HC Deb 11 October 1944 vol 403 cc1779-816

Order for Second Reading read.

12.10 p.m.

The Attorney-General (Sir Donald Somervell)

I [beg to move, "That the Bill be now read a Second time."

The Bill amends the Liability (War-time Adjustment) Act. It deals with a problem with which I have been myself concerned since the beginning of the war and in which I have taken great interest. The main purpose of the original Act was to provide conciliation, and ultimately court machinery, in order that there might be a fair and reasonable arrangement of the affairs of those who, in war circumstances, were brought into financial difficulties. In most cases, these people had not been improvident nor had they pur- sued any of the courses which normally lead to bankruptcy, and it would have been, in the view of the Government and of the House, quite wrong to force them into formal bankruptcy. In most cases it was in the interest of their locality and of their creditors, as well as in their own, that they should be enabled to weather the storm, distribute such payments to their creditors as were reasonable in the circumstances and be in a position to start again when circumstances become normal.

The Bill, from Clause 4 onwards, makes a number of sufficiently important Amendments to the original Act, which other circumstances or, in some cases, decisions of the law courts have shown to be desirable, but the first three Clauses deal with a somewhat different matter. They enable the conciliation and the court procedure of the Act to be applied to debts which have been put under a moratorium, under what I call the Evacuated Areas Defence Regulations. Those Regulations date from July, 1940, at a time when the coastal areas were in great danger. People were being exhorted to leave them and it was possible that at any moment, for military reasons, compulsory evacuation might have had to be applied if voluntary evacuation was not sufficient for the purpose. In those circumstances Regulations were passed applying the moratorium to certain types of debt in certain circumstances. It was felt that if a man had been exhorted, in the public interest and for the safety of the Realm and for military reasons, to leave his home in a particular area, it was quite wrong to expect him to go on paying his rent and rates and certain other things covered by the Regulations. I believe, on the whole, the code has worked not too badly but there is, of course, as a result, a very large volume of debts suspended by the moratorium which will become enforceable when the moratorium is lifted and it is essential that there should be a procedure for the tidying-up process.

In order to invoke the procedure of the original Act a person had to show that he was in certain financial difficulties. It is possible that a man who owes a moratorium debt may be in no financial difficulties and also that the person to whom the debt is owed may be in no financial difficulty. On the other hand it may be right and proper that there should be an adjustment of the debt, a scaling down of the full amount having regard to all the circumstances.

Clause I therefore provides that anyone liable for what I call a moratorium debt may go to the adjustment officer for advice and assistance to enable an equitable and reasonable settlement to be arrived at. It is really impossible to lay down a rule or code stating how these various individual cases should be dealt with, because circumstances will differ so much. Some account should, of course, be taken of hardship and ability to pay. In the case of a house account must be taken of whether the lessee, although he has not been in occupation of it, has made some use of it. He may have stored his furniture there and to that extent avoided storage charges which otherwise he might have incurred. Clause 2 gives the court power to step in if the parties cannot agree and the adjustment officer has failed. The House will find that the most general words have been used. I will read them from paragraph (a) of Sub-section (2): On any such application the court— (a) shall determine as respects any such debt or any sum which is due or will fall due under any such liability, whether it is to be paid in full or whether it is reasonable and equitable in all the circumstances of the case (including the relative degrees of hardship suffered by the parties) that it should be remitted or reduced and, if it is to be reduced, the extent of the reduction; I do not think I need trouble the House with the later Sub-section of Clause 2. If any hon. Member has any individual point arising out of this somewhat complicated Bill which I do not expound now, perhaps I may have the leave of the House to answer it later. I do not want to deal in too much detail with minor points. Those later subsections fit these new powers into the general scheme of the original Act. For example, Sub-section (9) gives the adjustment officer and the county court jurisdiction in all company cases, whatever the amount of the debt and the capital of the company. The original liability adjustment procedure did not apply to public companies.

Clause 3 is a permissive Clause dealing with these cases: There are some areas on the coast which have never actually been declared coastal areas under the Defence Regulations but where, in fact, everybody has behaved—at least so I am told—as though they had been declared areas under the Regulations, that is to say, rent and rates have not been paid, people have been urged to go out, and so on. Under Clause 3 there is power in the Lord Chancellor to declare these areas subject in fact to the adjustment procedure for unpaid debts as if those debts had been suspended under a moratorium. That is, in fact, what it comes to. The remaining Clauses make amendments to the principal Act. The broad effect of those amendments is to widen the discretion given to the courts by the principal Act. When we introduced the original Act we realised that we were setting out on a rather uncharted field, that we were conferring a wide and somewhat novel jurisdiction on the courts, and we therefore thought it right to be cautious and to insert words indicating the lines between which the highway should run. But experience has shown that the courts, as no doubt one would expect, have a very fair grasp of the essentials of this problem and it is desirable that they should have a wider discretion than in some cases they have under the original Act.

Let me now go through the Clauses, doing my best to pick out points which are of interest and importance. I need not delay for more than a moment over Clause 4, but it is an example of what I have said in that it introduces somewhat wider words into Section 3 of the original Act, which dealt with the circumstances in which a person could apply for an order, and it clears up a difficulty which arose out of a Court of Appeal decision regarding the circumstances in which an interim order could be made. That decision was to the effect that it would not be right to make an interim order unless the court could see its way to settle the debtor's whole affairs. We want the power to make an interim order although the court has not had time to go into the whole of the debtor's position. Subsection (2) of Clause 4 is really a drafting Amendment and paragraph (b) makes it clear—and this is very important—that a sum may be excepted from the property to be distributed among the creditors in respect of working capital for the maintenance and continuance of the debtor's business.

Clause 6 enables reductions of rent to be made retrospective. I think it was an oversight that, when we were framing the original Act, we did not confer this power, because obviously there are cases in which a man delays before coming along —possibly he did not know about the Act. His house is in an area where he has been unable to use it for a profitable purpose and therefore all the circumstances which justify a reduction in rent —it only applies if the rent has not been paid—were operative before he actually came and said, "Can you help me to tidy up my affairs?" We make it clear that the reduction in rent which the court has power to make, subject to a limitation, may be made retrospective.

Mr. Bowles (Nuneaton)

Suppose a woman whose husband was in the Army, a woman with two children, was living in Eastbourne and was told to go out. She was paying, say, £100 a year for her house. She had to go to another part of the country where she paid Lao a year. Cannot she be completely relieved of her rent and rates on the Eastbourne property? Has her financial situation anything to do with it?

The Attorney-General

Has it not? It is a difficult question. Suppose a millionaire had a house in one of these areas and he left it. There would be no hardship on him. Say he had taken the house on a 14 years' lease and that the owner of the house was a poor person and that the rent from this house was a substantial part of his income. I think it might be reasonable to take those facts into account. The hardship there is on the side of the owner of the house.

Mr. Bowles

I am suggesting that the Exchequer should pay, of course.

The Attorney-General

The hon. Member is miles outside the Bill. He raises a far wider issue than I can deal with here, but it has been said over and over again, and I am sure the House realises it, that it would be quite impossible for the Government to attempt to pay losses of earnings or other losses which result from the war over the whole community—to make up the difference, for example, to every man who has been called up for service and leaves a profitable profession. We are spending enough money as it is—at least so I hear—and we should be on a very slippery slope if we did what has been suggested. At any rate it is outside this Bill.

The remaining Clauses make minor provisions in respect of rent reduction and postponement. Clause 7 makes similar retrospective provisions in respect of mortgage interest. That is very important. Under most mortgage deeds arrears of interest are added to the capital sum and therefore it is important that there should be this power. The extent of the reduction is controlled, as in the case of rents, by Sub-section (2) and is related to the fall in the value of the property. The other Sub-sections deal with technical points which I do not think raise questions of principle. Clause 8 deals with relief from rates. I have had some questions about it put to me before the Debate, and so perhaps I may explain in a little detail why it takes the form which it does take. It confers a power on the court to reduce rates. It is not intended that this power should be used except in cases where what I may call the lettable value has substantially fallen and it is our intention that the reduction in rates should be related to the fall.

