Commons Sitting of 24 June 1964

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Herring Industry
    Mr. Wolrige-Gordonasked the Secretary of State for Scotland what steps he now proposes to take in order to restore confidence in the herring industry.
    The Under-Secretary of State for Scotland (Mr. J. A. Stodart): Over the last two or three years the financial results of herring catching have been reasonably good for most of the boats concerned, the majority of which are now able to choose between this and other forms of fishing as they see fit. It would seem, therefore, that there are good reasons why the fishermen should have confidence in their future. My right hon. Friend and the Minister of Agriculture, Fisheries and Food will shortly be laying before Parliament their proposals for fisheries subsidies for the coming subsidy year.
    Mr. Wolrige-Gordon: Is my hon. Friend aware that what has shaken confidence amongst the fishermen were the recent revelations by the Herring Industry Board? Will he give an assurance on two points: first, that the Government believe in, and will support, a prosperous, efficient and developing herring industry; and, secondly, that that industry will be efficiently administered in the future?
    Mr. Stodart: I am, of course, aware that the herring fishermen have been extremely critical of the Board's mistake over the price of surplus herring in Stornoway last winter, but we must keep a sense of proportion. A mistake was made, but there is no indication that it was more than an isolated one. The Board has done its best to rectify the
    376
    mistake and has offered to meet the fishermen's representatives regularly and to consider any suggestions they may have to make. I would affirm that the Government are anxious to see a prosperous herring industry.
    Mr. Rankin: In order to assist that prosperous herring industry, can the hon. Gentleman tell me why the herring is becoming such a scarce commodity for the Scottish housewives?
    Mr. Stodart: The herring is by no means scarce, if the housewife wishes to buy it. It is a cheap and excellent food, and if only people would eat more than one herring a month the whole future of the industry would be assured.

    School Building
    Mr. Brewisasked the Secretary of State for Scotland what is the estimated value of school building at present under construction.
    The Under-Secretary of State for Scotland (Lady Tweedsmuir): The total value of school building work under construction at 31st May, 1964, the latest date for which information is available, was £44·illion, the highest figure so far achieved.
    Mr. Brewis: Is not this position very satisfactory, and does it not reflect great credit on the Government, the local authorities and the building industry in Scotland?
    Lady Tweedsmuir: Yes, Sir.
    Mr. Ross: Over how many years is this figure spread? Does it include the two technical colleges, in Ayr and in Kilmarnock, which were first given highest priority in 1955 but which have not yet been completed?
    Lady Tweedsmuir: The question referred to school building.
    Miss Herbisonasked the Secretary of State for Scotland if he has completed his consideration of the need for special financial provision for school building purposes for local authorities which have a new town within their boundaries; and if he will make a statement.
    Lady Tweedsmuir: My right hon. Friend has accepted a recommendation of the Local Government Finance (Scotland) Working Party that the general

    377
    grant distribution formula which has applied since 1959 should continue unaltered until the review of local government finance which is now in progress has been completed. The Working Party rejected the suggestion that special financial provision for school building is needed by local authorities with a new town in their boundaries.
    Miss Herbison: Does not the noble Lady realise that those authorities in Scotland which have new towns are finding it very difficult to provide the schools which the rest of the child population desperately need? Is she aware that the provision of schools in East Kilbride new town and the big development in Bishop-briggs, providing schools for pupils who previously had no connection with Lanarkshire, is starving the rest of Lanarkshire of schools? May I emphasise once again that, if I had a child allocated to one of these schools in Lanarkshire outside the two new towns, some of which are in a scandalous condition, I would go to gaol before my child would enter it?
    Lady Tweedsmuir: In areas which have either overspill or growth areas or new towns, account is taken of the extra needs in the investment authorisation.
    Mr. Bence: In Dunbartonshire we have the new town of Cumbernauld and Kirkintilloch has an overspill agreement with Glasgow which is working very successfully, but education in Dunbartonshire and the provision of schools is very difficult indeed. Will the noble Lady look into the matter again and see to it that in Dunbartonshire particularly some extra help is given for the county school programme?
    Lady Tweedsmuir: As the Working Party specifically recommended against any change until after the Local Government Review, I cannot give the hon. Gentleman that assurance.
    Mr. Ross: Surely, the noble Lady must have been convinced by what has been shown in debate after debate, that there is a great distorting factor here in the provision which must be made within a county for a new town. Will she reconsider this business? How long is the Review to take? Are we to be bound by a recommendation made by a Working Party if we ourselves have
    378
    no great confidence in its ability adequately to deal with this matter? Why cannot this be separated and dealt with now, since the problem is here?
    Lady Tweedsmuir: The major local authority associations were represented on the Working Party. I said in answer to an earlier Question that the present amount of school building under construction in Scotland is a record.

    Housing
    Mr. Brewisasked the Secretary of State for Scotland how many houses he now expects to be completed in Scotland in 1964.
    Mr. Rossasked the Secretary of State for Scotland if he will estimate the number of houses he expects to be completed in 1964; and how many of these will be for private owners.
    The Under-Secretary of State for Scotland (Mr. Gordon Campbell): About 34,000 houses should be completed by all agencies this year, of which some 7,000 are likely to be built for private owners.
    Mr. Brewis: Is not this also a record, for a great many years at least? Can my hon. Friend say whether any particular building agency is responsible for this more than any other?
    Mr. Campbell: It is a satisfactory figure and reflects the energetic work of all the building agencies concerned. More than 48,000 houses are now under construction, and this is the highest number since the war.
    Mr. Ross: But is not the figure which the hon. Member for Galloway (Mr. Brewis) described as a record still 6,000 less than that reached in 1953 as a result of the planning of the Labour Government? Is it not a fact that if that 1953 figure had been maintained we would have had 100,000 more houses in Scotland today?
    Mr. Campbell: I should add that there are no fewer than 40,000 public authority houses currently under consideration, so the public authorities are clearly pressing ahead vigorously.
    Mr. Gourlay: Is the hon. Gentleman aware that last week he informed me

    379
    that only 22,000 local authority houses were expected to be completed this year? According to the figures which were given today, he has said that something like 7,000 private houses will be built in 1964. Is he aware that in 1957, the last occasion on which the Government managed to reach the high figure of 28,000, only about 3,500 private houses were built and that in my constituency, in Kinghorn, where 48 private houses were built recently, no local authority houses were built for people in need? When will the Government so alter the subsidy structure that local authorities can build houses?
    Mr. Campbell: I pointed out that the local authorities are building at a high rate and that a great number are now under construction. I am glad to note the increase in private enterprise building, which we also encourage. This is essential in order to accommodate the first-class management, scientists and technologists who are needed in industry in Scotland.
    Mr. W. Hamiltonasked the Secretary of State for Scotland what was the annual average of houses completed, as expressed in terms of apartments, for the two periods 1945–51 and 1958–63, respectively.
    Mr. Campbell: Information available about houses provided by public authorities is in the form of tenders approved, not of houses completed. I shall, with permission, circulate in the OFFICIAL REPORT a table showing the average number of different house-sizes provided

    —

    Less than 2-apt.

    2-apt.

    3-apt.

    4-apt.

    5-apt. or more

    1945–51

    Public Authorities* (Tenders approved)

    165

    130

    5,097

    14,419

    1,547

    Private Enterprise and Others† (Houses Completed)

    —

    1

    315

    779

    159

    1958–63

    Public Authorities* (Tenders Approved)

    651

    3,731

    12,979

    5,727

    405

    Private Enterprise and Others† (Houses Completed)

    4

    57

    1,566

    2,767

    2,137

    * Local Authorities, Scottish Special Housing Association, New Towns Development Corporations.

    † Housing Associations (other than S.S.H.A.), Government Departments.

    annually by all agencies for these two periods.
    Mr. Hamilton: Why could not the hon. Gentleman give the two figures I asked for? I have sought to work them out myself and they show that the number of apartments provided in the first period was at least as great as in the second period. This reveals the stupidity and silliness of seeking to make comparisons in terms of houses built. Will not the hon. Gentleman consider putting into the Housing Return in future an additional table showing the number of apartments provided instead of the number of houses? Does not he recognise that, in the first period, the number of four and five-apartment houses provided was 58 per cent. and in the second 19 per cent.? Does not this make nonsense of talking about a house as if it were a homogeneous commodity?
    Mr. Campbell: Public authorities are free to build the size of houses they need. Since the war, 45 per cent. of public authority houses have been of the four-apartment size or over. There is now a need for smaller houses. One category in particular which will benefit from this is the elderly. They need such houses. During the second of the two periods mentioned by the hon. Gentleman, 7,500 more houses per year were built.
    Mr. Hamilton: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise this matter on the adjournment at the earliest possible opportunity.
    Following are the figures:

    School Pupils (Age Groups)
    Sir C. Thornton-Kemsleyasked the Secretary of State for Scotland (1) how many pupils remain at school in Scotland after attaining the age of 17;
    (2) how many pupils remain at school in Scotland after attaining the age of 15.
    Lady Tweedsmuir: On 15th January, 1964, there were 66,000 pupils at public and grant-aided schools in Scotland aged 15 and over. Of these, 12,400 were 17 and over.
    Sir C. Thornton-Kemsley: Can my noble Friend tell the House how these figures compare with the corresponding figures of 10 years ago?
    Lady Tweedsmuir: There are twice as many pupils aged 15 and over in Scottish schools as there were 10 years ago, and the proportions in each age group have doubled.
    Mr. Woodburn: Would the noble Lady call the attention of the Press to these remarkable figures and point out that all juveniles today are not delinquents but that they are attending schools full-time and evening classes to a record number?
    Lady Tweedsmuir: I quite agree with the right hon. Gentleman, and I hope that the Press will take note of his comment.
    Mr. Ross: We are all gratified at the number remaining longer at school, but is the noble Lady aware of our concern that last year of the number who left school and those who continued at school beyond the leaving age, 15,300 did not complete a five-year secondary course and that the test is whether or not the courses have been completed? It was certainly an increase from the previous year, but we have no room for complacency.
    Lady Tweedsmuir: I quite agree; that is why we have decided to raise the school-leaving age in 1970–71.

    Succession (Scotland) Act
    Mr. Clark Hutchisonasked the Secretary of State for Scotland what steps are being taken to make the provisions of the Succession (Scotland) Act known to the public.
    Lady Tweedsmuir: I would refer my hon. Friend to the Reply my right hon. Friend gave to the hon. Member for Edinburgh, Leith (Mr. Hoy) on 17th June.
    Mr. Clark Hutchison: Does my noble Friend agree that this Act underlines the need for people to make wills and the wisdom of so doing?
    Lady Tweedsmuir: Yes, Sir. However carefully the Act has been framed, it cannot be anything but a substitute for the making of a will, and I hope that everyone will note how important it is to make a will.
    Miss Herbison: Is the noble Lady aware that the vast majority of women in Scotland know the provisions of the Bill, since they waited many years to get it and had to depend upon this side of the House pushing the Government to bring it forward?
    Lady Tweedsmuir: The fact remains that it was this Government that got the Bill on the Statute Book.

    Criminal Legal Aid Scheme
    Mr. Clark Hutchisonasked the Secretary of State for Scotland when legal aid in criminal cases will start operating.
    Mr. Willisasked the Secretary of State for Scotland when he intends to appoint a day for the coming into operation of Clause 48 of the Criminal Justice (Scotland) Act, 1963.
    Mr. Millanasked the Secretary of State for Scotland what further progress has now been made in preparing for the introduction of legal aid in criminal causes under the Criminal Justice Act, 1963.
    Lady Tweedsmuir: The necessary preparatory work is now well advanced and it is hoped to start operating the Criminal Legal Aid Scheme in the autumn.
    Mr. Clark Hutchison: Will my noble Friend press ahead as quickly as possible with this matter and give attention to methods of publicising the scheme when it comes into operation?
    Lady Tweedsmuir: Yes, Sir.
    Mr. Willis: Is the noble Lady aware that last year she promised that this scheme would come into force on 1st April of this year? Is it not quite scandalous that after all this shillyshallying over the past 12 years we were told that it was to come into operation on 1st April and now we are told that it will come into operation in October? Why should we have to lag so many years behind England in this matter? Is not it quite disgraceful?
    Lady Tweedsmuir: I indeed said that I hoped that it would be possible to bring the scheme into operation in the financial year 1963–64, but all those concerned are working very hard on the preparatory work and it should be ready by the autumn.
    Mr. Hector Hughes: Will the noble Lady ensure that persons who are tried and found not guilty and whose trial has involved expense in legal costs are provided with costs or indemnity? It would be unjust otherwise.
    Lady Tweedsmuir: That is another question.

    Highlands and Islands
    Mr. N. McLeanasked the Secretary of State for Scotland what are the current investment figures in the Highlands and Islands through public investment, loan or grant under the following headings, namely, roads, tourism, electricity, including nuclear power stations, and other industries.
    Mr. Campbell: As the Answer consists of a table of figures, I shall, with permission, circulate it in the OFFICIAL REPORT.
    Mr. McLean: Can my hon. Friend ensure that, despite the importance of the plan for central Scotland, the rate of investment in the Highlands continues and is increased on present figures, because this is of tremendous importance to the Highlands?
    Mr. Campbell: I agree with my hon. Friend about the importance of this, and it is certainly my right hon. Friend's intention that the Highlands and Islands shall continue to benefit from public investment. An important contribution is the Exchequer expenditure connected with the pulp mill. Another is the fact
    384
    that the Highland counties are development districts and qualify for financial assistance under the Local Employment Act.
    Mr. Ross: Will the hon. Gentleman take every advantage of whatever means there are to give widespread publicity to the dependence of the constituency of the hon. Member for Inverness (Mr. N. McLean) on public investment? Could he also think of adding to the list of figures one showing the number of Questions which the hon. Member for Inverness has asked about this matter over the last four years?
    Mr. Campbell: I do not think that it is necessary to do the first, because my hon. Friend the Member for Inverness (Mr. N. McLean) made a very good speech on the subject recently. The important point which he made was that these important industries should not be under the threat of nationalisation.
    The following are the figures:

    1963–64

    1964–65

    (near-actual)

    (estimate)

    Roads

    £3·1 million

    £3·6 million

    (of which Exchequer grants)

    (£2·7 million)

    (£3·2 million)

    Electricity (including Dounreay)

    £11·3 million

    £10·2 million

    Tourism and other industries
    Separate figures about capital investment in tourism and other private industries are not available.
    Exchequer assistance offered under the Local Employment Acts to private industry generally is:

    1963–64

    1964–65

    (near-actual)

    (estimate)

    £330,000

    (not available)

    In addition exchequer expenditure in respect of the pulp mill project at Fort William is:

    1963–64

    1964–65

    (near-actual)

    (estimate)

    £3·17 million

    £5·52 million

    Mr. N. McLeanasked the Secretary of State for Scotland what are the current investment figures in the Highlands and Islands through public investment, loan or grant under the following headings, namely, crofting, rural industries and shipping services.
    Mr. Stodart: As the Answer consists of a table of figures, I shall, with permission, circulate it in the OFFICIAL REPORT.
    Mr. McLean: Can my hon. Friend break down the figures for crofting into

    385
    those amounts given for agricultural improvements and those given for the improvement of the tourist side of the crofting economy?
    Mr. Stodart: At a quick glance, I think that the increase is roughly the same between 1963–64 and 1964–65. It appears that the increase in those two years was roughly 10 per cent. on agricultural production and about 12 per cent. on housing which might be attributed to improvements with a view to furthering the tourist trade.
    Mr. Bence: Could the hon. Gentleman include in the figures the total amount of private investment in the Highlands?
    Mr. Stodart: Not without notice.
    Mr. Rankin: The hon. Gentleman is getting the notice.
    Mr. Woodburn: Could the hon. Gentleman add to the figures the public money which has gone under the Labour Government's equalisation grant to provide local services in the Highlands, which amount in some cases to between 90 per cent. and 95 per cent. of the expenditure?
    Mr. Stodart: I do not think that those figures are included, but if the right hon. Gentleman cares to put a Question down we will answer it.
    Following is the table:

    1963–64 Expenditure

    1964–65 Estimate

    Crofting

    (Loans)

    (£143,000)

    (£172,000)

    (Grants)

    (£627,000)

    (£702,000)

    (Other Services)

    (£44,000)

    (£41,000)

    Total

    £814,000

    £915,000

    Rural Industries

    Loans (mainly through the Highland Fund Treasury Loan Scheme)

    £35,500

    £50,000

    Shipping Services

    (Capital expenditure on ships)

    (£835,000)

    (£382,000)

    (Grants)

    (£281,000)

    (£384,000)

    Total

    £1,116,000

    £766,000

    Factory Farm Products
    Mr. Rankinasked the Secretary of State for Scotland if he will take steps to ensure that food grown by factory farm methods has its source designated for the benefit of the consumer by the retailer, in view of the fact that it is of inferior
    386
    quality to that produced in the normal way.
    Mr. Stodart: No, Sir. I know of no evidence to support the hon. Member's view that food produced by intensive methods is of inferior quality.
    Mr. Rankin: In view of the hon. Gentleman's ignorance on the subject, would he pursue his inquiries a little more closely and deeply than evidently he has done? Is he aware that the practice of designating food supplies, both liquid and solid, as to source and quality is now widely followed by those who have no reason to fear any challenge to their products? Would he not approve of it and encourage it in these new methods of producing food which have now developed?
    Mr. Stodart: It is true, as I think we discussed last night, that there are regulations under the Food and Drugs Act which give power to prescribe labelling to protect the public against buying food which is different from or inferior to what they want to buy, but there is no evidence, in the true meaning of the word, that this intensively produced food is inferior in quality.
    Mr. Rankin: Is the Minister aware that while the regulations to which he refers protect the animal which is fed the commodities which are suspect, particularly in the case of arsenical compounds, there is no regulation known—if there is one perhaps the hon. Gentleman will quote it—which protects the consumer against the amount of the animal that he may eat carrying those dangerous products?
    Mr. Stodart: Let me repeat that there is no evidence of food being inferior in quality.
    Mr. Rankin: Then what is it?
    Mr. Brewis: Is my hon. Friend aware of the considerable anxiety in all sections of the community, including the farming community, about factory farm methods, and would he see if any regulation could be made laying down conditions under which animals should be kept in these farms or factories?
    Mr. Stodart: I shall certainly take note of that suggestion. It is a fact, of course, that a Committee is about to investigate

    387
    the whole question of the condition under which animals are being kept under intensive methods, and this, I am quite sure, will be a subject of which it will take note.

    Road Safety
    Mr. Steeleasked the Secretary of State for Scotland if he will set up a committee to examine and report on the provisions made for road safety in Scotland.
    Mr. Campbell: My right hon. Friend is considering with the Minister of Transport how best to give a new impetus to road safety activities, and he will bear the hon. Member's suggestion in mind.
    Mr. Steele: In view of the fact that Scotland has some responsibility in this matter, that road accidents are increasing, and that the reports from the various authorities in Scotland show varying success records and that efforts differ very widely on how to tackle this problem, would it not be worth while, in Scotland, to have a committee to examine this problem so that it could give guidance to local authorities and others as to the best methods and organisations to deal with it?
    Mr. Campbell: As I said, this suggestion will be taken into account. The hon. Member has described what he has in mind, and I know that he has studied this matter very fully. I can assure him that his suggestion will be considered.

    Typhoid Outbreak, Aberdeen
    Mr. Hector Hughesasked the Secretary of State for Scotland when and where the inquiry into the typhoid epidemic in Aberdeen will hold its sittings; and what evidence it will call.
    Mr. Grimondasked the Secretary of State for Scotland where the inquiry into the typhoid epidemic at Aberdeen will hold its meetings.
    Mr. Stodart: These are matters for the Committee to decide. I understand that they intend to hold meetings in Aberdeen, Edinburgh or elsewhere, as occasion requires.
    Mr. Hughes: Now that the epidemic in Aberdeen is happily over, will the Minister see that the inquiry is as expeditious
    388
    and as complete as possible, so that Aberdeen can quickly regain its traditional reputation as a clean and healthy seaside resort?
    Mr. Stodart: I know that the Committee is aware of my right hon. Friend's desire to have its report as quickly as possible, but when the precise date will be I would not like to say. I should like to pay tribute to the public health authorities and to the public in Aberdeen for the quite miraculous way in which the disease has been contained.
    Mr. Grimond: As to the places where the Committee will meet, may I ask the Minister to be more explicit? Could it possibly require a meeting anywhere eise outside Edinburgh or Aberdeen?
    Mr. Stodart: There was a meeting in London initially, and I believe that the Committee met in Aberdeen yesterday and proposes to meet there again, but it is not impossible, perhaps, to seek some kind of bacteriological evidence from experts, that it may wish to sit in London.
    Commander Donaldson: Apart from the actual meetings of the Committee, could I ask my hon. Friend to press on his right hon. Friend once more the need to make it clear to Britain as a whole, through any contacts that he may have with the Press and otherwise, that the epidemic has now subsided and that it is quite safe for people from other parts of Britain to book their tourist holidays in Scotland from now on? There have been cancellations in hotels in my area in the South-East and the Borders, and I think that people have not been sufficiently informed that the danger is over and that they can well book their reservations for August at least.
    Mr. Stodart: I think that my right hon. Friend the Prime Minister made it clear on Tuesday that Scotland is a large place and that holidays in Scotland are perfectly safe. It gave me great satisfaction to see in the newspapers this morning that in certain parts, namely on the Western Coast, the tourist traffic has built up to a peak much sooner than usual.
    Mr. Hector Hughesasked the Secretary of State for Scotland if he will so frame the terms of reference of the proposed inquiry into the typhoid epidemic in Aberdeen as to enable its members

    389
    to assess the loss and damage sustained by shipowners and crews and by owners and workers in hotels, boarding houses, shops and other businesses, and to make appropriate recommendations.
    Mr. Stodart: My right hon. Friend announced on 8th June the terms of reference of the Committee of Inquiry, and it has already started its work. The purpose of the Committee is to investigate the source of the epidemic, and my right hon. Friend does not think it would be appropriate to ask it to consider the different questions raised by the hon. and learned Member.
    Mr. Hughes: But does not the hon. Gentleman realise that precedents show that in typhoid epidemics elsewhere similar committees dealt with the question of compensation? Will he make it clear to the Committee now sitting that it should construe its terms of reference in such a way as to enable it to deal with the question of compensation?
    Mr. Stodart: I am afraid that I cannot give that assurance. If the hon. and learned Gentleman would like to give me details of the examples which he has quoted, I will certainly invite my right hon. Friend to draw them to the Committee's attention. My impression is that on previous occasions committees of inquiry into the causes of the outbreak did not deal with compensation. However, if I am wrong, I hope that the hon. and learned Gentleman will let me know.
    Mr. Hughes: The hon. Gentleman is wrong.

    Tuberculosis
    Sir J. Hendersonasked the Secretary of State for Scotland how many hospital patients in Scotland were suffering from tuberculosis during each of the years 1951, 1957 and 1963.
    Mr. Stodart: The numbers of hospital beds occupied by patients suffering from respiratory or non-respiratory tuberculosis in the years in question were as follows:

    1951

    …

    …

    …

    5,947

    1957

    …

    …

    …

    4,674

    1963

    …

    …

    …

    1,582.

    Sir J. Henderson: The figures given by the Minister will be welcomed by the people of Scotland. May I ask my hon. Friend if the beds occupied
    390
    formerly by T.B. cases are now available for general hospital use?
    Mr. Stodart: There is certainly no surplus of beds to hospital requirements. The greatly lessened need for such beds over the past few years has resulted in the closure of some of these types of hospitals, either in whole or in part, and the diversion of beds in others to different uses, for example the accommodation of geriatric patients.
    Mr. Ross: Could the hon. Gentleman try to correct the impression that he has given by stating the number of patients admitted rather than the number of beds that were used. If he will look at the figures which I had in answer to a similar Question a few days ago, he will discover that I was given an entirely different set of figures. Although the trend was much the same, there was a greater number of patients—7,900 and 4,500.
    Mr. Stodart: I shall certainly take note of that. I am afraid that my memory does not carry the number of figures which the hon. Gentleman has given.

    Cancer
    Sir J. Hendersonasked the Secretary of State for Scotland how many-cases of cancer were notified in Scotland in each of the past five years.
    Mr. Stodart: Cancer is not a statutorily notifiable disease. The numbers of deaths from cancer in the last five years, however, were as follows:

    1959

    …

    …

    …

    11,032

    1960

    …

    …

    …

    11,033

    1961

    …

    …

    …

    11,221

    1962

    …

    …

    …

    11,476

    1963

    …

    …

    …

    11,720

    Sir J. Henderson: Does my hon. Friend realise the great anxiety that there is throughout Scotland at the enormous increase of this dread disease, and can I have an assurance that neither money nor effort will be spared to try to arrest and combat this dreadful disease?
    Mr. Stodart: Yes, Sir.
    Mr. W. Hamilton; Can the hon. Gentleman say what steps the Government are taking to step up their campaign against smoking because of the connection between smoking and cancer?
    Mr. Stodart: It is a fact that the great increase in the cause of cancer lies in cancer of the lungs. Continuing efforts are being made to improve the methods of earlier diagnosis and treatment, and the Government and local health and education authorities are carrying out a campaign to try to educate the public about the risk involved in smoking.

    Cockenzie Power Station
    Sir J. Gilmourasked the Secretary of State for Scotland what information he has about the progress of the construction of the Cockenzie power station.
    Mr. Campbell: I am informed by the South of Scotland Electricity Board that work is proceeding satisfactorily and to schedule. The Board hopes to have the first of the four sets in operation by 1966.
    Sir J. Gilmour: Can my hon. Friend tell me when the work will be completed and the whole station working, and what effect it will then have on the number of people employed in the coal mining industry?
    Mr. Campbell: It is hoped to have the station in full production by 1968. It should keep about 5,000 miners employed.

    Magistrates (Training Scheme)
    Sir J. Duncanasked the Secretary of State for Scotland whether he intends to arrange for training and instruction of magistrates in Scotland, and if he will make a statement.
    Lady Tweedsmuir: As my right hon. Friend stated in reply to the hon. Member for Kirkcaldy (Mr. Gourlay) on 10th June, he already encourages local arrangements for courses of lectures for justices.
    Sir J. Duncan: Will my hon. Friend step up the arrangements so that, in the interests of justice, magistrates will not be as much in the hands of their clerks as they have been up to now?
    Lady Tweedsmuir: Yes, Sir. A good deal is being done to encourage these local courses.
    Mr. Gourlay: In a reply which I received the other week, it was stated that a new manual was being produced,
    392
    "What the Scots Magistrate Ought to Know." Will the noble Lady give an assurance that when this manual is ready she will circularise all local authorities in Scotland requesting them to supply copies to all the magistrates?
    Lady Tweedsmuir: This manual was published in 1955. It is being revised and brought up to date. There will be a free issue to justices, and all clerks of the court will be told about it.

    Combine-Harvesters
    Sir J. Duncanasked the Secretary of State for Scotland how many combine-harvesters there were at work in Scotland during the 1963 harvest; and what was the equivalent figure 10 years previously.
    Mr. Stodart: Information is not available about the number of combine-harvesters at work during a particular harvest, but the Agricultural Machinery Census of February, 1964, shows that there were then 5,531 combine-harvesters in Scotland. The total at the corresponding census in 1954 was 1,245.
    Sir J. Duncan: In view of this remark able increase showing the energy and enterprise of Scottish farmers to take advantage of modern machinery and modern methods, can my hon. Friend say approximately how much of the 1963 harvest was reaped in this way and what was the increased productivity?
    Mr. Stodart: I cannot give any specific figures. As we move about Scotland during harvest time our eyes give us a pretty good indication that the proportion of the total acreage harvested in this way is very large. I do not think that there are any precise figures available about the increased productivity. For my own part, I would hazard the guess that it might well be one or two bags extra on every acre.
    Mr. Steele: In view of the representations of the Scottish farmers to Members recently, can the hon. Gentleman say how the Scottish farmers could afford these very expensive machines? Was there any application to the National Assistance Board to enable them to purchase them?
    Mr. Stodart: Farmers are most remarkable people.

    Gin Traps
    Sir T. Mooreasked the Secretary of State for Scotland if he is yet satisfied that a humane substitute has been found in Scotland for the gin traps: and if he will make a statement.
    Mr. Stodart: No humane and reasonably effective substitute for the gin trap has yet been found for use under Scottish conditions against foxes and otters, which are the only two remaining permissible uses. Every effort is being made to find a satisfactory alternative.
    Sir T. Moore: Since a suitable humane trap has been found for England and Wales, why could not my hon. Friend authorise a similar trap for Scotland?
    Mr. Stodart: I think that that is putting a slightly different inflection on the problem. Most of Scotland is hill country where it is extremely difficult to hunt foxes efficiently. It is also very difficult to gas them. In Scotland foxes do a great deal of damage to lambs, which form a much higher proportion of the livestock population than they do in England.
    Mr. Emrys Hughes: Is the hon. Gentleman aware that the hon. Member for Ayr (Sir T. Moore) is of the opinion that a humane alternative to the gin trap is birth control pills for rabbits? Is he further aware that the rabbit problem is causing great concern in Ayrshire and that we would welcome a safe period-say, between April and October? Does the hon. Gentleman know that the only reason why the hon. Member for Ayr does not advocate this is that he is awaiting a decision by the eminent ecclesiastical authorities?
    Mr. Stodart: I say to the hon. Member in reply to his suggestion about contraceptives for rabbits that many a true word is spoken in jest.
    Sir T. Moore: Is my hon. Friend aware that the hon. Member for South Ayrshire (Mr. Emrys Hughes) is talking complete nonsense, as he very often does?

    New Hospital, Airdrie
    Mr. Dempseyasked the Secretary of State for Scotland if he will give an approximate starting and finishing date
    394
    for the new general hospital to be built in Airdrie; and if he will make a statement.
    Mr. Stodart: This project is at present expected to start in 1968 and to take about four years to complete.
    Mr. Dempsey: Will the plans be completed by 1968? Is the hon. Gentleman aware that planning is being held up because the planners are tackling this onerous task only in their spare time? In view of the fact that general hospitals in this part of the country are already a century out of date, is it not about time that the hon. Gentleman expedited the starting of this new building?
    Mr. Stodart: My information is that the start is not being held up because of planning delays. The starting date of this scheme could not be brought forward without disturbing an order of priority which was settled after full consideration of hospital needs.
    Mr. Lawson: Will the hon. Gentleman tell us who was consulted and by what process of consultation the order of priority putting Motherwell after Airdrie was decided?
    Mr. Stodart: There was certainly correspondence with the chairmen of the regional hospital boards, who were well aware of what was intended.

    Health and Hygiene
    Mr. Dempseyasked the Secretary of State for Scotland if, in cooperation with other interested bodies, he will launch a health and hygiene campaign, with a view to giving the general public greater protection against the outbreak and spread of typhoid and other serious epidemics; and if he will make a statement.
    Mr. Stodart: My right hon. Friend is sure that the Aberdeen outbreak has brought home to all concerned the importance of cleanliness in avoiding the spread of infection, and the chief medical officer wrote on 8th June to all medical officers of health recommending them to reinforce continuous food hygiene teaching to traders and the public. To help in this, posters were distributed to local health authorities and hospitals.
    Mr. Dempsey: Is the hon. Gentleman aware that his right hon. Friend is wrong in this respect, and does not he realise that thousands of people who are taking meals from certain restaurants would never dream of eating them if they knew the unhygienic conditions in which the meals had been cooked? Is it not about time that we reinforced the sanitary inspectorate for this purpose and appealed to proprietors, consumers and all who handle food, either directly or indirectly, to have a widespread campaign in Scotland to improve present standards of hygiene?
    Mr. Stodart: My right hon. Friend is well aware of this problem. The Scottish Food Hygiene Council considered it at its last meeting. The Council has proposals in preparation and expects to make recommendations after its next meeting.

    Store Cattle
    Sir J. Gilmourasked the Secretary of State for Scotland if he will state, for the latest year available, the average cost of store cattle produced by farmers in the East of Scotland; what was the average realisation price; and what profit or loss accrued to the feeder.
    Mr. Stodart: Figures of costs of store cattle in the East of Scotland, their eventual realisation prices and the resulting profit or loss vary enormously with the age of the animals, the system of feeding and management and other factors. I refer my hon. Friend to the recent report, "Costs of Cattle Production 1962–63", from the Edinburgh School of Agriculture, which shows the results for a number of different systems of feeding on a sample of farms in the South-East of Scotland.
    Sir J. Gilmour: Having regard to the public interest in meat prices, will my hon. Friend agree that these figures show that some feeders make a very small profit and others make a loss, the high price of meat being due to world shortage and, for instance, the doubling of the amount bought by the Common Market in the last two years, not to any increased profit accruing to Scottish fanners?
    Mr. Stodart: I notice from the report that there were 109 enterprises examined, and it is certainly true that the profits
    396
    shown were disappointing. I agree with my hon. Friend that it is, initially, a world shortage of meat, particularly of beef, which is causing the high prices in the market at present.
    Mr. Hamilton: Can the hon. Gentleman say what the profits of the wholesalers and distributors are, because there is a vast body of opinion in the country which feels that this is where the housewife's purse is being filched, rather than at the farmer's end?
    Mr. Stodart: I could not give that figure without notice, but, if the hon. Gentleman is anxious to have it, I commend to him the Verdon Smith Report which, I believe, went into the matter in great detail.

    Roads (Expenditure)
    Mr. Andersonasked the Secretary of State for Scotland what was the expenditure for the year 1963–64 per head of population in new construction and major improvements on roads in Scotland.
    Mr. Campbell: Expenditure in 1963–64 on new construction and major improvements on roads in Scotland was about £3 10s. per head of population.
    Mr. Anderson: How does this figure per head compare with the equivalent figure for England and Wales?
    Mr. Campbell: The comparable figure for England and Wales is £2 15s.

    A.74 (Dual Carriageway)
    Mr. Andersonasked the Secretary of State for Scotland how many miles of the A.74 dual carriageway from Glasgow to the English Border have been completed; how many are at present under construction; on how many miles construction has not yet commenced; and what is the estimated date of completion of each of these two last categories.
    Mr. Campbell: I refer my hon. Friend to the Reply my right hon. Friend gave to the hon. Member for Dunbartonshire, West (Mr. Steele) on 22nd June.
    Mr. Anderson: Is my hon. Friend aware that the A.74 carries about three-quarters of all the road traffic between

    397
    Scotland and England? Will he, therefore, regard it as a matter of special urgency to have the work pressed ahead on the section which constitutes something of a bottleneck between Beattock in Dumfries and the Lanarkshire county boundary, and can he state when work on that section will begin?
    Mr. Campbell: My right hon. Friend recognises the importance of the road to which my hon. and learned Friend refers. I can tell my hon. and learned Friend that the Secretary of State has just authorised Dumfries County Council as his agents to seek tenders for the scheme which he mentioned, and work should start this summer.
    Mr. Steele: In the reply which the Secretary of State gave me earlier this week, it was said that this whole stretch from Uddingston to the Border would be finished by 1970, but I had a letter in 1955 saying that it would be finished by 1965. Since the project is now five years behind anyway, may we have a firm assurance that the work will, in fact, be completed by 1970?
    Mr. Campbell: I can repeat what my right hon. Friend said to the hon. Gentleman in his earlier Answer. It is certainly his intention that the work should be completed by 1970.

    Probation Service
    Mr. Wolrige-Gordonasked the Secretary of State for Scotland whether he will now set up a single negotiating body for the Probation Service; and if he will make a statement.
    Lady Tweedsmuir: My right hon. Friend and the Home Secretary will shortly be writing to the parties concerned inviting them to consider the establishment of Great Britain negotiating machinery.
    Mr. Wolrige-Gordon: This matter has been subject to considerable delay. Can my noble Friend say whether the Government are in favour of Great Britain negotiating machinery?
    Lady Tweedsmuir: They are in favour.

    Day-release Classes
    Mr. Lawsonasked the Secretary of State for Scotland what proportion of
    398
    working persons under 18 years of age attended day-release classes in Scotland in 1956–57 and in the latest year for which figures are available, giving proportions for boys and girls separately.
    Lady Tweedsmuir: Eleven per cent. of insured persons under 18 attended day-release classes in 1956–57, and 12·4 per cent. in 1962–63. Separate figures for boys and girls are not available for 1956–57; for 1962–63 they were 20·9 per cent. for boys and 4·2 per cent. for girls.
    Mr. Lawson: Is it not time that all the Ministers for Scotland looked into this matter again? Is it not shameful how badly off we are in Scotland compared with other parts of Great Britain, even though other parts of Great Britain are badly off compared with what is happening elsewhere? Will the noble Lady express her shame and concern that the results are what they are, and will she see to it that something is done at once about this desperately urgent matter?
    Lady Tweedsmuir: Without doubt, the figures are disappointing, but a number of new colleges have been opened in an effort to deal with the problem, and we have also passed the Industrial Training Act. I think that these measures, together with the special publicity undertaken, ought to help to improve the situation.
    Mr. Clark Hutchison: Will my noble Friend give special attention to increasing the present small number of girls who are given day-release?
    Lady Tweedsmuir: I agree that the figures for girls are not at all good. I understand that part of the reason is that many of them do not go in for apprenticeships, and also, of course, employers are inclined to think that they may get married. No doubt this is true, but I do not share this view about girls—[Laughter.] I hope that girls will get married, but I do not share the view that employers should not try to let them go on day-release. What we have done in the new colleges which are coming into use is to encourage the authorities to give, for instance, commercial education and catering education. We hope that this will assist.
    Mr. Dalyell: What action have the Scottish Office taken since the publication of the Henniker-Heaton Report on day-release?
    Lady Tweedsmuir: What I said in answer to the last supplementary question gave some indication of what we are doing. Of course, we did have the equivalent of the Henniker-Heaton Report in 1962, and we are studying that as well.

    Crimes of Violence
    Sir T. Mooreasked the Secretary of State for Scotland how the figures for 1963 compare with the previous year in respect of crimes of violence against the person, including sexual offences.
    Lady Tweedsmuir: The number of crimes against the person made known to the police in Scotland in 1963 was 4,604, of which 2,084 were sexual offences. The corresponding figures for 1962 were 4,508 and 2,079.
    Sir T. Moore: I admit that I cannot say that there is much increase, but, in view of the figures which my noble Friend has given, does not my noble Friend agree that there is still the need for far more severe punishment—
    Mr. Bence: Corporal punishment?
    Sir T. Moore: —yes, preferably physical—and that this should be adopted in Scotland?
    Lady Tweedsmuir: No, Sir; we are not in favour of the reintroduction of corporal punishment.
    Mr. Emrys Hughes: Do the crimes of violence listed include offences committed by motorists under the influence of drink, which are causing a great deal of concern in Ayrshire? Is it proposed to introduce flogging for such cases?
    Lady Tweedsmuir: No, Sir.
    Sir J. Duncan: Is my noble friend satisfied that a Bill similar to the Malicious Damage Bill is necessary in Scotland, or is the law adequate, in her opinion, to deal with hooliganism?
    Lady Tweedsmuir: I think that the law at present is adequate. A great deal is done by the police, so far as they can, in crime prevention.
    400
    Perhaps I should have made clear that the figures which I gave do not all involve violence. The numbers involving violence were 1,936 in 1963 and 1,829 in 1962.

