§ 3.30 p.m.
§ Mr. Hugh Lawson
I beg to move, in page 5, line 42, leave out Sub-sections (2) and (3), and insert:(2) Where a licence has been extinguished under the preceding Clauses of this Act, it shall be referred for compensation under Section twenty-one of the Licensing (Consolidation) Act, 1910 (which relates to the compensation levy), and where any compensation authority applies to the Secretary of State for power to increase the statutory levy or for powers to borrow on the credit of the compensation fund, he shall have power to make regulations to meet such application, notwithstanding any provision in the Licensing (Consolidation) Act, 1910.This Amendment deals with the rather difficult subject of compensation values. As I see the position, it is this. Up to the present, if in any area a public house has become redundant, compensation for the extinction of the licence has come out of the profits of the trade at large, and this seems to me a very reasonable provision. In spite of it, I am of the opinion that the dividends on brewery shares have been fairly considerable and no one would suggest that it has been in any way a penal levy because, as new housing estates are built up, and licensed houses are built on up-to-date lines, the profit has been as great, or possibly greater, when small places have been closed down as redundant. The Bill has a different principle for the extinction of these licences. It is going to be a question of arrangement between those who own the licensed premises, the licensing justices and the planning authority, and the suggestion is that probably five or six licensed houses which have been in a bombed area will be exchanged or two or three, or more, when the area is rebuilt. I do not think there is any objec- 1994 tion at all to this procedure where all the parties concerned are agreed about what they are going to do.
The point which was made on the Second Reading and which my Amendment seeks to cover is this. Suppose an agreed scheme has been arrived at, no doubt there will be unofficial means of compensating the owners of the premises that are going to be done away with. Then suppose there is a public inquiry and objection is made to the erection of particular premises, and suppose that objection is sustained and the agreement is upset; compensation will then be necessary and I think it should be from the compensation fund on the basis of the levy. If this is not done what I can see happening is as follows. If any money were to be required from public funds to pay for the extinction of a licence which had been agreed upon by the planning authority, that would be a reason which would defer the Minister from upholding the objections at the inquiry. I want an assurance that there are no circumstances in which public funds shall be called upon. If the Amendment, and the proposed new Clause—[Extinguishment of certain licences]—consequent upon it, were accepted, it would make it quite clear that the compensation fund would be carried on, that the levy should be made and licences, when redundant from any reason whatever, should be extinguished out of the aggregate profits of the trade. I think also that a very great many premises which will fall into the provisions of the Bill would in any case have become redundant very soon if they were in a congested area.
§ The Deputy-Chairman (Mr. Charles Williams)
Does the hon. Member consider that the proposed new Clause is consequential on this Amendment? I think it is and I think he said so.
§ Mr. Silkin
I should like to associate myself fully with the very well-reasoned case the hon. Member has made. I think he was on a first-class point. Agreement may well be reached, and the result of the public inquiry may undo the agreement, and it would not be possible to provide a new licence as intended. But I ask the hon. and learned Gentleman to look at the matter from an even wider angle. The assumption behind the Bill is 1995 that a large population is going to be moved from one place to a large number of other places and that, consequently, the licences will follow the population and, roughly speaking, the plan of the Bill is that that should happen. You will be depopulating certain areas as the result of your planning and the population will go to specific housing estates round about the congested town and you transfer the licences. You give the brewers the same number of licences, or give it them in the form of equivalent value. But I think the scheme breaks down, because it does not in the least follow that the population is going to the different housing estates in accordance with your plan. The normal population of the County of London is about 4,250,000, and the number of licensed premises in existence, or suspended, is equivalent to the requirements of a population of that size. The present-day population is probably not more than 2,500,000—it may be less. The rest of the population is scattered all over the country and some abroad. There is no guarantee that that population is coming back at the end of the war. I rather think that it will not. Certainly you will not find the difference between 2,500,000 and 4,250,000 scattered among the different new housing estates that are going to be put up.