It may be said, "Why not insert in the Clause a stopper to say"—as we have in the case of rent and mortgage interest—" you can only reduce the rates to the extent of the fall in the lettable value?" We have been in touch with the rating authorities and our understanding is that they prefer that the Clause should be left in this general form. Although it gives or would appear to give a very wide discretion to the court the rating authorities, having seen the Act at work, are not afraid that that discretion will be used in any way which is adverse to the position of the local authorities as a creditor in comparison with other creditors. The sum on which we pay rates, is a sum which appears in the rating and valuation list, and there is a whole code as to how those figures are arrived at, and how they are put up or down. That has its own procedure. It is felt that there might be a danger of a reduction made by the court under this Clause, being treated as if it were an alteration in the rating and valuation list and, therefore, as we understand it—it is rather a technical point but has some interest—they prefer the Clause in this general form.

Mr. Logan (Liverpool, Scotland)

How does that affect the power vested in magistrates to give a release?

The Attorney-General

Rating authorities have exercised their power throughout the country with great humanity and wisdom.

The other point I have been asked about is Schedule A. There are two things I want to say. about Schedule A. Of course, a lot is said against Income Tax and the law dealing with Income Tax, but there is one thing to be said in its favour, and that is, that you can find it all in the Finance Acts. Therefore, if there was—I will suggest to the House there is not—any necessity for altering the Schedule A provisions, the time and place to do so is in the Finance Act. Schedule A is, of course, based on the amount for which premises can be let by the year. If they are let and there is a tenant, it has long been the practice, and has been followed in cases where rent has been reduced under this Bill, that Schedule A follows a reduction of rent unless made for some reason other than the decrease in value. So there is no trouble there. The owner-occupier can always apply to the Revenue authorities and say that when the value was arrived at, things were very different, but that you would not get £10 a year for it now. The Revenue authorities take that into consideration, particularly, of course, in the cases we are dealing with, in areas where circumstances have been so unusual. If, under this Clause, rates are reduced in the case of an owner-occupier and the Revenue are satisfied, as they are almost certain to be satisfied, that that reduction is due to a fall in value, they will have regard to that, although I cannot, of course, give an undertaking that in every case they will follow to sixpence, the decision of the court. I believe that the way in which Revenue authorities have dealt with the Schedule A tax, in the circumstances of hardship and any decrease in value which have arisen in these areas, has been, on the whole, appreciated and to the satisfaction of sensible people.

Mr. Moelwyn Hughes (Carmarthen)

May I ask the right hon. and learned Gentleman whether it is the practice of the Revenue authorities to make a reduction where the court has reduced the rates? Would they also following the example of the court in point of time, that is, retrospectively?

The Attorney-General

Yes, I think so. I will look into that, but that is what I have understood, that where the court makes a reduction in rent the Revenue follows suit. However, I will make an inquiry with regard to that and communicate with my hon. Friend, or the matter can be raised in the Committee Stage.

Mr. Hely-Hutchinson (Hastings)

Is it possible that a reduction in Schedule A will follow a temporary reduction in rentable value?

The Attorney-General

Yes, that is what is happening. The conditions in these areas are temporary. They are improving already,

Captain Peter Macdonald (Isle of Wight)

Does the right hon. Gentleman realise that some of these properties are unrentable, unlettable and uninhabitable?

The Attorney-General

Certainly, and in many cases you will find that the tax has been remitted altogether. I should certainly be very glad to have any case brought to my notice, or to the Exchequer's notice, where what I am saying is not being carried out in the letter and the spirit. The power is there, and I think the machinery is there. I may say that I know of specific cases in which it has been said, in view of the line taken by the court, that the Revenue authorities have not played their part. Clause 9, again, has rather a legal meaning. It removes a doubt as to what exercising the remedy means. It arose in a case, reported in the papers, where the original claim for a water rate was against the landlord, who was potentially the debtor, in financial difficulties. Then there was the alternative remedy against the tenant. Having recovered from the tenant, the tenant can deduct it from his rent so, in fact, you were making the landlord pay the debt in full where other creditors had to take their quota, and Clause 9 puts that right in respect of general rates and water rates. Clause 10 is a drafting Clause.

Clause 11 is important. That abolishes the priority under the Bankruptcy Act. It was felt that those powers, as far as bankruptcy was concerned, were right and should be maintained. But in very special cases which we have had to deal with, where the war has brought insolvency to people whose capacity, and indeed, whose business in normal times never suffered that disaster, it was found, in a good many cases, that Schedule A, the rates, rent, and war damage contribution loomed very large, and there was not much chance of the other creditors getting their heads up above this brick wall so, as a reasonable concession, both by the Exchequer and by the local authorities, we propose that for these purposes priority shall be abolished and everybody will stand on an equal footing. Clause 12 is merely a power to approve compromises. Clause 13 extends. or rather enables one to meet, the case where a man who was in financial difficulty was killed or died before he had a chance of applying. In the case where the people interested are members of his family they can go to the court and the man's affairs can be adjusted as if he had lived. Clause 17 gives the court the proper power under the Money Lenders Act. Clauses 18 and 19 deal with technical points. Clause 20 introduces the Schedule, and Clause 21 is an interpretation Clause.

That is the Bill. It is somewhat of a patchwork, but we believe it will improve a code which we also believe, on the whole, has worked well. May I say that when I moved the Second Reading of the original Act from this Box, now some three years ago, I said that its usefulness would be measured not by the number of court orders, but by the number of settlements which would be arrived at. The actual legal working is, and must be, complicated, but I believe it has played a very useful part, not only in the cases it has dealt with, but by making creditors come together and deal fairly with their debtors.

Mr. Woodburn (Stirling and Clackmannan, Eastern)

Has the right hon. and learned Gentleman any idea of the number of settlements made outside the courts by the liability adjustment officers?

The Attorney-General

I believe I have a note of the number and will produce it.

12.40 p.m.

Mr. Pethick-Lawrence (Edinburgh, East)

I do not rise for the purpose of delaying the House in coming to a decision on this important Bill. I think we are greatly indebted to the Attorney-General for the description he has given of the various amendments in the law which are being made. They, of course, cover a very wide range of detailed points, and I have no intention of going over those details again. I propose to confine myself to two main observations. The first question which I was going to ask has already been answered to a very large extent, by my right hon. and learned Friend. In reading through this Bill one is aware of the very wide discretion that, in places, it gives to the courts. As a rule, the courts are rather unwilling to have wide discretions thrust upon them, and I was delighted to hear from the right hon. and learned Gentleman that, in the exercise of the powers already conferred upon them by the original Act, the courts have experienced little or no difficulty in this matter.

I think that is a very great tribute to the courts themselves and to those who have come before them seeking relief and arrangement through their means, and if the right hon. and learned Gentleman's knowledge of what has taken place, leads him to think that the still wider powers of discretion conferred by this Bill will, equally, be acceptable to the courts, I do not think this House will take any exception to the conferment of these wider powers. I was also very pleased to hear from the right hon. and learned Gentleman that it was his opinion that a very large number of claims had been settled outside the provisions of this Bill and the question which my hon. Friend the Member for East Stirling (Mr. Woodburn) asked as to whether he could give us any idea of the number, is certainly one the answer to which, if he can supply it, will be most interesting.