    Highland Development Authority
    Mr. Grimondasked the Secretary of State for Scotland if he will now take steps to set up a Highland Development Authority.
    Mr. Stodart: No, Sir. My right hon. Friend takes the view that the setting up of a Highland Development Authority is a matter for consideration in the light of the outcome of the Scottish Development Group's current review of the Highlands and Islands.
    Mr. Grimond: Is the hon. Gentleman aware that his right hon. Friend is wrong, that this matter has been under consideration for years and years, and that the north of Scotland cries out now for some executive action by a body which is not merely advisory but which has a duty to act and some finance? Will the hon. Gentleman read the introduction by Crowther to the Buchanan Report which makes quite clear that development authorities are the solution to the imbalance which exists between different parts of the country?
    Mr. Stodart: It is true that a great deal of the activity in the Highlands does need co-ordination, but where coordination is required it can be achieved through the action of the Secretary of State and his Departments, with the advice of bodies like the Highlands Panel or the recently established Highland Transport Board.
    Sir John Macleod: Has my hon. Friend been given any indication by the right hon. Member for Orkney and Shetland (Mr. Grimond) and others of the powers that they would be prepared to take out of the hands of the local authorities and give to a body like the one suggested? That is a very important factor.
    Mr. Stodart: It is one of the considerable problems involved.
    Mr. Ross: The Government say that co-ordinating action should be achieved by the Secretary of State, but is it not the case, certainly in transport, that

    401
    such action has not been forthcoming and that there is conflicting advice from various advisory bodies in relation to what is being done by the Minister of Transport and the Secretary of State? Is it not also true that the Government always manage to find a reason for saying "No" to taking the right action in the Highlands? Is it not time that we had a body with executive authority and suitably backed with adequate finance?
    Mr. Stodart: The Highland Transport Board has a promising future and I expect great things of it.

    A.9 (Conon River Bridge)
    Sir John MacLeodasked the Secretary of State for Scotland when he will give authority for a permanent bridge to be erected to replace the temporary Bailey bridge on the A.9 trunk road which passes over the Conon river.
    Mr. Campbell: My right hon. Friend hopes to authorise replacement of this bridge within the next three or four years.
    Sir John Macleod: This is absolutely ridiculous. Does my hon. Friend realise that this is a main trunk road and that it has had this Bailey bridge for over eight years? Does he know that the bridge has had to be closed because it is breaking down? This would not be tolerated in the South. Will he put more drive and energy into this and see that a two-way bridge is started immediately?
    Mr. Campbell: I fully understand my hon. Friend's concern about this. I, too, live in the North and I am familiar with this bridge. Within the last few days the county council has been in direct touch with the Department and the matter is under consideration at this moment. I am sorry that I cannot say more at present, but I will keep in close touch.

    Church of Scotland Training Centre
    Miss Herbisonasked the Secretary of State for Scotland if he will increase his proposed grant of £4,000 in respect of Carberry Tower youth leadership training and conference centre of the Church of Scotland.
    Lady Tweedsmuir: My right hon. Friend has already increased from £4,000 to £6,250 his offer of grant for the further extension and adaptation now proposed.
    Miss Herbison: The figure of £6,250 is certainly better than £4,000, but is not the hon. Lady aware that excellent work is done at this centre in training for youth leadership? She must also be aware of how important it is in these days that as many youth leaders as possible should be trained. Will she give further consideration to giving an even bigger grant to the Church of Scotland for this purpose?
    Lady Tweedsmuir: The further consideration which we gave to this matter has resulted in the higher grant. We gave the usual 50 per cent. grant on the amount for the protected use of Carberry Tower for youth leadership training and social and recreational purposes. We did not think that we could give it for purposes purely of religious instruction.
    Sir J. Duncan: Is it not rather unfair to say that this is discrimination against the Church of Scotland? Will my hon. Friend make it clear that there is no intention of discrimination?
    Lady Tweedsmuir: Certainly there is no discrimination.
    Mr. Ross: Does that mean that they are all treated inadequately?
    Lady Tweedsmuir: They are all treated fairly.

BROADCASTING (ADVERTISING CONTRACTS)
Mr. Jeremy Thorpe (Devon, North): I beg to move,
That leave be given to bring in a Bill to regulate the placing of advertising contracts with radio and television stations.
The Bill which I seek leave to introduce is sponsored by hon. Members on both sides of the House. Its aim is to regulate the placing of advertising contracts with radio and television stations, which would be achieved by causing stations wishing to enter into such contracts to register with the Postmaster-General or any other body to which he would be prepared to accord recognition.
Perhaps I should at once declare two interests, although they are remote. First, I make part of my living by broadcasting, but the products are not such as ever to commend themselves for inclusion in the existing menu put out by the pirate radio ships. I am also a director of the south-west region of Rediffusion, although I understand that that body does not and would not derive any financial benefit or advantage from the operation of these stations.
Let me say of the pirate operators that one might admire their legal ingenuity, their capacity to make tax-free profits and, not least, their capacity to provide this sort of programme that appears to fill a need. In so far as this is shown by pirate radio operators, I would concede that they may well have indicated that this House and, to a lesser extent, the B.B.C. have lagged behind public opinion. But I suggest that there are four main objections to pirate radio stations.
The first is that 123 nations, of which we are one, have decided to share out radio frequencies on a rational basis rather than leave congested wavelengths to jamming and confusion. It is clear that the pirates care nothing for this. We have already received complaints of interference from neighbouring countries, and were there to be an increase in pirate transmissions it would follow that such interference would be aggravated and that, ultimately, there would be a very real chance that this would interfere with the safety frequencies used by ships and aircraft. We are surely all agreed that this is something we
404
could never tolerate in this country and I cannot see why we should have to wait until such a thing actually happens before taking effective action.
The second reason is that there is no legal recourse in connection with the contents of broadcasting by pirate radio transmitters. The content may be innocuous now, but it could just as easily be defamatory, seditious, obscene, or undesirable in some other way without any protection for the public or for this House.
The third objection is that, unlike the B.B.C. the I.T.V. Companies, Radio Luxembourg and Radio Manx, these stations are exploiting the products of recording companies without making any recompense. This is doubly unfortunate since these recording companies recognise the interests of the musical profession and the performers in making their livelihood in these ways. I do not believe that any ex gratia payments by these pirate radio stations are any substitute for payment as of right.
The fourth objection to these stations is that, by broadcasting outside the jurisdiction, they are not liable to tax on their profits and I believe that it is not unreasonable to expect that when money is made out of this country something should be paid back in return. If any proof is needed of the unsatisfactory state of existing legislation, I would point out that every person who listens to an unauthorised broadcast commits a criminal offence, for which he can be fined £10, and £50 for every subsequent offence. In fact the Postmaster-General has been condoning a series of criminal breaches of the law by not withdrawing the licences of the offenders.
I will not weary the House with the legal niceties involved. Suffice to say that the powers possessed by the Postmaster-General are far greater than he appears to understand. Radio Caroline has already had its registration withdrawn by Panama. It is not now registered in any country and is accorded no protection from visit or search by a warship of any country. It is, in certain circumstances, liable to seizure, and in certain other circumstances individuals broadcasting from it are personally liable to arrest under the Wireless Telegraphy Act.

405
Radio Atlanta is in a somewhat stronger position, because the Postmaster-General has not yet asked Panama to withdraw its recognition on the ground of the breach of the International Telecommunications Union which is being committed by that Panamanian registered ship. In fact, the only executive act so far adopted by the right hon. Gentleman and his colleagues is to divert a helicopter on a training flight to collect a food-poisoned disc jockey who was suffering the ill effects of eating tinned salmon squatting on Crown property and broadcasting therefrom.
The right hon. Gentleman has said that nothing can be done until we receive the recommendations of the Council of Ministers. I make three comments about that. First, the Parliaments of Sweden, Norway, Denmark and Finland have effectively legislated already in regard to pirate radio stations and I refuse to believe that this House is less competent to act than the Scandinavian Parliaments.
Secondly, under the Representation of the People Act, 1949, we have already claimed extra-territorial powers to prevent political broadcasts, wherever they may emanate from, to this country so if a precedent is called for, there it is.
Thirdly, the proposed provisions of the European Convention are reasonably well known and none of them would conflict with the machinery which my Bill would set up. In any event, whether or not we accept the Convention an Act of Parliament will be necessary to give it force. The longer this problem is left, the harder it will be to tackle.
I ask leave to introduce the Bill without prejudice to the future of regional broadcasting, whether, indeed, there should be such broadcasting, and
406
whether it should be commercial or under the B.B.C. That is quite another problem and one for intelligent discussion. But, in my submission, the present situation in which pirate radio stations pay no tax, are under no obligation to pay copyright fees, and have no regard for internationally-agreed wavelengths, is something which cannot on any basis whatever be defended.
It will be interesting to see whether, if this Motion is opposed, the opposition comes from those hon. Members who sit for East Anglian seats, coincidentally on a marginal basis, who are prepared to condone these pirates rather than fight for a land-based and recognised legitimate alternative; whether it comes from the commercial radio lobby, who regard this as the thin end of the wedge, I believe wrongly, because if this pirate broadcasting is popular and made illegal the greater will be their case for a legalised substitute; or whether it will come from hon. Members who give unqualified support to the varying attitudes taken by the Postmaster-General and his colleague since this problem first arose. On these grounds, I beg to ask leave to introduce the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Thorpe, Mr. Donnelly, Miss Quennell, Mr. Elwyn Jones, Mr. Holt, and Mr. G. Johnson Smith.

BROADCASTING (ADVERTISING CONTRACTS)
Bill to regulate the placing of advertising contracts with radio and television stations, presented accordingly and read the First time; to be read a Second time on Friday and to be printed. [Bill 172.]
ORDERS OF THE DAY
  HIRE-PURCHASE (No. 2) BILL [Lords]
  As Amended (in the Standing Committee), further considered.
  HIRE-PURCHASE (No. 2) BILL [Lords]

    New Clause.—(HIRER'S LIABILITY ON TERMINATION BY OWNER.)
    Where the owner lawfully recovers possession of any goods subject to a hire-purchase agreement (in circumstances other than those referred to in section 4 of the principal Act), and in any action begun after the commencement of this Act the owner makes a claim for moneys due under the said agreement a provision of the agreement purporting to set out an amount (or a method of arriving at an amount) to be payable by a hirer to the owner in the event of such lawful recovery of possession, shall be enforceable if in the opinion of the Court the amount or the method as the case may be is reasonable having regard to—

    (a) the hire-purchase price of the goods,

    (b) the sums already paid by the hirer to the owner pursuant to or in connection with the agreement,

    (c) the value of the goods at the date of recovering possession,

    (d) the expenses incurred by the owner in connection with the recovery of the goods and their storage or disposal.

    This section shall have effect notwithstanding the provision of section 5(c) of the principal Act.— [Mr. A. J. Irvine.]
    Brought up, and read the First time.
    3.41 p.m.
    Mr. A. J. Irvine: I beg to move, That the Clause be read a Second time.
    Mr. Speaker: I would propose that we should discuss with this new Clause, new Clause No. 12—"Rights of owner on repossession of goods.", which I would call for a separate Division, if desired—new Clause No. 13—" Amendment of Section 4 of the principal Act."—and Amendments Nos. 41, 110, 111 and 122.
    Mr. A. J. Irvine: That will be convenient, Mr. Speaker.
    The new Clause arises out of the decision taken in Committee to apply the true measure of damages principle to the termination of hire-purchase contracts. If there was a need to introduce that principle into the measurement of damages at all, it was obviously made greater by the wide extension of the financial limits which the Bill applies.
    408
    The decision taken in Committee has undoubtedly given rise to a great deal of thought and discussion by all those concerned. In view of the number and scale of hire-purchase transactions and the number of families affected, this obviously raises a matter of very great importance indeed.
    The Clause deals with the cases where the owner recovers possession of the goods in circumstances where the hirer has not exercised his right under the 1938 Act to terminate the contract by notice. I think that it is necessary to consider the point in the context generally of the rights and liabilities of the parties on hire-purchase contracts. I should like to have the opportunity to put forward the Clause with that background and in that context.
    In 1938, at the date of the principal Act, Parliament was very vigilant towards the whole concept of hire purchase. The whole idea of hire purchase was more suspect then that it is now. I have no doubt that in giving the hirer the right to terminate the agreement by notice, as the 1938 Act did, it was felt that a rather drastic innovation was being made in the law. The 1938 Act imposed, as the price, so to speak, that the hirer had to pay for receiving that concession, some onerous provisions as to what he would have to pay when he exercised that right.
    It could not be a sum less than half the hire-purchase price and, if the hirer had paid as much as half of the hire-purchase price, in addition to that the instalments due up to the date on which he gave his notice terminating the contract. This could operate, and in some instances did operate, harshly, especially when the chattel was delivered back to the owner in good condition, when it had been well looked after and had not markedly depreciated in value.
    It is an important change in the law which has been effected. In Committee, we dealt with this matter by an Amendment to Clause 1 to introduce the principle of the true measure of damages in cases where contracts are terminated by notice given by the hirer under the 1938 Act. It may be thought, and I hope it will be thought, that that was a useful decision to have arrived at. It was felt that, if this adjustment was made, some

    409
    regard should be had to the position of the owner, because the Amendment we achieved was confined to what the hirer would have to pay in the event of his terminating the contract by notice. It was felt that, some change having been made under that head, it was proper to have some regard to the owner's position. The need for this was felt to be all the greater because the effect of decided cases has been severely to limit the damages which owners can recover when hire purchase contracts are terminated.
    3.45 p.m.
    It was the desire of many hon. Members, in Committee, that this whole problem should be dealt with compendiously. It was this which led, as I understood—I want to put this perfectly fairly—some hon. Members opposite who were on the Committee to abstain and enable us to carry the Amendment which is now enshrined in Clause 1. We were glad of that. We felt considerable sympathy with those hon. Members opposite who abstained on this ground. Our common objective, a least in part at that stage, was to try to persuade the Government to make an overall and compendious treatment of this problem of damage and introduce in round terms the principle of the true measure of damages in a fashion which would do justice both to owners and to hirers.
    The Government's reaction to this situation was to decide to accept the principle of our Amendment, which the House will see is now in Clause 1(5). I say "accept the principle", because there is later to be proposed from the Government side an Amendment to the wording of the subsection. The Government decided to accept the matter in principle and to leave the whole thing at that. This seemed to us not a proper course to take. We felt that it would not be playing fair to acquiesce in that way of dealing with the matter, nor would it be in the public interest so to do.
    The Clause has the objective of endeavouring to do what we thought was acceptable in principle to large numbers of hon. Members on both sides in Committee, to make the true measure of damages principle more widely applicable than the Bill as it at present stands does. When the hirer is in breach of contract—that is the situation with which the Clause is concerned—and the owner
    410
    recovers the chattel, the owner may sometimes, under the existing law and in present circumstances, be very severely disadvantaged in the assessment of the damages which he recovers.
    The figure comprised in the contract setting out what is regarded between the parties to be an appropriate amount to be recovered by way of damages in the event of the contract being terminated may not be enforceable because it may be treated by the courts as a penalty and not as a genuine pre-estimate of damage. The courts have, perhaps, been particularly strict in their application of the concept of penalty relative to damages for breach of contract in hire-purchase transactions; no doubt because they have regarded hire-purchase transactions as having distinctive and special characteristics justifying that attitude towards them.
    The Clause is designed to get over that difficulty. It is, on the face of it, designed to assist the owner and we think that this is the proper and right thing to do because we feel that if we are altering the law to make it possible for the hirer to pay rather less than at present when he terminates by notice—as we effected by an Amendment which the Government now acknowledge as part of Clause 1—we see no harm in giving this element of relief to owners. Indeed, we are inclined to think that, by and large, this is a fair thing to do.
    It means that great importance will in future, if our proposed Clause becomes part of our law, attach to the form of the contract because the idea is to incorporate into the contract a pre-estimate of damage or, alternatively, a method of arriving at such an estimate—and that would be an amount which the owner would be entitled to recover or apply, as the case may be, in the event of a breach of contract. He would be entitled to recover that figure comprised in the contract as a pre-estimate if the amount of the figure or the method contained in the contract by which the figure was arrived at was regarded by the court as reasonable, having regard to the matters set out in the proposed Clause, the hire-purchase price of the goods, the sums already paid by the hirer to the owner pursuant to or in connection with the agreement, the value of the goods at the date of recovering

    411
    possession and the expenses incurred by the owner in connection with the recovery of the goods and their storage or disposal.
    The proposals in the Clause do not go the length which the finance houses desire. They would like, as I understand the position, to put their entitlement when they recover possession on all fours with what they are to get under Section 4 of the principal Act, as amended by Clause 1 of the Bill, when the hirer terminates by notice. At first sight, the House may think that there is a lot to be said for that view. It sounds all right. Yet a number of my hon. Friends and I have throughout recoiled from the idea that special safeguards to protect hirers—and remember that the 1938 Act was basically a consumer protection Act—should be treated as equivalently applicable to owners.
    We take the view, for example, that the proposal in the Clause is preferable to what is proposed in new Clause 13, which purports to deal with the owner on the same basis as our proposals in the Amendment which the Government accepted, which is now part of Clause 1 and which deals with the hirer. I ask the House, in that connection, what is the result? It means—and this is a valid objection to it—that an owner who terminates the contract, perhaps at an early stage after a very small number of instalments have been paid, calls in aid, by virtue of new Clause 13, a process of compensation for himself which at any rate starts from the 1938 Act position; that the hirer must pay at least half the purchase price. I do not like that in principle.
    It is perfectly true that, by the Amendment in Clause 1, that original 1938 provision is profoundly modified and on that modification would have to be founded any argument in favour of new Clause 13. None the less, I do not think that the assessment of the money on this hypothesis recoverable by the owner should start from a point so favourable to him, especially when that point was originally selected as part of a scheme of things designed to safeguard the hirer and to give him, as it did, a novel right to terminate the operation by notice.
    I would have the same kind of criticism to offer to new Clause 12. That
    412
    gives more aid to the owner than does the Clause that I have proposed. It does that because it offers damages to the owner apart, as I read it, from any pre-estimate that has been comprised in the contract. That seems to be going too far, although I do not think that at this stage I need say more. I venture to make the same criticism of the Amendment to new Clause 9 in the name of my hon. and learned Friend the Member for Stoke Newington and Hackney, North (Mr. Weitzman). He is recommending a change in the wording of our proposed new Clause and—
    Mr. Speaker: Order. I should have said that neither of the Amendments to the new Clause in the name of the hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman) is selected.
    Mr. Irvine: I am obliged for that advice, Mr. Speaker. I was simply about to comment, in passing, that that Amendment seemed to have an effect similar to the effect that would flow from new Clause 12 and be open to the objection I have indicated; that it would be going somewhat too far in the direction of assisting the owner as distinct from the hirer and upsetting the rather narrow balance which hon. Members on both sides of the House would best like to achieve.
    As I said earlier, the 1938 provisions relating to the payment to be made by the hirer on termination were not advantageous to the hirer in the same sense as was the grant of the right to terminate by notice. The benefit which the hirer got from the 1938 Act was substantially the right to terminate.
    That having been given, the money terms attached to the right of termination were fairly onerous upon him. Even though, by virtue of changes made in the Bill in Committee, we have adjusted them so that they may be more favourable to the hirer, I still do not think that they necessarily provide the right starting point from which to measure the owner's damage.
    4.0 p.m.
    It is arguable that something on the lines of new Clause 12 or new Clause 13 may be better than simply leaving this whole problem alone. As to that, we

    413
    reserve our position. Be that as it may, the best way of effecting the purpose which is so widely held in different parts of the House is by the language of our new Clause, which we regard as striking the right balance,
    I trust that in future an objective historian will note that in this matter of rewriting the law relative to damages on the breach and termination of hire-purchase contracts, a tired Government left it to the Opposition to do the constructive work both of finding out, recommending and formulating the appropriate remedies for faults in the existing law which called for remedy.
    Dr. Reginald Bennett: It is not in order for me now to move either new Clause No. 12 or new Clause No. 13, in my name, so I will merely animadvert upon them. I am pained, if nothing more, to find that in a matter in which the consciences of no less than 20 of my honourable colleagues on this side of the House are exercised to the extent of having put their names to a Clause to which my name is the first, my right hon. Friend the Secretary of State should not be present to discuss the matter.
    I am very upset about this. I do not accuse my right hon. Friend of discourtesy to me—1 have had the benefit of long discussion with him in his room on this subject; but when many of my hon. Friends on this side who have not taken part in any of the former stages of the Bill have attended to listen to the debate to hear discussion of this serious matter, on which it is clear that the consciences of my colleagues are divided, to put it mildly, my right hon. Friend should be here to state his case. I say this without insult to my hon. Friend the Parliamentary Secretary, but this is a grave matter and I am sorry.
    As on Second Reading, I should declare a financial interest in the industry. I repeat, however, as I said then, that I hope that this interest enables me to have knowledge on a subject which so many of my hon. Friends have discovered to be too abstruse for them to attempt to delve into and that it does not cloud my judgment of what is right and what is equitable.
    The hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine)
    414
    has expounded the principle to which the new Clauses seek to give expression. I do not believe that it can be imputed to self-interest on the part of hire-purchase companies that this type of adjustment in the case of broken contracts is brought forward. I have heard that imputation made, but it is unworthy and I will seek to explain why by saying that it is not only the hire-purchase industry which seeks this principle. As the hon. and learned Member for Edge Hill said towards the end of his remarks, my new Clause No. 13 represents the common denominator of opinion of the finance houses. New Clause No. 12 is by no means acceptable to them. If it seems to the hon. and learned Member to favour the owners or finance houses more than his own new Clause, it may do in one respect, but in another respect it does not, since my Clause seeks to be permissive and a guide to the courts whereas the Opposition new Clause is mandatory.
    In any event, what I seek to establish is that this is not a matter of sectional interest. If it were, the House would be justified in affording it scant regard as being a self-interested manoeuvre. I should, however, like to point out some of the disinterested bodies which have expressed themselves on this subject, and they have usually done so fairly strongly. Before doing that, I should, perhaps, draw attention, as the hon. and learned Member for Edge Hill has done, to the provisions at present in force under the 1938 Act, as modified in 1954, that on the termination of a contract by the hirer the sum payable to discharge the whole obligation shall be 50 per cent. of the total charge.
    There are many other hon. Members who will be able to confirm this with far more active knowledge of the running of the industry in detail than I can do, but I would say that this is, in the words of the Molony Committee, "rough justice". The 1938 Act has outgrown its strength. The scope of the industry has outgrown the scope ever envisaged in the 1938 Act, which, we know, as a Private Member's Measure and was undertaken in the diffident way that we private Members have to undertake these things in order not to cut across the entrenched legislation of the country too grossly.

    415
    The settlement of 50 per cent. could bring the grossest injustice to a hirer, especially if there is a termination in the earlier part of a contract when the hirer has paid a deposit and only a few instalments. It will, no doubt, be said that the reputable hire-purchase companies would never seek to press for the full 50 per cent. charge, because it must be remembered that when the first Act originally became law, the maximum charge under that Act was £50.
    I thank my right hon. Friend the Secretary of State for having arrived.
    In 1954, that figure was raised to £300, which is a multiplication by a simple factor of 6. In the Bill, it is sought to put it up to £2,000, which is a multiplication by something like 40. Surely, what is rough justice in a sum of £50 becomes savagery in a sum of £2,000. That is why I believe that the attempt to preserve this undoubtedly worthy legislation in its present form is misguided.
    It is also inevitable—and this is where a sectional interest may be pleaded—that owners can be let in for some serious losses under the sort of guidance which the courts at present receive. One might get judgments which allow the hire-purchase companies to suffer some really heavy losses which they cannot be said to deserve. There is usually a great deal of impatience with hire-purchase companies, but I have two examples of judgments which illustrate the sort of thing I mean.
    One case involved a washing machine and fittings at a hire-purchase price of £114. The loan began in February, 1960. By January, 1962, £66 had accrued due and £28 had been paid, so £38 were in arrear, the unpaid balance of the hire-purchase price being £76. Termination took place in January. No offer was made by the hirer. A summons was issued and in July, 1962, an order was obtained for the return of the goods but was suspended on payment of the unpaid balance plus costs by instalments of £2 10s. a month. No payment whatever was made. The goods were repossessed in November, 1963, and handed to the plaintiffs, who were able to realise only £6 10s. on the goods. The company therefore sustained a loss of £70. I will
    416
    not go into other cases. Other hon. Members can reproduce many.
    It is true to say that these companies are well able to afford these losses. Perhaps they are, but is it right that they should? By leaving this legislation in its present form, we are allowing injustice, admittedly to people who are not quite so much in need of protection as the hirer, but we are still allowing injustice to occur. I do not think that this House wishes that to happen.
    Nowadays, with the prolongation of this legislation, we have to acknowledge that the people who undertake hire purchase have no protection against the man who signs an agreement, puts down a deposit and thereafter pays no instalments and does not intend to do so. The answer which is usually given is that the hire-purchase companies should select their customers better. Any form of fraud could be brought home to the person who has been swindled with the remark, "Why did you trust the man?" We would not need a police force if that were a valid comment. My view, therefore, is that this 50 per cent. legislation is not the answer, and that is why I have put down my new Clause.
    I have said that other disinterested bodies have expressed themselves strongly on the matter. It was in paragraph 531 of its Report that the Molony Committee mentioned for the first time that the 50 per cent. was "rough justice" under the legislation as we know it today. I should, perhaps, read in detail and in full paragraph 548, in which the Molony Committee reached its conclusions on this matter. It stated:
    "In theory, a more equitable result would be achieved by restricting the owner's right of recovery to the hire-purchase price less money received from the hirer and the value of the goods retaken or returned. Such a provision would inevitably lead to disputes as to whether the true value had been obtained on realisation, with subsidiary issues as to the necessity to spend money on repairs etc. We prefer the simpler restriction to be found in Sections 4 and 5(c) of the Act"
    That is the full record. I direct the attention of the House to the Molony Committee's statement that
    "In theory, a more equitable result would be achieved …"
    Surely, it is for the House to attempt to translate theory into practice. I say, as I have said before, that I do not believe

    417
    it to be entirely beyond the wit of Parliament to devise a way in which that theory could be properly carried out and translated into practice.
    4.15 p.m.
    The disinterested bodies, other than the Molony Committe, included the Law Society, which said that it was in favour of this step. It argued this with legal validity and came to the following conclusions:
    "Where termination takes place under the agreement itself the owner's damages should be confined to the unpaid balance of the hire-purchase price less:

    (i) the value of any goods repossessed,

    (ii) any fee payable for the exercise of the option to purchase,

    (iii) a discount for acceleration of payment."

    This is broadly parallel with what I have attempted to move in the new Clause.
    The Economist, which is not generally biassed in these matters, published on 1st February an article on this subject of hire-purchase reform. The first sentence of this article reads:
    "Relentlessly, Britain is moving nearer the wrong sort of hire-purchase reform."
    It argues the point closely and refers to a decision under the present legislation. Towards the end the article reads:
    "This decision does pinpoint the need not merely to amend the Bill to incorporate the principle of true damages—which is still the fairest balance between hirer and company—but also to provide machinery to make sure that principle works. An amendment might, therefore, be accompanied by an obligation on the part of the finance house to show—in court if necessary—that a reasonable price was obtained."
    From the few quotations which I have brought to the House it will be seen that neutral and uncommitted opinion feels strongly on this subject. There has been no doubt about the feeling in Parliament. In another place, Baroness Elliot, who, as we all know, represents the feelings of the Consumer Council, spoke firmly in favour of this principle, and Lord Chelmer, who knows the subject, did so from the Government benches. There were many speeches. These speeches were made on an Opposition back bench Amendment. The hon. and learned Member for Edge Hill, in Standing Committee on the Bill, without any personal approaches having been made, apart from the speeches of my hon. Friends,
    418
    abstained from voting for the status quo when a group of Amendments similar to these new Clauses was before the Committee.
    I do not want to go on too long, although this is a long and complex subject. My own attempts to champion this principle started by my doing what the Economist so firmly recommended in its article—attempting to produce the machinery by which this should take place. I moved a new Clause in Standing Committee which was, I agree, most compendious, but which had an automatic scheme by which, with equity between the parties and agreement by both, a car, or whatever it may be, could be valued at the time of repossession and the value of the goods taken into account.
    The argument was that if one had a motor car which had been burnished every day by a proud owner who had since come on evil days and who had been unable to complete, it would be worth far more than a car which had been taken by a rascal who had never intended to pay for it, had been kicked around and run into the ground, never cleaned, and allowed to rust. Surely there should be some reward for virtue on the part of the hirer. We should take notice of the hirer's own efforts.
    In Standing Committee I moved that new Clause, and it included the machinery by which this should be brought about. As those who were present know, this was turned down, and I withdrew the new Clause in order that perhaps at a later stage, this afternoon, the principle could be discussed without being shut out by having already been discussed upstairs.
    To try to meet the Government's reluctance to adopt this principle, I have abandoned position after position. Not only does the new Clause which I have here today fail—and I am only too well aware of the fact—to contain the machinery by which the automatic and just appraisal of values between the parties could be arranged, but I have accepted automatically, therefore, that the matter must go to court. It was thought very desirable that litigation on this subject should be minimised, and that therefore we should attempt to keep these cases from constantly being taken to court, by making an equitable settlement by this arbitration.

    419
    Under the new Clause the cases would go to court, but there is not an absolutely stringent presumption on the court, for it is agreed that the court, if it thinks equitable, should estimate the measure of loss. I prefer that phrase "measure of loss" to the phrase "measure of damages", which has a dual meaning. The assessment of the measure of loss would be at the judge's discretion.
    I have done all this progressively to try to meet the Government, and on this sort of thing I am always prepared to compromise although not to abandon the principle. I hope that it is not too late to ask my right hon. Friend to accept the new Clause. I know that he has not felt inclined to do so in the past. But I hope that it is not too late to ask him to accept it, because if he does not, I shall deplore his decision exceedingly, and I shall repeat that we have made a wrong decision.
    Mr. David Weitzman: Frankly, if any of the three new Clauses were accepted I think that the position in law would be greatly improved, but I support the new Clause moved by my hon. Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine). As he pointed out, an Amendment has already been made, which is Clause 1 (5), which deals with the position of the hirer, and I think that the amendment contained in that Clause results, to a certain extent anyway, in the acceptance of the principle that the true measure of damages is the test.
    Now we have the case in the new Clause in which the owner recovers possession other than under Clause 4. The question is, to what sum should he be entitled because of the hirer's default? The new Clause says that if there is a provision in the hire-purchase agreement setting out the amount or method of arriving at the amount, that provision is enforceable only if the court thinks it reasonable, having regard to the matters set out in paragraphs (a), (b), (c) and (d). That seems to me to be right. Faragraph (a) is
    "the hire purchase price of the goods".
    Paragraph (b) is
    "the sums already paid by the hirer to the owner pursuant to or in connection with the agreement".
    420
    Paragraph (c) is
    "The value of the goods at the date of recovering possession".
    Paragraph (d) is
    "The expenses incurred by the owner in connection with the recovery of the goods and their storage or disposal".
    In effect, that lays down the factors which matter in assessing the damages, and it puts in legislative form what I think are the material factors which go to show what is the true measure of damages. On Second Reading, I put forward a plea for the adoption of this principle. Why is it right to do so? Why is it right to adopt the principle of the true measure of damages? I am sure that the House appreciates the difficulty which exists today in that, clearly, the decisions in this branch of the law appear to be manifestly unfair.
    Lord Denning, in the case of Financings Ltd. v. Baldock, set out that difficulty very clearly, and I hope that the House will forgive me if I quote from part of his judgment because it illustrates the difficulty. As reported in The Law Reports, 2 Queen's Bench, 1963, on page 113, he said:
    "But while those cases can be distinguished on the ground that they were cases of repudiation, I must say I am disturbed about the assessment of damages in them. Take the present case. A hirer does not pay two instalments, whereupon the owners retake the vehicle. There is no repudiation. The damages are limited to the unpaid instalments with interest. But take another case. If he had been more courteous and had written: ' I cannot pay any more instalments ', that would have been a repudiation and the damages would be multiplied ten-fold. It seems that in the ' repudiation ' cases the damages were calculated on the basis that the hirer had bound himself by a firm contract to pay all instalments up to the very end—indeed, as if he had made a firm contract to purchase—and had repudiated it. No regard seems to have been paid to the fact that the hirer had the right to terminate the hiring at any time and thus bring to an end his obligation to pay any more instalments."
    The Master of the Rolls went on:
    "I should have thought that, on this account, he would not be liable for any more damages than if he had himself given a notice to terminate, and that if he had given notice himself, the damages would be limited to the breaches up to the date of termination and no more: unless, of course the owners could rely on the 'minimum payment' clause. As a matter of principle, I should have thought that the damages should be the same in either case, whoever terminated the hiring. I say no more on this point, however, because it does not arise for decision today."

    421
    There we have set out, in the language of the Master of the Rolls, the real difficulty which exists today, and unless some alteration is made in the Bill about the law, that difficulty will continue. Personally, I feel that in all cases the proper way to deal with a breach is by the court being asked to assess the damages on a common law basis. That would get rid of any assessment on any artificial basis, and it is because I think that the new Clause moved by my hon. and learned Friend the Member for Edge Hill sets out that principle that I support it.
    I put down two Amendments. I recognise that I cannot deal with them, but I want to say something about the matter in them in criticising these Clauses. As the new Clause stands—and this applies equally to new Clause 12—one objection appears to me to be that new Clause 9, moved by my hon. and learned Friend, clearly says that if there is a provision in the agreement setting out a sum of money to be claimed or the method by which it shall be claimed, that provision shall be enforceable if the court thinks it reasonable.
    But that leaves a gap—in this way, that if the court does not think is reasonable, it is left to the law as it stands today. I think, frankly, that some provision ought to be made by which the court has power to award a reasonable sum. This is not a point which I want to elaborate. The argument has been gone into again and again. It is strictly limited in this way: clearly an injustice exists today, as is shown by the decided cases. I am sure that the Government will take the view that this is not a party matter and that if it is a real injustice, it ought to be cured. The way to cure it is to accept the great weight of opinion which says that on a principle of common law the true measure of damage ought to be ascertained in that way.
    I hope that the Government will accept the Clause which has been moved by my hon. and learned Friend.
    4.30 p.m.
    Mr. Iain Macleod: I am not a director of a hire-purchase company, but I am of a bank which has one of the most important finance
    422
    houses in the country amongst its subsidiaries. I am glad that my right hon. Friend the Secretary of State for Industry and Trade has come to listen to, and I hope to take part in, this debate, for this is perhaps the most important issue left to decide on the Bill.
    Although I was not a member, I followed very carefully the proceedings in Committee upstairs. It genuinely was an all-party Committee in the best sense of the word. But the House is now in a dilemma, and the dilemma was put very clearly by the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine), although he threw a couple of minutes' worth of party bricks at the end. But who am I to complain about ending a speech with partisan observations?
    I believe that in general the good firms have little, except a lot of paper work, to fear from the Bill. This is always so. The standards for which we can legislate are never the standards of the best. If we take the Factories Acts, for example the standards of safety that we demand are miles below those which the best fact Dries would themselves carry out, and, equally, they are miles above the standards of the worst. In practice, I do not think that any reputable company would pursue up to the 50 per cent. if, in fact, its loss was less.
    Although I have declared an interest, I am more concerned about this matter as a Parliamentarian than in any other capacity. Part of the difficulty, I am bound to say with regret, arises from the suspicious attitude—and I use the most amiable term that I can—of the Parliamentary Secretary, during the Committee stage, towards the finance houses. One sentence from the beginning of his very first speech illustrates that. He said:
    "Naturally, in looking to the protection of the consumer we must see that we are not grossly unfair to the other party."—[OFFICIAL REPORT, Standing Committee F, 27th February, 1964; c. 36.]
    That is a poor aim for the House of Commons. I cannot believe that we should aim at anything less than being fair to all parties if we can when we legislate. His is an opinion which is shared by legal luminaries, and in a recent case concerning the subsidiary to which I lave referred judgment was

    423
    given on a car at a rate of 1s. a month, which would mean that it would take 279 years to repossess that car on the capital loss alone—a length of time which I think most people would regard as excessive.
    I know, because I have heard my right hon. Friend speaking at the Finance Houses Association dinner, that he regards the work which the finance houses do in this field as very important indeed. I think, therefore, that we should look at this concept of rough justice—this is the real problem behind these new Clauses—with the intention, if we can, of producing something that is fair to everybody. If that can be done, it should be done.
    We—when I say "we" I mean the bank of which I am a director—have interests in this field in Australia, Canada, New Zealand, Cyprus, the Lebanon, and Switzerland. In every one of those six countries there are clauses either as to the true measure of damage, or a similar provision, and in many other countries, of which I have no particular knowledge, but I know that the United States is one, this is also the case.
    The method that we have in this country, far from being normal, is, anyway within the limits of my knowledge, abnormal, and, I am sure, unfair, because what might be rough justice where perhaps shillings were concerned under the 1938 Act, is certainly very difficult to accept when hundreds of pounds can be involved, as they are under the Bill. It is also true, as my hon. Friend the Member for Gosport and Fareham (Dr. Bennett) said, that many bodies not conceivably connected with this industry, such as the Law Society and the Consumer Council, have expressed the view that if possible machinery should be devised.
    The point that I particularly want to put to my right hon. Friend is that if we reject all these new Clauses—and this is why I said that I am concerned more than anything else as a Parliamentarian—we shall thwart the intentions of the Committee upstairs, because it is clear that on the relevant Amendment moved by the hon. Member for Sheffield, Hillsborough (Mr. Darling) a majority of Tory back benchers abstained, having
    424
    heard the arguments of the Parliamentary Secretary, and having heard the debate. Throughout the long discussion upstairs, I think that not one hon. Member on either side of what I have described as an all-party Committee spoke in support of the point of view of the Parliamentary Secretary, and so far at least no one has done so in the House this afternoon.
    The expectation and belief of both sides in Committee upstairs—I agree that there was no pledge; I am not suggesting that for a moment, and I see that the Opposition Front Bench agree with me—was that this matter would be put right on Report, and that having brought off, as it were, one leg of the double upstairs, at least the other leg would come home this afternoon. It may be necessary—indeed, it has been—to reword here and there, but that always happens. At the moment, we are left with one foot on the ground and the other in the air. It is only the Secretary of State for Industry and Trade who can rescue us from that awkward position.
    I agree with the hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman) that any one of these new Clauses will improve the Bill, and, therefore, the law as it stands. I say, in passing, that I hope that in due course we can bring together all the law on this subject which is getting extremely confused; but that does not immediately arise. For myself, unlike the hon. and learned Member for Stoke Newington and Hackney, North, I prefer new Clause 12 to new Clause 9, but I agree that either would improve the Bill.
    I hope that my right hon. Friend will agree that I have spoken as moderately as I can on this subject, which is one on which I feel very strongly. I hope that he will rescue the House—and I mean both sides of the House, or anyway several Members of it—from what is an embarrassing position—a position which could have been avoided if he had devised and tabled an adequate new Clause on true measure of damage; and I have shown how simple many other countries in the world find this to be—by accepting one or other of the Clauses under discussion. I hope very much that he will do so.
    Mr. John Robertson: My dislike of the new Clause is exceeded only by my dislike of the Bill, but I should