I very much hope that the "de-congestion" of London will not require to be as great as appears to be necessary, for the reason that many people will not be coming back. They have possibly made their homes in more desirable parts of the country and have employment there, and will remain there. It will almost certainly be the case that the requirement of licensed premises for London and other large towns will be substantially less than before the war. Therefore it will not be possible to make agreements with the brewers to give them in the new housing estates equivalent facilities so as to make the total facilities that they will enjoy equal to what they enjoyed previously. In other words, a certain quantity of facilities will have to be extinguished, and it will not be possible to give the brewers any quid pro quo. Therefore it is a matter which it will not be possible to settle by agreement. I cannot conceive the brewers merely accepting the position that a certain number of licences are to be extinguished and that they are to get 1996 nothing for it. They will want, and will probably be entitled to, compensation. Who is to pay it?
I suggest that the proper method of paying it is the compensation fund, which was designed for this express purpose. I know that the Morris Committee, which my right hon. Friend has followed fairly closely, has reported in favour of the step that is being taken, in Clause 8, the temporary suspension of the compensation fund. I suggest that my right hon. Friend has taken the easy course of following that recommendation, but it is not easily defensible. After saying that in their opinion the matter will be dealt with by agreement and mutual good will, which I do not dispute—brewers are not unreasonable; one could more easily do a deal with them than perhaps with many other people—the Committee felt compelled to recognise that there would be cases which it would not be possible to deal with by agreement. Then they come to this rather weak conclusion:Moreover, the chances of agreement may be prejudiced and general uncertainty be created in the minds of all those taking part in the negotiations if there is always the possibility that some of the licences under discussion may be dealt with under entirely different machinery.Really, is that a reason for suspending the compensation fund, that there may be uncertainty in the minds of the people who are negotiating? After all, this machinery of negotiation has been in operation for many years. I have had considerable experience of these very negotiations. There has always been this fear of uncertainty, but that has never prevented reasonable agreements being made. I cannot see why it is necessary to suspend the compensation fund in order to facilitate negotiations. I think it is a non sequitur. I am really shocked that the Committee should have arrived at such an illogical decision in an otherwise excellent document.
They also refer to the fact that to invoke the machinery of the compensation fund might involve delay. Anyone, of course, can put up the argument of involving delay but there is no desperate hurry about all these things. You have to know where you stand, but the question of compensation in isolated cases, where you cannot renew licences, should not hold up the general planning of the area, and I 1997 cannot see any real reason why it should. No one accepts the position that the licensed industry is not to be compensated for the extinguishing of licences, but I cannot see why there should be any delay. I hope, therefore, that for both of the reasons given by the hon. Member for Skipton (Mr. H. Lawson) and for the reasons I have given, which I think are fundamental, careful consideration will be given to the Amendments desired. You are going to get these movements of populations, vast dispersals of populations, but there is no guarantee that the people are going to any particular place, and, therefore, no possibility of giving the brewers equivalent licensing facilities. The Government have to face up to this, and I hope it may be possible to do away with the suggested postponement of the operations of the compensation fund and enable the matter to take its normal course—that where a licence is extinguished the matter can be dealt with in the ordinary way.
I should have thought that if any trade in the world was able to pay compensation or to have a compensation fund, it was the drink trade. I should like to give the Committee a few figures of what has been spent on drink in the country during the war and—
§ The Deputy-Chairman
I do not think this is a matter on which we can discuss such figures. That is going a bit too far.
This is a question of someone compensating the drink trade, and that case has been very well put by the Member for Skipton (Mr. H. Lawson). This trade, of all trades in the world, is in a position to compensate itself. If it has not a compensation fund of its own, the money is going to come out of the local inhabitants, and as, during the past 10 years, the drink trade has doubled its profit, I think it should pay its own compensation. If this is not done we shall have a position like that which arose when Mr. Chamberlain had a profit of £1,000,000 to deal with, and instead of putting it into social security, took a 1d. off beer. What was the result?
§ Mr. Cove (Aberavon)
On a point of Order. I would like to take what is to me the rare pleasure of supporting the noble Lady. Surely, if she seeks to advance an argument that the trade can well afford to compensate itself, it is fair and legitimate in support of that contention to point out what its sales and its profits have been.
§ The Deputy-Chairman
We are discussing the question of compensation under this Clause. To raise the whole matter of compensation would seem to me to make it rather wide, too wide, in fact. That is why I think we cannot go on discussing this particular question.