That is really all I have to say which is strictly relevant to the passage of this Bill, but there is one further observation I should like to make. There are a great many people who have become bankrupt and many of those people are, no doubt, morally guilty in reaching bankruptcy. Of course, a great number of people who do reach bankruptcy in ordinary times cannot be held very greatly to blame for what takes place. Without saying that it is entirely outside their power to prevent the circumstances, over which they have comparatively little control, and which have brought them to the bankruptcy courts, I would point out that this war-time Bill has shown us that in the circumstances of war it is possible to arrive at a more humane method of dealing with people who, through no fault of their own, would in ordinary circumstances reach bankruptcy. I am not going to suggest that you could take all the limitations of time which are implied in the length of run of the original Act and obliterate them all, or that you could make this purely war-time Measure, without any change, apply to peace-time conditions. But I do suggest to the Attorney-General whether, before the war comes to an end, or the original Act ceases to operate, he should not consider, if some of these merciful, humane and expeditious methods which have been applied in full during the war, might not be carried over into the times of peace. I realise the difficulty. It will be an experiment, and we cannot expect it to go on too far. I hope however, the point will be given full consideration, because if we can relieve some of the unmerited suffering which at present arises in bankruptcy, I am sure it would be the view of the House that it should be done.

12.46 p.m.

Mr. Hely-Hutchinson (Hastings)

I feel sure that the House will welcome this Bill, particularly as it is a further recognition of the special problems that affect individuals in what are called Defence and Evacuated areas, and also in districts which, while not technically Defence and Evacuated areas, have suffered from very much the same difficulties. One of the most refreshing and inspiring things to watch in the course of the war has been the way in which individuals, faced with every kind of difficulty and with dwindling resources, have fought their own way and paid their own way without asking for help. There is a tremendous pride in Englishmen which makes them good debtors but bad beggars. I hope that that may long continue. While I welcome this Bill, I think that there are one or two points with regard to it which entitle us to say that it is only good as far as it goes.

I am glad my right hon. and learned Friend admitted that it is not only the debtors who have difficulties. There are often difficulties which creditors experience. Contrary to a prevailing impression, creditors are not as a class rich and well-to-do people. In the world of debits and credits, the number of creditors is large and the average amount of their credits is small, whereas, relatively speaking, the number of debtors is small and the average amount of their debts is large. If anyone doubts this, all he has to do is to ask a bank whether their depositors are more numerous than their borrowers, and he will find that, whereas depositors are numbered in millions, the borrowers are numbered only by the hundred thousand. And, as the balance sheet of a bank adds up to the same amount on both sides, it follows that the average credit of a depositor is much smaller than the average debit of a borrower.

There must be many cases which will come within the purview of this Bill where not only can the debtor ill afford to pay but the creditor can ill afford to forgo. There are many small creditors—such as elderly people living on small fixed incomes, such as interest on mortgage, or rent of a small house, or something of that kind—who can ill afford to give up what they may be asked to give up under the provisions of this Bill. In such cases, where the debtor cannot pay and the creditor can ill afford to forgo, there is only one solution, and that is help from outside. What is needed is someone with a cheque book. It is necessary to inject some new money. Those of us who represent Defence and Evacuated areas have impressed on the Government the necessity of finding some additional money and injecting it into this situation in order to solve cases which will otherwise be insoluble without great and undeserved hardships.

I was glad to hear what my right hon. and learned Friend said on the subject of Schedule A. In the minds of most of us rentable value, rates, and Schedule A, in equity, hang together; and where rates are remitted, albeit temporarily, there should be a parallel remission of Schedule A. I am not sure that that has been the case in the past, but I hope that in the future, at any rate, remission of Schedule A will follow remission of rates. I am sure that this Bill will be welcomed, but, in welcoming it, I would like to say to the Government that I hope they are not under the illusion that it really tackles the problems of the Defence areas. The Government will have to go a great deal further than this Bill in dealing with the problems of those areas. The taxpayers will have to stump up. But in saying this, I would add that all the finance in the world will not be of the slightest use in the Defence and Evacuated areas unless materials and labour are available for the money to buy.

12.52 p.m.

Mr. Loftus (Lowestoft)

As one who has in his constituency two boroughs subject to a moratorium, I welcome this Bill whole-heartedly, but, like my hon. Friend the Member for Hastings (Mr. Hely-Hutchinson), I regard it as a Bill to alleviate, but not to effect a cure of, the ills from which these coastal towns are suffering. We quite recognise that the losses of individuals due to the war cannot be met throughout the country, but we feel that the coastal towns have special claims for consideration for some extra help. The fact that these are moratorium areas is an indication that the Government regard them as having a claim to exceptional treatment. Secondly, there is evacuation. I admit that it was not compulsory, but it was as near compulsory as possible. I have heard a loud speaker van sent by the Ministry of Information touring the streets, and frightening people by saying that they must go away at once. Therefore, while it was not officially compulsory, we can take it that it was unofficially. A third factor is that all these areas largely depend on visitors, but for four of five years they have been prohibited. There is a fourth factor. We recognise that places like London, Coventry and Liverpool have suffered terribly, but they have not endured the continuous strain of four or five years. In the coastal areas there has always been during these years the daily possibility of quick cut-and-run raids, and there was always a continuous strain in the coastal areas which went on year after year, day after day, and night after night. Lowestoft has had about 2,000 alerts and more people killed than even the much enduring borough of Dover. I feel that that makes another claim for separate consideration.

This Bill gives great relief to the debtor, but, as my hon. Friend the Member for Hastings pointed out, creditors in many cases suffer as much as, indeed more than, debtors. In coastal towns there are elderly people dependent on the rents of houses who to-day can only live with public assistance. Therefore, we who represent these places must really press for some kind of further relief for cases of exceptional hardship. There should be interest-free loans to be administered by the local authority who should be responsible for repayment.

Major C. S. Taylor (Eastbourne)

Why should the local authorities be responsible for repayment?

Mr. Loftus

The ideal thing would be a grant, and I would press for grants if possible, but if grants are unobtainable, then there should be interest-free loans. If it is a loan, somebody should be responsible for repayment, and the local authority, which would issue the loan, should be responsible. I would like to ask a question on Clause 6. Would it be possible for the court in certain cases to extend the period of a lease. A lease during these five years has been without value in many cases, and, therefore, it would seem equitable in some cases to extend the lease as a compensation for loss during the five years. That must be done, of course, without prejudice to the rights of the lessor, and that might be a difficult point to achieve. With regard to Clause 8, the remission of rates is necessary, but let us recognise that it will impose loss on the local authority and make the task of reconstruction in these towns still more difficult. Therefore, I would ask my right hon. and learned Friend if we can have an assurance that the special grants plus loans, which have hitherto been given to these local authorities, will not be cut off immediately after the armistice, but will continue for part of the reconstruction period. I ask that because my two boroughs have so far not taken advantage of the offer of Government grants plus loans, but they feel that, when reconstruction comes, they must get financial assistance. I thank my right hon. and learned Friend for his clear exposition of the Bill. It does not, however, go far enough, because we must have a continuance of the grants, we must have labour and material for repairs of properties, and we must have special types of treatment.

I have already urged the exceptional claims of these towns. They have been front line towns, subject to continuous attack, day and night, for many months; but they have also claims in the national interest. When the war is over and after the Armistice with Germany, our people who have been enduring the strain of war and suffering from over-work, blackout and lack of holidays, will demand and require immediate holiday facilities. They will want to go to the seaside towns, whose recreational facilities must be provided, by further Government help, if necessary. Let us remember that the rehabilitation of our national health after the war, will largely depend upon the speedy rehabilitation of our coastal towns.

1.2 p.m.