    425
    like to point out that the provisions in Scotland in respect of hire-purchase are superior both to the Bill and to the new Clauses.
    I think that some of the difficulty is due to the confusion which arises from the two questions involved in the Bill and in the new Clauses. The right of termination is one, and, having dealt with the right of termination, we go on to consider what would be a proper settlement on termination. Unfortunately, the Bill deals with the two questions in the same way. It says that when 50 per cent. has been paid the hirer has the right of termination, or if he terminates he must pay 50 per cent. One does not follow from the other.
    In the Scottish Act of 1932 the right of termination is granted when one-third of the hire-purchase price is paid. But this does not mean that having paid one-third the hirer is completely absolved. The courts can judge whether or not the damage to the article exceeds "reasonable wear and tear". That meets the point made by the hon. Member for Gosport and Fareham (Dr. Bennett).
    This is an important point. It was said in Committee that Scotland will suffer in any case from the passing of the Bill. We think that the present law of Scotland is superior to that of the 1938 Act or to the new Bill. That being so, if we must accept the 1938 Act and the 50 per cent. payment provision as a right of termination, we would prefer to see new Clause 9 accepted. There is not much difference between its provisions and the provisions of new Clause 12, but it gives a little more protection to the consumer. The other new Clause looks at the question from the point of view of the finance houses.
    The instances referred to this afternoon concerning the losses incurred by finance houses could not occur in Scotland because there the hirer would be sued for arrears of instalments. A binding order could be made, and this could be repeated time and time again, so that the hirer would never clear the debt. Finance houses in Scotland therefore have certain advantages in that respect, although there is no imprisonment for debt there. This is a sort of quid pro quo.
    What displeases me about our whole discussion is that Scottish practice has
    426
    been completely disregarded. No one has thought fit even to discover what it is. Hon. Members opposite have merely brushed it aside without a second's thought. I take a poor view of this, and at a later stage I shall have something to say about it. We could have used the experience of Scottish law and the practice of the Scottish courts in this matter to evolve better provisions than are contained in either of the new Clauses.
    The right hon. Member for Enfield, West (Mr. Iain Macleod) referred to an order being made for the payment of 1s. a month in respect of a motor car. This is a measure of the ability of the hirer to pay, and such a situation arises only through the fault of the finance company. Finance companies stand back from these transactions and allow their agents and dealers to sell indiscriminately That is the real evil of the system They make no effort to discover the credit-worthiness of hirers. They are not interested. They have people and agents all over the country pushing goods on people who obviously cannot afford to meet their hire-purchase commitments. The fact that courts give judgments of the kind referred to is proof of my point. We should not offer too much protection to the finance houses.
    They have far too much power in court as it is. I would like to see them compelled to test the credit-worthiness of the people with whom hire-purchase contracts are made. They should check the agents and dealers who are selling goods and making contracts on their behalf. At present they do not do this to a sufficient extent.
    As I have said, I do not like any part of the Bill, but if we have to accept the existing English legislation as laid down in the 1938 Act in place of Scottish legislation, I would prefer to see new Clause 9 added to the Bill. Then courts would at least be able to make some measure of judgment which would not be unfair cither to the owner or to the hirer.
    4.45 p.m.
    Mr. Charles Fletcher-Cooke: This is not a branch of the law about which I know as much as I should. Certainly, I do not know the law of Scotland on the subject. My concern is to ask my

    427
    right hon. Friend two questions about the Bill as at present printed. I was disturbed by the example given by my hon. Friend the Member for Gosport and Fareham (Dr. Bennett) relating to the motor car. That leads me to my first question.
    Let us suppose that there is a hire-purchase agreement for the sale of an expensive motor car—because a £2,000 motor car is an expensive one—and that after one or two instalments have been paid the hirer, who is a person of no responsibility, having driven the car wildly and damaged it considerably, if not wrecked it, does no more about paying instalments, and eventually the owner treats the vehicle as recoverable, as he would normally be entitled to do.
    Under the terms of the Bill, is it the case that in normal circumstances he will be able to recover a maximum of only £1,000, even though the agreement was in respect of a £2,000 car which may now be worth only £100 as scrap? Is that the case even though the hirer is a person of substance and is quite well able to afford the full measure of damages as we know them under common law?
    My second question is this: would it make any difference if, instead of being an irresponsible person, the hirer had shown some vestige of responsibility by writing to the owner or the finance house and formally repudiating the contract, saying that he was not interested in going on with it and that he wished to return what was left of the motor car and regard the contract as at an end—that is, legally to repudiate the contract?
    From the observations of the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine), I understood that as a result of an Amendment in Committee the position would be quite different in the latter case. In that case, although the hirer would have gone through the hoop of repudiating, and would have behaved rather better than the man in the first instance, his liability would be considerably greater. If that is so, it is a paradox of such a nature that it puts a premium on bad behaviour. I cannot believe that that can be right.
    It is for that reason that I ask my right hon. Friend to deal with the two questions that I have asked. His answers will very much determine my attitude to the situation.
    Mr. John Silkin: It is with some diffidence that I endeavour to follow the remarks of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke). The answer to his problem lies in Section 4(2) of the principal Act, which provides that
    "Where a hire-purchase agreement has been determined under this section, the hirer shall, if he has failed to take reasonable care of the goods, be liable to pay damages for the failure."
    I agree with my hon. Friend the Member for Paisley (Mr. J. Robertson) about the cases where finance houses find themselves receiving only a few shillings a week or a month in respect of a hire-purchase debt. That situation arises from an imperfect use of hire-purchase information, and if they suffer in this way they have only themselves to blame. At the same time, there is merit in the argument of the finance houses that the balance under the Bill is not fair to both sides. If the hirer terminates the agreement, Clause 1(5) will help him, because it will do two things.
    It will enable him to tell the court, "The exact measure of damage which has been suffered"—or the loss; one hon. Gentleman preferred the word "loss" to "damage"—"is all that can be demanded of me." At the same time, it limits this exact measure of loss to 50 per cent. I do not disagree with that. It imposes a maximum which I think is right and was the original intention of the 1938 Act.
    In our judgment of the Parliamentary Secretary we ought to remember that he reminded us over and over again during the Committee stage that this was a consumers' Measure and was not intended purely to benefit the finance houses. I think it just and proper that the other side of the equation should also be agreed, particularly as during the Committee stage many hon. Gentlemen abstained from voting on the basis that a full and adequate consideration of the whole problem of true measure of damage would be given by the Board of Trade and—if I may put it in this way—the Board of Trade would do the homework for us when it came to Report stage. In fact, hon. Members on both sides of the House appear to be doing the homework for the Board of Trade and I regret that. We have

    429
    to remedy this situation and balance the equation.
    As I see it, the alternatives suggested are those in new Clause 9 and in new Clause 12. What is the basic difference between them? New Clause 9 gives the finance houses the right to the true measure of damage where a finance house terminates the agreement. It will be terminated only when there has been a fault on the part of the hirer and this seems to be reasonable justice. New Clause 12 goes further. Perhaps I am wrong, but if I read it correctly it makes complete nonsense of the concession in Clause 1(5). For this reason, although I think that new Clause 12 is better than nothing, I prefer new Clause 9.
    The Parliamentary Secretary to the Board of Trade (Mr. David Price): It may be convenient for the House if I intervene now. These new Clauses raise the question of what should be the liability of the hirer if a hire-purchase agreement is terminated. This question was considered by the Molony Committee and widely discussed after that Committee had presented its Report. It has been debated in another place; during the Second Reading of this Bill; during the Committee stage of the Bill and it is now being debated again on Report.
    I wish, first, to remind the House of the broad approaches to this matter which have formed the subject of debate and have been the continuing theme. On the one hand, there are the existing provisions of the 1938 Act. Section 4(1) provides that the hirer may terminate an agreement at any time and must then pay any amount necessary to bring what he has already paid up to one-half of the hire-purchase price or to the amount of the instalments due under the agreement, if that is more than half the hire-purchase price.
    Section 5(c) prevents the inclusion in an agreement of provisions which would impose a greater liability on the hirer in the event of the agreement being terminated by the owner.
    Under these provisions, the maximum liability of the hirer is both predetermined and easy to ascertain. The Schedule to the 1938 Act contains a notice, to be included in the agreement,
    430
    which in the first paragraph 2 tells the hirer just where he stands.
    May I here interpose, in reply to my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), that in relation to the first of the two instances which he cited, when he said that it would be very unfair if in the circumstances he envisaged the owner could not recover more than 50 per cent., Section 4(2) of the 1938 Act applies, and states:
    "Where a Hire-purchase agreement has been determined under this section, the hirer shall, if he has failed to take reasonable care of the goods, be liable to pay damages for the failure."
    I think that that covers the first instance quoted by try hon. and learned Friend. I will deal with the second one in due course.
    The alternative which has been urged and is being urged in the new Clauses is the so-called "true measure of damage" principle. Under this, on termination of the agreement certain factors, and particularly the residual value of the goods, would be taken into account and the hirer's liability assessed. This proposal was put to and carefully considered by, the Molony Committee. Since the Committee's conclusion has at times been misrepresented, I wish to emphasise what it was.
    As my hon. Friend the Member for Gosport and Fareham (Dr. Bennett) reminded us, the Committee said that this alternative would, in theory, achieve a more equitable result. But the conclusion of the Committee was that it would inevitably lead to disputes about the value of the recovered goods, the cost of repairing them and so on. The Molony Committee, therefore, came done, on grounds of practical protection of the consumer, in favour of maintaining the existing provisions of the 1938 Act, and against substituting this alternative of true measure of damages for them.
    I assure the House, and particularly my right lion. Friend the Member for Enfield, West (Mr. Iain Macleod), that we did not simply accept the conclusions of the Molony Committee without considering the matter extremely carefully. Like the Molony Committee, we favour of the alternative—primarily, let received powerful pleas from those in it be admitted, and properly, from

    431
    finance houses. But we reached the conclusion that with practice the existing provisions would protect the consumer better. I think that it would be helpful for the House to look separately at the cases of termination by the hirer and of termination by the owner. First, termination by the hirer.
    New Clause 12 applies the "true measure" principle and repeals the existing provisions. In the case of termination by the hirer we have to make the direct choice between two approaches. We must make this choice on practical considerations rather than on the theory. On the one hand, there are the existing provisions under which a hirer knows at all times where he stands; he knows what his liability will be if he terminates and there is neither delay nor dispute in determining it.
    On the "true measure" principle the hirer's liability cannot be assessed in advance; it would depend on the assessment of a number of factors all, in the nature of things, not easy to determine to mutual satisfaction and, even more, things about which it is very difficult for the man-in-the-street to maintain his opinion against that of the trade; not least the value of the goods at the date of recovery of possession. During the passage of the Bill several proposals for giving statutory effect to the so-called "true measure" approach have been discussed. In my view, these discussions have served to bring out how great the practical difficulties would be. Two ways of introducing the principle have been discussed.
    First, there have been attempts to enact a self-operating system by making provision for every factor and how it must be taken into account. I pay tribute to the ingenuity of my hon. Friend the Member for Gosport and Fareham and his efforts to try to frame a Clause along these lines. These Clauses, although they still had gaps, were un-workably complicated and could never have been comprehended by the generality of those who may obtain goods on hire-purchase. In effect, they would have put the finance house in a very strong position where it could confront the hirer with a detailed account and demand payment. His only remedy would be to go to court and contest the finance house and trade evidence on
    432
    matters such as the value of repossessed goods and the cost of recovery, storage and repairs.
    5.0 p.m.
    Secondly, Clauses were considered, rather like those we are now considering, which expressed the principle in more general terms. They left the decision in each case to the courts. In our view this approach evades the difficulties of setting out the details and saying what, in practice, is to be done to resolve them, but there is no effective protection for the hirer since he has no remedy which he can exercise without the formidable risks of going to court against powerful interests.
    I cannot accept that, in practice, these provisions would operate equitably. The finance house and the motor trade—and it is of course, primarily with cars that we are concerned—would make their assertion of matters such as the residual value of the repossessed car. The hirer would not normally have the technical means to contradict them, or the resources to oppose them at law. This is not to be dismissed as a matter of possible chicanery by a minority of unscrupulous finance houses or motor dealers.
    The general legal provision on this point will determine the practices of all finance houses, and we have to consider the question in terms of the pressure which is brought to bear on an inexpert member of the public by a large company quoting the terms of a legal agreement. In practice, the hirer would normally have to pay what the finance house demanded. He would have no way of knowing in advance how much his liability would be if he terminated the agreement. The present situation—the widespread suspicion, by some at least, of the finance houses—would continue, and that is surely not to be desired.
    So much for termination by the hirer. I turn now to termination by the owner. This case is covered by this new Clause 9, as well as by new Clause 12. In this case I do not accept that it can even be maintained theoretically that the hirer's liability should in all cases be assessed on the so-called true measure of damage basis. Termination by the owner can take place in a wide range of circumstances. At one extreme the hirer's conduct may

    433
    have shown that he has no intention of going through with the agreement—amounting to repudiation; but then, at the other extreme, the hirer may have committed only a minor breach.
    Finance houses normally reserve the right to terminate the agreement in the event of any breach of its terms by the hirer. I have looked today at the terms of agreement of some of our most respectable finance houses, and this is quite clearly there. They are, of course, entitled to make this provision and enforce it where they see fit, but some breaches are more serious than others, and some are only trivial. A breach by the hirer may be due to oversight or misfortune. Such a breach certainly should not entitle the finance house to step in and claim damages as if the hirer were quite unable or unwilling to go through with the contract.
    The common law at present protects the hirer against this. In the recent case of Financings Ltd. v. Baldock, to which the hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman) made reference—a case, incidentally, which lay outside the scope of the 1938 Act—the finance house had terminated the agreement on account of a breach by the hirer, but the hirer's conduct did not amount, in the court's view, to repudiation of the contract.
    The court held that the finance house was not entitled to common law damages on the true measure basis and that the damage flowing from the breach by the hirer was the failure of the owner to receive the instalments in arrear and that, therefore, the amount of these instalments was the amount of damages to which the owner was entitled.
    There is, I think, a further and possibly more important case of Anglo Auto Finance Company Limited v. James. Here there was in the contract, again a contract beyond the scope of the 1938 Act, a clause which provided for the true measure of damage to be paid on termination by the owner as a result of a breach by the hirer. The owner in this case terminated the agreement because the hirer was in arrear with his instalments to the sum of £17 11s. 6d., and sued for a sum calculated on the true measure of damage clause. The court held that this clause was a penalty clause which did not
    434
    contain a true pre-estimate of damage and, consequently, was unenforceable. The result was that the owner recovered only arrears of instalments, together with a small amount of the costs of repossession.
    The new Clauses we are now considering would allow the owner to provide in the agreement for the recovery of damages on the "true measure" basis in any case where the owner had terminated the agreement as a result of a breach by the hirer. The court is not given any discretion, under these Clauses, in determining whether the provision is reasonable, to have regard to the seriousness or triviality of the hirer's breach of the agreement. These Clauses would thus allow the finance house to obtain damages which might be very much greater than those which they can now recover under the common law.
    The new Clauses go a great deal further than the common law approach which was proposed by the hon. and learned Member for Stoke Newington and Hackney, North.
    Mr. A. J. Irvine: We are at a rather difficult point here, perhaps, but is it the Government's view of this matter that the concept of exemplary damages should apply to breaches of contract? In this sort of transaction I am somewhat concerned by the emphasis which the Parliamentary Secretary is laying upon the point that the amount of damages payable should, in some way, depend upon the obliquity of the wrongdoing or mischief of the breach. Is that the position that the hon. Gentleman is taking up?
    Mr. Price: The point is surely this, that under the 1938 Act, where one-third has been paid and the owner has to go to court for repossession on failure to pay, the court does take a number of factors into consideration which are not spelt out in detail. General circumstances are taken into account, as in some of those judgments which, as hon. Members have suggested, have been to some extent penal on the finance house. The point I am making here is that, so I am advised, these new Clauses provide that on a technical breach of a hire-purchase agreement the court would have to assess damages on the true measure principle, and these other

    435
    circumstances would not be taken into account—such as being only 10 days late.
    I have here an agreement which says that if a hirer is 10 days late in paying then the owner would have the right to terminate. I am putting to the House that this is surely not good consumer protection. I thought, at earlier stages of the Bill, that the intention was certainly not that we should so introduce the true measure principle that it would in all cases be more onerous on the hirer than even the common law.
    What I have said applies to new Clause 13. That Clause also deals with the hirer's liability on termination by the owner. It does not bring in the "true measure" principle, but it does oblige the hirer to make his payments up to one-half of the hire purchase price as if he himself had terminated the agreement. It is true that since this particular proposal was debated and withdrawn in Committee, in another place, the situation has changed a little in that Clause 1(5) has been added to the Bill and there is now more scope for flexibility about liability in the event of termination by the hirer.
    I still feel that what is proposed here would have results which the House would not wish. It would be possible, under the proposed Clause, for the finance house to terminate the agreement in the initial stages on grounds of the most trivial breach by the hirer, repossess the goods and demand that he make his payments up to one-half of the hire-purchase price.
    Dr. Bennett: Surely my hon. Friend is castigating these new Clauses for making it necessary for the courts to come to a judgment unduly harsh and onerous to the hirer, but as I read my own new Clause 12 the court can
    "make an order requiring the hirer to pay that amount if it is satisfied that the amount or …the method by which it is to be calculated is reasonable…"
    having regard to the facts. Surely my hon. Friend's argument does not stand up in the face of that?
    Mr. Price: With respect to my hon. Friend, its wording is
    "reasonable having regard to the hire-purchase price"
    etc. It in no way mentions the difference between a trivial or technical
    436
    breach and complete repudiation. I am sure my hon. Friend will agree that there is a whole range in between. I have no doubt that my hon. Friend might wish it were different but, in fact, the wording is
    "reasonable having regard to the hire-purchase price"
    and does not refer to the reasonableness or otherwise of the breach.
    I would like now to turn to a point which has, perhaps, already received more attention than its practical significance justifies. During the passage of the Bill attention has several times been drawn to a possible anomally under the 1938 Act as it stands. A hirer who recognises in the early stages that he cannot go through with the agreement becomes liable to make his payments up to one-half of the hire-purchase price if he terminates. The argument is that he might get off more cheaply if, instead of terminating, he defaulted and left the initiative to the finance house.
    This is the second of my hon. Friend's points. The hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) also referred to the fact that an Amendment was passed in Committee to insert what is now Clause 1(5) into the Bill, adding a proviso to Section 4(1) of the 1938 Act. This provides a remedy for this very point by empowering the court, in a case where the hirer has terminated the agreement in the early stages, nevertheless to assess his liability at less than the amount necessary to make his payments up to one-half of the hire-purchase price.
    In debate, I advised the Committee against this Amendment because I saw that it could be represented as one-sided and could only benefit the hirer. I foresaw that there would be suggestions that the benefit should be open to both sides, and I knew that this, involving a breach of the basic safeguard about the hirer's maximum liability, was something that we would not be able to accept.
    The Amendment was carried by a majority vote of the Committee and the Government have felt that they should not seek to reverse this decision. The new proviso of Section 4(1) is an added measure of consumer protection, if not one which we think likely often to be invoked. It is, as it were, a long-stop for the aggrieved hirer. We are not

    437
    entirely happy with the drafting, which we think does not achieve unambiguously the intention of the hon. Members who voted for the Amendment. We have, therefore, tabled Amendments to change the wording, but we are not changing the intended effect.
    This new proviso to Section 4 will dispose, in the way which hon. Members opposite advocated in Committee, of the point about early termination and about possible detriment to the hirer because he behaved in a straightforward manner. I hope that hon. Members opposite realise that we have shown on this point that our minds are not closed to ideas for improving the Bill.
    So much for the interests of the consumer. There is, of course, another side. The "true measure" principle has been strongly urged on behalf of finance house interests, and I can see that it is very attractive and an improvement from their point of view. I have seen it suggested that this is only reasonable, in that as with a loan of money, it simply allows the finance house to recover the amount it expected. This seems to me to be a slightly fallacious and one-sided view. But, in particular, it takes no account of the customer, or of his need, as the weaker party, to know where he stands and to be protected. If finance houses want to do business on terms which will entitle them to get their money in full, let them dispose of the goods—cars or anything else—on credit-sale terms rather than on hire purchase.
    In the hire-purchase field, I think that the difficulties arising for finance houses from the application of Section 4(1) of the 1938 Act to agreements covering motor cars have been exaggerated. I have seen it suggested that finance houses will be imposed upon by hirers, who will so time the termination of the agreement that the finance houses will lose I doubt whether this is overall a serious risk, particularly if finance houses tighten up in some respects on the way they do business, if they do not accept hirers without proper scrutiny and do not take business from dealers who make cars out to be worth more than they are. I think that this is also the answer to those who suggest that the Bill will involve finance houses in bigger risks and so compel them to put
    438
    up their charges. Looking at the Bill as a whole, I believe that the changes in commercial practice which will flow from it will mean that they will have fewer bad hirers and fewer bad debts.
    5.15 p.m.
    In the end, in framing legislation of this kind, a balance has to be assessed between the various parties—the consumer, the dealer, the finance house. We have had to do that on various matters in the Bill, and it is, of course, not an easy balance to strike. The parties are not of equal strength, and, in the past, the consumer has all too often been imposed upon because of his lack of expertise. Motor dealers and finance houses, on the other hand, handle this type of business every day and I think that they can guard against being exploited by their customers.
    My hon. Friend the Member for Gosport and Fareham (Dr. Bennett) and others have drawn attention to the views of the Consumer Council. I would point out to them that in its statement the Council did recognise that there were considerable practical difficulties, though I believe that it did not think that they were insurmountable. But neither in its statement or since has it given any indication as to how they could be surmounted. It is also interesting that the noble Lord, Lord Peddie, who led for the Opposition in another place on this matter, and who is a member of the Consumer Council, has taken the view that the attitude of the Government in this matter is both logical and excellent.
    I should be interested to hear from the hon. Member for Sheffield, Hillsborough (Mr. Darling) why the Opposition, during the passage of the Bill, have changed their attitude to this from that expressed in another place.
    Mr. Iain Macleod: I can understand my hon. Friend's argument if that is what he wishes to put forward, that the balance of the Bill, including the Amendment carried upstairs, is now right. I do not have to agree with it, but I can understand it. What I cannot understand is the argument about the difficulties of drafting or enforcement of a Measure of this nature when we know perfectly well that many, if not most,

    439
    foreign countries and countries in the Commonwealth have achieved exactly this purpose.
    Mr. Price: This was looked at by Molony in great detail and also by the Government, and they are of the opinion that the difficulties which I have outlined seem to them to be substantial. If we adopted the true measure of damage principle there would be less protection for the hirer than there is at present.
    Dr. Bennett: Surely we have to see this in perspective. Molony's remit was so colossal that the amount of attention given to this was very small. No wonder the Molony Committee felt that this was a little much when we consider the vast volume of other matters considered. It was mentioned only ten times or so in a book of hundreds of pages.
    May I remind my hon. Friend, though in no sense am I ever likely to be a supporter of the Labour Party, that in another place I understood that the problem was that the Amendment there under discussion was too long and also a bad one, and that, perhaps, explained the difference between the attitude of certain noble Lords towards that Amendment and the one I am claiming to be of a totally different order of merit.
    Mrs. Harriet Slater: Is the hon. Gentleman arguing that because Molony is recommending this we ought to accept it? If he is, he should revise some of the statements he made on the Weights and Measures Bill.
    Mr. Price: I am saying that it was made clear on Second Reading that the primary purpose of the Bill was to implement in the main the Molony recommendations on hire purchase. It is surprising that the hon. Lady should intervene on this matter, because she has always been a very great defender of the rights of the consumer, and I would have thought that the arguments that I have been outlining would appeal to her.
    As to the point made by my hon. Friend the Member for Gosport and Fareham on what went on in another place, I believe that our rules of order preclude my answering him in detail, and quoting in extenso the speech of Lord Peddie, which makes it perfectly clear that his objections
    440
    were not just to that particular Amendment but to the basic "true measure of damage" principle. I was quoting the noble Lord not so much as a member of the Labour Party, but as a member of the Consumer Council.
    I remain convinced that we must not delete the safeguards that Sections 4 and 5 of the 1938 Act provide for the consumer. In terms of protecting the consumers' interests, I believe that new Clauses 9, 12 and 13 would be retrograde, so I have to advise the House to reject them all.
    Mr. George Darling: I am rather surprised, and very disappointed, that the Parliamentary Secretary, in spite of all the arguments put forward in the Standing Committee and today, and the representations made to him by various bodies, should still be obstinately against the acceptance of the principle of the true measure of damage in regard to terminated contracts. As far as I could tell, the hon. Gentleman built up his case on trivial breaches which he suggested would, if the new Clauses were accepted, work harshly against the hirers.
    I do not want to argue the legal complexities—I am not in a position to do so. As the Committee knew, and as this House will know before we finish our business today, I have to rely very heavily on the expert legal advice of my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine), and other of my hon. and learned Friends. Nevertheless, I should have thought that to rely on a small number of cases, as did the Parliamentary Secretary, is an altogether wrong approach to this problem.
    The new Clauses we are now discussing did not suddenly appear on the Notice Paper. We sent new Clause 9 to the Board of Trade a very long time before it appeared on the Notice Paper, and I understand that the hon. Member for Gosport and Fareham (Dr. Bennett) acted similarly. Hon. Members on both sides wanted the help of the Board of Trade in solving the very difficult problem with which the House now has to contend. I deeply regret to say that we received no help whatever.

    441
    To suggest now, in view of all the representations that have been made, that the Board of Trade must stick to the principle, which it enunciated right from the beginning of these proceedings in another place and in Committee, that the 1938 provisions for dealing with damages in a case of breach of contract or the ending of a contract should remain in this Bill, and that the true-measure-of-damages idea we put forward should be rejected, seems to be a peculiar way of dealing with a very difficult problem.
    The Parliamentary Secretary has put himself and the Secretary of State in an almost indefensible position. Despite all the arguments, the hon. Gentleman stands almost alone—I do not know whether the Secretary of State is still with him, but I suppose he is—against everyone who has a real interest in this problem, including the Consumer Council. He has no support from any quarter that I would call responsible in this business, and this short debate has shown that.
    We want new Clause 9. Every hon. Member opposite who has spoken—and this was the case also in Committee, as the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) has pointed out—wants something like new Clause 9, 12 or 13. The finance companies want something on these lines, as do the industrial bankers, the Law Society, the co-operative societies, and the financial journalists who have studied the problem. Everyone wants it except the Secretary of State and the Parliamentary Secretary, who stand alone on the burning deck whence all but they have fled—
    Mr. R. M. Bingham: The Opposition must not take silence on these benches as assent to their proposition. For my part, I stand—as I am sure do many of my hon. Friends—firmly behind the Government. I do so for the reason that new Clauses 9 and 12, which seek to provide a so-called true measure of damage, both depend on the ascertainment of the value of the goods. If one takes the value of a car that has been repossessed and is sold as a repossessed car, its value as such very often stands at little above its scrap value, but its value to the hirer before repossession would bevery much more than that figure. Because of this difference, the so-called true measure of damage often works in
    442
    practice to the detriment of the hirer, and necessarily leads to disputes in court, in which the hirer finds himself at a disadvantage.
    Mr. Darling: We have discussed all these problems that the hon. and learned Member has just raised. I do not think that there is any great substance in what he instances but, if there is, it is one of the technical issues which the Board of Trade should have helped us to sort out. It had plenty of time to do so, but gave us no help at all.
    The Parliamentary Secretary came to what was to me a very surprising conclusion when he said that rather than try to get fairness in this matter under this Bill the finance houses should resort to credit trading instead of continuing with their hire-purchase contracts. I do not want to go over the whole Bill again, but I should have thought we would have to make substantial alterations in it to allow for this so as to get the fairness of which we talk.
    The Parliamentary Secretary knows very well that we on this side—and, I suspect, hon. Members opposite, too—want a complete recasting of our hire-purchase legislation. None of us are satisfied with it. I should very much prefer to see the introduction of the chattel mortgage system on the basis of personal loans—but it is rather late now to make suggestions like that—as a solution of these problems. I assure the Parliamentary Secretary that when he tried to quote the noble Lord against us, the conversion of Lord Peddie to the principle of the true measure of damage has not been entirely unsuccessful.
    I am sure that practically everyone concerned with the problem supports our approach, if not the actual wording we have used. I have mentioned the finance companies. I know very well that part of the propaganda, if I can put it like that, that has been directed against us is that by carrying the Amendment to Clause 1, in the Standing Committee, we in some way sold out the finance companies.
    I said some very harsh things about the finance companies on Second Reading, I have said them outside, and I will say some other very harsh things about them, but n all fairness I must say that after discussion on the Bill started, the

    443
    reputable finance companies and the Finance Houses Association have given us a great deal of help. They have accepted our view that we cannot get absolute fairness in this Bill and that, therefore, if there is to be any balance of advantage on one side or the other it should go on the side of the hirer, who is always the weaker partner in the contract.
    I must give the Finance Houses Assotion credit for helping us after it had accepted that principle. In all fairness, we must see that its point of view that the Bill as it now stands is in some respects unfair to finance houses should be properly considered, and we should do something about it.
    5.30 p.m.
    I should like to go over one or two points again to make absolutely clear where we stand on this issue. As the hon. Member for Gosport and Fareham (Dr. Bennett) has said, we have agreed that the 50 per cent. rule in the 1938 Act was a rough-and-ready rule, but it was generally accepted. It was not based on a finely drawn legal principle of equity which apparently the Parliamentary Secretary now wants, but it gave a measure of justice and it was accepted because there was no ambiguity. People knew where they stood. It was also accepted because nobody was involved in great sums of money. The most that they could be caught for was £25 less the instalments already paid. Later, when the limit was raised to £300, the most they could be caught for was £150, minus the instalments paid up to the point when the contract was terminated.
    Now we come to great sums of money. The limit has been raised to £2,000, and when the Parliamentary Secretary quoted the Molony Report as saying that the difficulties of working a true measure of damages principle were too great to be accepted I should have thought that this was one of the views expressed in the Report that could not be accepted, because the Molony Committee did not want to put any legal limit on the transactions. Therefore, if the 50 per cent. rule had applied, the damage which people who ended their contracts would be liable to pay would be excessive indeed, far more than the £1,000 which we are now talking about. The only
    444
    distinction between the contracts which the Molony Committee wanted in a new hire-purchase Bill and the contracts outside the provisions of that Bill, was through a definition of consumer sales. Consumer sales could have gone well beyond the £2,000 and, therefore, I do not think that this is a view which should be taken on the basis of recommendations in the Molony Report.
    The issue with which we are now faced arises from the fact that, in Committee, we persuaded hon. Members opposite to abstain so that we could get this issue raised on Report. As a result, we inserted in the Bill Clause 1(5), which throws all the advantage now on the side of the hirer. We did this deliberately so that we could raise the issue here. The Parliamentary Secretary opposed that Amendment, now inserted in the Clause. He opposed it very vigorously and he has said that it would lead to unfairness. Of course it would be unfair. We were trying to make it unfair in order to have the whole issue raised. In accepting it now as a measure of unfairness the Parliamentary Secretary is not being as responsible on this issue as he should be.
    The Government accept an unfairness now, as they accepted the old unfairness under the 50 per cent. rule and as they wanted to go on accepting that old unfairness. We ought not to be legislating here for a continuation of an unbalanced and unfair Statute of that kind. We realise, as the Parliamentary Secretary has pointed out, that one result of the inclusion of Clause 1(5) will be that finance companies will have to draw up their contracts a great deal more clearly and carefully than they have in the past, but in any case they would have had to do that under other provisions in the Bill.
    We also compel them to look carefully at the customers for whom they provide hire-purchase facilities. I am glad that this is happening and that this is one of the results which will flow from the unfair measure which we put into Clause 1(5). But, in return, the finance houses are entitled to ask for the protection which they need against the defaulting customer and our new Clause, as has been clearly explained, does that. It is more than a quid pro quo for the acceptance by the finance houses of the favoured position which we have now given to the customer.

    445
    I do not want to discuss again the legal differences between the three new Clauses. I personally deeply regret that the Secretary of State and the Parliamentary Secretary in the course of our discussions have made no effort to help us to draft what would have been an acceptable new Clause to deal with this situation. I repeat that before any of these new Clauses appeared on the Notice Paper, and they have been there for a long time, they were all submitted to the Board of Trade for the views of the Department on them because, as the right hon. Member for Enfield, West has said, we treated these issues, as indeed most others in Committee, on a purely nonparty basis, and we tried to have a workable Bill.
    The Bill has a limited scope from the point of view of a consolidation Measure, which obviously must come before long, but we tried to treat it as a non-party Measure, and I regret that in our efforts to secure understanding and help from the Board of Trade to make the Bill fair and equitable we absolutely failed. The only thing that we can do now is by supporting the new Clause in the Division Lobby to register our protest at the way in which the Secretary of State and the Parliamentary Secretary have treated the matter.
    The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath): Naturally, as I have been asked to intervene I am glad to do so, but more particularly in view of the closing remarks of the hon. Member for Sheffield, Hillsborough (Mr. Darling). I cannot accept that the Board of Trade or the Parliamentary Secretary or myself have been in any way obstructive in trying to make the best possible provisions in the Bill. On Second Reading, I explained clearly that this was a consumer protection Bill and that we were anxious to do everything possible to make it a good Bill. It had very little party content in it and it was a Bill to which the whole House could devote its attention and on which we would greatly value the advice of the House.
    Again, the hon. Member for Hillsborough has said that because we have not accepted this proposed principle, and because we do not intend to accept
    446
    the Opposition's new Clause, we have shown remarkable obstinacy, and he has said that this is a peculiar way of dealing with a difficult problem. But we have given continual, careful thought to this problem and the ways of meeting it. We have come to our conclusion, which we have reviewed constantly in the process of the Bill, in what we believe to be the best interests of the consumer.
    It may be that the hon. Member thinks that we are not protecting the interests of the consumer. I do not want to go into technical matters which have been dealt with fully by my hon. Friend the Parliamentary Secretary, but I hope to show that the attitude which we have taken on this matter is sincere because we feel that there is a balance of power involved in the relationship between the finance house and the consumer and that fundamentally we must consider the interests of the consumer.
    My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) hoped that we would be fair. I said on Second Reading that I had the utmost desire to be fair to all the parties involved in this transaction. I repeated this at a dinner of the Finance Houses Association at which my right hon. Friend and also the hon. Member for Hillsborough were present, and in our attitude towards Part III of the Bill we showed how seriously we wanted to find the best possible solution. We admitted weaknesses in our own proposals at that time. We said that if anyone could come forward with better ones, and particularly the finance houses, who will be responsible for working the provisions of the Bill, we would be glad to embody them. Some proposals were brought forward and they were embodied in the Bill. This shows that we have every desire to secure a just solution and make the Bill as good a Bill as we can make it in the circumstances of the time.
    I say "circumstances of the time" because the hon. Member for Hillsborough has never concealed his view that the whole Bill is misconceived. He wishes to change over to a system of chattel mortgage, broadly speaking, and, to be fair to him, he has done his best, in Committee, to get as near to that as he can.
    Mr. Darling: No.
    Mr. Heath: Well, broadly speaking, and the hon. Gentleman has done his best in Committee to get this as near to that system as he can.
    Mr. Darling: No.
    Mr. Heath: I do not mind the hon. Gentleman doing that, because those are his objectives; whether they are the objectives of his right hon. Friends and his party, I do not know.
    I said on Second Reading that there was absolutely no doubt that this is one of the major issues so far as consumers are concerned. The Molony Committee, in dealing with it, rejected the idea of moving over to chattel mortgage and thought that the present system could have been embodied in one Bill for the protection of the consumer.
    I said on Second Reading that we had produced the best Bill we could in the circumstances of the time, but I was absolutely willing thoroughly to examine this question—and the Department was already at work on it—to see whether there ought to be a change in the general arrangements for credit sales or hire-purchase and whether we ought to move on to some other system.
    At the time I invited the views of the finance houses and of those journalists who_ have been writing about this so that we could take them into full consideration when we looked at the whole of this problem. We are dealing with hire-purchase and I gave the undertaking to the House that we will, of course, go into the whole of the larger issue, as soon as we are able to do so, to see whether we ought to change over to some other system of consumer protection.
    Mr. Darling: The right hon. Gentleman has seized upon the point that I made about chattel mortgage, which was irrelevant to our general discussion, in order to bring forward this red herring. In Committee, I never discussed chattel mortgage and I did not put forward any suggestions for bringing chattel mortgage into the Bill, and the only Amendments that we discussed were well within the terms of the Bill. They had nothing to do with chattel mortgage at all.
    Mr. Heath: I am not saying that the hon. Gentleman tried to change this Bill
    448
    into a chattel mortgage Bill. This is not a red herring. I am saying to the House that if one wants to adopt another system I am quite prepared to examine it. This, I think, is in some people's minds. My hon. Friend the Member for Gosport and Fareham (Dr. Bennett) quoted the Economist as saying that we are moving into a wrong form of hire-purchase. This is another expression of the same view—that we ought to move away from this form and into a different system, to use a neutral phrase.
    Dr. Bennett: I referred to the Economist, as saying that
    "Relentlessly, Britain is moving nearer the wrong sort of hire-purchase reform…"
    After two paragraphs of discussion it said:
    "This decision does pinpoint the need not merely to amend the bill but to incorporate the principle of true damages… but also to provide machinery to make sure that principle works."
    Mr. Heath: I am not querying that at all. This is the view of other writers besides the Economist.
    My right hon. Friend the Member for Enfield, West said that it had been possible to find solutions in other countries. These solutions have to be looked at in the context of the common law of the countries and the system which they are using—and some of them are using chattel mortgage—and the general arrangements which they have. We have not found a means of dealing with the practical difficulties.
    I believe that this fundamental problem, to which my hon. Friend the Member for Gosport and Fareham drew attention, lies at the root of the whole matter. We have had various examples of possible cases of fraud, of court decisions on these matters, and of the views of the Master of the Rolls that this is a very real problem. Indeed it is.
    I agree that members of the finance houses can feel in some respects that the burden on them is heavier than it is on the hirer. What has weighed with me from the time that I looked at this matter when the Bill was being formulated, on Second Reading, and again during Committee and before the Report stage, when the Amendments were put down, was that to adopt the procedure suggested would mean that a hire-purchase company

    449
    would make a decision about the value of a car, for instance, about any repairs that were made to it, the cost of holding it during disposal, and so on. I believe that in the face of this the ordinary hirer—the ordinary man in the street—would have no power at all unless he was prepared to take the matter to the court.
    5.45 p.m.
    I say in all fairness to the hon. Gentleman that what has surprised me throughout all this is that he and his hon. Friends are among the most assiduous of all Members in keeping in touch with the ordinary problems of persons who are faced with this kind of situation. People come to a Member of Parliament, and they come to me in my constituency, and say, "What do we do here?" The only thing one can advise them to do is to take the case to the court. We know all the difficulties of taking a case to court, even with legal aid, the amount of time which it will take, and what can happen to the article if it is being held during that time.
    I tell the House frankly that, leaving aside all the legal complexities, and all the questions of particular cases and of balance, the one thing which weighed with me is the position of the ordinary man who is getting a car on hire purchase and who finds himself faced, as he would be under these proposals, with an assessment from a powerful firm as to what his position is. It is true that he will not know what it will be beforehand, which he would know under the provisions of the Bill. I think that that is important, but to me it is not the most important thing. The most important thing is what his position is when he is faced with this situation.
    In fact, he knows perfectly well that his position does not amount to anything. This is my anxiety and fear about moving over to this system. One may then say, "Is there no practical way of dealing with it?" My hon. Friend tried to find a practical way. I do not believe that any of the practical ways which have been put forward meet the case. I am told that in Australia there is a system of prolonged negotiation between the parties and that, even in that situation, it is very difficult to maintain a balance between a man in that position negotiating with a finance house or a company of that kind.
    450
    It is this fundamental problem of how to protect the consumer who is faced with this situation which has made me believe, very sincerely and very firmly, that, although one may say that it is rough justice, that there are these unfairnesses and that the finance houses will have difficulty in certain cases, nevertheless, taken over the broad field of hire purchase, the consumer is best protected in this way.
    Mr. Darling: Before the right hon. Gentleman leaves the point about court procedure—und I agree with him, generally speaking, that the people we are concerned with do not want to get into the county court—I think that he will appreciate that by accepting Clause 1(5) we are calling upon the county courts to arbitrate on what the true figure should be for the hirer. What, then, is the objection to allowing the courts to arbitrate on the true figure for the finance company?
    Mr. Heath: There may be arbitration; I do not disagree with that at all, and I agree that the Committee has shifted the balance further in favour of the hirer. But I think that the problem of the hirer going to the court in these circumstances is very real. I confess that I have been greatly influenced by the persona] experience of people who have been confronted with these difficulties. I believe that, fundamentally, the balance on this point ought to come down on the side of the consumer.
    I fully appreciate my hon. Friend's problem about unfairness and the feeling of the finance houses, but, at the same time, there are two points which are important. The number of cases, such as those cited, in which a person buys a very expensive car and deliberately runs it into the ground in two months, will, I think, by the nature of things, be very few. It is true that a company is in a position to spread incidents of this sort over the whole field of its business and in organising its business takes this into account. I believe that the finance houses are in a position to deal with this problem.
    Mr. A. J. Irvine: The right hon. Gentleman can take it from me that I am as concerned as he is about the position of the hirer, particularly the hirer of relatively modest means. Will he have regard to one factor which has weighed with us?