The trade has made enormous profits and unless they are compelled to pay out their own compensation they will do what they have been doing right along, and have a regular campaign to make the children of this country beer-minded, and this Government will be responsible for it.
§ The Deputy-Chairman
That is just the point. This is not a matter for discussion under this Clause.
It is very, very difficult to know what does or does not come in under the Clause. The case has been made out very clearly, and I hope this Committee will see to it that whatever compensation is paid, will not come out of the local inhabitants but will come from the drink trade itself.
I am not sure that I support the hon. Member for Peckham (Mr. Silkin) entirely, but the hon. Member for Skipton (Mr. H. Lawson) has made his point clear. I want to raise one question. This Bill is temporary and is to operate for five years after the date of the Emergency Powers (Defence) Act, 1939. The licensing planning committees may have completed their work before the end of that period, but, according to this Bill, the compensation fund and the levy cannot start again until the end of the period which may be six months or may be a year. I think it is generally agreed that the compensation fund must start again sometime to deal with redudancy, and some of those changes of policy, and the other wider questions which the hon. Member for Peckham has raised. It seems to me that under the provisions of the Bill, as it stands, they cannot start 1999 this again before the end of the operation of the whole of the rest of the Bill. I would just ask the hon. and learned Gentleman to clear up that point.
§ The Solicitor-General
We are proceeding on the basis of the general question of compensation. I think it was the basis on which the hon. Member for Peckham (Mr. Silkin) made his speech, not limiting it to the matters which are raised in the actual wording of the Amendment of the hon. Member for Skipton (Mr. H. Lawson). I only want to say and I hope he will not take it amiss with regard to that Amendment, before I deal with the points raised to support it, that certain difficulties will arise. The hon. Member raises by his Amendment the position of justices being compelled to refer licences and that is a new conception, which would be taking away completely the discretionary and judicial character of the justices functions. However, these are only points which arise on the wording of the Amendment, for I know the hon. Member would immediately, and quite properly, ask me to deal with the substance of his point. I only wanted to tell him there were these difficulties in his Amendment, before going on, to meet, as well as I can, the substance of his point.
With regard to the general position, I should like the Noble Lady to appreciate that there is no provision in the Bill for brewers or licence-holders to be compensated by the local authority or the local people. The position the hon. Member for Peckham has raised is that, in his view, the scheme on which the Bill depends is a scheme which might break down in part and, therefore, may leave the Licensing Planning Committee with the only sanction left, a public acquisition by the local authority. That I think fairly puts my hon. Friend's point. I do not want my Noble Friend to think that the Bill contains a provision out and out for compensation from local funds; it does not.
I want the Committee to consider with me the merits of the two forms of getting rid of licences. The present compensation proposals relate to licences which were in existence before the coming into force of the Licensing Act, 1904. They are roughly 40-year-old licences. Their renewal cannot be refused. What 2000 the justices can do is to refer them for compensation, in which case the amount of compensation is considered by the compensation authority and it is eventually paid out of the fund which is collected by the levies from the various houses. That system applies to this class of licence, which, I readily admit, is a big class.
I want the Committee also to understand that that system did not work alone for many years before the war. There were licensing justices who, when they were considering the question of an ordinary removal from one premises to another, or considering the grant of a new licence, even where monopoly value was paid, said to the brewers, "It is no good coming before us with this removal or with this application for a new licence, unless you are prepared to propose the surrender of other licences." That was criticised as being bargaining by people in a judicial capacity, but it was done, and we all know it was done. We have all seen it done, and the results were good in regard both to distribution of licences and serving the needs of the people. That, however, was only one section of it, as nobody knows better than my hon. Friend the Member for Peckham, whose great experience in this matter has been such an advantage to us all. The local authorities were also in a position to secure redistribution. They controlled the land and they could offer the brewers a new site, and in many cases they could not only offer a new site but the conditions of a special removal, because they took possession of the old site under one improvement scheme or another.