Mr. Moelwyn Hughes (Carmarthen)

I rise to welcome this Bill. It amends an Act in which I have, perforce, taken a considerable amount of interest. I have had very close personal contact with the matter, because I had the honour of addressing this House for the first time during a Debate upon the Measure which is now being amended, and I have followed its administration thereafter with great interest. I agree with the Attorney-General that the test to be applied to its efficacy is not to be found in the number of cases brought before the courts, but in the number settled by the use of the conciliation machinery which the Act set up. The statistics will show that conciliation has taken by far the greatest burden of adjusting these liabilities. The House can congratulate itself upon having established for war purposes, a just and equitable method of assessing rights and obligations when debtors are faced with difficulties as a result of war conditions.

I welcome the extension of that principle to the cases set out in the Bill, and to the moratorium cases in particular. I also welcome the fact that the equitable principle embodied in the Act has been extended to the liability for rates and that Crown debts have been placed on the same level as other debts. We are, in fact, setting up what is almost a complete code for adjudicating upon liabilities in the circumstances when a debtor is unable to meet debts arising through no fault of his own. We started with the cases where the position was caused by the war, and now we are extending the principle to cases arising owing to evacuation. I am sure that we can extend it further some day to all proper cases where the position of the debtor is one in which he himself cannot be expected to shoulder the responsibility.

Having said that about the Bill and the desirable amendments of the law which it incorporates, I have a word of Stricture. The Bill, as presented to us, is about the worst piece of legislation by reference that I have ever seen. The Act which it amends is not very long, although somewhat legal in phraseology. We are supposed to consider the amendments of the law proposed in the Bill, before we come to this Chamber, and I find that three different methods are employed in order to set them out. First there is quite an admirable method, of providing in the Bill for such an amendment and then setting it out in the Schedule along with all the other provisions of the Section which is being amended, so that in the Schedule we get the new Section as it will be if the Bill is passed. That is a very desirable extension and makes that amendment almost intelligible in itself.

There is a second method, by which proposed amendments of the Act are put up in Clause after Clause. There are a number of them in the Bill, substituting one Sub-section for another and omitting certain words in the setting up. Then there is a third method, the old, standard method of providing in one Clause in the Bill for a series of amendments which will be found in the Schedule, where they are tabulated. It is bad enough for those of us who have been trained in the law, and who have earned our bread and butter by working out these puzzles, to have to sort out exactly what is the eventual result of these provisions—let it be remembered that we have to do so before we have the advantage of the Second Reading speech by the Attorney-General—but it is difficult to imagine how the layman can work out, without an expenditure of time quite disproportionate to his other duties, what the real effect of all these amendments of the law will be.

I urge upon the Government that they should follow still further the first of the methods shown here, that is to say, that they should print the original Measure as it will be altered when all the amendments suggested have been incorporated. I am confident that it is not beyond the skill and power of your other self, Mr. Deputy-Speaker, as Chairman of Committees, to rule out of discussion matters which have been settled in the Act to be amended, and which are not affected by the amending Bill. Subject only to that criticism, I welcome the Bill.

1.10 p.m.

Mr. Jewson (Great Yarmouth)

In welcoming the Bill, I would make one very important reservation, which is that it must be looked upon as only one step in dealing with the problem as between creditor and debtor, and not as a final settlement. It has already been pointed out that the Bill is very partial in its attitude, being almost entirely in favour of the debtor. It leaves the creditor to bear the whole loss, when loss arises from the Regulations that we ourselves have made from time to time. That was the first impression made upon quite a number of my constituents, who at once drew my attention to that fact. They declared that the Government were getting away with it at the expense of the unfortunate creditors. It has already been pointed out that there is no difference between creditors and debtors, in fact nearly all of us are both creditors and debtors at the same time, and the creditor is not by definition richer than his debtor.

Creditors are worthy of at least as much consideration as debtors, and if we are to accept the Bill as a final step we shall leave the creditors to carry a burden which they ought not to be asked to carry alone. The method of moratorium, which is a very proper thing to use, is only a shock-absonber to tide over a sudden emergency. That is its proper use and it should last usefully for three months or six months and do no harm. When we find it extended to four or five years it inevitably creates an impossible situation. That is just what it has done, and that is why we have this Bill to try to clear up that situation. I do not want to say anything about the rates side of the matter. There is a scheme relating to municipal affairs which I am confident will ultimately be extended satisfactorily to deal with that matter. But as the Bill applies between individual creditor and debtor, we shall have to look for something further from the Government to meet the situation arising from the burdens which are now placed upon the shoulders of creditors alone.

Clause 6 raises some apprehension in my mind. It refers to the letting value of premises being depreciated "as a result of war circumstances." The Government order people to clear out of these areas, tell everybody else to keep out, and then say that the letting value has depreciated! Of course, it has! That situation is the direct responsibility of the Government, who should be prepared with a scheme to lessen the burden which the Bill leaves upon the shoulders of the unfortunate creditor. To make battle areas, people in some parts of the country were told to clear out, but not without compensation from the Government. The defence areas, which have put up with so much for so long, do not base their claim for compensation upon the enemy action which they have had to face, as all parts of the country have been liable to that as well—although a good case could be made out on that ground, as was indicated by my hon. Friend the Member for Lowestoft (Mr. Loftus—but on the ground that they are suffering from direct orders given by our own Government. Surely the whole community should take its share in bearing the consequences of those orders. Subject to the one reservation that we must not consider the Bill as closing the door to anything further being done to meet the situation, I welcome the Bill, and I hope it will go through.

1.15 p.m.

Lieut.-Colonel Marlowe (Brighton)

We who are interested on behalf of residents of the coastal areas, are always grateful for any small recognition of the plight which has fallen upon them, but this Bill represents only a very small recognition of that plight. I entirely agree with my hon. and learned Friend the Member for Carmarthen (Mr. Hughes) that it is an extremely badly drafted Bill. That has certain advantages, as it will curtail the length of what I have to say, because after reading a number of times some of the parts on which I wished to comment, I was unable to understand them. I shall, therefore, have to pass them over. There are one or two things I want to say in relation to this Bill generally. I rather apprehend that the purpose of this Bill is working back towards the normal conditions; it is the first step towards ending the moratorium period. That is rather an alarming circumstance, because it appears to signify that the Government take the view that the whole of our troubles in the coastal areas will end with the end of the war. Of course that is not so. If one looks at the Defence Regulation which the earlier Clauses of this Bill amend, one finds that the Bill only deals with one small part of our special problem, particularly in relation to rent and hire purchase contracts. The end of hostilities will not solve our difficulties in that regard.

It is not, generally, sufficiently realised that these coastal areas have, virtually, only one industry, and that is the letting of rooms, of hotel accommodation, and of course that involves the letter being in possession of furniture, and the question of rent and the furniture hire-purchase contracts are of vital importance to people in those areas. This Bill, therefore, goes to the very root of their one and only industry. It has been said by other hon. Members, and I shall not repeat their arguments now, that this Bill goes nothing like far enough for us in relation to the damage we have suffered through the war. I was glad to hear the hon. Member for Lowestoft (Mr. Loftus) point out that this is not merely a local but a national problem. It is in the national interest that these areas should be restored to normal prosperity at the earliest possible moment. Any other course may well result in the creation of an almost devastated area, and the existence of a devastated area, as we know only too well from the inter-war years, is something which affects not only that area itself, but the prosperity of the whole country. Therefore, it is essential that everything that can possibly be done should be done to bring prosperity back to the coast towns.

When I said I was rather apprehensive about whether the Government were fully alive to our difficulties, I doubted whether they realised that these difficulties will not end with the termination of hostilities. I was rather fortified in that view by a phrase which occurs in Clause 2. In Subsection (3), line 35, there is a reference to "the relevant period." I hope my right hon. and learned Friend will clear up when he replies, what is the reference there, and what is meant by the relevant period. If the relevant period is a reference to the evacuation period, of course it is nothing like enough. I apologise for repeating that our main industry in these areas is the provision of holidays, and the letting of accommodation to visitors; and of course, as ancillary to that, the provision of entertainment. But the end of hostilities will not solve our problems. Most of the accommodation which is normally available has been requisitioned, and it will be many months, maybe more than that, we may have to count it in years, before we can have restored to us our hotel accommodation. This is no time, of course, to go into the problems which will be involved in that. The provision of the relevant labour and materials, and I hope the financial assistance which will be necesary for that, are of course not in place in a discussion on this Bill, but they are matters to which the Government will have to give their attention. This Bill is a small, an insignificant part, of the help they will have to give to us.