    451
    The new Clause which we have moved proposes that an estimate of the amount of damage, in certain events, shall be incorporated as a term of the contract. I acknowledge that in many cases the hirer will not readily understand all the complications and ramifications of the form of contract, but will the right hon. Gentleman appreciate that if this kind of practice were to become general and sustained the overall consequence would be that as time passed fair and reasonable sums would tend increasingly to be incorporated as the relevant sums in these contracts? The cases which went to court to be decided on their merits as to reasonableness would make their influence felt on the sums contained in the forms of contract.
    We think that the overall effect of our proposal would, after a short time, be in that important respect favourable to the hirer.
    Mr. Heath: If I understand the hon. and learned Gentleman correctly, it would be favourable to the hirer on the occasion of a court case. This brings us back to the fundamental question of how ordinary people deal with problems of this kind.
    Mr. Irvine: I am sorry to interrupt the right hon. Gentleman again, but I do not want there to be any misunderstanding about this. We say more than the right hon. Gentleman has indicated. We claim that our proposal would tend to lead to fair amounts being entered in the contracts. We do not think that the satisfactory effect to which I have referred will take place only when each case goes to court. We think that the results will flow as a matter of commercial practice affecting the contents of the contracts themselves after a few test cases.
    Mr. Heath: That may be so. I should not like to offer a judgment on it. But I was making the point that I think that the hire-purchase companies can spread the risk of these difficult incidents.
    The second point that I wish to make is the one that I made on Second Reading. I have been absolutely plain about this from the beginning, and I emphasised it to the finance houses at their dinner. The Bill means that they will have to become much more selective in their choice of clients. Most people in the trade agree that this would be a good thing. I believe that it will deal with many of the problems about which there are anxieties and some of which have been expressed by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke).
    Therefore, having thought about this matter very carefully—and I ask the House to accept that—and recognising the powerful arguments which have been put forward about the intellectual clarity of the situation and to the effect that there should be a true measure of damages, and in view of the practical difficulties of getting this in the situation of what I might describe as the man in the street who is a hirer in relation to the finance house, I came to the conclusion that it was right to maintain our present system and not to change over to that proposed by the new Clause. I have explained frankly why I came to that conclusion. I believe it to be in the best interests of the consumer, and I ask the House to accept that view.
    Question put, That the Clause be read a Second time:—
    The House divided: Ayes 150, Noes 196.

    Division No. 114.]

    AYES

    [5.54 p.m.

    Ainsley, William

    Braddock, Mrs. E. M.

    Duffy, A. E. P. (Colne Valley)

    Albu, Austen

    Bradley, Tom

    Ede, Rt. Hon. C.

    Allaun, Frank (Salford, E.)

    Butler, Herbert (Hackney, C.)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Allen, Scholefleld (Crewe)

    Callaghan, James

    Edwards, Robert (Bilston)

    Awbery, Stan (Bristol, Central)

    Castle, Mrs. Barbara

    Edwards, Walter (Stepney)

    Bacon, Miss Alice

    Collick, Percy

    Evans, Albert

    Bence, Cyril

    Corbet, Mrs. Freda

    Finch, Harold

    Bennett, J. (Glasgow, Bridgeton)

    Craddock, George (Bradford, S.)

    Foot, Dingle (Ipswich)

    Benson, Sir George

    Crosland, Anthony

    Foot, Michael (Ebbw Vale)

    Blackburn, F.

    Cullen, Mrs. Alice

    Forman, J. C.

    Boardman, H.

    Dalyell, Tam

    Galpern, Sir Myer

    Bottomley, Rt. Hon. A. G.

    Darling, George

    George, LadyMeganLloyd (Crmrthn)

    Bowden, Rt. Hn. H. W. (Leies, S. W.)

    Davies, S. O. (Merthyr)

    Ginsburg, David

    Bowen, Roderle (Cardigan)

    Dempsey, James

    Gordon Walker, Rt. Hon. P. C.

    Bowles, Frank

    Diamond, John

    Gourlay, Harry

    Boyden, James

    Doig, Peter

    Grey, Charles

    Griffiths, Rt. Hon. James (Llanelly)

    Loughlin, Charles

    Rogers, C. H. R. (Kensington, N.)

    Griffiths, W. (Exchange)

    Lubbook, Eric

    Ross, William

    Grimond, Rt. Hon. J.

    MacColl, James

    Shinwell, Rt. Hon. E.

    Gunter, Ray

    McInnes, James

    Short, Edward

    Hale, Leslie (Oldham, W.)

    Mackenzie, Gregor

    Silkin, John

    Hamilton, William (West Fife)

    MoLeavy, Frank

    Silverman, Julius (Aston)

    Harper, Joseph

    Mallalieu, E. L. (Brigg)

    Slater, Mrs. Harriet (Stoke, N.)

    Hart, Mrs. Judith

    Mapp, Charles

    Slater, Joseph (Sedgefield)

    Hayman, F. H.

    Mason, Roy

    Small, William

    Healey, Denis

    Mendelson, J. J.

    Smith, Ellis (Stoke, S.)

    Henderson, Rt. Hn. Arthur (Rwly Regis)

    Millan, Bruce

    Snow, Julian

    Herbison, Miss Margaret

    Milne, Edward

    Sorensen, R. W.

    Hilton, A. V.

    Mitchison, G. R.

    Soskice, Rt. Hon. Sir Frank

    Holman, Percy

    Monslow, Walter

    Steele, Thomas

    Holt, Arthur

    Moody, A. S.

    Stewart, Michael (Fulham)

    Houghton, Douglas

    Moyle, Arthur

    Stones, William

    Hoy, James H.

    Mulley, Frederick

    Swain, Thomas

    Hughes, Cledwyn (Anglesey)

    Noel-Baker, Francis (Swindon)

    Symonds, J. B.

    Hughes, Emrys (S. Ayrshire)

    Oswald, Thomas

    Taverne, D.

    Hunter, A. E.

    Owen, Will

    Thomas, Iorwerth (Rhondda W.)

    Hynd, H. (Accrington)

    Pannell, Charles (Leeds, W.)

    Thompson, Dr. Alan (Dunfermline)

    Hynd, John (Attercliffe)

    Pargiter, G. A.

    Thornton, Ernest

    Irvine, A. J, (Edge Hill)

    Pavitt, Laurence

    Thorpe, Jeremy

    Janner, Sir Barnett

    Pearson, Arthur (Pontypridd)

    Warbey, William

    Jay, Rt. Hon. Douglas

    Peart, Frederick

    Weitzman, David

    Jeger, George

    Pentland, Norman

    Willis, E. G. (Edinburgh, E.)

    Jones, Elwyn (West Ham, S.)

    Prentice, R. E.

    Wilson, Rt. Hon. Harold (Huyton)

    Jones, J. Idwal (Wrexham)

    Probert, Arthur

    Winterbottom, R. E.

    Jones, T. W. (Merioneth)

    Redhead, E. C.

    Woodburn, Rt. Hon. A.

    Kenyon, Clifford

    Rees, Merlyn (Leeds, S.)

    Woof, Robert

    Key, Rt. Hon. C. W.

    Reynolds, G. W.

    Yates, Victor (Ladywood)

    King, Dr. Horace

    Roberts, Albert (Normanton)

    Lawson, George

    Roberts, Goronwy (Caernarvon)

    TELLERS FOR THE AYES:

    Lee, Frederick (Newton)

    Robertson, John (Paisley)

    Dr. Broughton and Mr. McCann.

    Lewis, Arthur (West Ham, N.)

    Rodgers, W. T. (Stockton)

    NOES

    Agnew, Sir Peter

    Farey-Jones, F. W.

    Kershaw, Anthony

    Arbuthnot, Sir John

    Farr, John

    Kirk, peter

    Atkins, Humphrey

    Fell, Anthony

    Langford-Holt, Sir John

    Awdry, Daniel (Chippenham)

    Finlay, Graeme

    Leather, Sir Edwin

    Barber, Rt. Hon. Anthony

    Fletcher-Cooke, Charles

    Leavey, J. A.

    Barlow, Sir John

    Fraser, Ian (Plymouth, Sutton)

    Legge-Bourke, Sir Harry

    Barter, John

    Freeth, Denzil

    Lewis, Kenneth (Rutland)

    Batsford, Brian

    Galbraith, Hon. T. G. D.

    Lilley, F. J. P.

    Bell, Ronald

    Gammans, Lady

    Lindsay, Sir Martin

    Bennett, F. M. (Torquay)

    George, Sir John (Pollok)

    Litchfield, Capt. John

    Bevins, Rt. Hon. Reginald

    Gibson-Watt, David

    Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)

    Biggs-Davison, John

    Giles, Rear-Admiral Morgan

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Bingham, R. M.

    Gilmour, Sir John (East Fife)

    Longbottom, Charles

    Birch, Rt. Hon. Nigel

    Glyn, Dr. Alan (Clapham)

    Longden, Gilbert

    Bishop, Sir Patrick

    Glyn, Sir Richard (Dorset, N.)

    Luoas, Sir Jocelyn

    Black, Sir Cyril

    Goodhew, Victor

    Lucas-Tooth, Sir Hugh

    Bossom, Hon. Clive

    Cower, Raymond

    McAdden, Sir Stephen

    Bourne-Arton, A.

    Griffiths, Eldon (Bury St. Edmunds)

    McMaster, Stanley R.

    Box, Donald

    Grosvenor, Lord Robert

    Maddan, Martin

    Brewis, John

    Gurden, Harold

    Maitland, Sir John

    Bromley-Davenport, Lt.-Col. Sir Walter

    Hamilton, Michael (Wellingborough)

    Marlowe, Anthony

    Brown, Alan (Tottenham)

    Harris, Reader (Heston)

    Marshall, Sir Douglas

    Bryan, Paul

    Harrison, Col. Sir Harwood (Eye)

    Mathew, Robert (Honiton)

    Buck, Antony

    Harvey, John (Walthamstow, E.)

    Maude, Angus (Stratford-on-Avon)

    Burden, F. A.

    Harvie Anderson, Miss

    Mawby, Ray

    Butcher, Sir Herbert

    Hastings, Stephen

    Maxwell-Hyslop, R. J.

    Carr, Rt. Hon. Robert (Mitcham)

    Heath, Rt. Hon. Edward

    Maydon, Lt.-Cmdr. S. L. C.

    Channon, H. P. G.

    Henderson, Sir John (Cathcart)

    Mills, Stratton

    Chichester-Clark, R.

    Hiley, Joseph

    Miscampbell, Norman

    Cleaver, Leonard

    Hill, Mrs. Eveline (Wythenshawe)

    Montgomery, Fergus

    Cooke, Robert

    Hill, J. E. B. (S. Norfolk)

    More, Jasper (Ludlow)

    Cooper, A. E.

    Hirst, Geoffrey.

    Morrison, Charles (Devizes)

    Cooper-Key, Sir Neill

    Hobson, Rt. Hon. Sir John

    Morrison, John (Salisbury)

    Cordle, John

    Holland, Philip

    Mott-Radclyffe, Sir Charles

    Costain, A. P.

    Howard, Hon. G. R. (St. Ives)

    Neave, Airey

    Coulson, Michael

    Howard, John (Southampton, Test)

    Nicholson, Sir Godfrey

    Craddock, Sir Beresford (Spelthorne)

    Hughes Hallett, Vice-Admiral John

    Nugent, Rt. Hon. Sir Richard

    Cunningham, Sir Knox

    Hughes-Young, Michael

    Orr, Capt. L. P. S.

    Curran, Charles

    Hutchison, Michael Clark

    Orr-Ewing, Sir Ian (Hendon, North)

    Currie, G. B. H.

    Iremonger, T. L.

    Osborn, John (Hallam)

    d'Avigdor-Goldsmid, Sir Henry

    Irvine, Bryant Godman (Rye)

    Osborne, Sir Cyril (Louth)

    Doughty, Charles

    James, David

    Page, John (Harrow, West)

    Drayson, G. B.

    Jennings, J. C.

    Partridge, E.

    Elliot, Capt. Walter (Carshalton)

    Johnson, Eric (Blackley)

    Percival, Ian

    Elliott, R. W. (Newc'tle-upon-Tyne, N.)

    Jones, Arthur (Northants, S.)

    Pickthorn, Sir Kenneth

    Emmet, Hon. Mrs. Evelyn

    Kerby, Capt. Henry

    Pitman, Sir James

    454

    455

    Pitt, Dame Edith

    Skeet, T. H. H.

    Turton, Rt. Hon. R. H.

    Pounder, Rafton

    Smith, Dudley (Br'ntf'd & Chiswick)

    Tweedsmuir, Lady

    Powell, Rt. Hon. J. Enoch

    Speir, Rupert

    van Straubenzee, W. R.

    Price, David (Eastleigh)

    Stainton, Keith

    Vaughan-Morgan, Rt. Hon. Sir John

    Price, H. A. (Lewisham, W.)

    Stanley, Hon. Richard

    Vickers, Miss Joan

    Prior-Palmer, Brig. Sir Otho

    Stevens, Geoffrey

    Walker, Peter

    Proudfoot, Wilfred

    Stodart, J. A.

    Walker-Smith, Rt. Hon. Sir Derek

    Pym, Francis

    Stoddart-Scott, Col. Sir Malcolm

    Wall, Patrick

    Quennell, Miss J. M.

    Storey, Sir Samuel

    Ward, Dame Irene

    Redmayne, Rt. Hon. Martin

    Studholme, Sir Henry

    Whitelaw, William

    Rees, Hugh (Swansea, W.)

    Summers, Sir Spencer

    Williams, Sir Rolf Dudley

    Rees-Davies, W. R. (Isle of Thanet)

    Tapsell, Peter

    Wills, Sir Gerald (Bridgwater)

    Renton, Rt. Hon. David

    Taylor, Sir Charles (Eastbourne)

    Wilson, Geoffrey (Truro)

    Roberts, Sir Peter (Heeley)

    Taylor, Edwin (Bolton, E.)

    Wise, A. R.

    Robson Brown, Sir William

    Taylor, Sir William (Bradford, N.)

    Wolrige-Gordon, Patrick

    Roots, William

    Thatcher, Mrs. Margaret

    Wood, Rt. Hon. Richard

    Ropner, Col. Sir Leonard

    Thompson, Sir Kenneth (Walton)

    Woodnutt, Mark

    Scott-Hopkins, James

    Thompson, Sir Richard (Croydon, S.)

    Woollam, John

    Sharples, Richard

    Thornton-Kemsley, Sir Colin

    Shepherd, William

    Touche, Rt. Hon. Sir Gordon

    TELLERS FOR THE NOES:

    Mr. McLaren and Mr. MacArthur.

    New Clause.—(SPECIAL PROVISION FOR TAX SAVING SCHEMES.)
    Where any part of the hire-purchase price payable under a hire-purchase agreement has been paid to the owner pursuant to a contract of loan made between the hirer and any third party and the hire-purchase agreement contains a covenant by the owner to guarantee the hirer's liability under such contract, then for the purpose of calculating the hirer's liability to the owner on termination of the agreement whether by the owner or by the hirer any sum paid by the owner or for which the owner is liable under such covenant at the date of such termination shall be deemed not to have been paid by the hirer under the hire-purchase agreement.—[Mr. Darling.]
    Brought up, and read the First time.
    Mr. Darling: I beg to move, That the Clause be read a Second time.
    Mr. Deputy-Speaker: It will be possible to discuss at the same time Amendment No. 40, in Clause 26, page 27, line 32, to leave out "and 23" and to insert:
    "23 and (Special provision for tax saving schemes)".
    Mr. Darling: I am much obliged, Mr. Deputy-Speaker.
    This new Clause makes an entirely new proposal which was not mentioned in another place, on Second Reading in this House or in Standing Committee. We are putting it forward for incorporation in the Bill at this late stage because the finance companies are now arranging certain hire-purchase agreements in such a way as to bring them within the ambit of tax relief on loans, but they did not start these new arrangements until after we had completed our proceedings in Committee.
    The arrangements which have been made to give tax relief on the loan part
    456
    of hire-purchase arrangements, if I may for brevity so describe it, are operated, of course, under our existing legislation, not under the terms of the Bill. We are asking the Government to accept this new Clause because it is very doubtful whether the tax relief arrangements can continue when the Bill is enacted. The doubt arises because of the provisions in the Bill dealing with termination of contracts before all the payments have been completed, a problem on which we have spent a very great deal of time, as the House knows. We are not concerned here with whether or not tax reliefs on loan interest are good or bad or whether they should be permitted or not. The point is that the law governing tax reliefs is not the hire-purchase law; it is the fiscal law under the Finance Acts, and the Finance Acts permit tax relief on loan interest in certain circumstances.
    As we have often said in previous debates, hire purchase is a form of money lending, a perfectly respectable form of money lending when the transactions are honestly and properly conducted, as most are. What happens in ordinary hire-purchase transactions is that the customer, in effect, borrows the money to pay for the goods he wants, he pledges the goods as security for the loan, accepting a condition that the goods do not belong to him until he has settled the final repayment of the debt.
    If the customer borrowed the money from a bank, he could claim tax relief on the interest charged. One or two respectable finance houses have found a way to provide for similar tax relief on hire-purchase transactions. Therefore, we have a duty here, now that we can do something about it before the Bill leaves

    457
    us, to recognise these arrangements, which are clearly within our fiscal law, and provide for them suitably in this Bill, because, otherwise, we shall be discriminating between one form of money lending and another. As we have said, hire purchase is the ordinary man's bank loan. If we discriminate by failing to adjust our hire-purchase law to what is now an accepted practice, we shall be discriminating against the less well-off sections of our community. We shall put them at a disadvantage as against those who, because of their substantial bank accounts, can get personal bank loans which they use to buy the goods they need.
    If hon. Members have read the new Clause, they will not want me to explain in detail how the arrangement works. If it is necessary to put anything on the record, I would say that, in order to make a hire-purchase transaction a personal loan for the purpose of attracting tax relief on the interest, one has to bring in a third party who goes through the motions of lending the money, the third party being a subsidiary of the finance company which has been set up quite legally and respectably for this purpose. The purpose of this new arrangement, which, as I have said, has come into being since we finished the Committee stage, is to give to the ordinary householder who goes in for hire purchase instead of borrowing money from the bank the same kind of tax relief as he would have if he were to borrow from the bank in order to purchase the things he wanted.
    The arrangements which have been made for this purpose have been accepted by the City, by the Bank of England and by the Treasury as being well within our fiscal laws. If we discriminate against these arrangements by refusing to adapt our hire-purchase law so that they can continue, we shall discriminate in general against the poorer sections of the community. I say "in general" because, of course, the benefit would go to someone who wanted to buy a Jaguar at something less than £2,000 on hire purchase, but, of course, hire purchase is, in the ordinary way, the poor man's money lending arrangement.
    I plead with the Parliamentary Secretary, therefore, to accept this new Clause. If he refuses to do so, he will be denying
    458
    tax relief on interest to poorer people while continuing to allow a similar facility on the personal loans arranged by those who have substantial bank accounts.
    Mr. D. Price: First, I make the general point that we have to be rather careful in dealing with the finance houses because they suffer a little from schizophrenia in these matters. They are not altogether certain whether they are basically moneylenders or hirers of goods, and there is apt to be something of a split personality in their approach.
    Mr. Darling: I hope that the hon. Gentleman is not putting that forward as a criticism of the finance houses. Incidentally, I am getting rather embarrassed at being so much in the position of having to defend them. The reason why finance companies have to behave like this is, surely, that they have to operate under rather silly legislation.
    Mr. Price: With respect, I was merely observing this fact. One has to be careful and not accept that finance companies should have all the benefits of a hiring company and all the benefits of a money-lending company.
    As the hon. Gentleman very fairly observed, this new Clause raises a subject which we have not discussed before and which has not even seen the light of day on the Notice Paper hitherto. Nevertheless, I am always happy to consider any new matters.
    As we see it, the new Clause is designed to deal with the situation which could arise under a scheme of hire purchase recently announced by some finance houses. As I understand it, the scheme is to offer transactions where the hire-purchase price exceeds £300, and it is thus not within the scope of the Hire Purchase Acts at present. This will, of course, change when the Bill comes into force and the monetary limit is raised to £2,000. As I understood it, the particular schemes which have given birth to the new Clause have been drawn up so that, in respect of certain payments made by the hirer, the hirer may be able to claim repayment of Income Tax on the amount of interest paid on the loan.
    The House will realise that the question whether particular payments are eligible for such tax relief or not is one

    459
    of general application and not to be dealt with in the Hire Purchase Acts. The purpose of the Hire Purchase Acts is to protect the consumer, and this involves many different provisions regulating the relations between owner and hirer, and covering the dealer or even the guarantor when they come into the picture. The aim in framing legislation of this kind must always be to keep it as simple and as direct as possible, although the complexities of the relationships and situations which must be provided for make this a little difficult. There can be no question of adjusting the law to take account of slightly unusual ways in which particular companies may wish to do business.
    In the present case, as I understand it, the concern in question operates, again, in a slightly schizophrenic way. One of its companies makes a loan, another makes the hire-purchase agreement and acts as guarantor of the loan. I recognise that there may be commercial reasons why the companies want to see the Hire Purchase Acts adapted so as to protect themselves if they enter into rather unusual arrangements. But we really cannot change the consumer protection law to take account of situations in which finance houses wish to take advantage of the tax law. If we did, we should have to change the law to take account of other unusual arrangements which other finance houses want to operate.
    6.15 p.m.
    The law must concern itself with the normal transaction, and the normal transaction is that, whatever has been paid under the agreement on behalf of the hirer, that amount has been paid and it is no concern of the finance house whether the hirer has saved the money out of his salary or wages or has gone off to his uncle or his bank to borrow it. The money has been paid as part of the hire-purchase price, and this will be taken into account if the provisions of Section 4 of the 1938 Act about termination or Section 11 about repossession have to be applied. This is certainly not simething to be interfered with. Finance houses—this applies generally, not only with regard to the scheme I have just mentioned—must plan their arrangements so that they can operate them within the Acts. They cannot expect the Acts to be adjusted to suit
    460
    them so that they can get the advantage of a tax exemption which, I understand, was designed for a different set of circumstances.
    The issues involved here are basically matters of liability to tax arising from the Finance Acts and not from the Hire Purchase Acts. This is not the right Measure in which to deal with matters of tax exemption. If it were decided that the interest element in h.p. charges should be made eligible for tax relief—and the hon. Member, as usual, has put formidable arguments for it—then it should be done by amending the tax law in the next Finance Bill and not by amending the Hire Purchase Acts to fit schemes designed to get within the present eligibility for tax relief.
    I understand that some variants of this arrangement could come within the present eligibility for tax relief, but that is a matter for fiscal law and not for us to determine in this Bill or for me to pronounce an opinion on. It would not be proper for me to go into the broader issue the hon. Member raised when he claimed that hire purchase was the poor man's method of getting bank loans and that, if we give tax relief on bank loans to people with the credit to obtain them, we should allow similar relief on h.p. agreements. I do not want to express an opinion one way or the other on that, but if I were a Treasury Minister I would only say, "I cannot anticipate the Chancellor's next Budget."
    Mr. Darling: I do not know why the Parliamentary Secretary keeps dragging in the issue of consumer protection. I think that he is fascinated with the words. He seems to be under the impression that he understands what they mean. We will have to disabuse him of that before we finish.
    In putting forward this Clause, we have no concern for the arrangements which finance houses make under present legislation—their split-minded activities, as the hon. Member calls them. We are not asking for tax exemption for finance companies or for tax relief for them. I could not care less if they do not get it. We are asking for tax relief for the customers. When the hon. Member says that we should not deal with fiscal questions in this legislation, I think he has the thing the wrong way round. Unless we include this Clause in the Bill we

    461
    shall be using the Bill to stop customers on h.p. loans, so to speak, from getting the benefit of existing tax laws.
    I am sure it was never the intention in the Finance Acts to deny customers of h.p. loans the facilities for tax relief given to people getting personal loans from banks or insurance societies. As the hon. Member has said, the finance companies can make this arrangement within our existing tax law now, because they do it above the £300 limit and therefore do not get caught by h.p. legislation.
    This Bill without our Clause will prevent poorer people from getting the benefit. In that sense, it will, in fact, interfere with the tax law. If the hon. Member cannot see that argument, and knowing how stubborn the Board of Trade can be, the only thing we can do is once more to register our protest at their inability to see something that ought to be done.
    Question put, That the Clause be read a Second time:—
    The House divided: Ayes 149, Noes 176.

    Division No. 115.]

    AYES

    [6.19 p.m.

    Ainsley, William

    Grimond, Rt. Hon. J.

    Owen, Will

    Albu, Austen

    Gunter, Ray

    Pannell, Charles (Leeds, W.)

    Allaun, Frank (Salford, E.)

    Hale, Leslie (Oldham, W.)

    Pargiter, G. A.

    Allen, Scholefield (Crewe)

    Hamilton, William (West Fife)

    Pearson, Arthur (Pontypridd)

    Awbery, Stan (Bristol, Central)

    Harper, Joseph

    Peart, Frederick

    Bacon, Miss Alice

    Hayman, F. H.

    Pentland, Norman

    Bennett, J. (Glasgow, Bridgeton)

    Healey, Denis

    Popplewell, Ernest

    Benson, Sir George

    Henderson, Rt. Hn. Arthur (Rwly Regis)

    Prentice, R. E.

    Blackburn, F.

    Herbison, Miss Margaret

    Probert, Arthur

    Boardman, H.

    Hilton, A. V.

    Rees, Merlyn (Leeds, S.)

    Bottomley, Rt. Hon. A. G.

    Holman, Percy

    Reynolds, G. W.

    Bowden, Rt. Hn. H. W. (Loics, S. W.)

    Holt, Arthur

    Rhodes, H.

    Bowen, Roderlc (Cardigan)

    Houghton, Douglas

    Roberts, Goronwy (Caernarvon)

    Bowles, Frank

    Hoy, James H.

    Robertson, John (Paisley)

    Boyden, James

    Hughes, Cledwyn (Anglesey)

    Rodgers, W. T. (Stockton)

    Braddock, Mrs. E. M.

    Hughes, Emrys (S. Ayrshire)

    Rogers, G. H. R. (Kensington, N.)

    Bradley, Tom

    Hunter, A. E.

    Ross, William

    Butler, Herbert (Hackney, C.)

    Hynd, H. (Accrington)

    Shinwell, Rt. Hon. E.

    Callaghan, James

    Hynd, John (Attercliffe)

    Short, Edward

    Castle, Mrs. Barbara

    Irvine, A. J. (Edge Hill)

    Silkin, John

    Collick, Percy

    Janner, Sir Barnett

    Silverman, Julius (Aston)

    Corbet, Mrs. Freda

    Jeger, George

    Slater, Mrs. Harriet (Stoke, N.)

    Craddock, George (Bradford, S.)

    Jones, Elwyn (West Ham, S.)

    Slater, Joseph (Sedgefield)

    Crosland, Anthony

    Jones, J. Idwal (Wrexham)

    Small, William

    Cullen, Mrs. Alice

    Jones, T. W. (Merioneth)

    Smith, Ellis (Stoke, S.)

    Dalyell, Tam

    Kenyon, Clifford

    Snow, Julian

    Darling, George

    Key, Rt. Hon. C. W.

    Sorensen, R. W.

    Davies, Ifor (Gower)

    King, Dr. Horace

    Soskice, Rt. Hon. Sir Frank

    Davies, S. O. (Merthyr)

    Lee, Frederick (Newton)

    Steele, Thomas

    Delargy, Hugh

    Lewis, Arthur (West Ham, N.)

    Stewart, Michael (Fulham)

    Dempsey, James

    Loughlin, Charles

    Stones, William

    Diamond, John

    Lubbock, Eric

    Swain, Thomas

    Dodds, Norman

    McCann, J.

    Symonds, J. B.

    Doig, Peter

    MacColl, James

    Taverne, D.

    Duffy, A. E. P. (Colne Valley)

    McInnes, James

    Thomas, Iorwerth (Rhondda, W.)

    Ede, Rt. Hon. C.

    Mackenzie, Gregor

    Thompson, Dr. Alan (Dunfermline)

    Edwards, Rt. Hon. Ness (Caerphilly)

    McLeavy, Frank

    Thornton, Ernest

    Edwards, Robert (Bilston)

    Mallalieu, E. L. (Brigg)

    Thorpe, Jeremy

    Edwards, Walter (Stepnoy)

    Mapp, Charles

    Warbey, William

    Evans, Albert

    Mason, Roy

    Weitzman, David

    Finch, Harold

    Mendelson, J. J.

    Williams, W. T. (Warrington)

    Foot, Dingle (Ipswich)

    Millan, Bruce

    Willis, E. G. (Edinburgh, E.)

    Foot, Michael (Ebbw Vale)

    Milne, Edward

    Wilson, Rt. Hon. Harold (Huyton)

    Forman, J. C.

    Mitchlson, G. R.

    Winterbottom, R. E.

    Galpern, Sir Myer

    Monslow, Walter

    Woodburn, Rt. Hon. A.

    George, Lady MeganLloyd (Crmrthn)

    Moody, A. S.

    Woof, Robert

    Ginsburg, David

    Moyle, Arthur

    Yates, Victor (Ladywood)

    Gourlay, Harry

    Mulley, Frederick

    Grey, Charles

    Noel-Baker, Francis (Swindon)

    TELLERS FOR THE AYES:

    Griffiths, Rt. Hon. James (Llanelly)

    Oliver, G. H.

    Mr. Redhead and Mr. Lawson.

    Griffiths, W. (Exchange)

    Oswald, Thomas

    NOES

    Agnew, Sir Peter

    Barlow, Sir John

    Bevins, Rt. Hon. Reginald

    Arbuthnot, Sir John

    Barter, John

    Biggs-Davison, John

    Atkins, Humphrey

    Bell, Ronald

    Bingham, R. M.

    Awdry, Daniel (Chippenham)

    Bennett, F. M. (Torquay)

    Bishop, Sir Patrick

    Barber, Rt. Hon. Anthony

    Bennett, Dr. Reginald (Gos & Fhin)

    Black, Sir Cyril

    Bossom, Hon. Clive

    Howard, John (Southampton Test)

    Pitt, Dame Edith

    Bourne-Arton, A.

    Hughes Hallett, Vice-Admiral John

    Pounder, Rafton

    Bromley-Davenport. Lt.-Col. Sir Walter

    Hughes-Young, Michael

    Powell, Rt. Hon. J. Enoch

    Brown, Alan (Tottenham)

    Hutchison, Michael Clark

    Price, David (Eastleigh)

    Buck, Antony

    Iremonger, T. L.

    Price, H. A. (Lewisham, W.)

    Burden, F. A.

    Irvine, Bryant Godman (Rye)

    Prior-Palmer, Brig. Sir Otho

    Butcher, Sir Herbert

    James, David

    Pym, Francis

    Carr, Rt. Hon. Robert (Mitcham)

    Jennings, J. C.

    Quennell, Miss J. M.

    Chichester-Clark, R.

    Johnson, Eric (Blackley)

    Redmayne, Rt. Hon. Martin

    Clarke, Brig. Terence (Portsmouth, W.)

    Kerans, Cdr. J. S.

    Rees, Hugh (Swansea, W.)

    Cleaver, Leonard

    Kerby, Capt. Henry

    Renton, Rt. Hon. David

    Cooke, Robert

    Kershaw, Anthony

    Roberts, sir Peter (Heeley)

    Cooper-Key, Sir Neill

    Kirk, Peter

    Robson Brown, Sir William

    Cordie, John

    Langford-Holt, Sir John

    Roots, William

    Costain, A. P.

    Leavey, J. A.

    Scott-Hopkins, James

    Coulson, Michael

    Legge-Bourke, Sir Harry

    Sharples, Richard

    Craddock, Sir Beresford (Spelthorne)

    Lewis, Kenneth (Rutland)

    Shepherd, William

    Cunningham, Sir Knox

    Lilley, F. J. P.

    Skeet, T. H. H.

    Curran, Charles

    Lindsay, Sir Martin

    Smith, Dudley (Br'ntf'd & Chiswick)

    Currie, G. B. H.

    Litchfield, Capt. John

    Speir, Rupert

    d'Avigdor-Goldsmid, Sir Henry

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Stanley, Hon. Richard

    Elliot, Capt. Walter (Carshalton)

    Longbottom, Charles

    Stodart, J. A.

    Elliott, R. W. (Newc'tle-upon-Tyne, N.)

    Longden, Gilbert

    Storey, Sir Samuel

    Emmet, Hon. Mrs. Evelyn

    Lucas-Tooth, Sir Hugh

    Studholme, Sir Henry

    Fell, Anthony

    McAdden, Sir Stephen

    Summers, Sir Spencer

    Fletcher-Cooke, Charles

    MacArthur, Ian

    Taylor, Sir Charles (Eastbourne)

    Fraser, Ian (Plymouth, Sutton)

    McLaren, Martin

    Taylor, Frank (M'ch'st'r, Moss Side

    Freeth, Denzil

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Taylor, Sir William (Bradford, N.

    Galbraith, Hon. T. G. D.

    McMaster, Stanley R.

    Teeling, Sir William

    Gammans, Lady

    Maddan, Martin

    Thatcher, Mrs. Margaret

    Gardner, Edward

    Maitland, Sir John

    Thompson, Sir Kenneth (Walton)

    George, Sir John (Pollok)

    Marshall, Sir Douglas

    Thompson, Sir Richard (Croydon, S.

    Gibson-Watt, David

    Mathew Robert (Honiton)

    Thornton-Kemsley, Sir Colin

    Giles, Rear-Admiral Morgan

    Maude, Angus (Stratford-on-Avon)

    Touche, Rt. Hon. Sir Gordon

    Gilmour, Sir John (East Fife)

    Maxwell-Hyslop, R. J.

    Turner Colin

    Glyn, Dr. Alan (Clapham)

    Maydon, Lt.-Cmdr, S. L. C.

    Turton, Rt. Hon. R. H.

    Glyn, Sir Richard (Dorset, N.)

    Mills, Stratton

    van Straubenzee, W. R.

    Gower, Raymond

    Miscampbell, Norman

    Vaughan-Morgan, Rt. Hon. Sir John

    Griffiths, Eldon (Bury St. Edmunds)

    Montgomery, Fergus

    Vickers, Miss Joan

    Grosvenor, Lord Robert

    More, Jasper (Ludlow)

    Walker, Peter

    Gurden, Harold

    Morrison, Charles (Devizes)

    Ward, Dame Irene

    Hamilton, Michael (Wellingborough)

    Morrison, John (Salisbury)

    Wells, John (Maidstone)

    Harrison, Col. Sir Harwood (Eye)

    Mott-Radclyffe, Sir Charles

    Whitelaw, William

    Harvey, John (Walthamstow, E.)

    Neave, Airey

    Williams, Sir Rolf Dudley

    Harvie Anderson, Miss

    Nicholson, Sir Godfrey

    Wills, Sir Gerald (Bridgwater)

    Hastings, Stephen

    Nugent, Rt. Hon. Sir Richard

    Wilson, Geoffrey (Truro)

    Heath, Rt. Hon. Edward

    Oakshott, Sir Hendrie

    Wise, A. R.

    Henderson, Sir John (Cathcart)

    Orr, Capt. L. P. S.

    Wolrige-Gordon, Patrick

    Hiley, Joseph

    Orr-Ewing, Sir Ian (Hendon, North)

    Wood, Rt. Hon. Richard

    Hill, Mrs. Eveline (Wythenshawe)

    Osborn, John (Hallam)

    Woodnutt, Mark

    Hill, J. E. B. (S. Norfolk)

    Page, John (Harrow, West)

    Woollam, John

    Hirst, Geoffrey

    Partridge, E.

    Hobson, Rt. Hon. Sir John

    Percival, Ian

    Holland, Philip

    Pickthorn, Sir Kenneth

    TELLERS FOR THE NOES:

    Howard, Hon. G. R. (St. Ives)

    Pitman, Sir James

    Mr. Finlay and Mr. Batsford.

