that in many instances it may not be a case of the mortgage or bond representing say one half, two-thirds or three-quarters of the value, but that probably it considerably exceeds the value. The result is that owner and mortgagee or bond-holder have been for some time locked together inextricably in a situation from which they cannot escape because of the Rent Restrictions Act. Accordingly, it is a matter of very serious concern to ensure that no additional burdens should be imposed needlessly upon an owner, if the owner will, thereby, be prevented or hindered in keeping the property in repair and continuing to make it a contribution to the all-too-limited housing accommodation in the West of Scotland. From that point of view we thought it desirable that in relation to the class of property, included in the first of the two Sub-sections, in the phrase tenement comprising dwelling houses the rateable value of none of which exceeds thirty-five pounds. The provisions of Clause 20 should enable the owner to pass on to the mortgagee or bond-holder a considerable proportion of the amount of the contribution. In the case of much of that property the only person who has a real interest in it is the mortgagee or bond-holder. The owner has become little more than a conduit pipe for passing on the rent to the mortgagee. It would obviously be unfair to ignore that position. I accept the possible criticism that this proposal, or indeed any proposal that might be made 453 to meet this situation, is nothing more than an experimental compromise. Wherever the line is drawn there will be cases on the wrong side of the line. I am afraid that is a thing we shall have to put up with, but I hope my hon. and gallant Friend will regard this Amendment as an attempt to meet a grievance which I fully recognise. The numerous Amendments which have been made to Clause 20 may make it necessary that the exact phraseology of this Amendment should be looked at a little more closely before the Bill is finally passed, but I have outlined the solution we suggest. The second Sub-section deals with a different point. It is a matter of machinery. Cases are common enough in Scotland— I am not sufficiently versed with English law to know whether they are common here or not—where there are two bonds which do not rank pari passu. There is a provision in the main Clause itself, but it is necessary in order to complete the scheme to make provision for the bonds to rank pari passu.

Major Lloyd (Renfrew, Eastern)
As one who has been pressing very strongly the Chancellor and the authorities in Scotland to make some concessions in the direction outlined by the Lord Advocate, I would like to express my gratitude, and I am sure it will be shared by those who are to benefit by these concessions, especially in Glasgow and the West of Scotland. We wanted more and we hoped to get more, but nevertheless we are thankful for what we have got. As the situation is studied by those concerned in Scotland, they will recognise that the Chancellor and the Lord Advocate have made a real endeavour to understand and meet the problem. I appreciate and am grateful for the consideration of the Chancellor and of the Lord Advocate in those respects.