There is one other particular matter on the Bill to which I would like to refer, in Clause 2, Sub-section (4). The effect of that Sub-section, as I understand it, is to establish that if the principal debtor is relieved in any way by the liabilities adjustment officer, the guarantor is only relieved to the same extent as the principal debtor. That is perhaps rather an unhappy position, because many guarantors entered in to guarantees in peacetime, in the belief that they were giving their guarantee in normal circumstances. They could not be expected to guarantee the principal debtor against the risk of war, and in effect, therefore, the guarantor is being called upon to implement a guarantee against a risk which he could never have foreseen. I hope the Attorney-General will give some consideration to that matter and leave the Clause open wide enough for adjustment to be made to relieve the guarantor to a greater extent than that is at present possible under this Bill. These are the comments I want to make on the Bill itself, but I urge upon the Government the importance of this question to the evacuated areas, and I feel bound to warn them that none of us will be satisfied by this small contribution towards our prosperity, and that we look to them for further assistance. Certainly we who are interested in these areas propose to go on pressing them, until they have done everything in their power to restore the prosperity of coast towns.

1.23 p.m.

Captain Duncan (Kensington, North)

I, too, welcome this Bill as I welcomed the original Bill when it was introduced three years ago, in 1941. At that time we had a particular problem through the bombing of London, and my constituents were extremely grateful at that time to the Attorney-General for passing that Bill into law. The situation is now entirely different, but still that Measure and this amending Bill are required. I want to raise one or two points from the local authorities' angle arid in doing so I do not want to refer to the coastal areas at all. I want to refer only to those areas not covered by the evacuation transactions. I would refer to the principle in relation to the priority of debtors. The priority of debtors was laid down in the Bankruptcy Act, 1914. Section 33 (1, a) laid down that the priority was all parochial and other local rates due within 12 months, all assessed taxes, and not exceeding in the whole one year's assessment, wages, workmen's compensation payments and national health insurance contributions. Under (I, b) all these debts rank equally and other debts rank after that. In this Bill, for the first time, under Clause 8, Sub-section (1), rates are to be—

Major C. S. Taylor (Eastbourne)

On a point of Order. In view of the fact that this Bill affects a large portion of the United Kingdom and that various Government Departments are affected by, the troubles and distress of these coastal areas, and in view also of the fact that at the moment there are only two Members on the Government Front Bench, would I be in Order, Mr. Deputy-Speaker, in drawing attention to the fact that there are not 40 Members present?

Mr. Deputy-Speaker (Major Milner)

The hon. Member would be out of Order in asking for a count at this hour.

Major Taylor

On that point of Order, if I have drawn attention to the fact that there are only two Members on the Government Front Bench and that other Ministries should also be represented, I have perhaps succeeded in my purpose.

Mr. Gallacher (Fife, West)

Further to that point of Order, could a request be made that some responsible Ministers should attend, even at this particular hour?

Mr. Deputy-Speaker

That is not a matter for me, but for the Government.

Captain Duncan

I had reached the point that rates are to lose their priority over ordinary trade debts. That raises two points. First, I think it is clear from the Attorney-General's speech, that Schedule A property tax generally ranks pari passu with rates, and, under Clause 11 (1), pari passu with all other debts. It seems unnecessary therefore to put Clause 8 (1) in the Bill at all in view of Clause 11 (1). It is only a drafting point.

The Attorney-General

There are two quite different headings. There is the power to reduce rates, rather on the same sort of lines as rents are reduced, because the value of premises has fallen. The abolition of priority under Clause II is really quite different.

Captain Duncan

There is a further point in connection with that. This is the first time it has ever been done and local authorities feel that it should not be regarded as a precedent for further legislation. The right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) rather suggested that some such procedure might be devised for carrying on in peace. I think the Government will find that local authorities will be chary of giving up the priority rights, which they now have, under the Bankruptcy Act. I hope an assurance will be given that it will not be regarded as a precedent. I do not want to quarrel with the procedure set out in this Bill, but I think it would be interesting to describe, very shortly, the extremely convenient arrangements which have already been made to deal with this question. There are two ways in which it can be done. You can go to the assessment committee and attempt to get a reduction in your assessment, or, when your assessment has been fixed by them, you can go to the rates rebate committee of your council, and ask them to reduce the actual amount you have to pay. That method has worked extremely well in the constituency which I represent. I wonder whether in the circumstances, Clause 8 is really necessary for areas other than the coastal ones. Perhaps if my right hon. and learned Friend would say that he did not propose to put it into operation in these other areas, it would relieve the minds of people who are concerned about it. One small point arises on Sub-section (3), which provides that: Where the rates in respect of any premises are payable in the first instance by any person other than the debtor, but are recoverable by him from the debtor, the debtor shall be deemed to be liable for the payment of these rates. and under Sub-section (1) he may be relieved of this liability. This appears to apply to premises the rates of which are payable in the first instance by the owner, either in consequence of a decision by the rating authority or in consequence of an agreement with the debtor. The effect would appear to be that the owner may be relieved of his obligation to pay the rating authority the rates: in other words, he may be receiving the whole of the rent, but not paying the rating authority any of the rates. If I am right in that interpretation, it seems hard on the rating authority, even though the owner may be in a parlous financial position himself. It should be necessary for the owner to make a separate application to the adjustment officer, rather than for the rating authority to be automatically deprived of the right to receive the rates. I understand that this Bill is intended to be put into operation only in areas where there is distress owing to the war and where the Government are giving a substantial subvention. The area which I represent was in receipt of a subvention from the Government, by grant and by loan. It has paid back the whole of the loan, and is on its feet again. It seems to me that in cases like that, where they are not indebted in any way, the rating authorities should be entitled to some consideration, and the procedure which I have described, of application to the assessment committee or the rates rebate committee, which is being carried on to the satisfaction of all concerned, should be continued, in respect not only of past but of present and future rates. If my right hon. and learned Friend can give some assurance on that point I shall have nothing more to say.

1.37 p.m.

Mr. Hugh Lawson (Skipton)

I am not one of those who give unthinking support to all the Measures that the Government bring to the House, but I welcome this little Bill very much indeed. As the learned Attorney-General has told us, this is a Bill to extend and add to a previous Measure, which introduced novel principles. I welcomed those novel principles, and I welcome their extension. If one thinks that this is a good Measure, one must have at the back of one's mind the conception that, if the rights of property and the rights of individuals come into conflict, it is the rights of individuals that must have preference.

That seems to me a very sensible view. This Bill, to a large extent, is an infringement of some of what we have regarded as the rights of property. It introduces novel principles, which result in the rejection of principles long established in this country; and I think we are wise to examine those principles. There is a common idea that ownership of property gives the individual a right to income, whatever the result is to other individuals—in other words, the old conception, "Business is business." This Bill, in a very limited way, dealing with limited circumstances, cuts at that principle: it cuts something away from the idea that just because you happen to own property, you are entitled to receive income from it. I was interested in the question put by my hon. Friend the Member for Nuneaton (Mr. Bowles) to the Attorney-General. He put the case of a soldier's wife, living at Eastbourne, who, because of the war, had to go away, and asked: Was it not right that her rent should be remitted? The Attorney-General said in reply that there might also be a millionaire living in Eastbourne, and if he moved away it was not right to remit his rent, which might be going to a person in poor circumstances.