    Clause 1.—(EXTENSION OF APPLICATION OF HIRE-PURCHASE ACT 1938.)
    Mr. A. J. Irvine: I beg to move, in page 1, line 10, to leave out "subsection (5)" and to insert "subsections (5) and (6)".
    Mr. Speaker: I understand that it will be convenient to discuss at the same time Amendment No. 121, in the name of the hon. and learned Gentleman and some of his hon. Friends: In page 2, line 17, at end insert:
    (6) Any hire-purchase agreement or credit-sale agreement made after the coming into operation of this Act in respect of which a person acts as agent of the owner or seller shall contain a statement to that effect and of the amount of commission paid or payable to such person in respect of the subject-matter of the agreement and if either a statement is not contained as aforesaid or is
    464
    contained but expresses an amount of com mission in excess of twelve and one half per cent. of the hire-purchase charge on the good: thereby agreed to be hired or sold the agree ment shall be deemed never to have beer enforceable.
    6.30 p.m.
    Mr. Irvine: Our purpose is to put some kind of limit upon the element of commission charged in hire-purchase agreements. The first Amendment paves the way to Amendment No. 121, which contains the substance of our proposal The effect of our proposal, which would apply to both hire-purchase agreements and credit-sale agreements, would be that, in all instances taking effect after this Bill comes into operation, where a person acted as agent of the owner or seller, the fact should be recorded in the agreement. Where there was such

    465
    an agent there would be, additionally, as a provision in the contract, a statement as to the commission the agent was receiving on the deal. If that statement expressed an amount in excess of 12½ per cent. of the hire-purchase charge on the goods thereby agreed to be hired or sold, the agreement would be deemed never to have been enforceable.
    We are concerned in principle with the issues raised by the matter of dealers' commissions. A great deal of emphasis has been placed during the course of debates on the Bill on the circumstance that hire-purchase legislation is basically consumer protection legislation. This Amendment is manifestly entirely designated to increase the benefit to the consumer and the hirer. There is no desire to suggest that a scale of commission is necessarily or, indeed, as a matter of narrative, a commission factor present in hire-purchase transactions, but when one is legislating on a matter of this kind it is necessary to have safeguards ready against the perhaps unlikely event of a hire-purchase transaction being made subject to an extortionate or oppressive level of commission paid to the dealer. This is an endeavour to meet that sort of difficulty, to curb the payment of commissions at too high a level to dealers and, under this important head, to give further and, we believe, needed protection to consumers.
    Mr. Silkin: I support the Amendment, which must be seen in the context of the number of hire-purchase transactions dealing with motor cars which take place every year. There are nearly I million of them, a large total indeed, and we have come to the rather strange situation that it pays a motor car dealer better if the customer buys the car on hire purchase than if he pays cash because the question of the dealer's commission is now the pre-eminent consideration from the dealer's point of view. Indeed, I believe there are cases where dealers have almost gone down on their knees to implore the customer to buy on hire purchase rather than pay cash.
    When one talks about the dealer's commission one must realise that this commission, indirectly, is paid by the hire purchaser in the variety of transactions which take place throughout the
    466
    country. I do not know what difference it makes to hire-purchase charges, but it must be considerable. In this Amendment my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine) is seeking to restrict the dealer's commission to 12½ per cent. of the hire-purchase charge. On a motor car with a total hire-purchase value of, say, £2,000, 12½ per cent. might come to £25. We are, therefore, talking about relatively large sums of money in connection with each transaction.
    There are other reasons why I find the question of the dealer's commission a little repugnant. If one talks in terms of the sale of a house it is, as far as I know, usually the vendor who pays the commission and not the purchaser. Here the boot is rather on the other foot. I expect that the finance houses theoretically pay it, but all hon. Members will agree that, in fact, the hirer himself finds this burden eventually falling upon him.
    Dr. Bennett: Hear. hear.
    Mr. Silkin: I am glad to see that I have some support from the benches opposite.
    In these circumstances is it not right that we should show the hirer exactly what he is letting himself in for? Should we not put a limit on the amount of commission that may be charged? To do this would be bound to have two beneficial effects; first, it would stop what I believe is quite prevalent in finance house business—touting for dealers—and, secondly, we would stop this inevitable charge being levied on the hirer, perhaps indirectly, but nevertheless really—a charge which I regard as repugnant and wrong. It is for these reasons that I support the Amendment.
    Mr. R. E. Winterbottom: I apologise for not having intervened in the discussion earlier. I was not a member of the Committee upstairs, although this is a subject in which I am particularly interested. My interest in it leads me to wonder what the Amendment is all about. If it is accepted, will it mean that the Bill will go further than its title would indicate; further than matters of hire purchase? That would seem to be the effect, because the Amendment talks of credit-sale agreements.

    467
    I should like to know how prevalent credit-sale agreements are compared with the general run of hire-purchase agreements. I support the principle of the Amendment and the remarks of my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine), certainly when those remarks are applied to hire-purchase transactions. I appreciate the necessity for the hirer to have some knowledge of the details of the agreement, particularly of the amount being paid to the dealer in commission.
    Are not credit-sale agreements much wider in their implications than hire-purchase transactions? Indeed, are not the ramifications of hire-purchase agreements peculiar to those types of agreement, outwith transactions involving credit sales? For example, in a short-term credit sale, possibly with no agreement at all, it is possible for the length of the term of repayment to be extended over a longer period—subject, of course, to the necessary poundage being paid—although the credit-sale agreement remains known as a short-term agreement.
    That is why I want to know how far the Amendment would go in the control of credit trade in this country as distinct from the control of hire purchase. There are many forms of credit trade, for example direct credit trade or check credit trade. Under both forms there is a development which impinges on hire purchase. Are credit sales eliminated by the Bill? If not, I see dangers in this proposal.
    How will the 12½ per cent. be applied? Will it be applied to the commission paid to an agent who collects from door to door on a credit basis? Is the 12½ per cent. to be reckoned on the interest charged under a credit-trade agreement, which is Is. in the £ over 20 weeks, which, in terms of the interest involved in the ramifications between the check trading company and the seller of the goods, can be multiplied to a very high rate of interest on the money. Or is it 12½ per cent. of the purchase price? If so, this agreement will lower somebody's wages.
    Mr. Darling: Generally speaking, the Amendment would apply only to hire-purchase agreements. Where a creditsale
    468
    agreement—and it must be an agreement, not the kind of credit sale about which my hon. Friend is talking—involves giving a commission to the agent who has brought the trade, then the Amendment provides that the commission must be mentioned in the agreement and that it must not exceed 12½ per cent. of the charges which are made for the hire-purchase arrangements.
    Mr. Winterbottom: If that is so, we are treading on very dangerous ground and opening the door to practices in short-credit trading which may be very dangerous. I should not like to see some of these practices develop. I should like to see some control of the short-term credit sales and of the hire-purchase agreements, for if we are leaving one wing of credit-sale distribution uncontrolled and are controlling the other wing, then there are dangers that malpractices in the uncontrolled wing will start to dominate the other. Some goods are sold in this country not on hire purchase but on credit sale which normally would be sold on hire-purchase agreements. They are sold without any agreement at all and on the basis of short-term credit. This is manipulated by ordinary administrative methods which are used in the short-term credit industry.
    I am afraid that if this provision were made it would affect the whole of credit-sale agreements as distinct from only those which are covered by hire-purchase agreements. If so, it would affect wages, because many of the agents in the check credit business are the best paid men in distribution. They get a wage which is far more than 12½ per cent. commission on the checks of which they dispose, for supply by the dealer with whom the firm for which they work is in agreement. There ought to be an elimination of short-term credit sales from this proposal. The provision should apply only to hire purchase.
    If we introduce into the Bill a provision which can be interpreted far wider than sales on hire purchase, then in my opinion all kinds of difficulties will arise between the various sections of credit. I am sorry that the words "credit-sale agreement" have crept into the Amendment because with the exception of those words I can support it.
    6.45 p.m.
    Dr. Bennett: I confess to having considerable sympathy with the Amendment. We have hire-purchase legislation before the House at a moment of considerable crisis within the industry, particularly in the matter to which the Amendment would apply. We have recently seen a "running amok", or the early stages of "running amok", in the hire-purchase business. It was well summed up in an article in the Financial Times on 9th June, which began:
    "It must be counted a matter for great regret that the Ford Motor Co's. bid to establish itself in the hire purchase business is largely taking the form of offering to pay commissions to motor dealers for introducing transactions that are materially in excess of the ceiling set by the Finance Houses Association code."
    Later the article reads:
    "…there can be little doubt that when the council of the Finance Houses Association meets shortly to discuss what should be done to counter this threat, there will be a good deal of support for the proposal that such competition should be answered in the only way in which it can be effectively answered in the short run—by suspending the commissions code so that Ford can be beaten at its own game".
    This is a most terrifying prospect, and I am most alarmed by it. I think that we should all like to see the abolition of, or the limiting of this kick-back. The motor dealer does not do too badly. He names his own profit on the sale of the car. I think that it is nearly always cars which we have in mind in these matters. Why should he claim a percentage of the extra hire-purchase charges which he can obtain by persuading a customer to take something on hire-purchase instead of paying cash?
    This is a deplorable affair, and it is our duty to try to abolish or limit this kind of thing. I know that the difficulties are great. I have a sneaking suspicion that my hon. Friend the Parliamentary Secretary regards it as impossible, because one argument which can be used is that if they cannot get their extra second commission that way, they can stick a bit on the price. But it would be a form of direct competition in selling cars if it were put on the price.
    I feel that we have a duty to try to check this practice. At the moment people in this country are being subjected to a price war in commissions, a sort of auction sale by which the highest bidders will get the prize and the highest commissions to the motor dealers will secure the
    470
    hire-purchase business from them. I therefore think that we have a desperate duty to try to do something to check this practice.
    The trouble is that, as far as I can see, the business done, particularly the motor-car business, is through these dealers, and it is the dealers who introduce the business to the finance houses. I do not see how the finance house trade can advertise directly to the customer that their charges are lower than the other chap's. It would be a good thing, except that the attempts to advertise in this way would be much too diffuse. But there ought to be some way of making known to the public the extent of the commission which the hirer must pay to the motor dealer. It should be made public that the companies which give least commission to the motor dealer are those which in the end charge the hirer least. This is a consumer protection Bill, and this is the kind of provision which we need in consumer protection. I am strongly of the opinion that we ought to abolish, or at best diminish, these commissions. That is why I think that there is a great deal to be said for the Amendment, which tries to do a most important job.
    Mr. Bingham: I rise shortly to echo some of the sentiments expressed by the hon. and learned Member for Liverpool, Edge Hill (Mr. Irvine) and my hon. Friend the Member for Gosport and Fareham (Dr. Bennett). If the dealer, in acting as the person who introduces the finance company to the hirer, is acting as agent of the hirer in that transaction, the whole legal basis of the payment of these commissions is in doubt, because a payment to the agent of a principal by the other party to the contract is a secret commission, in the eyes of the common law a bribe, and is recoverable. But I can readily see that in fact the dealer is not in law an agent of the hirer for this purpose.
    But although in law that is not his position, in practice many hirers or purchasers who consult a dealer look upon him as one who will give them guidance as to the hire-purchase company with which they should deal. I feel that if the dealer is receiving what in common parlance is a back-hander from the finance company, he should tell the hirer at the time. It is not the dealer in

    471
    the long run who will have to pay the back-hander; it will be charged against the hirer.
    One doubts whether the general public appreciate that some finance houses give commissions in this way. One doubts whether the public understands that. The method of dealing with the situation proposed by the hon. and learned Member for Edge Hill may not be the best method, but I echo the sentiments of my hon. Friend the Member for Gosport and Fareham that in general this practice is extremely undesirable, that publicity ought to be given to it and that discriminating hirers ought to realise that the finance houses which give no dealers' commission are in the long run the best finance houses with which to deal.
    Mr. Kenneth Lewis: I am not a lawyer or a financial expert. I merely want to say a word on this matter as it appears to me as a prospective consumer. There is no doubt that there is a great deal of need for the public to be educated in this matter about what they are paying and who gets the rake-off. It is, neverthless, within their competence to be educated, but I am not sure that it is part of our job to legislate for consumer protection to the extent of putting everything into Bills and making it impossible for people to make their own mistakes. If they are inclined to make mistakes in paying too much and thus giving too much profit to a finance house or an agent, it is up to them to remedy this by trying to get something cheaper.
    I am not sure that I am in entire sympathy with my hon. Friend the Member for Gosport and Fareham (Dr. Bennett), who seemed to indicate that a fair amount of competition was coming into the business of paying for agents. This should help to bring down the charge to the consumer.
    Mr. Darling: No. It has the other effect.
    Dr. Bennett: The competition is to pay the agents more so as to get the best from them. The poor consumer does not come into this.
    Mr. Lewis: I thank my hon. Friend for putting me right. Obviously, I got it the wrong way round.
    472
    Nevertheless, it is clearly a matter of competition, and this applies not only to motor cars, of which we have heard a good deal, but to the whole range of consumer goods which are sold on hire purchase. The total cost of the article must be a matter for competition.
    I do not know whether I am correct, but I wonder whether we have ever legislated for a fixed profit. I cannot think that there is any such legislation. It would be an extremely dangerous precedent. [Interruption.] To pass the Amendment would mean fixing a percentage. In this case, as so often happens elsewhere, the ceiling would become the general level.
    Mr. Winterbottom: Is it within the hon. Member's knowledge that the Board of Trade fixed a rate of interest both for long-term and short-term credits in 1958, in regulations which were presented under an Act of Parliament?
    Mr. Lewis: I accept that, but it is not on all fours with fixing a rate of commission.
    Mr. Bingham: Most of the remarks have been directed not only to the 12½ per cent., which would be an excessive amount, but to publicity concerning the percentage of the hire-purchase charge which goes in dealers' secret commission.
    Mr. Lewis: I agree. Nevertheless, it would be a dangerous precedent to fix a percentage of that kind. As my hon. and learned Friend the Member for Liverpool, Garston (Mr. Bingham) has said, the figure suggested is rather high. I repeat that this is a matter of educating and informing the public.
    Mr. E. G. Willis: How can they be educated about something that is secret?
    Mr. Lewis: If something is secret, it is being kept secret. I suggest that information should be given to the public. If the finance houses are involved, clearly, if they want to maintain their reputation, they would participate in informing the public. The Board of Trade can take a hand in this. It seems to me a better way to deal with it than to legislate in the manner proposed by the Amendment.
    7.0 p.m.
    Mr. J. Robertson: If the hon. Member for Rutland and Stamford (Mr. K. Lewis) extended his reasoning to our activity here, we would soon be out of business. The only purpose of the Bill is to deal with the problems which have arisen in hire purchase. If those difficulties had not arisen and complaints had not been made, we would not have had the Bill. There is no doubt that the consumer needs protection, and that is the purpose of the Bill.
    One of the greatest concerns which has been expressed, on Second Reading, upstairs in Committee and elsewhere, has been the position of the finance house in all this business. Hon. Members have told us that finance houses are reasonable people and would not do any of the things which we on this side have spoken about. The responsibility is, however, that of the finance house. Where finance houses go so gravely wrong is that they do not make any check upon the activity of, for example, garage owners dealing in second-hand cars or the activities of their agents or dealers who sell goods and act as agents. By paying commission, they are encouraging dealers and agents to make bargains with people who obviously are not creditworthy and with whom the agreement should not be made. One of the main criticisms of the finance houses is that they shrug off their responsibility in this regard.
    What we say in the Amendment is that at least we should try to limit that aspect of the matter. In Scotland, in particular, one shudders at the idea of firms like Napier pushing dealers and agents with secret commissions to make sales to people who obviously are a bad risk.
    Mr. K. Lewis: There is no secrecy about the fact that commission is paid to people to sell goods on hire purchase. It is well known. Nobody keeps it secret.
    Mr. Robertson: I do not disagree. My concern is with two aspects: that there should be commission at all, and the way it is done. I do not mind people making a reasonable profit. They have to live. Nobody knows, however, the way in which this is worked. Certainly, the hirer can never find exactly
    474
    what he pays to the dealer for the privilege of making a bargain with him or, through him, with the finance house. What is even worse than the activity of the dealer is that the finance house which really is responsible stands back, washes its hands of the whole affair and disclaims responsibility.
    In that regard, the finance houses show great irresponsibility. Anyone who has had to deal with his constituents concerning hire purchase knows that this is where the evil begins. No check is made with the potential hirer. The dealer has no desire to do so. He wants his commission and to make the deal, and the finance house is not concerned.
    If there are finance houses which do not do that kind of thing the Amendment certainly would help them. It would keep a lot of people in Scotland out of the small debt courts, which had the fantastic number of 109,000 cases in one year. It would keep a lot of those people out of the courts and out of the clutches of the finance houses.
    Mr. D. Price: It was nice to have interventions from the hon. Member for Sheffield, Brigftside (Mr. Winterbottom) and my hon. Friend the Member for Rutland and Stamford (Mr. K. Lewis,", who were not with us much during our deliberations in Committee. The question of commissions being paid by finance houses to dealers who bring them hire-purchase business has been the subject of a good deal of discussion. It was debated in another place and it has been debated upstairs.
    Opinions differ on the question of principle. Some people regard these commissions which are paid for the introduction of business as wholly bad. That was the view expressed by the hon. Member for Paisley (Mr. J. Robertson). It was the conclusion reached by the Molony Committee in paragraph 562 of its Report, although for practical reasons that Committee decided against recommending statutory prohibition. Other people take the view that these commissions should be restricted to a fixed maximum. That is the system which the Amendment attempts to assist. Other people take a third view that these commissions are in principle no different from commissions paid in other walks of life for the introduction of business.

    475
    On a point of fact, I should like to answer a point made by my hon. and learned Friend the Member for Liverpool, Garston (Mr. Bingham). Although my hon. and learned Friend may perhaps know of one, my understanding is that there are no finance houses which operate without taking commission. Therefore, what we are discussing is an established practice.
    As my hon. Friend the Member for Gosport and Fareham (Dr. Bennett) pointed out, there is a code of practice amongst the finance houses and I understand that hitherto they have recommended 15 per cent. as their commission rate. Those who feel that as a matter of consumer protection something should be done about dealers' commissions do so because they believe that the result of the payment of commissions is directly reflected in the level of hire-purchase charges. Therefore, they argue that if commissions were prohibited, charges would come down. This was the argument of the hon. Member for Deptford (Mr. Silkin).
    I see the argument, but I have doubts about it. I cannot help feeling that, in practice, these commissions are one element in the income of the dealer. If he were to lose them, I am not certain that in the long run he would not try to make up that amount of income in the price of the goods which he sells.
    In support of that view, which I cannot express definitively, may I quote a letter in the Financial Times on 8th May, from a director of a finance house, who said:
    "Hire-purchase commission is taken into account by the motor trade when fixing a price for trade-ins."
    Having said that on an issue of principle, I turn now to the practicalities. As the Molony Committee recognised, the plain fact is that a statutory prohibition or limitation of commissions could not be enforced. Having expressed the view that it did not like commissions, the Molony Committee said:
    "However, we do not think that the prohibition of the Australian Acts ought to be adopted, for the reason, which we regretfully recognise. that it is impossible to stop such practices."
    That was the Committee's view. We have pointed it out each time that proposals of this kind have been put forward.
    476
    The ways in which a finance house can reward a dealer who brings it his hire-purchase business are numerous. The crudest is the cash payment, which can be difficult to trace. Even where there was evidence of payments in cash or other benefits by the finance house to a dealer, it might be very difficult to relate such cash transactions to particular hire-purchase transactions and show that in fact the cash had been paid as a commission.
    But, apart from that, we have to recognise that dealers perform a variety of services for finance houses, and very often bear a degree of the risk. I believe that they are entitled to be paid for legitimate activities which are spread beyond those of simply introducing the business to the finance house. The rate, which naturally depends on what services they give, and what risks they are asked to bear by the finance houses, is a matter which must be left to agreement between the parties. Equally, however, payments of this kind could easily be used to conceal rewards for the introduction of business.
    The suggestion in the Amendment is that excessive commissions should render the agreement unenforceable. I do not see the practicality of that. A hirer would have no way of finding out what commission had been paid. The logical conclusion at which those who advocate prohibition or limitation of commissions must arrive is that breaches should constitute criminal offences. Obviously, however, a criminal offence should not be created where it is known that enforcement would be virtually impossible, and no doubt the hon. Gentleman had this in mind in not including criminal penalties in the Amendment.
    When this matter was discussed in Committee, I said that I thought that the choice lay between doing nothing and prohibiting commissions, subject to criminal penalties. I saw no merit in a half-way house which attempted to impose a limitation. But I also drew attention to the practical difficulties of enforcement which, in our view, are quite overriding. I therefore cannot ask the House to accept the Amendment, and I shall not bother the House with certain deficiencies in the drafting of it, though I should mention that, as the Amendment

    477
    stands, the finance houses would be permitted to pay as much commission as they liked, provided that they were careful not to insert in the agreement a figure in excess of 12½ per cent. of the hire-purchase charges.
    My hon. Friend the Member for Gosport and Fareham (Dr. Bennett) mentioned the question of Ford's paying a higher commission than has been customary amongst finance houses. Ford's says that its charges are no higher than those it found in the market. Although it is alleged that Ford's pays a higher commission to the dealer, the company maintains that the end price to the hirer is no higher than that charged by the finance houses who pay a lower commission. We need not go into the arguments on the matter. I just say that that is the firm's riposte.
    But if competition to pay higher commissions is reflected in higher charges, then I believe that there should be opportunities for those finance houses which are not minded to get involved in this race to appeal directly to the public by offering more favourable terms. It is not true that finance houses can go on pushing up charges by giving dealers bigger and bigger commissions, without getting some reaction from the public. During the course of our discussions on the Bill we have all agreed that hire purchase is about the most expensive way of buying anything. If, to get more business, a certain finance house pays bigger commissions, it cannot contain those within its charges in some other way and puts up its charges, that will produce sales resistance to buying things on hire-purchase.
    The House should remember that under the Bill anyone who advertises or solicits for hire-purchase business has to give the true rate of interest. If the arguments which have been deployed are carried out, that figure will be very high.
    Dr. Bennett: The true rate of interest being the rate of interest on the loan, but not the percentage. They do not have to give the percentage paid to the dealer.
    7.15 p.m.
    Mr. Price: No, but they have to give the total charges. The total hire-purchase price has to be included. This includes a charge for the use of the loan. My hon. Friend knows that the dealer's commission is not added as an extra oncost
    478
    to the hire-purchase price, but it is no doubt included in the general spread of overheads in the actual hire-purchase charges, which are included in the total hire-purchase price. Therefore, indirectly it is included.
    Mr. Winterbortom: The simple interest charged on the capital involved, and the total over the period, are usually given, but the total amount to be paid does not represent the total interest that is paid, because the money is paid at such intervals of time as enables compound interest to be charged.
    Mr. Price: The hon. Gentleman has not been present during the whole of the debate. If he looks at page 54 of the Bill, he will see an attractive little formula which takes all the facts into account. It is the true rate of interest formula.
    I conclude by saying that it would not be practical to prohibit commissions, because they would have to have a criminal sanction behind them. I do not think that the half-way house, being a compromise, will commend itself to the House, and I therefore ask the House to leave the matter where it is.
    Mr. Bingham: I appreciate what my hon. Friend says about the impossibility of limiting or prohibiting the maximum charge, but what does he say about the other point of the Amendment, namely, publicising the rate of commission?
    Mr. Price: I am advised that, providing a finance house announces a rate of commission which is not in excess of 12½ per cent., that is all right. There is nothing to prevent a finance house paying a dealer an extra 3 or 4 per cent. in some other way. Thus, the publication of that information in the agreement would not meet the intention of the Amendment, which is to limit commissions to 12½ per cent.
    Mr. Darling: I am not surprised that the drafting of the Amendment has been criticised, just as others which we have tabled may be criticised. After all, we have had the extraordinary job of trying to put right what the Government have produced without the help which the hon. Gentleman and his Department receive. It may be that we have made a mistake in the drafting, but the purpose of the Amendment is clear and it seems to me that as drafted it would achieve what we want.

    479
    I think that the hon. and learned Member for Liverpool, Garston (Mr. Bingham) expressed the issues quite clearly when he said that commissions ought to be disclosed, and that the practice of paying secret commissions was undesirable. Merely to ask that the commission should be disclosed, though in itself desirable, would not achieve our object, which is to keep down commissions or abolish them altogether.
    The Parliamentary Secretary has told us that if he had to choose between abolition and restriction of the amount, he would prefer abolition. But there are practical difficulties here, as the Molony Committee and other people have pointed out. After having quite a long discussion among ourselves, we therefore put down this Amendment to limit the commissions, for two purposes—largely because we were persuaded that abolition would be very difficult and could easily be evaded, but also because by putting down the limitation we had two lines of attack. The commission had to be disclosed, and the problem of excessive charges was tackled.
    When the Parliamentary Secretary has tried to deal with the constructive Amendments that we have put forward he has painted a picture that has varied constantly from Clause to Clause and from Amendment to Amendment. There is no consistency in this. He talks about all the difficulties that buyers have in going round and making sure they get proper service and then, on other occasions, he insists that the buyers must behave responsibly, and that it is up to them to see that they are not defrauded. A little while ago he was painting for us a picture which I am sure does not exist anywhere—a picture of buyers going round from dealer to dealer to ask what his commission is, and finishing up by going to the one who is receiving the lowest commission.
    Car buyers do not operate in that way. They are faced with secret commissions, and there are very few customers, for cars, washing machines or whatever it may be, who, when presented with the agreement which lays down the hire-purchase charges, are capable of working it all out. I admit that the new Clause will help here, because the true
    480
    rate of interest has got to be put down. But customers cannot work out what the hire-purchase charges mean, or how much they have added to the purchase price.
    Very few customers make these calculations. They want to end up with what they think is a fair hire-purchase charge to add to the cash price. We know very well that the advertised charges will be laid down by law, and that under the new Clause the true rate of interest will have to be charged, but this will be meaningless to most customers. I cannot see customers going round the country to find out which car dealer is getting the lowest commission.
    Mr. K. Lewis: Why should they want to know what the commissions are? If a customer goes round from dealer to dealer he does so because he wants to know what the price is for cash and what the price is on hire purchase. He gets a price from each, and is able to relate one price to the other, whether for hire purchase or cash. If, in Birmingham, one is buying a suit made in London, one does not ask what rate of commission is paid to a dealer in London.
    Mr. Darling: I agree entirely. I was using this argument against the Parliamentary Secretary.
    Mr. Lewis: What the hon. Member was suggesting was that there is a secret commission and that it should be made public. The point is that the public can discern it if they get comparative prices.
    Mr. Darling: They cannot. I am coming to the question of commissions. The Parliamentary Secretary has said there are difficulties about enforcement. We admit that, but I think that he exaggerates the difficulties. We have got to remember that the members of the Finance Houses Association have, largely successfully, run their own voluntary limitation scheme. The voluntary limitation scheme has frequently got out of hand, however, when a "maverick" company has decided to break away from the voluntary agreement, and, to attract more trade to itself, has started paying higher commissions so that dealers will bring more trade to it.
    On occasions, the commission war that broke out among the members of

    481
    the Finance Houses Association some time ago caused commissions to go up to 40 per cent. of the hire-purchase price. This is quite indefensible, and it is no use saying that these commissions do not affect the price. In the end the customer has to pay for these commissions.
    Mr. John Wells: I think that the hon. Member made a slip of the tongue. He referred to 40 per cent. of the hire-purchase price.
    Mr. Darling: I am sorry. All the time we are talking about a percentage of the hire-purchase charge. We originally spoke about 1 per cent. of the hire-purchase price, but changed it to 12½ per cent. of the hire-purchase charge in order to make it quite clear that we were talking about commission on hire-purchase charges. During this war, which occurred not very long ago, commissions rose in some cases to 40 per cent. of the hire-purchase charges.
    In this debate and in Committee many hon. Members quoted the Financial Times, which has been leading, for very good practical reasons, a campaign against secret commissions. I would like to quote from an article that appeared in the Financial Times on this subject on 17th February. The first quotation reads:
    "It must be counted remarkable that although its sole purpose is to provide the public with better protection against abuses of the deferred payments system the Hire Purchase Bill now before Parliament makes no attempt to do anything about something that is almost certainly the biggest evil in this sector of the consumer credit field today—the payment of excessive introductory commissions by finance houses to dealers at the public's expense."
    The second, rather longer, quotation reads:
    "It is worth recalling that most of the leading hire purchase finance houses were so far persuaded a few years ago that the practice of competing for business by offering big commissions to motor dealers was a bad thing in the industry as well as for the public itself that they agreed between themselves to limit such payments to 10 per cent. of the hire purchase charge—in the commissions war that had been raging previously such payments have gone up to 40 per cent. and more of the charge. It was their full intention that this should be the first move towards the virtual elimination of such payments which it was generally recognised had little—if any—economic justification."
    482
    I agree. I stand entirely with the arguments put forward. But the point is that the commissions went up to 40 per cent. of the charges because people started competing in the business on the basis of raising their commissions to attract trade
    As I have just said, and as the hon. Member for Gosport and Fareham (Dr. Bennett) mentioned, there is another "maverick" coming into the business—the Ford motor credit arrangement. The Parliamentary Secretary has said that the Ford Motor Company has assured him that though it is already arranging to put its commissions up to 17 or 25 per cent. of the charges it will so arrange commissions that it will make no difference to the price the customers will pay for the cars. This is very difficult to believe, and without further evidence I am not going to accept it. The mere fact that the Ford Motor Company is going into the business in this way means that the members of the Finance Houses Association have to review their position.
    I would like to quote a letter that I have had in response to one that I sent to one of the directors of a prominent finance house on this very issue. He said:
    "The standard commission terms that have been laid down by Ford for their dealers are, generally speaking, more favourable to the dealers than companies who are members of the Finance Houses Association are allowed to offer. The Ford minimum commission is 17 per cent. of the charges rising to as high as 24 per cent. of charges where the hire purchase risk is shared between the finance company and the dealer. There is little doubt that unless the Finance Houses Association drastically amends the commission part of its Code, much Ford business is going to be lost by its members and it is fairly clear…that the Finance Houses Association is not going to allow that to happen. The Code "—
    that is the limitation of commission, the voluntary limitation—
    "so far has. on the whole, been well observed by F.H.A. members, in spite of an increasing loss of business to non-members not so restricted, but the intervention of the Ford scheme is, I am afraid, going to act as the last straw. The finance companies are discussing the desirability of the commission part of the F.H.C. Code being abandoned completely and I think there is little doubt that most of the companies will regretfully agree that this will have to be the decision. After all, there comes a time when even the staunchest upholders of a principle are going

    483
    to come to the conclusion that to continue to uphold it will be tantamount to suicide."
    7.30 p.m.
    That may be an exaggerated view, but it is the considered view of one of the directors of a prominent finance company. This is the situation. It may not only be Ford's. We must not forget that we are legislating not for the situation today, but for some time ahead, until we come to the job of consolidating this legislation. Other "mavericks" may come into the business and drive up the commission charges, and the customer will have to pay.
    An argument against the Amendment is that enforcement would be difficult. I disagree, for the reasons which I have given, that the voluntary scheme of limitation has worked fairly satisfactorily. If there were just an element of legal sanction behind that scheme it would have been completely satisfactory. That is all we are asking for. Although the question of enforcement in a court of law might be difficult we ask that this voluntary code be given an element of sanction which I think we ought to provide.
    The other argument advanced against the Amendment is the curious one that commissions cannot be limited and ought to be abolished. I think that I have answered that. The reason we put in limitation is that it helps enforcement. We could have two bites at it, there could be two lines of attack. We could ask people how much commission they were charging and they would have to declare the amount. It would be illegal for them not to do so. I am extremely sorry that this is the last stage in the passage of the Bill. We cannot send any Amendments from here to be dealt with by another place.
    The Board of Trade has given no help whatever. The Government know very well that they can use the argument that this is badly drafted because there is no other stage to which we can take it. We protest at the way in which the Board of Trade is dealing with this matter—remembering that there are 94 Government Amendments on this stage of the Bill—and I suggest that we should take our protest to a Division.
    Question put, That "subsection (5)" stand part of the Bill:—
    The House divided: Ayes 157, Noes 125.

    Division No. 116.]

    AYES

    [7.35 p.m.

    Agnew, Sir Peter

    Galbraith, Hon. T. G. D.

    Kerans, Cdr. J. S.

    Arbuthnot, Sir John

    Gammans, Lady

    Kerby, Capt. Henry

    Awdry, Daniel (Chippenham)

    Gardner, Edward

    Kershaw, Anthony

    Barlow, Sir John

    George, Sir John (Pollok)

    Kimball, Marcus

    Barter, John

    Giles, Rear-Admiral Morgan

    Kirk, Peter

    Barsford, Brian

    Gilmour, Sir John (East Fife)

    Langford-Holt, Sir John

    Bennett, Dr. Reginald (Gos & Fhm)

    Glyn, Dr. Alan (Clapham)

    Leavey, J. A.

    Bevins, Rt. Hon. Reginald

    Glyn, Sir Richard (Dorset, N.)

    Legge-Bourke, Sir Harry

    Biggs-Davison, John

    Grant-Ferris, R.

    Lewis, Kenneth (Rutland)

    Bingham, R. M.

    Griffiths, Eldon (Bury St. Edmunds)

    Litchfield, Capt. John

    Bishop, Sir Patrick

    Grosvenor, Lord Robert

    Longbottom, Charles

    Black, Sir Cyril

    Gurden, Harold

    Longden, Gilbert

    Bourne-Arton, A.

    Hamilton, Michael (Wellingborough)

    Lucas-Tooth, Sir Hugh

    Braine, Bernard

    Harris, Reader (Heston)

    McAdden, Sir Stephen

    Brown, Alan (Tottenham)

    Harrison, Col. Sir Harwood (Eye)

    McLaren, Martin

    Buck, Antony

    Harvey, John (Walthamstow, E.)

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Burden, F. A.

    Harvie Anderson, Miss

    McMaster, Stanley R.

    Chichester-Clark, R.

    Henderson, Sir John (Cathcart)

    Maddan, Martin

    Cleaver, Leonard

    Hiley, Joseph

    Maitland, Sir John

    Cooke, Robert

    Hill, Mrs. Eveline (Wythenshawe)

    Marshall, Sir Douglas

    Cooper, A. E.

    Hill, J. E. B. (S. Norfolk)

    Maxwell-Hystop, R. J.

    Cooper-Key, Sir Neill

    Hirst, Geoffrey

    Maydon, Lt.-Cbdr. S. L. C.

    Cordle, John

    Hobson, Rt. Hon. Sir John

    Mille, Stratton

    Coulson, Michael

    Hocking, Philip N.

    Miscampbell, Norman

    Craddock, Sir Beresford (Spelthorne)

    Holland, Philip

    Montgomery, Fergus

    Curran, Charles

    Hornsby-Smlth, Rt. Hon. Dame P.

    More, Jasper (Ludlow)

    d'Avigdor-Goldsmld, Sir Henry

    Howard, Hon. G. R. (St. Ives)

    Morrison, Charies (Devizes)

    Doughty, Charles

    Howard, John (Southampton, Test)

    Nicholson, Sir Godfrey

    Elliot, Capt. Walter (Carshalton)

    Hughes-Young, Michael

    Nugent, Rt. Hon. Sir- Richard

    Elllott, R. W. (Newc'tle-upon-Tyne, N.)

    Hutchison, Michael Clark

    Oakshott, Sir Hendrie

    Emmet, Hon. Mrs. Evelyn

    Iremonger, T, L.

    Orr-Ewing, Sir Ian (Hendon, North)

    Fell, Anthony

    Irvine, Bryant Godman (Rye)

    Osborn, John (Hallam)

    Finlay, Graeme

    James, David

    Osborne, Sir Cynt (Louth)

    Fletcher-Cooke, Charles

    Jennings, J. C.

    Page, John (Harrow, West)

    Fraser, Ian (Plymouth, Sutton)

    Johnson, Eric (Blackley)

    Partridge, E.

    Freeth, Denzil

    Jones, Arthur (Northants, S.)

    Percival, Ian

    Pickthorn, Sir Kenneth

    Pitman, Sir James

    Skeet, T. H. H.

    Turton, Rt. Hon. R. H.

    Pitt, Dame Edith

    Speir, Rupert

    van Straubenzee W. R.

    Pounder, Rafton

    Stainton, Keith

    Vaughan-Morgan, Rt. Hon. Sir John

    Powell, Rt. Hon. J. Enoch

    Stanley, Hon. Richard

    Vickers, Miss Joan

    Price, David (Eastleigh)

    Steward, Harold (Stockport, S.)

    Ward, Dame Irene

    Proudfoot, Wilfred

    Stodart, J. A.

    Wells, John (Maidstone)

    Pym, Francis

    Stoddart-Scott, Col. Sir Malcolm

    Whitelaw, William

    Quennell, Mies J. M.

    Storey, Sir Samuel

    Williams, Sir Rolf Dudley

    Redmayne, Rt. Hon. Martin

    Studholme, Sir Henry

    Wills, Sir Gerald (Bridgwater)

    Renton, Rt, Hon. David

    Summers, Sir Spencer

    Wilson, Geoffrey (Truro)

    Rippon, Rt. Hon. Geoffrey

    Taylor, Frank (M'ch'st'r, Moss Side)

    Wise, A. R.

    Roberts, Sir Peter (Heeley)

    Teeling, Sir William

    Wolrige-Gordon, Patrick

    Roots, William

    Thompson, Sir Richard (Croydon, S.)

    Wood, Rt. Hon. Richard

    Ropner, Col. Sir Leonard

    Thornton-Kemsley, Sir Colin

    Woollam, John

    Royle, Anthony (Richmond, Surrey)

    Tlley, Arthur (Bradford, W.)

    Scott-Hopkins, James

    Touche, Rt. Hon. Sir Gordon

    TELLERS FOR THE AYES:

    Shepherd, William

    Turner, Colin

    Mr. MacArthur and

    Mr. Hugh Rees.

    NOES

    Ainsley, William

    Hamilton, William (West Fife)

    Oswald, Thomas

    Allaun, Frank (Salford, E.)

    Harper, Joseph

    Pearson, Arthur (Pontypridd)

    Allen, Scholefield (Crewe)

    Hayman, F. H.

    Pentland, Norman

    Awbery, Stan (Bristol, Central)

    Henderson, Rt. Hn. Arthur (Rwly Regis)

    Popplewell, Ernest

    Bacon, Miss Alice

    Herblson, Miss Margaret

    Probert, Arthur

    Bennett, J. (Glasgow, Bridgeton)

    Hilton, A. V.

    Pursey, Cmdr. Harry

    Benson, Sir George

    Holman, Percy

    Redhead, E. C.

    Blackburn, F.

    Holt, Arthur

    Reynolds, G. W.

    Bottomley, Rt. Hon. A. G.

    Houghton, Douglas

    Rhodes, H.

    Bowden, Rt, Hn. H. W. (Leics, S. W.)

    Hoy, James H.

    Roberts, Goronwy (Caernarvon)

    Bowen, Roderic (Cardigan)

    Hughes, Ciedwyn (Anglesey)

    Robertson, John (Paisley)

    Bowles, Frank

    Hughes, Emrys (S. Ayrshire)

    Ross, William

    Boyden, James

    Hunter, A. E.

    Short, Edward

    Braddock, Mrs. E. M.

    Hynd, H. (Accrington)

    Silkin, John

    Bradley, Tom

    Irvine, A. J. (Edge Hill)

    Slater, Mrs. Harriet (Stoke, N.)

    Butler, Herbert (Hackney C.)

    Janner, Sir Barnett

    Slater, Joseph (Sedgefield)

    Collick, Percy

    Jay, Rt. Hon. Douglas

    Small, William

    Craddock, George (Bradford, S.)

    Jeger, George

    Smith, Ellis (Stoke, S.)

    Cullen, Mrs. Alice

    Jones, Elwyn (West Ham, S.)