We had these two systems of redistribution working before the war, one by the justices and one by the local authorities who provided the new land. I would like my hon. Friend the Member for Peckham to remember that in no case was it on a hard and fast barrelage basis. I agree that I took an easy example where the barrelage equalled out. He was right in saying that that was too easy an example for me to take. But in many cases there has been a ready surrender of a greater amount of existing barrelage in order to get a new position which seemed to meet the needs of the future, and the results in many cases have been perfectly amazing. I do not want to mention names, but I have in mind one local authority which 2001 got 18 extinguishments, out of 26 licences they were considering, by the proper removal of the others to places where they were wanted. That was the sort of work that was going on, and that was one matter which induced the Morris Committee to take the line that they did. I indicated in moving the Second Reading of the Bill that here the licensing planning committees have got very strong weapons. No removal is to be allowed, except one that is done in this method, during the period of this Bill in a licensing planning area, and the new licence can only be granted if the licensing planning committee does not object. In addition, there has been an offer to the trade of co-operation. I ask the Committee to remember, and I ask my Noble Friend to remember, that in the example I quoted where 18 licences were extinguished, not one penny of compensation was paid to the trade by anyone. They were got rid of without any payment of compensation at all. That is the sort of thing for which we are working in this Bill, and I ask my Noble Friend, before she imputes a certain lack of care to the Government in considering this matter, to remember these facts.
What was the other point that impressed the Morris Committee? I am sure that my hon. Friend the Member for Peckham had this in mind. They found from their inquiries that the old method of compensation, that is, payment from a compensation fund out of the levy, was not working during the war. They said that 75 out of 152 authorities were not making any levy; that is, they were not attempting to make the old system work. A large number more were making reduced levies, and, while I agree that there are exceptions, my hon. Friend and I have one city in mind where a different policy has been pursued. We have, however, to regard the whole field, and when we find, as the Morris Committee did, that this system was not working in these abnormal conditions, we had to take that into account and consider whether the other method would not work better. I agree with my hon. Friend the Member for Peckham that one argument in the Morris Committee to which he referred, that the chances of agreement would be prejudiced by the compensation working at the same time, is at least a double-barrelled argument. I am not complaining that he should use that as a point of doubt, but I am asking 2002 the Committee to consider it on the general problem—and to bear in mind the way we used to work before and the position that the Morris Committee found by reviewing the country as a whole.
I now come to consider the point which my hon. Friend the Member for Peckham has specially in mind, and I will link it up with the point of my hon. Friend the Member for Skipton as to the failure of the scheme before the Minister is asked for a public inquiry. My hon. Friend was rightly concerned with the possibility of the local authority having to purchase. I do not want to repeat what was said by my right hon. Friend the Minister of Town and Country Planning and by myself, but there is, first, the position at the point when the licence exists. In many cases the brewer or the licence-holder will not want the licence to stay where it is because there is not any population. Many licences are in suspense under the Finance Act, 1942. In addition to that, one has the sanction that this is the only way they can get removals, and indeed, without the approval of the licensing planning committee they cannot apply for a new licence.
One must try to put oneself in the position of the intransigent brewer, who is not prepared to co-operate. I do not know whether the experience of my hon. Friend is the same as mine, but I have always found that the optimism in brewers about the chances of houses in a new area is one of the most surprising human characteristics. They are always very ready to take into account what they can do there, and they are pleased to go there.
§ The Solicitor-General
I quite agree. I am trying to be dispassionate. My Noble Friend knows that I am not trying intentionally to colour the picture in any wrong way. I said that they were anxious to go there. I am always reminded of a quotation from Dr. Johnson, when Mrs. Thrale's—now Barclay's—Brewery had to be sold. He said:We have not come here to sell a parcel of boilers and vats but the possibility of getting rich beyond the dreams of avarice.The point has a real relevance for my hon. Friend, because people are always prepared to take chance of a new area even if it means giving up chances in the area where they were before. The prospects always seem much brighter.
2003 That is the position with regard to that point. My hon. Friend might well put to me the position of the free house. Many hon. Members are concerned about the free house. There, it might be, we could get an arrangement between various brewery companies whereby somebody who owned the free house might be put in a very difficult position. It is a very small problem, because there are now only very few free houses left. In the layout as we see it, we think that there will practically always be a place for that house either on its present site or, if it has to be moved, on a corresponding method of working on a new site. That really applies to the position envisaged by my hon. Friend the Member for Skipton (Mr. H. Lawson). He put to the Committee that we might have a nicely balanced scheme put up by the licensing planning committee. They have arranged say, that five licences will be extinguished and two or three new licences will appear in different parts. What happens when there are objections at the public inquiry and the Minister does not agree with the situation of the two or three new houses? The obvious thing would be for my right hon. Friend to refer the matter back to the licensing planning committee and to tell them to find another place to which the same objections would not apply. That, he could do; but if he did not agree, there would be, first of all, the question of whether the house could remain and you should have one piece of your plan which would be wrong. The idea, of course, is that the licensing planning committee shall consider the whole area.