I submit that the principle introduced by this Bill is a very revolutionary one. It means that the individual has rights to income which may be bound up in the ownership of property, but that property, as such, has no rights at all. It follows from the conception that the individual has rights, and that property has no rights: that income in a community should be distributed in accordance, first of all, with the needs of the individual. This Bill also takes into account the income that the owner of property had before war conditions existed, and so the second principle is that income should be related in some way to the previous income of the individual. I do not suppose that I should be in Order if I developed that point at very great length, but, in any case, it is not a matter on which there can be any great argument: one either accepts the idea that individuals have rights and that property has not, or one rejects it. So we see the present Government forced by the circumstances to which this Bill refers—the fact that war conditions made it necessary for persons living in coastal towns to remove them- selves, and that their livelihood had, therefore, stopped—to introduce principles which I maintain are revolutionary.

Mr. Gallacher

The hon. Member says that this Bill lays it down that persons do not have to pay, or owe, rent in certain circumstances.

Mr. Lawson

The Attorney-General says that if you had two people in exactly similar circumstances, in an area from which they had to evacuate themselves, the person of humble circumstances would not have to pay his rent, but that it might be right for the wealthy person to do so. It will be seen from Clause 5 that that is correct. That is the whole point of the Bill: that these provisions should take into account all the circumstances of the individual, and should be so operated as to prevent hardship to the individual. That is a principle that I accept and welcome. While welcoming this limited provision, for certain coastal areas, I, like other hon. Members, suggest that it should be applied to many of the other problems which have arisen out of this war and which will arise as a result of this war. We may have problems similar to the evacuation of coastal towns, when we come to deal with the location of industry. The problem immediately arises out of the rebuilding of our bombed cities. The coastal areas are not the only areas that have suffered as a result of this war. Many large inland areas have suffered very greatly. As we have seen in this House in the last few days, the urgent problem of rebuilding these cities cannot remain until it has been decided, for instance, on what terms local authorities are going to purchase land.

Lieut.-Commander Joynson Hicks (Chichester)

- On a point of Order. Is it in Order for the hon. Member to discuss on the Second Reading of this Bill the extension of the principle which it involves to entirely different matters?

Mr. Deputy-Speaker

The hon. Member is in Order so far. Perhaps he will continue.

Mr. Lawson

I think that what I am saying is reasonably pertinent to the principles which this Bill introduces. I submit that on the Second Reading of a Bill which confessedly extends novel principles, I am in Order in saying either that I do not like the principles or that I approve of them, and in giving my reasons. Indeed, I believe that this is the time for us to say that things should be added. Without developing at any great length the point that I was making, I suggest that the principle that we should so arrange our affairs as to prevent hardship to the individual is the only way that the matter to which I am referring —that is, the public acquisition of land, or of any other property— can be applied. I think that if the Cabinet will give consideration to this matter, they will be able to meet the claim of the widow, which is always being trailed across this House, and at the same time see that the public are not exploited in connection with the sale of land to the public. I ask the Attorney-General, Does he really understand what he has started by introducing this Bill? What is going to happen if the principle on which this Bill is based is accepted by the whole of the population of this country? I am sure that the result will be that the whole of our economic system, which is built on the principle that property has rights and that individual rights matter very little, will go by the board. I welcome this Bill, because I think it is a small step towards a better and more equitable economic system, in which the rights of the individual predominantly decide and the rights of property have gone for ever.

1.45 p.m.

Lieut.- Commander Joynson Hicks (Chichester)

The House will absolve me, I hope, from any discourtesy if I do not follow the hon. Member for Skipton (Mr. Lawson) too far on the hypothetical ground on which he has been treading. I would, however, point out that this Bill, amending the previous Act, does contain a novel principle, not the principle to which the hon. Member for Skipton was referring, because I could not find any principle involved in his remarks at all. The Bill does contain a principle, which, to my mind, provides a very essential and admirable method for the adjustment of needs in time of emergency. The principle is, of course, that of State-sponsored conciliation between private individuals. I think that that has been, undoubtedly, in this time of emergency, of very great help, and I look forward to it continuing to be a very great help indeed, in the settlement of these differences which have arisen out of the emergency.

But I feel that this a matter which, if it were extended into a general principle for adoption in wider spheres throughout the country, would be very dangerous indeed, and might well be the thin end of the wedge which would lead to the undermining of the whole of our justiciary. I desire to enter that caveat because I think that particular method, admirable as it is for the purpose we are discussing to-day, would be a very dangerous one to adopt generally. I think that nowadays we have to consider that we have all paid taxes to the Government in order that the Government may pay part back to the taxpayers in some form of subsidy. I welcome this Bill, particularly because it does not carry that particular disaster—as it is to my mind—any further. In fact, I welcome the Bill because in the areas concerned we are proud that we have, so far, been able to settle so many of the difficulties that we have sustained as a result of war, without having recourse to the public purse. We cannot go on like that indefinitely, and we look forward to a time when we must, of necessity, be assisted in much wider ways than this Bill contemplates. The effect of this Bill, which is necessary, will only be to make more permanent the existing hardship from which the people in the South coast areas are suffering. They have been hoping that the time will come when the money owing to them will be paid. Without this money they are unable to rehabilitate their own lives. The effect of this Bill is to ensure that they will get part of what they have been looking forward to receiving. It is an absolutely essential protection for the debtor, but, on the other hand, unless the creditor can gain some assistance, in some way or another, the situation in these defence areas is not going to be put right.

One has only to take the case of a small house-owner in the locality, and I can assure hon. Members that it is a quite remarkable thing how many people in my constituency, who are now at a certain age and have retired, own two houses, in part of one of which they live themselves. The other part of the house represents, very frequently, either the whole or the bulk of their means of livelihood. That livelihood has all too often been swept away as a result of war. Frequently, these unfortunate people have had to leave the area altogether and have been unable to pay attention to their property, with the result that such damage as it has sustained as a result of enemy action, has been enhanced through enforced and unavoidable neglect. The situation of a lessor who is a creditor under this Bill is extremely difficult, and I am glad that the Attorney-General referred to the fact that the conciliation officer would be able to take into account, in those peculiar circumstances, the differences in the personal circumstances of the parties concerned, between whom he is seeking to find a way of settlement.

There are many cases which one should bear in mind. Some people had the good fortune, at an early date in the war, of being able to leave one of these unfortunate areas. For health, or family, or other reasons, they had gone to live in the comparative comfort and harmony, and the almost peace-time enjoyment, of beautiful districts, far removed from the immediate seat of war, in the North and West. These people have not lost so much as the person who, perhaps, in similar circumstances, in the next-door house, has had to be removed and has come to London, who has been bombed out there and has had to go back again to a relic of his own home in one of these districts. Then, perhaps, having sustained the tip-and-run raid period, they have suffered still further trials and tribulations through flying bombs and other incidents to which all of us are well accustomed. There should be no difference in the treatment of these two unfortunate debtors, and I hope very much that circumstances of that type, as well as of the more direct financial type, will be present in the minds of these conciliation officers when they are functioning.

I would like also to refer to Clause 3 of the Bill, which gives the Lord Chancellor power to make an Order extending the foregoing Section to additional areas. I welcome that, and I think hon. Members will appreciate the reason when I say that the line of demarcation will pass through the middle of my constituency, and I can foresee very great difficulties indeed where people on one side of the line would be entitled to the protection of this Bill, whereas people in identical circumstances on the other side would be without its protection altogether. I realise that there must be a line drawn some- where, but, if it were drawn without Clause 3, the line would be entirely arbitrary and bound to cause a very great deal of hardship.