    Snow, Julian

    Dalyell, Tam

    Jones, J. Idwal (Wrexham)

    Soakice, Rt. Hon. Sir Frank

    Darling, Goorge

    Jones, T. W. (Merioneth)

    Steele, Thomas

    Davies, S. O. (Merthyr)

    Kenyon, Clifford

    Stewart, Michael (Fulham)

    Delargy, Hugh

    King, Dr. Horace

    Stones, William

    Dempsey, James

    Laweon, George

    Swain, Thomas

    Diamond, John

    Lee, Frederick (Newton)

    Symonds, J. B.

    Dodds, Norman

    Lewis, Arthur (West Ham, N.)

    Taverne, D.

    Doig, Peter

    Loughlin, Charles

    Thomas, Iorwerth (Rhondda, W.)

    Ede, Rt. Hon. C.

    Lubbock, Eric

    Thompson, Dr. Alan (Dunfermline)

    Edwards, Robert (Bilston)

    McCarm, J.

    Wade, Donald

    Edwards, Walter (Stepney)

    MacColl, James

    Warbey, William

    Evans, Albert

    McInnes, James

    Weitzman, David

    Finch, Harold

    Mackenzie, Gregor

    Wells, William (Walsall, N.)

    Foot, Dingle (Ipswich)

    McLeavy, Frank

    Wilillams, W. T. (Warrington)

    Forman, J. C.

    Mallalieu, E. L. (Brigg)

    Willis, E. G. (Edinburgh, E.)

    Galpern, Sir Myer

    Mapp, Charles

    Wilson, Rt. Hon. Harold (Huyton)

    George, Lady MeganLloyd (Crmrthn)

    Mason, Roy

    Winterbottom, R. E.

    Ginsburg, David

    Mendeison, J. J.

    Woodburn, Rt. Hon. A.

    Gourlay, Harry

    Milne, Edward

    Woof, Robert

    Griffiths, Rt. Hon. James (Llanelly)

    Mitchieon, G. R.

    Yates, Victor (Ladywood)

    Griffiths, W. (Exchange)

    Monslow, Waller

    Grimond, Rt. Hon. J.

    Moody, A. S.

    TELLERS FOR THE NOES:

    Gunter, Ray

    Mulley, Frederick

    Mr. Charles Grey and

    Hale, Leslie (Oldham, W.)

    Noel-Baker, Francis (Swindon)

    Mr. Ifor Davies.

    7.45 p.m.
    Mr. D. Price: I beg to move, in page 2, line 11, to leave out "if any".
    It might be convenient, Mr. Speaker, if with this Amendment we were to take Amendment No. 3, as the two are linked.
    Mr. Speaker: If the House pleases, the two Amendments can be discussed together.
    Mr. Price: During the Committee stage, a new subsection (5) was inserted in Clause 1, and it has been referred to earlier today. If I may remind hon. Members who were not then present, the subsection deals with the case where the hirer terminates the agreement before on": half of the hire-purchase price is due. It adds a proviso to Section 4(1) of the 1939 Act. While preserving the hirer's statutory liability to pay one half of the hire-purchase

    487
    price if he terminates the agreement, the proviso makes this a maximum only, and empowers the court to assess the hirer's liability at a lower figure if the court is satisfied that that would be sufficient and appropriate to compensate the owner.
    As I have already explained, the Government accept that this new provision can serve a useful, if limited, purpose, and are not objecting to it in principle. But the drafting seems slightly unsatisfactory, and the purpose of these two Amendments is to remedy that without altering the meaning.
    The first Amendment deletes the words "if any", because they seem to us unnecessary. If one half of the purchase price does not exceed the total of the sums paid and accrued due before termination, the hirer has no further liability under Section 4(1) of the 1938 Act; and there cannot be an amount less than nothing.
    I am advised that, as at present drafted, subsection (5) could be interpreted as requiring the court to exercise a very wide discretion, taking into account a range of factors going beyond the circumstances of the hire-purchase transaction. The intention, of course, is that the court shall make its assessment of the loss sustained by the owner in consequence of the termination of the agreement. The second Amendment makes this clear.
    Mr. A. J. Irvine: The Parliamentary Secretary has very fairly revealed that although in some sort this is a drafting Amendment in another it may have effects of some importance, and I would wish the House to consider these proposals from that point of view. First of all, to the extent that the proposed Amendment involves simply a change in the wording from that in the Amendment we carried in Committee, the effect would appear to be to narrow the court's discretion. Instead of having to arrive at a sum
    "…sufficient and appropriate in all the circumstances to compensate…"
    which was the wording that we originally recommended, the court has now to be satisfied, if the Amendment is carried, that the sum is equal to the loss sustained. That seems to us to set the court a harder task.
    488
    Further, we think that to introduce the concept of equation here is to reduce the ambit and scope of the court's discretion. I feel sufficiently strongly that this is a change of wording which is, first of all, of some effect and, secondly, of an effect adverse to the objects I have, to recommend my hon. Friends to divide against this Amendment. I do not think that I can usefully deploy the argument further on that aspect.
    When considering this Amendment, it is appropriate to go just a little further. I am afraid that the position is that as the Amendment to subsection (5) of Clause 1 is now proposed to be amended, and takes the form of a proviso to Section 4(1) of the 1938 Act, there will, unfortunately, flow from this one or two quite difficult questions of construction about the effect of the law taken as a whole, and of the effect of the Amendments that have been made to this Bill since Second Reading.
    Discussions which we have had with persons interested in this matter have revealed that there is some doubt about the overall effect of the original Section 4 of the 1938 Act as modified by the terms of the proviso which our Amendment introduced. As the whole House knows, a proviso does not merely from the fact of its being a proviso by any means have necessarily a limited effect. There are instances which will be known to hon. Members where the effect of a proviso in a Section of an Act goes very near to the point of implying repeal of the provisions which have appeared before it. Therefore, the mere circumstance that, by our Amendment of Clause 1 in Committee, which is now inserted in the Bill, there is a proviso should not be regarded by the House as a reason for thinking that its effect is not very substantial and important.
    I desire to make clear my own view of the resulting position if as may well prove to be the case, the House determines in favour of the Amendment now proposed by the Parliamentary Secretary. The true measure of damages principle will be introduced in all cases of termination of hire-purchase agreements by notice of the hirer under the 1938 Act. The principle of the true measure of damages, which our Amendment introduced in Committee and which this Amendment which we

    489
    are now considering affects, does not just begin to apply when half the instalments of the hire-purchase price have been paid.
    To take the case of a £100 hire-purchase price for a chattel, if notice is given by the hirer terminating the agreement at an early stage, after instalments of £10 have been paid, in our reading of the matter, it would be open to the court to award something less than the difference between £10 and half the hire-purchase price as the amount which would have to be paid by the hirer. In the example which I have just given this would be something less than £40. This is my understanding, but quite possibly there will be arguments about the effect of this provision, taken as a whole, when the courts come to interpret the wording which we have produced.
    My understanding, in addition, is that it is not contemplated in applying the true measure of damages principle that in any circumstances will it be open to the hirer to recover back from his owner any instalments which he has
    paid. I think that that viewpoint will be generally agreed, but I want to make clear that it is my reading of it and I want placed on the record what we think will be the effect of the provision before we came to a conclusion on the merits of it in a Division.
    I am glad to have the opportunity of developing that point, but on the narrower point with which I began, that the wording proposed in the Government's Amendment has the effect of narrowing the scope of the court's discretion, in circumstances where we think it is desirable and important that that discretion should be capable of fairly wide exercise, I would say that the wording in the Government's Amendments strikes us as a good deal less admirable for the purpose than the wording of our original Amendment now standing in the Bill. I therefore recommend to my hon. Friends on that ground to divide against the Amendment.
    Question put, That "if any" stand part of the Bill:—
    The House divided: Ayes, 113, Noes, 158.

    Division No. 117.]

    AYES

    [7.57 p.m.

    Ainsley, William

    Hamilton, William (West Fife)

    Pearson, Arthur (Pontypridd)

    Allaun, Frank (Salford, E.)

    Harper, Joseph

    Pentland, Norman

    Allen, Scholefield (Crewe)

    Hayman, F. H.

    Popplewell, Ernest

    Awbery, Stan (Bristol, Central)

    Henderson, Rt. Hn. Arthur (Rwly Regis)

    Probert, Arthur

    Bacon, Miss Alice

    Herblson, Miss Margaret

    Pursey, Cmdr. Harry

    Bennett, J. (Glasgow, Bridgeton)

    Hilton, A. V.

    Redhead, E. C.

    Benson, Sir George

    Holman, Percy

    Reynolds, G. W.

    Blackburn, F.

    Houghton, Douglas

    Rhodes, H.

    Bottomley, Rt. Hon. A. G.

    Hoy, James H.

    Roberts, Goronwy (Caernarvon)

    Bowden, Rt. Hn. H. W. (Leics, S. W.)

    Hughes, Cledwyn (Anglesey)

    Robertson, John (Paisley)

    Bowles, Frank

    Hughes, Emrys (S. Ayrshire)

    Ross, William

    Boyden, James

    Hunter, A. E.

    Short, Edward

    Braddock, Mrs. E. M.

    Hynd, H. (Accrington)

    Silkin, John

    Bradley, Tom

    Irvine, A. J. (Edge Hill)

    Slater, Mrs. Harriet (Stoke, N.)

    Butler, Herbert (Hackney, C.)

    Jay, Rt. Hon. Douglas

    Slater, Joseph (Sedgefield)

    Collick, Percy

    Jeger, George

    Small, William

    Craddock, George (Bradford, S.)

    Jones, Elwyn (West Ham, S.)

    Smith, Ellis (Stoke, S.)

    Cullers, Mrs. Alice

    Jones, J. Idwal (Wrexham)

    Snow, Julian

    Dalyell, Tam

    Jones, T. W. (Merioneth)

    Soskice, Rt. Hon. Sir Frank

    Darling, George

    Kenyon, Clifford

    Steele, Thomas

    Davies, Ifor (Gower)

    King, Dr. Horace

    Stewart, Michael (Fulham)

    Davies, S. O. (Merthyr)

    Lawson, George

    Stones, William

    Deiargy, Hugh

    Lee, Frederick (Newton)

    Swain, Thomas

    Dempsey, James

    Lewis, Arthur (West Ham, N.)

    Symonds, J. B.

    Dodds, Norman

    Loughlin, Charles

    Thomas Iorwerth (Rhondda, W.)

    Doig, Peter

    MacColl, James

    Thompson, Dr. Alan (Dunfermline)

    Edwards, Robert (Bilston)

    McInnes, James

    Warbey, William

    Evans, Albert

    Mackenzie, Gregor

    Webster, David

    Finch, Harold

    Mallalleu, E. L. (Brigg)

    Wells, William (Walsall, N.)

    Fletcher, Eric

    Mapp, Charles

    Williams, W. T. (Warrington)

    Foot, Dingle (Ipswich)

    Mason, Roy

    Willis, E. G. (Edinburgh, E.)

    Forman, J. C.

    Mendelson, J. J.

    Winterbottom, R. E.

    Galpern, Sir Myer

    Milne, Edward

    Woodburn, Rt. Hon. A.

    Ginsberg, David

    Mitchison, G. R.

    Woof, Robert

    Gourlay, Harry

    Moody, A. S.

    Yates, Victor (Ladywood).

    Griffiths, Rt. Hon. James (Llanelly)

    Muliey, Frederick

    Griffiths, W. (Exchange)

    Noel-Baker, Francis (Swindon)

    TELLERS FOR THE AYES:

    Gunter, Ray

    Oliver, G. H.

    Mr. Grey and Mr. McCann.

    Hale, Leslie (Oldham, W.)

    Oswald, Thomas

    NOES

    Arbuthnot, Sir John

    Harvey, John (Walthamstow, E.)

    Pounder, Rafton

    Awdry, Daniel (Chippenham)

    Harvie Anderson, Miss

    Powell, Rt. Hon. J. Enoch

    Barlow, Sir John

    Henderson, Sir John (Cathcart)

    Price, David (Eastleigh)

    Barter, John

    Hiley, Joseph

    Proudfoot, Wilfred

    Batsford, Brian

    Hill, Mrs. Eveline (Wythenshawe)

    Pym, Francis

    Bavins, Rt. Hon. Reginald

    Hill, J. E. B. (S. Norfolk)

    Quennell, Miss J. M.

    Bingham, R. M.

    Hirst, Geoffrey

    Redmayne, Rt. Hon. Martin

    Bishop, Sir Patrick

    Hobson, Rt. Hon. Sir John

    Renton, Rt. Hon. David

    Black, Sir Cyril

    Hocking, Philip N.

    Rippon, Rt. Hon. Geoffrey

    Bourne-Arton, A.

    Holland, Philip

    Roberts, Sir- Peter (Heeley)

    Bowen, Roderic (Cardigan)

    Holt, Arthur

    Roots, William

    Braine, Bernard

    Hornsby-Smith, Rt. Hon. Dame P.

    Ropner, Col. Sir Leonard

    Brown, Alan (Tottenham)

    Howard, John (Southampton, Test)

    Royle, Anthony (Richmond, Surrey)

    Buck, Antony

    Hughes-Young, Michael

    Scott-Hopkins, James

    Chataway, Christopher

    Hutchison, Michael Clark

    Shepherd, William

    Chichester-Clark, R.

    Iremonger, T. L.

    Skeet, T. H. H.

    Cleaver, Leonard

    Irvine, Bryant Godman (Rye)

    Speir, Rupert

    Cooke, Robert

    Jennings, J. C.

    Stainton, Keith

    Cooper, A. E.

    Johnson, Eric (Blackley)

    Stanley, Hon. Richard

    Cooper-Key, Sir Neill

    Jones, Arthur (Northants, S.)

    Stevens, Geoffrey

    Cordle, John

    Kerans, Cdr. J. S.

    Steward, Harold (Stockport, S.)

    Coulson, Michael

    Kershaw, Anthony

    Stodart, J. A.

    Courtney, Cdr. Anthony

    Kimball, Marcus

    Stoddart-Scott, Col. Sir Malcolm

    Craddock, Sir Beresford (Spelthorne)

    Kirk, Peter

    Storey, Sir Samuel

    Crawley, Aidan

    Leavey, J. A.

    Studholme, Sir Henry

    Curran, Charles

    Legge Bourke, Sir Harry

    Summers, Sir Spencer

    d'Avigdor-Goldsmld, Sir Henry

    Lewis, Kenneth (Rutland)

    Tapsell, Peter

    Doughty, Charles

    Longbottom, Charles

    Taylor, Frank (M'ch'st'r, Moss Side)

    Elliot, Capt. Walter (Carshalton)

    Longden, Gilbert

    Teeling, Sir William

    Elliott, R. W. (Newc'tle-upon-Tyne, N.)

    Lubbock, Eric

    Thompson, Sir Richard (Croydon, S.)

    Emmet, Hon. Mrs. Evelyn

    Lucas-Tooth, Sir Hugh

    Thornton-Kemsley, Sir Colin

    Farey-Jones, F. W.

    McAdden, Sir Stephen

    Thorpe, Jeremy

    Fell, Anthony

    McLaren, Martin

    Tiley, Arthur (Bradford, W.)

    Finlay, Graeme

    McMaster, Stanley R.

    Touche, Rt. Hon. Sir Gordon

    Fletcher-Cooke, Charles

    Maddan, Martin

    Turner, Colin

    Fraser, Ian (Plymouth, Sutton)

    Marshall, Sir Douglas

    Turton, Rt. Hon. R. H.

    Freeth, Denzil

    Maxwell-Hyslop, R. J.

    van Straubenzee, W. R.

    Galbraith, Hon. T. G. D.

    Maydon, Lt.-Cmdr. S. L. C.

    Vaughan-Morgan, Rt. Hon. Sir John

    Gammans, Lady

    Mills, Stratton

    Vickers, Miss Joan

    Gardner, Edward

    Miscampbell, Norman

    Wade, Donald

    George, Sir John (Pollok)

    Montgomery, Fergus

    Wall, Patrick

    Gilmour, Sir John (East Fife)

    More, Jasper (Ludlow)

    Ward, Dame Irene

    Glyn, Dr. Alan (Clapham)

    Morrison, Charles (Devizes)

    Wells, John (Maidstone)

    Giyn, Sir Richard (Dorset, N.)

    Mott-Radclyffe, Sir Charles

    Whitelaw, William

    Goodhew, Victor

    Nugent, Rt. Hon. Sir Richard

    Williams, Sir Rolf Dudley

    Gower, Raymond

    Oakshott, Sir Hendrie

    Wills, Sir Gerald (Bridgwater)

    Grant-Ferris, R.

    Orr-Ewing, Sir Charles

    Wilson, Geoffrey (Truro)

    Griffiths, Eldon (Bury St. Edmunds)

    Osborne, Sir Cyril (Louth)

    Wise, A. R.

    Grimond, Rt. Hon. J.

    Page, John (Harrow, West)

    Wolrige-Gordon, Patrick

    Grosvenor, Lord Robert

    Partridge, E.

    Wood, Rt. Hon. Richard

    Gurden, Harold

    Percival, Ian

    Hamilton, Michael (Wellingborough)

    Pickthorn, Sir Kenneth

    TELLERS FOR THE NOES:

    Harris, Reader (Heston)

    Pitman, Sir James

    Mr. MacArthur and Mr. Hugh Rees.

    Harrison. Col. Sir Harwood (Eye)

    Pitt, Dame Edith

    Amendment made: In page 2, line 14, leave out from "termination" to end of line 17 and insert:
    "would be equal to the loss sustained by the owner in consequence of the termination of the agreement by the hirer, the court may make an order for the payment of that sum in lieu of that amount".—[Mr. D. Price.]

    Clause 3.—(REQUIREMENTS RELATING TO HIRE-PURCHASE AGREEMENTS AND CREDIT-SALE AGREEMENTS.)
    Mr. D. Price: I beg to move, in page 4, line 2, to leave out from "which" to the first "the" in line 5 and to insert:
    "on being signed as mentioned in section 2(2)(a) or section 3(2)(a) of the principal Act,—

    (a) constitutes a hire-purchase agreement to which that Act applies, or

    492

    (b) constitutes a credit-sale agreement to which that Act applies under which the total purchase price exceeds £30".

    This is purely a drafting Amendment.
    Mr. Winterbottom: I do not wish to question anything about the £30, but I want to know whether, in regard to check trading, which depends mainly on the income going into a house and not upon the wage values of any person in the house, and credit on check trading is allowed on that basis, it is possible under check credit trading to obtain goods which are normally obtained under hire purchase by means of spreading over the credit allowed. I am simply asking whether the open contract principle which applies to check credit will apply to the credit trade agreement.
    Mr. D. Price: The Bill does not deal with check trading at all. It deals only with credit sales. The point at issue is simply that Clause 3(4) empowers the Board of Trade to make regulations about the space on the agreement for the hirer's or buyer's signature, and the Amendment ensures that the regulations will apply in the case where the document, at the time when it is signed by the hirer or buyer, is only an offer to enter into an agreement and not yet an actual agreement. It is an extremely narrow point we are discussing, and I think that these wider questions are quite irrelevant.
    Mr. Winterbottom Mr. Winterbottom rose—
    Mr. Deputy-Speaker (Sir Robert Grimston): The hon. Gentleman has exhausted his right to speak again.
    Amendment agreed to.

    Clause 4.—(RIGHT OF CANCELLATION OF CERTAIN HIRE-PURCHASE AND CREDIT-SALE TRANSACTIONS.)
    Mr. D. Price: I beg to move, in page 5, line 13, to leave out "clearly".
    Clause 4(3) provides that a notice of cancellation shall have effect if, however it is expressed, it clearly indicates the intention of a prospective hirer or buyer to withdraw from the transaction.
    During the debate in Committee, I promised to give further consideration to two Amendments moved by the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine). These were to delete the word "clearly" and then to amend "intention" to read "wish or intention". I am proposing that we should delete the word "clearly" as unnecessary. To add the word "wish" to "intention" would, I feel, open the way to uncertainty.
    Amendment agreed to.

    Clause 8.—(FURTHER CONSEQUENCES OF NOTICE OF CANCELLATION.)
    Mr. D. Price: I beg to move, in page 10, line 35, at the end to insert:
    (4) Any sum recoverable under subsection (2) of this section shall be recoverable as a simple contract debt in any court of competent jurisdiction.
    It might be convenient to take this Amendment with Amendment No. 8, in page 11, line 18, at the end to insert:
    (4) Any sum recoverable under subsection (2) of this section shall be recoverable as a
    494
    simple contract debt in any court of competent jurisdiction.
    Mr. Deputy-Speaker: If it is agreeable to the House, yes.
    Mr. Price: These Amendments deal with cases where a sum of money is recoverable by a prospective hirer or buyer who has served a notice of cancellation. I have been advised that there is some doubt about whether an action to recover a sum of money could be brought in the county court. The purpose of these Amendments is to make it clear that the county court has jurisdiction, subject, of course, to the amount involved not exceeding £400.
    Amendment agreed to.

    Clause 9.—(EFFECT OF NOTICE OF CANCELLATION WHERE GOODS GIVEN IN PART-EXCHANGE.)
    Amendment made: In page 11, line 18, at end insert:
    (4) Any sum recoverable under subsection (2) of this section shall be recoverable as a simple contract debt in any court of competent jurisdiction.—[Mr. D. Price.]
    Mr. D. Price: I beg to move, in page 11, line 18, at end insert:
    (4) Where the prospective hirer or buyer recovers from the dealer a sum equal to the part-exchange allowance, then, if the title of the prospective hirer or buyer to the goods agreed to be taken in part-exchange has not vested in the dealer, that title shall so vest on the recovery of that sum.
    Clause 9 deals with the case where the dealer has taken goods in part exchange and the hirer subsequently exercises his right to cancel the transaction. It provides that, unless the dealer redelivers the goods taken in part exchange within ten days, the prospective hirer or buyer can recover a sum equal to the part exchange allowance. The Amendment adds a new subsection to make clear that when this sum has been paid the prospective hirer's title to the goods given in part exchange will be vested in the dealer.
    Amendment agreed to.
    Mr. D. Price: I beg to move, in page 11, line 29, at the end to insert:
    "or, if no such sum was agreed, the part-exchange allowance shall be taken to be such sum as in all the circumstances it would have been reasonable to allow in respect of those goods if no notice of cancellation had been served."
    Clause 9(2) provides that in a case where a dealer has taken goods in part exchange and the prospective hirer or buyer subsequently exercises his right to cancel the transaction he can, in certain circumstances, recover a sum equal to the part exchange allowance. That allowance is defined in Clause 9(4,b).
    During the debate in Standing Committee, my hon. Friend the Minister of State promised that further consideration would be given to an Amendment moved by the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) to cater for the case where no part exchange allowance had been agreed between the dealer and the prospective hirer or buyer. The Amendment makes the necessary provision.
    Amendment agreed to.

    Clause 10.—(DEALER TO BE AGENT OF OWNER OR SELLER IN RESPECT OF CERTAIN REPRESENTATIONS.)
    Mr. D. Price: I beg to move, in page 11, line 42, at the end to insert:
    (3) In this section "representations" includes any statement or undertaking, whether constituting a condition or a warranty or not, and references to making representations shall be construed accordingly.
    On 14th May, on Report, I promised to consider a point raised by my hon. and learned Friend the Member for Liverpool, Garston (Mr. Bingham). He asked whether, in Clause 10, the word "representations" would cover warranties and ensure that the dealer was deemed to be the agent of the owner or seller in respect of statements which involved contractual obligations. This new subsection will remove any possibility of doubt. There are consequential Amendments to Clauses 24 and 26.
    Mr. Bingham: I thank my hon. Friend the Parliamentary Secretary for the Amendment, which appears to me entirely to meet the point of view which I expressed.
    Amendment agreed to.

    Clause 12.—(IMPLIED CONDITION AS TO MERCHANTABLE QUALITY IN HIRE-PURCHASE AGREEMENTS.)
    8.15 p.m.
    Mr. D. Price: I beg to move, in page 13, line 3, at the end to insert:
    496
    (2) The following subsection shall be substituted for section 8(2) of the principal Act (whereby a condition is implied where the hirer makes known the particular purpose for which the goods are required):—
    "(2) Where the hirer, whether expressly or by implication,—

    (a) has made known to the owner, or to a servant or agent of the owner, the particular purpose for which the goods are required, or

    (b) in the course of any antecedent negotiations has made that purpose known to any other person by whom those negotiations were conducted, or to a servant or agent of such a person,

    there shall be an implied condition that the goods shall be reasonably fit for that purpose.
    Section 24(2) of the Hire-Purchase Act 1964 shall apply for the purposes of this subsection as it applies for the purposes of Part I of that Act."
    During the Committee stage, the hon. Member for Sheffield, Hillsborough (Mr. Darling) raised a point about Section 8(2) of the 1938 Act, which provides that where the hirer makes known the particular purpose for which the goods are required there shall be an implied condition that the goods are reasonably fit for that purpose.
    The case which the hon. Member for Hillsborough raised presumed that the dealer was, in fact, the agent of the finance house for the purpose of receiving a communication of the purpose for which the goods were required. Subsequently I wrote to him saying that I was satisfied that any subsequent change in relationship between the dealer and the finance house would not affect the position; the finance house would remain bound by the implied condition.
    However, I have since re-examined Section 8(2) and think that it can be improved. Usually the dealer is not the agent of the finance house for receiving a communication of the purpose for which the goods are required. A hirer who has made a purpose known to the dealer will, therefore, not normally have the benefit of the implied condition. To do so, he would have to make that purpose specifically known to the finance house.
    The Amendment provides that the condition of fitness for a particular purpose is implied if the hirer makes that purpose known either to the owner or a person who conducted any antecedent

    497
    negotiation. This person is normally the dealer. In effect, the Amendment makes the dealer the agent of the finance house for receiving a communication of that purpose.
    It is interesting to observe that since the Molony Report was issued the Law Reform Committee has recommended that the dealer shall be the agent of the owner in respect of representations about the goods, and this is being implemented in Clause 10. It is an obvious extension of this principle to make the dealer the agent of the owner for the receipt of a communication about the specific purpose for which the goods are required.
    Mr. Darling: All that I want to say is, "Thank you".
    Amendment agreed to.

    Clause 15.—(NOTICE OF HIRER'S DEFAULT.)
    Mr. D. Price: I beg to move, in page 14, line 25, to leave out Clause 15.
    This Amendment is consequential on the House's acceptance of the new Clause dealing with notice of hirer's default.
    Amendment agreed to.

    Clause 16.—(AVOIDANCE OF CERTAIN PROVISIONS RELATING TO DEATH OF HIRER.)
    Mr. D. Price: I beg to move, in page 15, line 32, to leave out from "of" to "agreement" in line 37 and insert:
    "subsection (2) or (as the case may be) subsection (3) of this section shall have effect where goods are let under a hire-purchase agreement to which the principal Act applies, and that agreement, or any other agreement, provides that, on the occurrence of, or at a time to be ascertained by reference to, one or more events referred to in the provision in question,—
    (a) the hire-purchase".
    It might be convenient to take this Amendment with Amendments Nos. 16, 17, 18, 19. 20, 21 and 22, all of which are consequential on the Amendment in line 32.
    Mr. Deputy-Speaker: If that is agreeable to the House, yes.
    Mr. Price: The House will recall the purpose of this Clause. The Molony Committee drew attention to the fact that provisions were being included in hire purchase agreements by which they
    498
    would terminate if the hirer should die. It recommended that this practice should be stopped, and Clause 16 carries out its recommendation by making void any such provision in a hire purchase agreement.
    However, it now seems to us that the provision in question might conceivably be included, not in the hire purchase agreement itself, but in some other agreement. The Amendment in line 32 will ensure that the intention of the Clause cannot be defeated in this way by use of a collateral agreement. The other Amendments are consequential.
    Amendment agreed to.
    Further Amendments made: In page 15, line 40, after "the", insert "hire-purchase".
    In page 15, line 44, after "hirer", insert: "under the hire-purchase agreement".
    In page 16, line 10, leave out from "where" to "contains" in line 11 and insert:
    "goods are let under a hire-purchase agreement to which the principal Act applies, and that agreement, or any other agreement".
    In page 16, line 12, after first "the", insert "hire-purchase".
    In page 16, line 13, after "the", insert "hire-purchase".
    In page 6, line 15, after first "the", insert "hire-purchase".
    In page 16, line 16, after second "the", insert "hire-purchase".—[Mr. D. Price.]

    Clause 17.—(RECOVERY OF POSSESSION OF GOODS AFTER DEATH OF HIRER.)
    Mr. D. Price: I beg to move, in page 17, line 29, at the end to insert:
    "and, in relation to any action to enforce a right to recover possession of the goods from the person in possession, section 10 of the principal Act shall apply as if any reference in that section to the hirer were a reference to the person in possession".
    This Amendment applies to the case in which, after the death of the hirer, the owner is seeking to recover possession of the goods from the person in possession but, because one-third of the hire-purchase price has been paid, he can do so only by an action in the county court. It makes the provisions of Section 10 of the 1938 Act applicable in such cases. An action to recover goods

    499
    can be maintained only against the person whose refusal to surrender them is not justified. The Amendment ensures that, although the person in possession may be justified in refusing to surrender the goods without a court order, an action to obtain such order may nevertheless be started.
    I hope that the House will regard that as sufficient explanation. Nevertheless, I shall be happy to go into greater detail if required.
    Amendment agreed to.
    Mr. Price: I beg to move, in page 18, line 24, at the end to insert:
    (9) The preceding provisions of this section shall have effect in relation to sections 11 (1) and 12 (1) of the principal Act as modified by section 15 of that Act (which relates to successive hire-purchase agreements between the same parties) as those provisions have effect in relation to the said sections 11 (1) and 12 (1) apart from the said section 15.
    The purpose of this new subsection is to ensure that, once one-third of the hire-purchase price has been paid, a deceased hirer's estate shall have the protection against repossession of the goods which Sections 11 and 12 of the 1938 Act would have given to the hirer had he lived.
    Section 15 of the 1938 Act deals with the situation when, after one-third of the hire-purchase price has been paid, a fresh hire-purchase agreement is made comprising the same goods. It ensures that, in this situation, protection against repossession will continue. The purpose of this Amendment is to make similar provision in the case to which the Clause applies, that is, when the hirer has died. In effect one can say that this is applying Section 15 of the 1938 Act to the death of the hirer.
    Amendment agreed to.

    Clause 20.—(PROVISIONS AS TO GUARANTEES AND INDEMNITIES.)
    Mr. Weitzman: I beg to move, in page 22, line 19, at the end to insert:
    (7) Without prejudice to the foregoing provisions of this section, in any action or proceeding by an owner of goods to enforce any contract of guarantee or indemnity in respect of a contract of hire purchase to which this Act applies against the person giving such guarantee or indemnity, the court shall enquire into the steps taken by the owner to enforce the contract of hire purchase or to repossess the goods the subject of the contract of hire
    500
    purchase or in any other manner in regard to such goods to minimise the owner's loss and if it shall appear to the court that by the exercise of proper diligence or by the taking of any steps that ought reasonably to have been taken—

    (a) goods that have not been repossessed could have been repossessed, or

    (b) goods that have been sold could have been sold at better price, or

    (c) further moneys could have been recovered from the hirer

    and that as a result thereof the liability of the person giving the guarantee or indemnity might have been reduced the court shall refuse to enforce such guarantee or indemnity to such extent as to the court shall seem just.
    An Amendment in these terms was moved in Committee by my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine). There was then considerable debate and the Minister of State at the Board of Trade was good enough to say that, although he could give no assurance, he would look at the matter again in the light of what had been said. I am disappointed that, in spite of his having looked at the matter again, as I am sure he has, the Government have put no Amendment down.
    The Amendment raises a question of real importance. In effect it provides that where, in a hire-purchase contract, there is a guarantor and an action is brought against the guarantor to enforce the contract of guarantee, the court should inquire into the steps taken by the owner to enforce the contract of hire purchase or to repossess the goods and into anything done by the owner to minimise the loss. If the court thinks that the owner could reasonably have taken steps so that the goods not repossessed could have been repossessed, the goods sold could have been sold at a better price, or further moneys could have been recovered from the hirer and, as a result, the liability of the guarantor might have been reduced, the court will have power to refuse to enforce the guarantee to such extent as it thinks fit.
    In Committee, the Minister of State seemed to oppose the Amendment on the ground that it would make some fundamental Change in the law affecting guarantees. I suggest that he was making a false point. The hon. Gentleman then said:
    "The general law on contracts of guarantee…is that, if a debtor whose liabilities are guaranteed fails to meet them, the creditor can proceed immediately to recover the amount of

    501
    the debt from the guarantor."—[OFFICIAL REPORT, Standing Committee F, 19th March, 1964, c. 276.]
    This is true enough as a statement of law, but, under our law, if a guarantee is given and the creditor has some form of security, it is the duty of the creditor to look after the security. Indeed, in law he is entitled to have the security handed over to him if he pays the guaranteed debt. Any act of the creditor interfering with or impairing this right will, to the extent of any loss inflicted, relieve the surety or guarantor.
    The difficulty in a hire-purchase transaction, is that the goods are not for legal purposes security, although the guarantor has given his guarantee in respect of those goods. The finance companies can be as careless as they like about enforcing the agreement with the hirer. They can be negligent in repossessing the goods, they can be negligent in reselling the goods, selling at a lower price so that the goods are diminished in value. In spite of all those things, the guarantor can be proceeded against and he suffers the whole loss.
    In an earlier debate, I referred to the case of Financings Ltd. v. Baldock. In that case, Lord Denning, in dealing with the facts—I remind the House that the sum in respect of the lorry involved was £538—said this:
    "The Company then put the lorry into the hands of the dealers who originally handled it, but they did not do what one would have thought would be the reasonable thing to do, try to let it on hire purchase again; they asked the dealers to try to sell it. They did not sell it for eighteen months, and eventually…they sold it for £140".
    That is a very good illustration of the sort of thing which might well happen in the case of a guarantor under a hire-purchase contract. The company in that case was, I suggest, negligent. It ought to have adopted the reasonable course of letting the lorry out on hire-purchase terms. Instead of that, it waited a considerable time and then, instead of letting it out in the way suggested and obtaining a considerably larger sum of money, it sold the lorry and received only £140. If there had been a guarantor in the case and he had been proceeded against, he would have had no remedy whatever.
    A guarantor is, I submit, entitled to say, "Why should I lose a large sum of money when you, the owner, have not
    502
    acted reasonably?" One of the answers given in Committee by the Minister of State was:
    "…we have to be fully realistic on the question of consumer protection".—[OFFICIAL REPORT, Standing Committee F, 19th March, 1964; c. 278.]
    I remind the House that the hon. Member said that in about one third of the hire purchase transactions, guarantees were insisted upon. In that debate, my hon. Friend the Member for West-houghton (Mr. J. T. Price) drew attention to the large number of guarantees on behalf of parents where hire-purchase contracts are made by minors. Therefore, this affects a very considerable number of people. I want to adapt the words used by the hon. Member and approach this matter on the basis that he put forward—of being fully realistic on the question of consumer protection.
    8.30 p.m.
    Why should a hire-purchase owner who does not make proper steps in regard to the matter be able to recover against a guarantor? In the Amendment, category (a) concerns
    "goods that have not been repossessed could have been repossessed."
    Suppose the owner deals with the goods in a neglectful fashion and does not take proper steps to repossess them, allowing them to stay for a long time on hirer's default and perhaps fall into disrepair. Why should the guarantor suffer because of that negligence?
    The second category in the Amendment, in (b), is
    "goods that have been sold could have been sold at better price,"
    I have already given a practical illustration of this. A finance company very often takes the attitude, "Why should we bother about the price? We simply sell the goods and we have the right to get the full amount from the guarantor."
    The Amendment's third category, (c), is
    "further moneys could have been recovered from the hirer…"
    Supposing the owner is negligent in pursuing his claim against the hirer because he takes the attitude that the guarantor is liable, why should the guarantor suffer? Why should the owner be able to adopt the attitude that it does not matter because he can always look to a guarantor? That is really the point of the Amendment.

    503
    It must be remembered that the guarantor is at the mercy of the owner but I suggest that he should be entitled to say to the finance company, "If you have not acted reasonably I should not bear the whole burden." I hope that the House will appreciate the importance of this matter and that the Government will accept the Amendment.
    Mr. J. Robertson: There is no doubt that the position of a guarantor is another of the great evils of modern hire-purchase practice. In Scotland, this system has caused untold misery. It has resulted in many broken homes. It is a method that finance companies have of covering bad risks.
    I had a case recently. A man came to see me who had signed a form for a hire-purchase agreement made by one of his workmates, who was much better paid than he was. The agreement was for the hire purchase of a car. Within six months the hirer stopped paying his instalments, sold the car and took a oneway ticket to the South.
    No attempt was made to catch him. All that happened was that the finance company got on to the guarantor and, when he pointed out that the car had been sold and that a considerable sum of money had accrued to the hirer which was not legally his, all he was told was that he himself could go to law on that matter. That was his only safeguard. Worse still was to come.
    Although the citation was against the hirer and the guarantor was not informed of the hearing, nevertheless the finding was given to the guarantor and pinding took place. That is a shocking state of affairs and one that must be rectified. It was suggested in this case that the man should pay £1 a week. But if he paid £1 a week for 249 years his debt would be almost the size of the National Debt—for the firm is Napier's, whose interest rates are phenomenal.
    We must do something about this matter. I wish that this Amendment was stronger, but at least it would provide some protection for the guarantor without completely removing the liability and it would not embarrass the hire-purchase company which took reasonable care to recover the debt from the person who contracted it. That would be a very
    504
    good thing indeed. I believe that the Government should have gone further to discourage finance companies from trying to cover up a bad risk by a worse risk.
    In the case I have stated, the guarantor was earning about £5 a week less than the hirer and had four children. He could not possibly meet the debt. His home was sold and the furniture taken away—not to cover the total cost of the goods, but to cover all the instalments which had not been paid so far. The finance company can still come back if he reestablishes his home and make the same claim. This can go on ad infinitum, because he cannot hope to pay off his debt.
    It is said that in Scotland a debtor does not go to prison, but this man would be better off in prison because he can never clear this debt off. It may be that if the Bill applies to Scotland it will help, but I am not satisfied that it will help the position of the guarantor and I urge the Parliamentary Secretary to look at this again and consider whether he cannot accept the Amendment or at least consider whether it would not be possible for the Government themselves to offer some form of protection, however little, to the guarantor of a hire-purchase agreement.
    Mrs. Slater: I join my hon. Friends in asking the Government to look at this again and to consider whether they cannot do something about the situation. Not very long ago I had the case of a woman whose son became friendly with a boy who was in the care of the local authority. This boy bought a scooter—he was out at work—and as this lady felt sorry for him, for he came from a broken home, and considered that he had never had a chance, she stood guarantor for him.
    The boy paid a few instalments, then nothing more. This lady was driven almost insane because the hire-purchase company did not bother to repossess the scooter from the boy but plagued her in an attempt to force her to pay up. She had agreed to act as guarantor through kindness of heart, but found herself in this position. She was just an ordinary person and certainly not wealthy.
    Fortunately for her, the boy joined the Army and we got his commanding officer

    505
    to see that he made payments on the scooter until it was paid off. But if the boy had not joined the Army, and had not had a commanding officer who ensured that he made these payments, the finance company would have taken the money from a woman who could ill afford it.
    In cases like this there should be some protection for the guarantor. Treasury Ministers have time and again said that the Bill is designed to protect the consumer. We are now considering another section of consumers—people who, out of the goodness of their hearts, or because the people coming to them are friends or relatives, implicate themselves and stand guarantor of agreements. They are members of the consuming public who will be severely handicapped, frightened out of their wits and made distraught by firms which fail to comply with what will become paragraphs (a), (b) and (c) of this part of the Bill if the Amendment is accepted.
    Mr. Eric Fletcher Mr. Eric Fletcher (Islington, East)rose—
    The Under-Secretary of State for Scotland (Mr. J. A. Stodart): I rise not to conclude this debate, but to answer the point raised by the hon. Member for Paisley (Mr. J. Robertson) on the subject of guarantors, with particular reference to the position in Scotland. He mentioned the name of Napiers and I, as well as every other Scottish hon. Member, am very well aware that it is the normal business practice of Messrs. Napiers, where the principal signatory to one of its agreements has defaulted, to pursue the guarantors.
    So long as people guarantee contracts, be they hire purchase or even the simple one of bank overdrafts, we must in general accept that some of them will be called upon to honour the undertakings they have given; and I cannot agree that, in principle, this is wrong.
    Mr. Weitzman: No one suggests that the guarantor should not honour his obligations. The whole purpose of the Amendment is to ensure that although he should honour them, he should also have rights akin to what he has at common law.
    Mr. Stodart: I am merely trying to answer the point made by the hon. Member for Paisley, who made particular reference to the firm of Napiers. I would
    506
    like to assure him, as I am sure he realises, that the guarantor in Scotland will be distinctly better protected after the Bill becomes law. At present in a hire-purchase contract the guarantee cannot be enforced against him unless he has signed the main contract and a copy is delivered to him. In the case of a credit sale agreement it is necessary for the seller to provide a considerable amount of information about the contract.
    Although Napiers is not much involved, if anything, in the hire-purchase business—it is mainly credit sales with which it is concerned—I can assure the hon. Member for Paisley that the position of the guarantor will be better as a result of the passing of the Bill.
    Mr. Fletcher: I do not think I have ever heard so much rubbish spoken from the Treasury Bench as we have just heard. I do not know what is the Minister's designation, but he came to the House obviously with a prepared speech. It was obvious that he had not listened or, if he had, that he had not attempted to understand, for he certainly had not understood the arguments put forward in support of what is a reasonable Amendment.
    8.45 p.m.
    The Under-Secretary of State for Scotland said that he was not concluding the debate. That was about the only sensible thing he said. I hope that at least before we conclude the debate on the Amendment we shall have a reply. I do not know why the Minister of State is not here to deal with this matter, which, as my hon. Friends have said, is of the greatest importance. I agree with what all my hon. Friends have said. I could quote, as they have done, numerous instances in which guarantors, sometimes innocent guarantors, often ill-informed and ill-instructed, out of the goodness of their hearts and, possibly, as the result of persuasion by diligent salesmen, have signed guarantees.
    The Minister has said, and we have heard it before, that the Clause is designed for the protection of guarantors, just as the Bill is designed basically for the protect on of consumers. The Amendment, which I support, is eminently sensible, reasonable and necessary if we are to give proper protection to guarantors.