That would be unfortunate, but you would have to deal with the matter. You may have to leave it there. As has been pointed out, these provisions last only for some five years. At the end of that period the question of compensation for redundancy will arise again. The only possibility that you have to consider is that the matter is not something which you can leave over. For some reason, my right hon. Friend has not sent it back to the committee. It cannot be left over and the public house cannot be left in that situation. It is a somewhat difficult concatenation of circumstances to imagine, and my hon. Friend is quite right to take the difficult case; but in that case, and in that case only, where it is 2004 essential for you to get rid of the matter at once, do you have the question of acquisition of both premises and licence. I grant my hon. Friend the Member for Skipton that it is a possibility, but it is such a shadowy possibility on the practical position as I see it, that I cannot myself, and I respectfully so advise the Committee, see that there is any real danger of public funds being wasted. Then I want to say to my hon. and gallant Friend the Member for Kensington, North (Captain Duncan), that the idea is that the suspension of the compensation fund and the levy should only be while the planning committees are operating. I will consider in detail whether it is necessary to meet his point, but that is the way in which it appears to us.
I would like to ask the Solicitor-General a general question. I know that the Bill is the outcome of the Morris Committee and he has told us, who are deeply interested in temperance reforms, that the Morris Committee had 13 members representing the trade and not one representing the churches. This is important—
§ The Deputy-Chairman
Undoubtedly, it is important, but not for now, and the learned Solicitor-General would not be in Order in answering the question.
§ The Solicitor-General
I am deeply conscious that I have detained the Committee, but I hope that they may think that the question of compensation is one of the central committee points in the Bill. I have tried to give the views as clearly and as fully as I could, on what is a very difficult and very technical matter.
§ Mr. H. Lawson
I am obliged to the Solicitor-General for having dealt so fully with the point I put. I have listened very carefully to him, and it seems to me that he did concede the point which I made, but said that it was very unlikely to arise. Suppose it does arise? Would it not be possible to compensate the licensee from the existing fund without introducing the levy? There may be very few cases, so I imagine there will be sufficient money in the fund to buy out any odd licence without introducing the levy during the next five years. I put that point to the Government and I suggest that, before the Bill is passed, some provision along those lines could be introduced.
§ The Solicitor-General
The general picture that I have is that the levy has not been enforced at all, in those areas, 75 out of 152, because of the difficulties that licensees were in general undergoing in those years. I will check it, because it is very difficult to carry everything in one's mind. In most of the areas there is not a big reserve. I think my hon. Friend has another Amendment on the Paper on the subject of borrowing powers. At the moment we hope we shall be able to get this re-distribution without any payment of compensation at all. We think that it can be done and I have conceded, as my hon. Friend says, a possible case. I think it is an extremely unlikely case, and I should not like to change our scheme for an unlikely case. However, I will consider carefully what the hon. Member has said.
§ Amendment negatived.
§ 4.15 p.m.
§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. Godfrey Nicholson (Farnham)
I was interested in what the hon. and learned Gentleman said about "free" houses. Can he add anything on that?
§ The Solicitor-General
The "free" house has become comparatively rare—I will not say whether fortunately or unfortunately—and I said that where there is a "free" house which is fulfilling the need of a certain public, the chance of there being a wish to extinguish it in this sort of area is extremely small; that is, there will be a place for the "free" house, either in the same part of the area, or perhaps with not such a big removal as there would be in the case of other houses.
§ Mr. Nicholson
I understood my hon. and learned Friend to say that some provision would be made for "free" houses to start de novo, not merely in exchange. Like him I have a great regard for "free" houses, and I desire that they should be encouraged. Is there any chance of increasing their numbers?
§ Clause ordered to stand part of the Bill.