There is one point under that Clause to which I would draw the attention of the Attorney-General. The Clause provides that, if it is expedient, "the foregoing Sections of the Act" should apply in relation to another area, to which it is desirable to extend the provisions of the Bill. I am not quite sure what that means. Supposing you get a person in the coastal area who has had to be evacuated, and who has incurred debts in the area, which would be the object of the moratorium. Like the people of whom I am speaking, she derives the whole of her income from two houses she owns in that area, and has consequently lost that income. She has been evacuated to somewhere right outside the area. Having lost her income, she has suffered as a result and has incurred debts in that other area. She still has no income with which she can pay these debts, because, in all probability, her creditors will themselves be absolved, in part, of their liability towards her. I think it is clear, under the Clause, that the creditors, and the debts which the lady has incurred in that area, will come under the operation of this Bill and will be resolved. But what is the position regarding the debts which the lady has incurred elsewhere and which she has no means of being able to pay? Could the Attorney-General clarify that point, which I fully realise presents great difficulty, though I feel the Bill would not be complete unless it deals with points of that sort?

1.57 p.m.

Mr. Channon (Southend-on-Sea)

Few Bills have had so many sponsors as this Bill and I really rise to join in a chorus of praise. I think the Bill will go a long wax, to get rid of the chaotic financial conditions which exist in coastal areas, and it will resolve the confusion that exists in these areas which have suffered so much in the last five years. Therefore, the Bill is welcome for itself, but, in addition, I think the large amount of praise with which we have received it is prompted by the fact that it is an indication, at least, that the Government are aware of the very difficult conditions that exist in all coastal areas and the acute suffering we have all undergone. Therefore, we accept it and receive it with the hope of better things to come. I think, at the same time, it should be pointed out that this Bill is only an adjustment Bill. The Government, as it were, are stepping in to arbitrate and give advice to coastal areas, but they are not offering us the other two things which we most need—money and priorities. Advice is all very well, so far as it goes, and it will be taken, but very much important factors are the money and priorities which we hope will follow later on.

I am glad that hon. Members have referred to those two unpopular classes—creditors and property-owners. Both of them occupy a unique and very difficult position. The creditor, on the whole, has probably had a worse time in the coastal areas than the actual debtor, and I am myself aware of many small property owners—and no class has suffered more during the war than these small property owners—who are now living on public assistance in my division. They are living on public assistance, partly because they are creditors and are unable to collect the back rents due to them for some years. In some cases debtors have completely absconded to other or more prosperous parts of the country and cannot be traced and do not answer letters. The people who retired and put their small savings into property have had a very thin time during the past five lean years. They are mostly old people, They are not rich and they are a class of people that is not much championed in this House or elsewhere, and I am very glad that at last something is to be done for them. In the framework of this Bill there is provision that will bring them some relief, provided that the time factor is not too long delayed. I really only rose on behalf of a borough which has suffered very much by Government evacuation to welcome this Bill and to join my colleagues in doing so.

2.1 p.m.

Major C. S. Taylor (Eastbourne)

I agree with other hon. Members who have spoken, that this Bill is all right as far as it goes. Except for any areas included under the provisions of Clause 3 of the Bill it affects mainly the defence and evacuation areas. It is clear that the Government must accept a large proportion of responsibility for the grave finan- cial position in which these defence and evacuation areas find themselves. These areas were evacuated not for their own benefit in the first place, but for the benefit of the whole of the country. They became the front line of the defence of England, businesses were closed down and a great proportion of the population was moved away at the Government's request. Before the war these areas were very largely holiday resorts and when they became defence and evacuation areas visitors were prevented from going there. Those who remained in the areas had no alternative open to them when the holiday traffic for which they had been catering in pre-war years was taken from them. The hotel and boarding-house keeper had to close down. He could not find any other employment in the defence area. He was not in the same position as for example a garage proprietor in the Midlands whose garage was closed down because he was not allowed to serve petrol. The garage proprietor was able to find alternative employment, probably in some factory nearby, but that was not so with the boarding-house keeper in my constituency. He was probably a member of the Home Guard, and it was very necessary that the Home Guard should remain in those areas just after Dunkirk. At that time we had very little else but the Home Guard in Britain's front line.

What have the Government done so far about these defence and evacuation areas? So far, as my hon. Friend the Member for Southend (Mr. Channon) says, they have agreed to assist by giving advice between creditor and debtor. That is not sufficient. As a matter of fact they have gone further. They have done one very excellent thing. They appointed my right hon. and learned Friend the Minister-without-Portfolio to investigate the hardships, the troubles and difficulties of these coastal areas. I must give great credit to-day to my right hon. and learned Friend for the immense trouble he took in visiting Eastbourne, Brighton, Hastings and the Isle of Wight, which, incidentally, is not strictly included in this Bill at the moment. He went round and visited hard-hit businesses and discussed the problems at great length with the local authorities. We are very grateful indeed for the trouble he has taken in this matter. We now understand that my right hon. and learned Friend has submitted a report to the Government, but it is a thousand pities that the Government have not made some statement on that report and have not said in what way they will be prepared to assist these areas at the same time as they introduced this important but comparatively small Bill to-day.

What can the Government do? As we see it, they can help us in this way. They can either give us a grant, recognising that these areas have been devastated financially and economically for the benefit of England as a whole, or they can give us a loan, free of interest, we hope, for a period of years to enable these areas to get on their feet again. It does not by any means stop there. We want help from the Ministry of Labour, and that is why I am glad to see my hon. Friend the Joint Parliamentary Secretary to the Ministry of Labour on the bench to-day. We shall want priority in the supply of labour. At the moment these coastal areas are known as "green" areas and we ask for them at least to be "red" areas and, if possible, "scarlet" areas I can see that you are getting a little restive, Mr. Deputy-Speaker, about what I am saying, but it affects the financial position of these coastal areas, and unless we have sufficient labour to reopen our industries and get upon our feet again, we shall, I am afraid, be forever in the doldrums. In addition, we also must ask for other special considerations in the form of coupons for the replacement of linen, etc.

Mr. Deputy-Speaker

The hon. and gallant Member really is going far beyond the contents of the Bill, which deals with industrial liabilities.

Major Taylor

I bow to your Ruling, Mr. Deputy-Speaker. Actually, I have almost finished on that subject, but very respectfully I would submit that I am talking about the position of the creditors and the debtors that are concerned in this Bill. I am trying to explain how these people must, as creditors and as debtors, be assisted by the Government in a substantial way from a monetary point of view, rather than from an advisory point of view only. After the war, we hope these areas will be ready to welcome the people who will much need a holiday after the end of five years of hostilities, and unless the Government are prepared to help substantially in the form of a grant or a loan, I am afraid they will not be able to fulfil this very admirable task.

2.9. p.m.

Captain Peter Macdonald (Isle of Wight)

Far be it from me to cast any reflections upon this Measure which has been introduced by the Government today, especially as it has been received with such universal acclaim both in this House and another place. There are only one or two aspects of the Bill which I would like to question, namely, the line of demarcation which has been drawn between certain areas. The hon. and gallant Member for Chichester (Lieut.-Commander Joynson-Hicks) mentioned his own constituency, which the line of demarcation divides into two parts. I am in a less fortunate position, because my constituency is excluded altogether. Yet, the circumstances which apply to this Bill and apply to these other areas, certainly apply to mine. As my right hon. and learned Friend, who visited the Isle of Wight, will agree, all the circumstances for which relief has been given for what we call evacuated areas, apply to an area like the Isle of Wight. We have suffered the same misfortunes and effects of the war as the other defence areas.