    507
    A guarantor very often signs a guarantee without fully understanding its commitments. The argument is that he should know, but we have to deal with the facts as they are. The guarantor signs because he accepts some responsibility. Let us be quite clear about what the principle should be. A guarantor who guarantees performance of a hire-purchase contract of this kind assumes only ultimate responsibility to the owner of the goods provided that the owner cannot get satisfaction elsewhere. All that the Amendment does is to write into the Bill assurances that before an owner has resort to the guarantor, he should exhaust all other remedies and should take all reasonable steps to minimise his loss. What could be more sane, just and reasonable?
    We all know from experience in our constituencies how, over and over again, an owner wishing to enforce a remedy takes the line of least resistance and pursues the guarantor. He ignores whatever may be his duty at common law or elsewhere to minimise his loss. He may not even take steps to pursue the principal debtor. He does not always take steps to ensure that the goods have been sold at the proper price. He does not take all necessary steps to obtain what he can from the principal debtor, who is primarily responsible.
    Where there is a guarantor, in most cases the owner not only has his claim against the debtor, but has his security in respect of the goods, which he can repossess and sell. The existing practice is intolerable in the conditions of modern life with the spread of hire-purchase contracts for all kinds of guarantees. I do not object to the fact that guarantees are required from time to time, but it is intolerable if the law permits an owner to take the line of least resistance and go for the guarantor before he has exhausted all other possible remedies and taken all proper and reasonable steps to minimise his loss.
    No guarantor who signs any of these contracts should be at risk unless and until the owner has done everything possible to minimise his loss. That is the kind of responsibility which, under these agreements, a guarantor takes. I agree that a person who signs a guarantee must have responsibility, but it is a
    508
    minimal, residual and ultimate responsibility and it should not be brought into operation until the owner has exhausted all other remedies. That is the simple, the only and the rational object of the Amendment.
    I know that we have a great deal of Amendments to deal with as a result of discussion in another place and as a result of Government mismanagement in this as in other matters, with which we are fully familiar and which we condemn. We have to deal with a great volume of Amendments, mostly introduced by the Government, to which we do not object, but there are some of these Amendments to which we on this side attach considerable importance.
    I do not know whether the Parliamentary Secretary, like his colleague the Under-Secretary of State for Scotland, will read to us a statement prepared by his Department without having listened to the reasoned argument which we have heard. If so, I for one would regard that as intolerable and irresponsible conduct on the part of the Minister. I hope that he will at least have had the courtesy and decency to the House to have listened with understanding and sympathy to the arguments which have been addressed to him in support of the Amendment and I hope that the House will support and carry the Amendment.
    Mr. D. Price: I am rather surprised at the slightly offensive remarks of the hon. Member for Islington, East (Mr. Fletcher) towards my hon. Friend the Under-Secretary of State for Scotland, who intervened only when he felt that he could assist the hon. Member for Paisley (Mr. J. Robertson) on a point which he had raised. The hon. Member will have observed that my hon. Friend has been sitting by me throughout the debate to take care of the Scottish points as they arise. It was rather offensive of the hon. Member for Islington, East, who has not taken much part in our affairs. He might have seen the courtesy with which my hon. Friend has endeavoured, not necessarily to everyone's satisfaction, to be present to try to answer the points related to Scottish legal practice.
    The Amendment seeks to ensure that the owner does not come down on the

    509
    guarantor until he has exhausted all possibilities of getting the hirer to comply with his obligations under the agreement. It was moved in Committee, when my hon. Friend the Minister of State said that the Government would consider without commitment the position of the guarantor of a hire-purchase agreement.
    On Second Reading several hon. Members referred to cases in which they believed that guarantors of hire-purchase or credit-sale agreements had suffered hardship. Several instances were cited. One was the case in which a person alleged that he had not realised that the document which he was signing was a guarantee. Another was a case in which the person realised that he was giving a guarantee but the obligation ultimately turned out to be greater than he had expected. The third was a case of a person who gave a guarantee confident that he would not be called upon and then felt that it was a hardship when the person he was guaranteeing defaulted and he was called upon to meet the obligation.
    In the light of what was said on Second Reading, we have looked at the whole question of guarantees under both hire-purchase and credit-sale agreements. As my hon. Friend said in Committee, we have not received complaints about the operation of guarantees in relation to hire-purchase agreements at the Board of Trade, either direct or passed on to us by hon. Members on behalf of their constituents. As he said, this is not conclusive, but it is significant, because when there is an active problem of this kind we have a number of cases referred to us both directly and from hon. Members.
    When it is a question of enacting statutory safeguards we need to be satisfied that in practice there is a serious abuse to be checked and not just individual cases. I do not want to sound unsympathetic, but we must be realistic in this matter of consumer protection, otherwise we shall find ourselves creating such a multiplicity of safeguards that they could defeat their own purpose.
    Mr. Weitzinan: Does the hon. Member understand the point which is put in the Amendment? Not a single word he has said has the slightest application to it.
    Mr. Price: I am coming to the common law point in a moment.
    Mr. Weitzman: The hon. Member's reply has not the slightest application to the Amendment.
    Mr. Price: Indeed it has. The hon. and learned Member and I fail to agree. I am a little hurt that hon. Members, and now an hon. and learned Member, have started to introduce this narky attitude into our affairs.
    The Amendment would mark a considerable change from the normal position. Under the general law in relation to contracts of guarantee, a creditor whose debt is guaranteed may proceed immediately against a guarantor if the debtor fails to pay his debt. The Amendment would make a fundamental change in the law relating to guarantees, but only in the rather narrow field of guarantees which relate to hire-purchase debts. The hon. and learned Member suggested that the common law position is different in relation to guarantees in hire-purchase. I am advised that this is not so and that possibly the guarantees of which he is thinking are those relating to mortgages. I am advised that the position of a guarantor who guarantees a hire-purchase agreement is no different from that of a guarantor in any other agreement.
    Mr. Weitzman: Will the hon. Member do me the kindness of reading Hansard tomorrow? He will see that I dealt with this point in some detail. He obviously has not listened or has not understood.
    Mr. Fletcher: I was about to say what my hon. and learned Friend said. The Minister obviously has not understood the argument. Whatever the common law may be, we are dealing with a special form of guarantees, namely, guarantees of hire purchase transactions. We are making law, and the law ought to be different in these cases. We are legislating in the Amendment to provide that a guarantor under a hire-purchase agreement should not be called to account until the owner has exhausted all other remedies. It is no answer to say what the common law is on the matter.
    Mr. Price: Indeed it is. The hon. Member is coming a long way towards my point of view. I am arguing that I see no reasen why a guarantor under a

    511
    hire-purchase agreement should be considered differently from the guarantor of a debt under any other agreement. This is my point and I do understand the hon. and learned Member's argument. He was contending that the common law position about a guarantor was that the rights which a guarantor had were reduced in the case of a guarantor under a hire-purchase agreement.
    Mr. Weitzman: At common law, where a person gives a guarantee as a rule he has security, and that security must be preserved by the owner. If it is lost or affected in any way, to that extent the guarantor has a right to claim it as diminishing what he has to pay. In this case the car is the security, but in law it cannot be the security because of the relationship in which the parties stand. What we are saying is that as we have an anomalous position in that way, surely the guarantor ought to be in a position to say to the owner, "If you interfere with what I have given a guarantee upon—the car—by not taking proper measures about selling it or repossessing it or exercising your right, then I, pro tanto, ought to be relieved of my liability". It is as simple as that, and quite in conformity with the principles of existing common law.
    9.0 p.m.
    Mr. Price: I see the force of the hon. and learned Gentleman's argument, and it has not changed since he accused me of not having listened to it. I have the point perfectly well, but I suggest that there are many cases other than hire purchase in which a person is a guarantor without there being any security at all. The most obvious case is when a person is asked to guarantee somebody's else's overdraft. My substantial point is that there is not the distinction which the hon. and learned Gentleman is trying to draw between a guarantor of somebody's hire-purchase agreement and a guarantor for somebody's overdraft, or any of the other things which people guarantee.
    The Amendment is limited to guarantees under hire purchase. The hon. and learned Gentleman has not extended it to credit sales. There must be some particular reason for that of which I am not aware. The basic proposition is this: there is, after all, no particular
    512
    reason why people should give guarantees of the performance of obligations under hire-purchase or credit-sale agreements. I suggest that the position is rather different from that of the consumer who, by entering in an agreement of this kind, can obtain goods which he thinks he needs at once, and pay for them out of his subsequent income. Provided that it is kept within bounds, it is a useful facility: but guarantees, if they enable hirers to incur commitments beyond their means, are a different matter.
    If people are willing to give guarantees, they should not be prevented from doing so in the field of hire purchase any more than in any other, but they must do it with their eyes open. The Clause helps in this respect by giving guarantors rights to documents and information, and I believe that when the Bill becomes law steps should be taken to bring home to the public, along with other features of the Bill, their rights and obligations in the matter of hire purchase. It should be made clear that people should not guarantee hire-purchase agreements unless they know what they are doing and what their obligations are going to be. As a general proposition I do not believe it is unreasonable that where there is a guarantor, the seller should expect that if the hirer or the buyer falls down, the guarantor will pay up.
    These arguments still seem to us to weigh conclusively against making any alteration in the form which the Amendment proposes in one facet of the law relating to contracts of guarantee. One is bound to feel sympathy with the guarantor who, through ignorance, or an excess of confidence in a friend or relation, finds himself burdened by debt. The proper answer lies more in bringing home to people the importance of knowing what they are signing than in amending the law in this one respect.
    Mrs. Slater: The hon. Gentleman says that there is no difference between being a guarantor for an article bought on hire-purchase and being a guarantor for a bank overdraft. Is not the difference that the owner of an article is able to take steps to see that the guarantor is not called on to meet his obligation, whereas in the second case there is no article which can be reclaimed?
    Mr. Price: That is true, but in the case of a bank overdraft the bank manager usually has some control over the person being guaranteed before he reaches the point at which the guarantor has to come in. There is nothing in law on this, but if the hon. Lady were to guarantee my bank overdraft to a certain figure, she would have reason to be angry with my bank if the first she knew was that I was heavily overdrawn and that she was faced with a substantial commitment.
    In essence, I do not believe that there is the kind of distinction which the hon. and learned Member has tried to draw. I emphasise this particularly since he has excluded credit-sales agreements and limited himself to hire-purchase agreements.
    Mr. A. J. Irvine: I am a little puzzled by the combative character which seems to have been attached to the discussion. I regret that the Parliamentary Secretary has not felt able to offer more in response to the arguments of my hon. and learned Friend and my other hon. Friends. I am sorry that I was absent when my hon. and learned Friend moved the Amendment, but I heard the rest of the debate. Before the House decides upon this issue there are two matters which it occurs to me to mention, dealing with the merits of the discussion.
    First, after saying that inquiries had been made by his Department to ascertain the facts, the Parliamentary Secretary seemed to argue that there was not much evidence of large-scale abuse under this head. He argued—and I took down his words as he uttered them—that the Government would have to feel that there was a serious abuse to be checked before they would think it appropriate to recommend legislation. I could not help wondering whether that was not putting the argument rather too high. If, in the nature of things, there is a danger—albeit in a comparatively few cases—of the kind of abuse to which my hon. Friends have referred, it would seem appropriate to take steps by way of legislation to prevent their occurrence, or their possible increase in the future.
    I have been interested to hear the striking and impressive cases of guarantors of hire-purchase agreements suffering a good deal by way of oppression and pursuit from the owners of chattels. If that kind of thing is
    514
    happening even on a comparatively small scale it is a flaw in our system which we ought to deal with as quickly as possible. We would certainly think it appropriate to take steps to prevent that kind of treatment of people increasing.
    The second matter which it occurs to me to menlion in connection with this argument arises from the question why we should advocate a particular law governing guarante es of hire-purchase contracts as distinct from the law governing guarantees in respect of other classes of contract. There is a good deal of force in the question put to the Parliamentary Secretary at the end of his speech by my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater). She pointed out the real feature which distinguishes a guarantee in respect of a hire-purchase transaction from a guarantee in respect of other classes of transaction.
    Furthermore, if the Parliamentary Secretary is going to take that somewhat academic line he could be heard to argue that in a whole manner of respects hire-purchase agreements are like all other kinds of contract; they have the same contractual features and characters. There are two parties; there is a financial consideration; there are governing conditions, and warranties. It may be argued that to a considerable distance a hire-purchase agreement is like any other agreement and has the features that any other type of contract attracts to itself.
    That circumstance, which I would acknowledge, has not prevented Parliament from recognising that hire-purchase transactions call for a totally different treatment from that of other classes of contract. It is that differentiation which explains the 1938 Act and the controversial treatment of the matter in which we have been so heavily engaged in connection with this Bill.
    All that my hon. and learned Friend and hon. Friends seek to do is to point out that hire-purchase agreements are treated as different from other agreements under certain heads, and that here is another in respect of which treatment of hire-purchase agreements should be different from the treatment of other agreements, namely, that of collatoral guarantee. To me that seems rational and sensible They are entitled to call in

    515
    aid circumstances to which reference has been made, that to their knowledge without the kind of precautions and safeguards which they seek to introduce, this type of guarantee is causing a great deal of oppressive hardship to some numbers of people. It is no answer to their complaint to say that the number is small. If on any scale at all this is a current
    source or oppression and hardship, that should be put right, and this would seem an appropriate opportunity to do it. I hope that my hon. Friends will pursue this matter to a Division.
    Question put, That those words be there inserted in the Bill:—
    The House divided: Ayes 111, Noes 163.

    Division No. 118.]

    AYES

    [9.12 p.m.

    Ainsley, William

    Gunter, Ray

    Pavitt, Laurence

    Allaun, Frank (Salford, E.)

    Hale, Leslie (Oldham, W.)

    Pearson, Arthur (Pontypridd)

    Allen, Scholefield (Crewe)

    Hamilton, William (West Fife)

    Peart, Frederick

    Awbery, Stan (Bristol, Central)

    Harper, Joseph

    Pentland, Norman

    Bence, Cyril

    Hayman, F. H.

    Popplewell, Ernest

    Bennett, J. (Glasgow, Bridgeton)

    Henderson, Rt. Hn. Arthur (Rwly Regis)

    Probert, Arthur

    Blackburn, F.

    Herblson, Miss Margaret

    Redhead, E. C.

    Boardman, H.

    Hilton, A. V.

    Rhodes, H.

    Bottomley, Bt. Hon. A. G.

    Holman, Percy

    Roberts, Albert (Normanton)

    Bowden, Rt. Hn. H. W. (Leics, S. W.)

    Holt, Arthur

    Roberts, Goronwy (Caernarvon)

    Bowen, Roderic (Cardigan)

    Hoy, James H.

    Robertson, John (Paisley)

    Bowles, Frank

    Hughes, Cledwyn (Anglesey)

    Ross, William

    Braddock, Mrs. E. M.

    Hughes, Emrys (S. Ayrshire)

    Short, Edward

    Bradley, Tom

    Hunter, A. E.

    Silkin, John

    Collick, Percy

    Hynd, H. (Accrington)

    Slater, Mrs. Harriet (Stoke, N.)

    Craddock, George (Bradford, S.)

    Irvine, A. J. (Edge Hill)

    Slater, Joseph (Sedgefield)

    Cullen, Mrs. Alice

    Jay, Rt. Hon. Douglas

    Small, William

    Dalyell, Tarn

    Jones, Elwyn (West Ham, S.)

    Smith, Ellis (Stoke, S.)

    Darling, George

    Jones, J. Idwal (Wrexham)

    Steele, Thomas

    Davics, Ifor (Gower)

    Kenyon, Clifford

    Stewart, Michael (Fulham)

    Davies, S. O. (Merthyr)

    King, Dr. Horace

    Stones, William

    Delargy, Hugh

    Lawson, George

    Symonds, J. B.

    Dempsey, James

    Lee, Frederick (Newton)

    Thomas, Iorwerth (Rhondda, W.)

    Dodds, Norman

    Lewis Arthur (West Ham, N.)

    Thompson, Dr. Alan (Dunfermline)

    Doig, Peter

    Loughlin, Charles

    Thorpe, Jeremy

    Edwards, Rt. Hon. Ness (Caerphilly)

    Lubbock, Eric

    Wade, Donald

    Edwards, Robert (Bilston)

    MacColl, James

    Warbey, William

    Evans, Albert

    McInnes, James

    Weitzman, David

    Fletcher, Eric

    Mackenzie, Gregor

    Wells, William (Walsall, N.)

    Foot, Dingle (Ipswich)

    Mallalieu, E. L. (Brigg)

    Williams, W. T. (Warrington)

    Forman, J. C.

    Mapp, Charles

    Willis, E. C. (Edinburgh, E.)

    Galpern, Sir Myer

    Mason, Roy

    Winterbottom, R. E.

    Ginsburg, David

    Mendelson, J. J.

    Woodburn, Rt. Hon. A.

    Gourlay, Harry

    Milne, Edward

    Woof, Robert

    Grey, Charles

    Mitchison, G. R.

    Yates, Victor (Ladywood)

    Griffiths, Rt. Hon. James (Llanelly)

    Mulley, Frederick

    Griffiths, W. (Exchange)

    Noel-Baker, Francis (Swindon)

    TELLERS FOR THE AYES:

    Grimond, Rt. Hon. J.

    Oliver, G. H.

    Dr. Broughton and Mr. McCann.

    NOES

    Awdry, Daniel (Chippenham)

    Crawley, Aidan

    Griffiths, Eldon (Bury St. Edmunds)

    Barlow, Sir John

    Curran, Charles

    Grosvenor, Lord Robert

    Barter, John

    Currie, G. B. H.

    Gurden, Harold

    Batsford, Brian

    d'Avigdor-Goldsmid, Sir Henry

    Hamilton, Michael (Wellingborough)

    Bennett, F. M. (Torquay)

    Doughty, Charles

    Harris, Reader (Heston)

    Bingham, R. M.

    Drayson, G. B.

    Harrison, Col. Sir Harwood (Eye)

    Bishop, Sir Patrick

    Elliot, Capt. Walter (Carshalton)

    Harvey, John (Walthamstow, E.)

    Black, Sir Cyril

    Elliott, R. W. (Newc'tle-upon-Tyne, N.)

    Harvie Anderson, Miss

    Bourne-Arton, A.

    Emmet, Hon. Mrs. Evelyn

    Henderson, Sir John (Cathcart)

    Box, Donald

    Farey-Jones, F. W.

    Hiley, Joseph

    Braine, Bernard

    Finlay, Graeme

    Hill, Mrs. Eveline (Wythenshawe)

    Bromley-Davenport. Lt.-Col. Sir Walter

    Fletcher-Cooke, Charles

    Hill, J. E. B. (S. Norfolk)

    Brown, Alan (Tottenham)

    Fraser, Ian (Plymouth, Sutton)

    Hirst, Geoffrey

    Buck, Antony

    Freeth, Denzil

    Hobson, Rt. Hon. Sir John

    Carr, Compton (Barons Court)

    Galbraith, Hon. T. G. D.

    Hooking, Philip N.

    Chataway, Christopher

    Gammans, Lady

    Holland, Philip

    Clarke, Brig. Terence (Portsmth, W.)

    Gardner, Edward

    Hornsby-Smith, Rt. Hon. Dame P.

    Cleaver, Leonard

    George, Sir John (Pollok)

    Howard, John (Southampton, Test)

    Cooke, Robert

    Giles, Rear-Admiral Morgan

    Hughes-Young, Michael

    Cooper, A. E.

    Gilmour, Sir John (East Fife)

    Hutchison, Michael Clark

    Cooper-Key, Sir Neill

    Glyn, Dr. Alan (Clapham)

    Iremonger, T. L.

    Coulson, Michael

    Goodhew, Victor

    Irving, Bryant Godman (Rye)

    Courtney, Cdr. Anthony

    Gower, Raymond

    James, David

    Craddock, Sir Bereaford (Spelthorne)

    Grant-Ferris, R.

    Jennings, J. C.

    Johnson, Eric (Blackley)

    Page, Graham (Crosby)

    Summers, Sir Spencer

    Jones, Arthur (Northants, S.)

    Page, John (Harrow, West)

    Tapsell, Peter

    Kerans, Cdr J. S.

    Partridge, E.

    Taylor, Edwin (Bolton, E.)

    Kershaw, Anthony

    Percival, Ian

    Taylor, Frank (M'ch'st'r, Moss Side)

    Kirk, Peter

    Pitman, Sir James

    Teeling, Sir William

    Langford-Holt, Sir John

    Pitt, Dame Edith

    Thompson, Sir Richard (Croydon, S.)

    Leavey, J, A.

    Pounder, Rafton

    Thornton-Kemsley, Sir Colin

    Legge-Bourke, Sir Harry

    Powell, Rt. Hon. J. Enoch

    Tiley, Arthur (Bradford, W.)

    Lewis, Kenneth (Rutland)

    Price, David (Eastleigh)

    Touche, Rt. Hon. Sir Gordon

    Lilley, F. J. P.

    Proudfoot, Wilfred

    Turner, Colin

    Litchfield, Capt. John

    Pym, Francis

    Turton, Rt. Hon. R. H.

    Longbottom, Charles

    Quennell, Miss J. M.

    Tweedsmuir, Lady

    Longden, Gilbert

    Redmayne, Rt. Hon. Martin

    van Straubemee, W. R.

    Lucas-Tooth, Sir John

    Rees, Hugh (Swansea, w.)

    Vaughan-Morgan, Rt. Hon. Sir John

    McAdden, Sir Stephen

    Renton, Rt. Hon. David

    Vickers, Miss Joan

    MacArthur, Ian

    Rippon, Rt. Hon. Geoffrey

    Wall, Patrick

    McLaren, Martin

    Roberts, Sir Peter (Heeley)

    Ward, Dame Irene

    McMaster, Stanley R.

    Roots, William

    Wells, John (Maidstone)

    Madden, Martin

    Ropner, Col. Sir Leonard

    Whitelaw, William

    Maitland, Sir John

    Scott-Hopkins, James

    Williams, Dudley (Exeter)

    Marshall, Sir Douglas

    Shepherd, William

    Wills, Sir Gerald (Bridgwater)

    Mawby, Ray

    Skeet, T. H. H.

    Wilson, Geoffrey (Truro)

    Maxwell-Hyslop, R. J.

    Spearman, Sir Alexander

    Wise, A. R.

    Maydon, Lt.-Cmdr, S. L. C.

    Speir, Rupert

    Wolrige-Gordon, Patrick

    Mills, Stratton

    Stainton Keith

    Wood, Rt. Hon. Richard

    Miscampbell, Norman

    Stanley, Hon. Richard

    Woodnutt, Mark

    Montgomery, Fergus

    Stevens, Geoffrey

    Woollam, John

    Morrison, Charles (Devizes)

    Steward, Harold (Stockport, S.)

    Nugent, Rt. Hon. Sir Richard

    Stodart, J. A.

    TELLERS FOR THE NOES:

    Oakshott, Sir Hendrie

    Stoddart-Scott, Col. Sir Malcolm

    Mr. Chichester-Clark and

    Orr-Ewing, Sir Ian (Hendon, North)

    Storey, Sir Samuel

    Mr. More.

    Osborne, Sir Cyril (Louth)

    Studholme, Sir Henry

    Clause 21.—(CONDITIONAL SALE AGREEMENTS.)
    Mr. D. Price: I beg to move, in page 22, line 30, after "by", to insert "or on behalf of".
    This is a drafting Amendment consequential on an earlier Amendment made in Clause 2 in Committee which, if I recall rightly, resulted from the initiative of the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine).
    Amendment agreed to.

    Clause 24.—(INTERPRETATION OF PART I.)
    Mr. D. Price: I beg to move, in page 26, line 26, at the end to insert:
    "In this subsection 'representations' has the same meaning as in section 10 of this Act, and references to making representations shall be construed accordingly".
    This is a consequential Amendment on the new subsection (3) which we added to Clause 10 and, therefore, is in response to the point raised by my hon. and learned Friend the Member for Liverpool, Garston (Mr. Bingham).
    Amendment agreed to.

    Clause 25.—(EXTENSION OF PRINCIPAL ACT TO SCOTLAND.)
    Mr. Stodart: I beg to move, in page 27, line 4, to leave out from the beginning to "the" in line 8.
    518
    It might be convenient also to take, at the same time, Amendment No. 33.
    In Committee, various hon. Members remarked on the complexities of what is now Clause 25. We have been looking at this and we think that it will be at least a little easier to follow if the opening lines of subsection (1), which repeal the existing code of Scottish hire-purchase law, are separated from the rest of the subsection. These Amendments reproduce the repeal as a new subsection (3). We are most indebted to the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) for the suggestion that these provisions might be moved and we have accepted the wording that he proposed.
    The hon. and learned Member suggested that we should tie these words to Schedule 2, but I hope that on reflection he will agree that they really belong to Clause 25, of which in a sense Schedule 2 is the end product. I assure the House that the sense of Clause 25 is in no way altered.
    Mr. A. J. Irvine: We welcome the Amendment I am most grateful to the Under-Secretary of State for Scotland for what he said about how the improvement originated. I think that this is an improvement, and that the matter has been most courteously and effectively dealt with.
    Mr. J. Robertson: I presume that we are taking also the Amendment in line 20. If so, I assume that the purpose of the two Amendments is to try to make this very difficult and complicated subsection, and indeed Clause, intelligible. I doubt whether the Minister has achieved this. Obviously these Amendments do not do what is required and what I thought might have been done by the Minister following our discussion in Committee.
    I heard the Under-Secretary of State's references to my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine), and I am pleased that he recognises the assistance which he received from my hon. and learned Friend. I should have thought that he received a great deal of advice from Scottish Members of the Committee which might have produced something more tangible than what is being suggested here.
    The Under-Secretary of State is not altering anything at all. All that he is doing is taking words from one place and putting them in another. We are repealing all but two Sections of the 1932 Act and modifying the Scottish provisions of the 1938 Act. Why do not the words in the Amendment in line 20
    "(in so far as it applies to Scotland)"
    apply to Section 4(2), which is in the Scottish legislation, instead of Section 3(1), that being the English provision, both dealing with the same subject? This does not make any sense of the new Scottish legislation.
    I should have thought that, having left out all the words in Clause 25 to the "the" in line 8, we might have had a rearrangement so that there emerged from this witches' brew of a Clause two distinct Scottish Measures parallel with the English legislation. That is not happening. The effect of this alteration is merely to modify the 1938 and 1954 Acts and then to take parts from Part I of this Bill and put them alongside these other Measures and call that the 1938 Scottish Act. Then we take other Clauses and modify them and call them the 1964 Act. If we had taken the 1938 Act and, I agree, the 1954 Act and called them the 1938 Act and modified this Bill and called it the 1964 Act, we should have achieved the desired purpose. But it would have been much easier to understand, and it
    520
    would have been right in line with the English legislation, which we were told was the purpose then and was to be the purpose of this Amendment.
    This is not a simple drafting Amendment. We understood that certain things would be done. They have not been done. All that is done here is to transpose words from one place to another. We need not have bothered. The effect is no different. I am very disappointed that the hon. Gentleman has produced these fiddling Amendments when we required something to make this a Bill which ordinary Scots people could understand. Perhaps I expected too much from the Government.
    9.30 p.m.
    Mr. Stodart: I hope that the hon. Gentleman was not under the impression that in Committee I promised him anything of a radical nature. I said that we should make what improvements we could in the Bill. I say frankly that, complex though it is, there is now a slightly more positive approach to explaining what are, I agree, two very difficult Clauses. I must add, if only in self-defence, that this was the suggestion of the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine).
    Miss Margaret Herbison: Does not the hon. Gentleman realise that Clauses 25 and 26 will make it almost impossible not only for Scottish people but, perhaps, even for Scottish lawyers to understand just what our hire-purchase legislation now is? From what I have heard in the debate, it seems to me that the Government would have been very well advised to have separate legislation on this matter for Scotland. I say that advisedly because I am not one of those who continually cry for separate legislation for Scotland on all sorts of things. The very complex nature of this matter, however, seems to have called for it.
    I agree with my hon. Friend the Member for Paisley (Mr. J. Robertson) that the Amendments which the Government have put down will not make the matter any more clear either to me or, I fear, even to Scottish lawyers.
    Amendment agreed to.
    Mr. Stodart: I beg to move, in page 27, line 9, to leave out "and (2)" and to insert "(2) and (5)".

    521
    I suggest that it might be convenient, Mr. Speaker, if we were to consider at the same time Amendments Nos. 82, 84, 92 and 93.
    Mr. Speaker: Yes, if the House so pleases.
    Mr. Stodart: When the Bill was in Committee, there was added Clause 1(5) which, as further amended today, amends the financial content of the conditions upon which a hirer may voluntarily terminate a hire-purchase agreement. He may now be called upon to pay either a sum which brings his total payments up to half the hire-purchase price or such lesser sum as the court may consider equal to the actual loss sustained by the owner in consequence of the termination of the agreement.
    The Scottish Amendments which we are now discussing are consequential upon the adoption of the revised financial conditions.
    Amendment agreed to.
    Mr. J. Robertson: I beg to move, in page 27, line 20, at the end to insert:
    "and shall be printed as a separate Act of Parliament to be intituled the Hire-Purchase (Scotland) Act, 1938".
    Mr. Speaker: I venture to suggest that the House would wish to discuss with this Amendment the following three Amendments: Amendment No. 42, in Clause 26, page 27, line 36, to leave out from "Act" to the end of line 43 and to insert:
    "shall be references to the Hire-Purchase (Scotland) Act, 1938 and references to Part I of this Act shall be references to such of the provisions of the said Part I as are extended to Scotland by this Act".
    Amendment No. 43, in page 27, line 36, to leave out:
    "and to Part I of this Act".
    Amendment No. 109, in page 29, line 29, at the end to insert:
    (2) In accordance with the preceding section this Act shall extend to Scotland and shall be printed as a separate Act of Parliament intituled the Hire-Purchase (Scotland) Act, 1964.
    Mr. Robertson: I am much obliged, Mr. Speaker.
    Clause 25 does more in relation to Scotland than all the rest of the Bill does in relation to England and Wales. It repeals all existing legislation on hire purchase and establishes a new principal
    522
    Act. This is extremely important because, as has been evident from the number of Amendments put down by the Government to the Scottish part of the Bill, Scottish practice and Scottish law on hire purchase are significantly different from the practice and law in England and Wales.
    It is not a matter of legislation alone. One has to interpret the legislation which will be enacted by Clause 25 in the context of the Scottish legal system, the Scottish sheriff courts in particular. One cannot just take the English Measure as in Part I and put it immediately into the context of the Scottish legal system. Not only do we have to change the words but we have sometimes to change the whole idea. For instance, although there may be something approximately equivalent, there is really no such thing in England as the small debt court. There is not in England the practice of poinding, of arrestment, and so on. All these matters are very important.
    I seek to have the legislation which Clause 25 will bring into being printed as a separate Act of Parliament for Scotland. We need this and deserve it. One cannot logically have a separate legal system and. then introduce parts of law as Clauses and Schedules in Measures of this kind. That is not good enough. I do not think that the Under-Secretary of State thinks it good enough, but he has had to accept it whether he likes it or not. The Scottish Office might have asserted itself a little more in this matter. Scottish lawyers consider that this is a step in the wrong direction, that it makes confusion worse confounded and that the introduction of a Clause and Schedules concerning Scotland into a Measure of this kind is not the way to enact legislation for Scotland.
    Scotland has its own legal system and we should recognise the fact. We were told in Committee that one reason for the form of this Measure was that the Scottish Grand Committee took so long to do anything. It may be that Opposition Members of that Committee talk too much for the Under-Secretary of State's liking, but they were apt pupils of former right hon. and hon. Friends of his. My hon. Friends learned their lesson well, and it is not good enough for the Government to introduce in this way provisions concerning Scotland. The only decent

    523
    thing that they can do is to accept, even at this late stage, the Amendment.
    Mr. Stodart: We in Scotland are extremely proud of our separate legal system and law courts, but, as I ventured to remark in Standing Committee, whereas the Police Bill was a proper thing to take to the Scottish Standing Committee because of the complete difference between the criminal codes of England and Scotland, there had been unanimous agreement during the Committee stage of this Bill—an agreement which echoed the findings of the Molony Committee—that there should be a single hire-purchase code for the United Kingdom. I did not think there was disagreement on that.
    Mr. J. Robertson: I am sure that the hon. Member would not like to mislead the House. Perhaps it was before he joined the Standing Committee but Scottish Opposition Members protested at the proposal.
    Mr. Stodart: It is true that I was a late comer to the Committee but certainly on the occasions on which I propounded this view I did not meet with great opposition from the hon. Member.
    If I understand it aright, the hon. Gentleman's object is to see that the Scottish hire-purchase code is printed as a separate Measure, thus facilitating reference to it by solicitors and others having an interest. I find some difficulty in following the details of how this would be done. The Amendment envisages that Part III of Schedule 2 should be printed separately and entitled the "Hire Purchase (Scotland) Act 1938". But that would exclude the very important provisions of Part I of the Bill, such as those dealing with the "cooling off" period, which are also to be part of the Scottish hire-purchase code. It would also exclude the provisions relating to motor vehicles and advertisements, which are also to apply to Scotland.
    Surely anyone wishing to consult a hire purchase code would prefer to have it in one Measure. An advantage we in Scotland enjoy over England is that the whole of the Scottish hire-purchase code will in future be found in one volume—Part III of the Schedule and in references to certain of the new things in Part I—whereas English lawyers will
    524
    have to refer to, I think, three different Acts until consolidation takes place.
    The hon. Gentleman's Amendment No. 109, to Clause 26, seems to propose a slightly different solution. I believe that it would cause the Bill to be reprinted exactly as it stands but renamed the "Hire Purchase (Scotland) Act, 1964". I do not think that it would be very helpful to have the same Act published under two different titles.
    Mr. J. Robertson: The hon. Gentleman must do me a little more credit. Obviously, the Amendment I have moved would seek to have a "Hire Purchase (Scotland) Act 1938", which would include all the things now in Clause 25. By my Amendment No. 109 we would take Clause 26 and Part I of the rest of this Bill and call it the "Hire Purchase (Scotland) Act 1964". These would be two separate and distinct Acts and the 1938 Act would be amended just as the present 1938 Act is amended in the existing form of the Bill.
    9.45 p.m.
    Mr. Stodart: With respect to the hon. Gentleman, I am not sure that the drafting of his Amendment would have that effect. Indeed, I am certain that it would not. This is not nearly as easy a matter as he thinks. I have watched with considerable admiration and no little respect the way in which he has been trying to make the Bill easier for Scottish practitioners to follow.
    As I said earlier, some of these difficulties can be exaggerated. Once the Bill is an Act the central part of the Scottish hire-purchase code will be in two places; Part III of Schedule 2 and Part T of the Bill, as applied to Scotland by Clause 26, along with the allied provisions within the covers of this single Measure. In due course, moreover, there will be consolidation. I cannot forecast the exact shape that these provisions will assume after consolidation has taken place, but I think I can safely promise that the utmost attention will be paid to making the resulting legislation as readily comprehensive as possible. The fact that the hire-purchase code will be within one volume is sufficient an advantage for me to ask the House to reject the Amendment.
    Mr. Thomas Steele: The Under-Secretary said that