I admit that in Clause 3 provision is made, if an application is made to a certain quarter, for these areas to be brought within the scope of the Bill, but I would prefer to see them included in the Bill itself. Therefore, I am going to move an Amendment on the Committee stage to have my constituency included in the benefits of the Bill. I cannot see why there have been exceptions between what are called defence areas and evacuated areas. The only real case for it, if there is any justification at all, is that notices were put up in these areas telling people that they must evacuate, but in a good many other areas such as mine these notices may not have been put up, but, as has been said, loud-speaker vans were sent round and people were coerced into leaving the areas. Those who did not leave were generally people who had nowhere else to which to go and decided to stick it out, and they were made prisoners until the other day, when the ban was lifted. In the meantime they had to suffer the disability of having their living taken away from them; their properties were requisitioned, and they had to suffer bombing, dive-bombing, tip-and-run raids, and doodle-bugs. They have had all these things with which to contend, and, after four years, they have a just grievance. One morning quite recently it was announced on the wireless that the ban had been lifted, without even the Regional Commissioner having been informed. The result was that people suddenly appeared without food, accommodation, housing, or anything else. All these things may be outside the scope of the Bill, but whatever the evacuated areas have had to put up with, my constituency and a good many others have had to put up with it, and as far as my constituency is concerned, I am going to move that it shall be included in the Bill.

Apart from that, I have no objection to the Bill. As has been pointed out, it is only an adjustment Bill; it is only introduced in order to make right the effect of a previous Measure and, in the circumstances, anybody would be a fool to object to it. Therefore, I welcome the Bill and intend to give every support to it, apart from the fact that my own constituency is left out, and I intend to see that it will be included.

2.14 p.m.

The Attorney-General

By leave of the House, perhaps I may answer, as I hope I can do, briefly, some of the points that have been raised. I would like to thank all hon. Members who have spoken for the welcome they have given to this Bill, and I can do that all the more readily because such shafts of criticism as were directed, were not really directed against me or, indeed, against the Bill and the problems it seeks to solve. But there were others covering a wider field and quite relevant to the details of the Bill. There is the question, whether, quite apart from proper procedure as between creditor and debtor, something more should be done by the Government for these areas. It is not for me to deal with that matter as I am sure the House will realise. I am sure that my right hon. Friend the Minister without Portfolio would wish me to acknowledge the tribute which was paid to his work, and I understand from him that in this wide field the Government and those interested are in touch and, of course, I cannot make any observations upon it.

I would like to give the figures for which I was asked with regard to the number of Orders as compared with the number of references to the adjustment officers and also—and here I have the hon. and learned Member for Carmarthen (Mr. Hughes) on my side—there is another figure I cannot give, namely, the number of settlements that have been effected without going to the adjustment officer because of this machinery in the background. The actual total of adjustment orders in the three years are some 716. Protection orders, a little over 1,000; requests for advice, round about 6,000 and, in between the two, about 3,000 cases on which the adjustment officers have exercised their powers under Section z of the original Act.

I cannot agree, I am afraid, with my two hon. Friends who said that this was a badly-drafted Bill. It is impossible to understand an amending Bill without having the two documents before you; one, the Bill as it originally was, and the other the amendment. We took a great deal of trouble in preparing this Bill. As was acknowledged by the hon. and learned Member for Carmarthen, in some cases we reprinted the whole thing as it will be; in other cases we thought that, on, the whole, it would be simpler to put in the new Sub-section, or whatever it was, to enable those studying it to see it with its context. If anyone will make a specific suggestion on this Bill, however, we will consider it, but speaking generally, I do not admit that its drafting deserves what was said about it by those two particular speakers. I will certainly consider, when it is on the Statute Book, whether it would not be convenient if we consolidated the two Acts into a single code.

I was asked certain specific questions. One was whether the court can extend the lease. The answer is, "No," and I hope my hon. Friend realises that there would be difficulties about it. It may often be done by agreement however. My hon. and gallant Friend the Member for Brighton (Lieut.-Colonel Marlowe) asked about the relevant period in Clause 2 (4), that is the period in respect of which they are proposing to effect the reduction. It may relate to the past and, in a restricted sense, may refer to the future. In reply to my hon. and gallant Friend the Member for North Kensington (Captain Duncan) I can assure him that the provisions of Section 11, under which the bankruptcy priorities are removed, is certainly not regarded by the Government as a precedent. It was thought right to do it in these exceptional circumstances but we believe that the priorities in the Bankruptcy Act should be preserved in the case of normal insolvencies. He then asked whether we need Clause 8 at all outside the coastal areas, and referred to the fact that in his own constituency —and I have no doubt he is perfectly right—what I call the regular machinery for effecting reduction of rates because of reductions in their values has been worked over the whole field. Therefore, he said, there is no need in a case like that for this Clause. Broadly, I think that is right.

I do not think he need be under any misapprehension that the court will make what I call an arbitrary and excessive use of Clause 8 in cases where rates have been properly reduced by the local authority having regard to the falls in value. On the other hand, however, it may be that that is not so in all cases other than North Kensington and I think it would be wrong to confine Clause 8 solely to coastal areas. May I also say that in coastal areas there may have been reductions under the normal procedure as well. I believe it is right to preserve the Clause, and I believe that local authorities can well trust the court not to make use of it in a way which they would be entitled to complain of as unjust from their point of view. He asked me a specific question on Clause 8 (3) which I would like to have time to deal with and communicate with him, as it is a little complicated.

The hon. and gallant Member for Chichester (Lieut.-Commander Joynson-Hicks) made a thoughtful speech—and may I say here how much I have appreciated all the speeches that have been made to-day because, if my hon. Friends will allow me to say so, they showed appreciation of the work that has been done on this subject. My hon. and gallant Friend, on the whole, expressed the view that we had done about as well as we could have done within the limits which the subject set us. He asked a question about a lady who had left one of these coastal or evacuation areas to go, say, to Cheltenham, and what was the position with regard to the debts that she incurred there. May I point this out—and it is relevant to the speech of my hon. and gallant Friend the Member for the Isle of Wight (Captain P. Macdonald) —that the main structure of this Bill and the Liabilities (War-time Adjustment) Act, is in no sense confined to the coastal areas. It is open to everybody all over the country. If the lady who has gone from the coastal area to Cheltenham is, as she obviously was in the case put by the hon. and gallant Gentleman, in financial difficulties owing to the war, she can go to the adjustment officer and ultimately to the court under the original Act, quite irrespective of the fact that she is affected by the coastal area moratorium. That applies to all the people in my hon. and gallant Friend's constituency and to everybody, whether in a coastal area or not. There is a dovetailing provision in Clause 1 or 2, so that, if somebody is already in the adjustment machine, or can go there in respect of something which is not a moratorium debt, then there is a procedure by which ultimately a moratorium debt is taken into the machine, and so the two things are brought together.

The idea of Clause 3 is this. There may be areas which ought to be treated in precisely the same way as the moratorium areas and if so, there is power to act. My hon. and gallant Friend the Member for the Isle of Wight said he had put down an Amendment, and of course we will consider it, but I believe it may be right to leave it in this form for the reason that, where this moratorium has, as a matter of law, been applied, the legal position is that the debts are not for the moment due. Where, in other areas, the moratorium has not been applied, the debts have remained due and settlement has been made on that basis. The main machinery of the Act is open. We did, however, think it right to take this power—and I am not expressing a view one way or the other as to what areas would be rightly included under Clause 3 because that is a matter which must be considered in the light of facts—which will have to be exercised with care, of course, and which will require a certain number of detailed matters to be decided. For instance, when you operate Clause 3, you deem the area to have become an evacuation area and therefore you have had a moratorium applying as from a certain date. The question whether an area ought to be brought in under that Clause, and if so what date it ought to be given, is one which requires consideration. We have every desire to see that, if the benefits of Clauses 1 and 2 ought to be extended, they shall be extended. I would like, in conclusion, again to point out, that what I may call the general machinery and procedure of the Bill, and the power given for adjusting financial troubles due to war circumstances, apply both inside and outside the coastal areas.

Question put, and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the Whole House.—[Mr. Mathers.]

Committee upon Friday.