    525
    after consolidation the resulting legislation would be as comprehensive as possible. Should he not have said "comprehensible"?
    Mr. Stodart: I beg the hon. Member's pardon.
    Mr. Steele: This indicates the confusion which has been associated with the Bill from the beginning. I was one of the hon. Members of the Opposition who went to see the Leader of the House about this Bill and other Measures concerning their application to Scotland. The Under-Secretary said that the Sixth Schedule of the Police Act had been sent to a Committee of Scottish hon. Members upstairs, but I hope that he is aware that that was done only following a good deal of agitation by my hon. Friends. It had not been the original intention of the Government that the Measure should be dealt with in that way. Similarly, we argued with the Leader of the House that the Scottish parts of this Measure should be dealt with by Scottish hon. Members separately.
    The Under-Secretary then said that he is proud of the legal system of Scotland. We have had little indication of that from the Government, particularly during this Session, because we have had the impression that although hon. Members opposite may be proud of Scotland's legal system, all the legislation of a Scottish nature they are producing is being tagged on to English Measures.
    Almost half of this Bill is Scottish. Many of its Clauses and Schedules could have been placed in a Scottish Bill, despite the Under Secretary's remarks about having the hire-purchase code in a single volume. We have one National Health Service, but we have other legislation for Scotland and separate legislation for England and Wales. So while we have one hire-purchase code, that is no excuse for a Measure of this kind and it is obvious that the only way to overcome this difficulty is to have a separate and purely Scottish Bill.
    The Under-Secretary went on to say how easy this would be for Scottish solicitors. I fail to understand that, particularly since in almost the next breath he said that it would be complicated for English practitioners. If that is so, it means that Scottish solicitors must inform themselves about all
    526
    this legislation and the various regulations in which it will be contained. The hon. Gentleman paid tribute to my hon. Friend the Member for Paisley in connection with his Amendments and the arguments which he adduced in Committee. We who know my hon. Friend know that he would apply himself in that way.
    Surely, the Under-Secretary has been long enough in the House to know that when the Opposition put down Amendments or put forward proposals, we are not concerned with the wording being absolutely correct, legalistic and all the rest. My hon. Friend's Amendments are framed in such a way as to give the Government an opportunity to accept them. Our purpose, however, is not so much to get an Amendment accepted as to get the principle debated. The principle here is not whether my hon. Friend's Amendments do the job that he seeks to do, but that the Government should be prepared at an early date to give us a Scottish Bill embodying in one Measure all these matters dealing with hire purchase. At least, we should have an assurance in that regard.
    Mr. Willis: In a way, I am rather sorry for the Under-Secretary of State for Scotland, because he is on a sticky wicket and he knows it. Scottish Members have been treated in astonishing fashion during this Parliamentary Session because of the Government's desire to do a bit of Tory propaganda and window-dressing. This is the third occasion when we have had practically complete Scottish legislation embodied in English Bills. In the case of the Housing Bill and of this one, it could be said with some degree of truth that the Bill makes more alterations to Scottish than to English law. But in spite of the fact that the alterations have been greater to the Scottish than to the English law, they have been considered by Committees on which there has been only a small minority of Scottish Members.
    The Under-Secretary should be ashamed that he has allowed himself to be party o this treatment of Scottish legislation and of the fact that it should be considered by Committees in which the majority—not just a slight majority, but the big majority—of Members have been English Members with little knowledge of

    527
    Scottish legislation. I do not suppose that they would claim any knowledge of Scottish legislation.
    By the Amendment, we seek to get a separate Scottish Bill published after the passage of this legislation to make the situation convenient for Scottish lawyers and others who have to consider the legislation. I ask the Under-Secretary to read subsection (1) of the Clause and to look at the changes which he is making concerning Scottish law. Imagine the ordinary person who looks into this in Scotland looking at this lot here and seeing:
    "(1) Sections 1 to 5 and 8 and 9 of the Hire Purchase and Small Debt (Scotland) Act 1932, the Hire-Purchase Act 1954 (in so far as it applies to Scotland) and the Credit-Sale Agreements (Scotland) Act 1961 shall cease to have effect and in lieu thereof the Hire-Purchase Act 1938, as amended by sections 1(1) and (2), 3(1), (2), (3) and (6), 12, 21(1) and 36 of this Act, shall extend to Scotland, subject to—
    (a) the modifications set out in Part I of Schedule 2"—
    we come there to two pages of modifications—
    "and
    (b) the addition of the provisions set out in Part II".
    We then come to 15 pages. In other words, we are wiping out a lot of legislation and applying—this is what I object to, because we did this in the Housing Bill—a completely new English Act to Scotland by shoving it into a Schedule.
    This Measure took probably 12 or 15 sittings to discuss in Committee, but when it is applied to Scotland it comes in simply by way of a Schedule and not as a Bill. How does the Under-Secretary think that anybody will find this simple to follow? He should read what the subsection says. I certainly do not consider it simple to follow.
    I cannot see why this Scottish legislation should not now be published separately. Why should not we take out the parts of the Bill which apply to Scotland and consolidate and publish them as a separate Scottish Bill? We would be creating no precedent. It was done, I think, in connection with the Town and Country Planning Act because of the volume of protests received from the Scottish Bar against this practice. The whole of the Scottish legal profession
    528
    is united in condemning this practice of interpolating Scottish legislation at the tail end of English Clauses and by way of Schedules. It has been condemned over and over again, yet the hon. Member tells us that it is a good thing for Scotland.
    I wonder whether he would like to debate that in his constituency with some member of the Scottish Bar. Let him go to Edinburgh and try to explain it. He would find that there was a great deal of resentment of this method of treating Scotland. My hon. Friend has struggled nobly, but in a very tiny minority in Committee and on the Floor to try to provide that for Scotland at least we shall have a law which makes sense instead of all this legalistic jargon which precedes our Amendment and which requires much cross reference and reference in order that one may follow it.
    I hope that the hon. Member will reconsider the matter. Let us have for Scotland something which makes sense and which is Scottish even if it does the same as is being done in England. Let us have a Scottish Act. Why not? We have had a Scottish Act in respect of town and country planning because of the large volume of protests. I do not know whether the Government feel that they are bound to be defeated and therefore it does not matter what they do, but this Session we have been treated in the most scandalous manner we have ever experienced in the House. Scottish Ministers have come to the Box apologising and trying to explain how beneficial this is—
    It being Ten o'clock, the debate stood adjourned.
    Ordered,
    That the Proceedings on the Hire-Purchase (No. 2) Bill [Lords] may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.
    Question again proposed, That the proposed words be there inserted.
    Mr. Willis: The Bill has come from the House of Lords and cannot now be changed in another place, but the Minister could accept the Amendment and publish a separate Act. That is not much to ask. It would be appreciated by everybody who has to deal with the rather complicated matter of hire-purchase and credit-sale agreements. He should put those concerned

    529
    to the bother—it would not be much bother—of producing a Scottish Act, which set out clearly, and in a manner which could easily be followed by people without having to wade through this vast problem, exactly what was done.
    That is eminently a reasonable request and eminently sensible. I am sure that everyone in Scotland who has to deal with these matters would thank the Government for doing it. It means no departure in principle. The Government need not alter their views or accept any views from the Opposition. All they are asked is to put this part of the Bill in an intelligible form. I hope that before we conclude the hon. Member will relent a little and think of the people who have to handle these provisions. Probably some of my hon. Friends will wish to join in the debate. Th Under-Secretary of State should say that he is prepared to accept the Amendment.
    Mr. William Ross: I apologise to the Under-Secretary of State because I did not hear his statement in the earlier part of the debate, although I gather that I did not miss much. I gather that in rather more words he said, "No" to the Amendment moved by my hon. Friend the Member for Paisley (Mr. J. Robertson), in line 20, at the end to insert:
    "and shall be printed as a separate Act of Parliament to be intituled the Hire-Purchase (Scotland) Act 1938".
    I should like to know why the hon. Gentleman adopts that attitude. If the law is to be of value to people in Scotland, and especially to those who administer it, be they sheriffs or lawyers advising their clients, it should be clear and intelligible. English hon. Members should be concerned about the purity of their Statute. I am sure that they have no great desire to see in their Statute provisions which bear no relation at all to England and Wales. Here we have the worst of all worlds—complexity for the English and complete unintelligi-bility for the Scots.
    One of the articles of the Treaty of Union preserved for Scotland its own legal system, with the result that in many aspects of the law we have separate legislation, separate Acts of
    530
    Parliament, and variations within the various Acts. In the past we had separate legislation for hire-purchase.
    I admit that we have had legislation which has applied to both Scotland and the United Kingdom, but, if we must have consolidation legislation—and this is not consolidation legislation, it is amending legislation, as the Title says—embodying in one Statute the law for Scotland and England, provided so that lawyers on both sides of the Border, and Members of Parliament, can follow it easily, we would be prepared to support the Government. But here we have the Government setting out with the desirable object of improving the hire-purchase law, but doing it in a way which makes it impossible for us to follow what is happening
    I do not know how the Under-Secretary of State for Scotland fared in Committee. I remember the difficulty that we had when we discussed the Police Bill and the Housing Bill with the Leader of the House. He did not understand the situation. He did not approve of what we wanted to do, but, nevertheless, we achieved what we are asking for here. We got the Scottish Statute reprinted. In fact, we got more than that. That part of the Bill which related to Scotland was considered by the Scottish Standing Committee, instead of being considered by an English Committee.
    Mr. Willis: My hon. Friend will remember that because of the row mat was kicked up about the Housing Bill we were given a promise of a consolidation Bill which would contain those parts of the Housing Bill which related to Scotland. We were promised that that would be produced by the autumn.
    Mr. Ross: We achieved what we wanted in respect of the Police Bill, because of the way it was drawn up, but we could not do it with the Housing Bill because the United Kingdom and Scottish parts were so intermingled. Neverthelesss, we were able to convince the Leader of the House that it was an insult to expect Scottish Members to understand what was being done. That was probably the reason why, although housing is one of the most important social problems in Scotland, not a single Scottish Tory Member served on the

    531
    Committee. They probably found it too difficult to understand the Bill.
    We were unable to discuss the Scottish part of this Bill separately, because it was not possible sensibly to extract the Scottish aspects of it. I defy the hon. Gentleman to defend what is being done from the point of view of legal purity and legal intelligibility. We suffer enough from legal jargon even in the most simple and straightforward Bills.
    This Bill makes absolute nonsense. One has only to read it to realise what ridiculous things we are wishing on the people and lawyers of Scotland. Clause 25, to which we propose to add the Amendment, says:
    "Sections 1 to 5 and 8 and 9 of the Hire Purchase and Small Debt (Scotland) Act, 1932, the Hire-Purchase Act, 1954 (in so far as it applies to Scotland) and the Credit-Sale Agreements (Scotland) Act, 1961 shall cease to have effect"—
    we have to start looking through all those Statutes to see what we have to score out—
    "and in lieu thereof the Hire-Purchase Act 1938, as amended by sections 1(1) and (2), 3(1), (2), (3) and (6), 12, 21(1) and 36 of this Act, shall extend to Scotland, subject to—
    (a) the modifications set out in Part I of Schedule 2 to this Act—"
    Schedule 2 runs to about 15 pages and 19 or more paragraphs.
    How can the Minister justify that? It is absolutely ridiculous. Let us consider all the parts that apply to Scotland. Clause 21(1) says:
    "In the principal Act and in this Part of this Act ' credit-sale agreement ' shall not include a condition of sale agreement."
    What does it mean? We do not know until we put the whole jigsaw together. Hon. Members opposite are concerned about their image under modernisation. Alexander the Straight tells us that this is what the Scottish legal system has to work to. This is modernisation and streamlining.
    I am sure that after he has finished his briefing from the Government Deputy Chief Whip he will agree that this is absolute nonsense. We are asking him to give the draftsmen a job during the next few weeks or months. They are not over-busy. Let them extract from the Bill and put into sensible and intelligible
    532
    order those Clauses which relate to Scotland, so that we shall have some measure of consolidation. If the draftsmen would like to do that in respect of all the other outstanding and related matters we would have a full body of Scottish Statutes relating to hire purchase. If the Government are not prepared to give us a consolidated and intelligible United Kingdom Measure—if they are to maintain this separation, and jigsaw cohesion—they must give Scotland something which she can understand.
    I do not understand the Minister's attitude. I remember him when he was a back bencher, and even when he was a Liberal, which was not so very long before that. He found that there was no path to fame in that party, so the Liberal farmer became a Tory farmer, and when he first became a Tory farmer and sat on the back benches he had plenty to say about jargon. I can remember the poetic speeches that he made, and the fun he had about our Statutes. He could not restrain himself. Now he has the power to do something about it.
    The hon. Gentleman need not worry about the Secretary of State. He is away at the Highlands Show. His bull got first prize there yesterday. This piece of "bull" would not get a first prize today. He is a junior Under-Secretary, and the rest have fled the field. Momentarily, during our discussion we had the assistance of a former Scottish Solicitor-General, but he, too, is now just a humble back bencher, and we are without the confused aid of a Scottish lawyer on the Front Bench opposite. The power is the hon. Member's. Will he use it? If he wants to act for the benefit of Scotland he will say that he has changed his mind and will accept the Amendment, and that he is prepared to give Scotland a separate statute on hire purchase.
    10.15 p.m.
    Mr. Stodart: I tell the hon. Member for Dunbartonshire, West (Mr. Steele) and the hon. Member for Edinburgh, East (Mr. Willis) that I have never said that this was simple to follow. On the other hand, I have said that unduly heavy weather can be made of it. We have one advantage, which I believe is worth while. I say no more than this. I have never denied that this is an extremely complex way of proceeding, but

    533
    the end product means that whereas the present English code is to be found only by looking at three different Acts, the Scottish code is to be found—once this Bill becomes an Act—in Part III of Schedule 2, together with the new provisions which have been added to Part I. I have always said that consolidation will be coming along. More than that I am afraid I am not prepared to say, and I cannot advise the House to accept the Amendment.
    Mr. Charles Longhlin: I am sorry to intervene in a Scottish matter, and I have a great deal of sympathy for the Under-Secretary of State for Scotland who finds himself in this predicament. I am a simple Englishman. I can understand the implication of lines 9 and 10 and of paragraph (a), but can the Under-Secretary of State explain what is meant by paragraph (b), where it states:
    "the addition of the provision set out in Part II of the said Schedule, being provisions corresponding to the provisions enacted for England and Wales by sections 2 and 3(1)"—
    Mr. Deputy-Speaker: Order. I should be obliged if the hon. Member will explain how his remarks refer to this Amendment.
    Mr. Loughlin: They do, Mr. Deputy-Speaker, in relation to the first Amendment. I have been sitting in the Chamber listening to the debate for the last three-quarters of an hour, and if they do not I am more confused now than when the debate started. I should like some clarification. As I see it, the Amendment submitted by my hon. Friend is an attempt to clarify the position. It states that it:
    "…shall be printed as a separate Act of Parliament intituled the Hire-Purchase (Scotland) Act, 1964."
    I may be wrong, but as I see it this provision is affected by the Amendment. I am trying to be helpful to the Minister and I hope that he will be helpful to me.
    Mr. Willis: I understand my hon. Friend—
    Mr. Deputy-Speaker: Order. The House must remember that this is the Report stage and hon. Members who have made speeches cannot make a second speech.
    Mr. Willis: I was not wishing to make a second speech. I understood that my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) was asking the Under-Secretary of State to answer a question. I should like to ask the Minister a brief question, which is that if he does not accept the Amendment, is not it still possible to achieve what the Amendment is designed to do? Will the Minister undertake to look at the matter again? He has admitted that it is complicated.
    Mr. Stodart: At this stage I do not think it would have any effect to undertake to look at it again. Either I accept the Amendment or I do not, and I must advise the House not to accept it.
    Mr. George Lawson: I have been interested in this subject for a long time. In common with my hon. Friends I know something of the difficulties which have existed in Scotland and the impotency of this Government in dealing with them. We know that members of certain firms have virtually put their fingers to their noses at the Government and got away with it. The Government have paid practically no attention to them.
    We know that the Act which is mentioned here the Credit-Sale Agreement (Scotland) Act, 1961, was brought in under great pressure and piloted by a former hon. Member of this House who sat on the benches opposite. We know something of the intrigue and effort that went or. in relation to this question. Scotland's hire-purchase difficulties are so much greater than those South of the Border that we had hoped at least to have had some sort of Measure that could be understood in Scotland. It was fairly clear when the Under-Secretary was asked what it meant that he himself hardly knows what he is dealing with.
    It is not often that I disagree with my hon. Friends the Members for Kilmarnock (Mr. Ross) and Edinburgh, East (Mr. Willis), but I do so tonight. They have spoken of the Under-Secretary being in a position of power. I disagree. I think that this is where the humiliation lies. The hon. Gentleman is not in a position of power. He is not able on this occasion to say "Yea". His instructions are to say "No". It does not matter how long we talk here.

    535
    In fact, when I came into the Chamber and saw him sitting there with a Whip, and only a Whip, it seemed to me that he was being given his instructions, "This is not an important matter. We will leave it to you. Let them talk their heads off for a wee while. It does not matter."
    That is all there is to it. The hon. Gentleman sits there, and no matter how forcible the arguments he cannot say anything but "No". His right hon. Friend is far away—
    Mr. Ross: My hon. Friend is confusing the meaning of power. There is power in regard to what a person is prepared to say, and what he is prepared to use; whether or not he is prepared to use his power.
    Mr. Lawson: The very fact that the Under-Secretary is not prepared to say "Yea" is indicative of his position. If he was prepared to stand up for Scotland, and say, "Come what may, I believe that hon. Members are right and [will back them up"—and say so—that would be all right, but we shall not get that from the hon. Gentleman—
    Mr. Willis: Surely, my hon. Friend does not suggest that the Under-Secretary of State is just a "stooge"?
    Mr. Lawson: I hate to use any such word of a man who comes from Scotland. I should have thought that he could stand up for himself, but there is no evidence of it—
    Mr. Ross: It is all right—the Under-Secretary is an Etonian Scot.
    Mr. Lawson: That perhaps accounts for it. There are so many synthetic Scots. My hon. Friend the Member for Edinburgh, East is not a Scot, but I will say it for him that he is better than many Scots—
    Mr. Deputy-Speaker (Sir William Anstruther-Gray): Order. I am sorry to interrupt the hon. Gentleman, but surely we had better come back to the Amendment we are debating.
    Mr. Lawson: You yourself being a Scot of outstanding distinction, Mr. Deputy-Speaker, and one who feels so much for his country, I am sure that you will agree that we are suffering here a humiliation, and that the subject
    536
    now before us is the subject of the humiliation of Scotland.
    I have nothing to say that is disrespectful to the Under-Secretary, but let him consider the position he is now in. He is a junior Minister—he is an excellent Member in himself, but he is a junior Minister—yet he is certainly not ready to stand up and fight on such a subject as this. He is put up to say "No", and will go on saying no on this matter of importance to us.
    My hon. Friend the Member for Kilmarnock has spoken of our discussions with the Leader of the House—it is a great pity that the right hon. and learned Gentleman is not here tonight. The Leader of the House was at least very ready to understand our difficulties over the Housing Bill and the Police Bill. We gave him an undertaking that if he took the Scottish part out of the United Kingdom Police Bill and sent it to the Scottish Committee we would finish it precisely on time. I believe that we finished it about one and a half hours before we were due to finish it, which says something very much for the Scottish Committee. We were offered another day, but we said, "No, we undertook to finish the Bill at a particular hour." We finished with one and a half hours to spare. That shows that when hon. Members opposite are reasonable with us we can be very reasonable with them.
    In many respects, this Bill is even more important than the Police Bill. It provides protection for people who have suffered over the years, something for which we have pressed for a long time. I am sure that the Molony Report was influenced very strongly by the type of practice in Scotland which was brought to the notice of that Committee.
    Here we have a Bill which is unintelligible in Scotland. It cannot be understood by my hon. Friends, and surely cannot be understood by hon. Members opposite, because these are matters in which they have little interest. Is it to be allowed to be said in Scotland that the Under-Secretary was treated virtually as a messenger boy and did what he was told and was not prepared to stand up and say, "I will do my utmost even if I have to resign as one of the Under-Secretaries of State for Scotland"? This is not a big thing to do.

    537
    The hon. Gentleman will not be holding the position for very long. At most it will be only for about a month. Let him think of the gesture which he could make by saying, "I agree with hon. Members opposite and if the Government say that this will not be done I will resign my office". If he does that we will back him, and it may be that if we return as the Government we shall look kindly at him and treat him more generously than otherwise we might do.
    Mr. Loughlin: On a point of order. A moment or two ago I rose to ask for information from the Under-Secretary and you, Mr. Deputy-Speaker, questioned whether my remarks were in order. With my usual diffidence to authority I was a little nonplussed. I tried to explain why I thought I was in order and it is possible that in consequence of your intervention at that stage the Under-Secretary was not too sure whether he would be in order in giving me the information which I sought. Would it be possible, therefore, through you to ask at
    538
    this stage whether the hon. Gentleman is in a position now to supply me with that information?
    Mr. Deputy-Speaker: I do not think that it is necessary to raise that as a point of order. I am sure that all that the hon. Member has just said has been heard.
    Mr. Loughlin: Further to that, with due deference. A little confusion arose out of your questioning the validity of my remarks and in consequence it is surely in order for an hon. Member to raise the question whether there was some confusion also on the part of the Under-Secretary who has not responded to my request for information. [Interruption.] The hon. Member should mind his own business. He has only just come in, and he should go back to the Bar.
    Mr. Deputy-Speaker: Enough has been heard for me to safely say that no point of order now exists for the Chair to deal with.
    Amendment negatived.
    Amendment made: In page 27, line 20, at end insert:
    (3) The following enactments shall cease to have effect, that is to say, sections 1 to 5 and 8 and 9 of the Hire Purchase and Small Debt (Scotland) Act 1932, the Hire-Purchase Act 1954 (in so far as it applies to Scotland) and the Credit-Sale Agreements (Scotland) Act 1961.—[Mr. Stodart.]
    10.32 p.m.
    Mr. Stodart: I beg to move Amendment No. 34, in page 27, line 21, to leave out subsection (3) and to insert:
    (4) The following provisions of this subsection shall have effect for the purpose of the construction of any reference (however expressed) in any enactment passed before this Act to a contract to which the Hire Purchase and Small Debt (Scotland) Act 1932 applied or would in certain circumstances have applied:—

    (a) if the reference is a reference to a contract to which paragraph (a) of section 1 of that Act applied or would have applied, it shall be construed as a reference to a hire-purchase agreement within the meaning assigned to that expression by section 21(1) of the Act of 1938;

    (b) if the reference is a reference to a contract to which paragraph (b) of the said section 1 applied or would have applied, it shall be construed as a reference to a conditional sale agreement within the meaning assigned to that expression by section 21(5) of this Act;

    (c) if the context of the reference requires that it shall be construed as a reference only to a contract relating to an article within the limitation as to value specified in the said paragraph (a) or, as the case may be, the said paragraph (b) it shall be construed as a reference to a hire-purchase agreement (within the meaning assigned as aforesaid) under which the hire-purchase price does not exceed the limitation for the time being specified in section 1(1) of the Act of 1938 or, as the case may be, a conditional sale agreement (within the meaning assigned as aforesaid) under which the total purchase price does not exceed the limitation specified or referred to in section 21(2) of this Act;

    (d) for the removal of doubt it is hereby declared that except as required by the last preceding paragraph no account is to be taken of section 1 of the Act of 1938, or section 2 of the proviso to section 21(2) of this Act, in construing any such reference;

    (e) in relation to any such reference, expressions to which meanings are assigned by section 21(1) of the Act of 1938 shall in any enactment passed before this Act have the meanings so assigned to them respectively, unless the context otherwise requires; and any words defining the expressions "purchaser" or "instalment"
    540
    for the purposes of any such reference shall be disregarded.

    It may be convenient to discuss with this the Government Amendments to Schedule 4 and to Schedule 7.
    These are rather formidable looking Amendments, but I shall do my best to explain them as simply as I can. The first of them replaces Clause 25(3) with a more detailed provision which seeks to achieve the same object more precisely. The other two Amendments are consequential.
    Subsection (3) is in standard form. Unfortunately, in this case it is not sufficient to say that a reference to a contract to which the Hire Purchase and Small Debt (Scotland) Act, 1932, applies is to be construed as a reference to a hire purchase or conditional sale agreement to which the Hire Purchase Act, 1938, as now extended to Scotland, applies. There would still be difficulty in construing certain references in previous Acts.
    The main difficulty arises in Clause 2 and Clause 21(2) of the Bill which were added in another place. This provides that the 1938 Act shall not apply to hire purchase and conditional sale agreements concluded by or on behalf of corporate bodies as hirers or buyers. It is, therefore, necessary to make clear whether references in previous Acts to agreements coming within the scope of the Scottish Act of 1932 are to include agreements made by or on behalf of corporate bodies.
    We are also taking the opportunity to introduce rather more precision in applying earlier references to the question of the transaction involved and where the monetary limits specified in the 1938 Act of £2,000, which may be revised by Order in Council, are to apply. The 1932 Act dealt with two kinds of transactions. Rather strangely, it did not give a name to either, but the first was what this Bill would call hire purchase and the second was what this Bill calls conditional sale.
    Paragraphs (a) and (b) of the Amendment make it possible to translate references to these transactions. Paragraphs (c) and (d) deal with financial limits and corporate bodies. The effect of paragraph (c) is that unless the earlier Act

    541
    quite clearly intended to refer to a transaction within the financial limits prescribed by the Scottish Act of 1932, no financial limits will apply. If such a reference was clearly intended, the new financial limits of this Bill will be substituted.
    In other words, if we find in an old Act a reference to a hire-purchase agreement for goods worth up to £20 or £100 or £300, which were the stages of increase in the various Acts, then we substitute £2,000 which is the new limit; but if we find no figure quoted or implied, then no limits will be imposed for the future.
    Paragraph (d) applies to corporate bodies. Quite simply, no previous references to an agreement within the scope of the Scottish Act of 1932 shall be deemed to exclude agreements by or on behalf of corporate bodies. If I may give a practical example, the Consumer Protection Act, 1961, refers to any
    "contract to which the Hire Purchase and Small Debt (Scotland) Act, 1932 applies."
    The object of the 1961 Act in the context where this is used is to prevent the sale under hire purchase of unsafe equipment such as, for instance, oil heaters. In this context, one would not wish by an over-precise reference to hire-purchase agreements as defined in this Bill to make it possible to sell defective equipment of this kind to corporate bodies or to sell it if, in total, its value is above the limit of £2,000 prescribed for hire-purchase agreements by this Bill. I hope that that will illustrate the kind of difficulty the Amendment is designed to solve.
    Paragraph (e) of the Amendment provides that in any previous enactment expressions are to be construed in accordance with the interpretation Provisions of the Hire Purchase Act, 1938. Any definition of "purchaser" in a previous Act is to be disregarded because it is defined in the 1938 Act, and any definition of "instalment" is to be disregarded because we consider that the word "instalment" now requires no definition.
    The other two Amendments are purely consequential. With that explanation, which I would hesitate to describe as simple, and which I feel will not be accepted I commend the Amendment.
    Mr. Willis: I do not know whether the Under-Secretary understood his explanation, but I found it rather difficult to follow, particularly as the hour is getting late. I am not always at my brightest and best at this time of night.
    Therefore, I endeavoured to understand what the Amendment really said in order to try to find out what it means. I must confess that this was a mistake. I have never seen a more unintelligible piece of legal verbiage, or, at least, it is a long tine since I have seen a more unintelligible piece of legal verbiage than there is in this Amendment. It demonstrates the points we were making in the previous debate, that there is great difficulty in following this legislation when there are so many cross-references.
    I ask the hon. Gentleman to read paragraph (c), or, perhaps, I had better read it for him:
    "if the context of the reference requires that it shall be construed as a reference only to a contract relating to an article within the limitation as to value specified in the said paragraph (a) or, as the case may be, the said paragraph (b) it shall be construed as a reference to a h re-purchase agreement (within the meaning assigned as aforesaid) under which the hire-purchase price does not exceed the limitation for the time being specified in section 1(1) of the Act of 1938 or, as the case may be, a conditional sale agreement (within the meaning assigned as aforesaid) under which the total purchase price does not exceed the limitation specified or referred to in section 21(2) of this Act."
    That is very clear, a brilliant piece of writing.
    Mr. Lawson: Has my hon. Friend noticed the opening words of paragraph (d)?
    Mr. Willis: Yes, it is clear that there was doubt about how plain all this was, though I must say that it would require a paragraph not of three-and-a-half lines, but of two or three pages to remove my doubts. Paragraph (d) reads:
    "for the removal of doubt it is hereby declared that except as required by the last preceding paragraph no account is to be taken of section 1 of the Act of 1938, or section 2 or the proviso to section 21(2) of this Act, in construing any such reference."
    Crystal clear, is it not?
    The hon. Gentleman, whose prose is frequently to be found in the columns of the Edinburgh Evening News, ought to have applied his pen to this task.

    543
    He would have made a better job of it than the draftsman has. At least, one can read his articles in that journal and understand them, but this takes a bit of understanding.
    It arises from the frantic hurry of Scottish Ministers to cash in on anything they think might do them good in Scotland. Whenever an English Bill comes along, they seize upon it and say, "Let us have a look at it. Why not apply this to Scotland? We will go on with this, and it will help us in the coming General Election."
    Mr. Lawson: Is my hon. Friend sure that they have even said, "Let us look at it"?
    Mr. Willis: My hon. Friend is probably right. They might simply have said, "This sounds good. We will come in on it," and then, of course, they have endeavoured to apply it to Scotland, producing the muddles about which we have had to complain so often, and have later tried to clarify the hopeless position which they themselves created.
    10.45 p.m.
    It is significant that in respect of this Clause relating to Scotland we have had on the Notice Paper no fewer than four Amendments in the name of the Secretary of State for Industry, Trade and Regional Development, which means that he has found it necessary to explain the Scottish adaptation of this Measure by means of four alterations of the original drafting. This shows the hurried way in which this Measure was considered, how the Scottish Office did not study it and how that Department was anxious to brighten up its rather tarnished image in Scotland by trying to get involved with something which promised it a little popularity.
    I will not weary the House by reading the rest of the new Clause.
    An Hon. Member: Hear, hear.
    Mr. Willis: If I get that sort of support I will not only read the lot, but give my interpretation of each point, which could keep hon. Members for a very long time.
    I am content to point out how involved all this has become simply because we have got ourselves tied up with an English Bill. The only answer would have been to have applied the 1938 Act
    544
    in terms which were understandable, if not to the layman then to the average practitioner. I defy anyone, apart from an expert draftsman or a lawyer specialising in the hire-purchase law, to understand the proposed Clause. Indeed, I do not believe that the Under-Secretary understood it when he read it to the House so very carefully.
    Mr. Darling: But he read it well.
    Mr. Willis: He never lifted his eyes from his brief. That meant that he had no assurance about reading it. He obviously felt that it was important that he should stick rigidly to his brief.
    I have no desire to delay the House, but I must continue to draw attention to this disgraceful way of treating Scotland. I am sure that in his heart the Under-Secretary feels ashamed of the way that he is treating Scotland. He must feel that he is being placed in an almost impossible position; of shouldering a responsibility which I do not think is his, a responsibility which arose before he came to office. To that extent I feel sorry for him.
    As my hon. Friend the Member for Motherwell (Mr. Lawson) pointed out, at a time when we are unveiling a great memorial at Bannockburn, the Under-Secretary should be fighting for Scotland and flying the lion rampant, saying, "I cannot accept this. I will do something to try to put this matter on a proper footing". He should, in other words, treat Scotland as she deserves to be treated. If he decides to do that my hon. Friends and I will give him our full support.
    Does not the Under-Secretary agree that it is a bit of an imposition to place a new Clause of this type before us at nearly eleven o'clock at night? The fact that we are keen to do what we can to improve this dubious, doubtful method of proceeding shows that my hon. Friends and I wish to assist the people of Scotland who have been suffering because of the activities of the hire-purchase firms in Scotland.
    Mr. J. Robertson: It is rather late in the day, and I have no desire to stay any longer than is necessary, but I must say a few words on the Clause. It is not as clear as the Under-Secretary would have us believe. In time, we progress. Everybody knew what hire purchase was in

    545
    1932, but today, apparently, we have to explain what the 1932 Act meant. Section 1(a) is now to be construed as referring to a hire-purchase agreement. No one can complain about this. I suppose that it makes it a little clearer. Perhaps people from England have been in doubt, but everybody in Scottish courts knew what a hire-purchase agreement was.
    Section 1(b), however, is made a little more difficult to understand. In the past, an agreement made under that paragraph was always thought and spoken of in the Scottish courts as a credit-sale agreement. That was the interpretation and the name usually given to such an agreement. Now, however, it has to
    "be construed as a reference to a conditional sale agreement".
    The difference between a conditional sale agreement as defined in Clause 21(5) and a credit sale is defined elsewhere in the Bill. If, however, there is a difference between a conditional sale agreement and a credit sale agreement, paragraph (b) of the Amendment is not appropriate.
    I am not sure about this, although I thought that I understood from the Bill in Committee that there was a difference between a conditional sale agreement and a credit sale agreement. There seem to have been doubts and differences in different parts of the Bill. There may be an error here, because if the Under-Secretary of State looks at the proceedings in Committee and in the House on the 1954 Act relating to Scotland as well as on the Credit-Sale Agreements (Scotland) Act, 1961—and, equally, on the 1932 Act—he will see that no one was under any misapprehension about what was being referred to in Section 1(e) of the 1932 Act. It was a credit-sale agreement. This is a significant point.
    Another and tremendously difficult aspect is that when the Amendment refers to "the Act of 1938", I am not clear whether we are referring to the Act of 1938 or the 1938 Act. I am not splitting hairs. In the Clause, the Act of 1938 is defined as the Act of 1938 as extended to Scotland, which hereafter is to be called the Act of 1938, and any reference to the Act of 1938 will be understood to be a reference to the Act of 1938 as extended to Scotland. Amendment No. 49, however, which we will reach later, seeks to leave out "Act of 1938" in that interpretation and to substitute
    546
    "Hire-Purchase Act 1938 as extended to Scotland".
    We must get this clear. Do the words "Act of 1938" in the proposed Amendment refer to the Act of 1938 in its original form or the Act of 1938 as put forward in the Schedule?
    Now this is significant, because the interpretation referred to in Section 1(b) of the Act of 1938 as we have hitherto known it, is not the interpretation as given by Clause 21(1) of the Act of 1938 in its application to Scotland. There are two different interpretations.
    In view of Amendment No. 49, this has to be cleared up. This confusion about which Act we are speaking about—whether it is the English 1938 Act that we have and to which Part I of the Bill refers, or the Act of 1938 which we will still have to contend with—must be cleared up We have to discuss the matter as though all these Amendments had already been discussed and accepted in order to try to make sense of this. Really, it is a bit thick.
    The hon. Gentleman the Under-Secretary has these back-room boys, and I am not sorry for him. He has got all this paperwork done for him. But I have got to try and do it for myself. Hon. Members may think that this is hairsplitting, but it is not. There is a very important point about a conditional sales agreement and Section 21(5) of this Act. I see that the Amendment uses the word "instalment", but paragraph (e) of it seeks to delete the definition of the word "instalment" from the Scottish legislation.
    In the Bill as originally drafted it was understandable that we did not need the definition of "instalment" as the word had been deleted because the Act using the word had been repealed. But by this Amendment we reintroduce the word "instalment" into Scottish legislation while, at the same time, we are repealing the definition of the word "instalment".
    Quite frankly, I do not think that this Amendment is quite as clever as it looks, although I admit it is complicated. Nor do I think—and, again, this is a matter of opinion—one would ever know exactly what this meant until one got into a Scottish court.
    I am not convinced that when it comes to the question of the limitation of the

    547
    hire-purchase price, paragraph (c) covers the position. It certainly covers the question of the £20 limit put down by the 1932 Act, but I cannot see how the same conditions would apply to the 1954 and later Acts where there is an increase to £100. I accept that under this legislation one would perhaps be able to construe the £300 situation, but there is nothing here to include the 1954 Act or the alterations made to the Scottish legislation by the 1954 Act, which is being repealed as far as it refers to Scotland by these two Clauses.
    The Under-Secretary of State must do a bit better on this, and get his backroom boys to do a bit better. It is rather a pity that a complicated Amendment like this should come on at this stage of the Bill.
    In Committee, there was a suggestion that hon. Members on this side of the Committee did not know what they were talking about, but obviously they did, because the debate has produced many of these Scottish Amendments. I am not sure that this Amendment achieves the objective outlined by the Under-Secretary of State, and he should look at it again. It is a pity that we are at the final stage of the Bill, because it is risky letting the provision go through.
    11.0 p.m.
    Mr. Ross: I hope that the Under-Secretary of State will make another attempt to explain the Amendment. I am surprised that the person named at the head of the Amendment did not appear to move it. Indeed, it is rarely that I have seen an Amendment put forward in this form because according to my Notice Paper nobody is sponsoring the Amendment. I do not know how you, Mr. Speaker, managed to call anyone to move it, and I should like your guidance on the point.
    Mr. Speaker: I do not think that any point arises, with respect to the hon. Member, for if he looks at page 3226 he will find one name which, according to our usaul practice, governs a series of Amendments—following through the Amendments until there is a change of name. That is the principle on which I have acted, and I do not think that it departs from our usual practice.
    Mr. Ross: We dealt with the previous Amendment and then someone was called to move this Amendment. Generally, when there is a series of consequential Amendments they are taken together and dealt with together because they concern the same point. No one is sponsoring this Amendment. Yet it has been called separately and taken separately. I wondered who was responsible for it. But if you are saying, Mr. Speaker, that the name of the Secretary for Industry and Trade, which appeared at the top of Amendment No. 33, applies to this Amendment, I will take your word for it.
    We are considering what is to happen to Scottish law. The Under-Secretary of State told my hon. Friend the Member for Paisley (Mr. J. Robertson) on a previous Amendment that these provisions would place Scottish lawyers at a considerable advantage and would make everything relatively simple, yet he has had to produce this further Amendment to simplify the position. My hon. Friend the Member for Edinburgh, East (Mr. Willis) referred to an event taking place on the Field of Bannockburn and a statue of King Robert the Bruce. One of my compatriots wrote of this event what is almost our national anthem—"Scots Wha Hae." One verse starts
    "Wha for Scotland's King and law, Freedom's sword will strongly draw."
    The Under-Secretary of State refused to draw that sword for Scotland tonight. He preferred to knuckle under to the power fo the proud Edward, the Secretary of State for Trade, Industry, and all the rest of it. I wish that proud Edward had been here to sponsor his Amendment. It is not surprising that he did not put his name to it. He could not understand it, and I confess that I find it difficult to understand.
    During the war I was consulted about how long it would take to break down the codes and ciphers being used by our allies, the Chinese. My knowledge of Chinese was strictly limited, but I assure hon. Gentlemen opposite that I found that task very much easier than trying to make sense of the Amendment.
    I presume that the Government are trying to simplify the term,
    "a contract to which the Hire Purchase and Small Debt (Scotland) Act 1932 applied or would in certain circumstances have applied".

    549
    Paragraph (a) says that
    "if the reference is a reference to a contract to which paragraph (a) of section 1 of that Act applied or would have applied"
    it shall be construed in a certain way. That is all very nice, but we must not forget what we have just done. Amendment No. 33, which has a name to it, says:
    "The following enactments shall cease to have effect, that is to say, sections 1 to 5 and S and 9 of the Hire Purchase and Small Debt (Scotland) Act 1932…"
    Thus, that Statute has been wiped out of existence.
    What are we playing at? Are the draftsmen trying to make things as complicated as possible? Or is it that because of the way in which this has been drafted, their efforts to clarify the matter have led them into further obscurity? This is not clarification, elucidation, or simplification. If the Tory Chief Whip is annoyed that we are discussing this matter at this time of the night, the fault is not curs. The responsibility rests with the Government for the way in which they treat Scottish law, Scottish Statutes, and Scottish Members.
    We are glad that a solitary Scottish Tory back bencher is present. The hon. Member for Fife, East (Sir J. Gilmour) is the vice-chairman of the Scottish Unionist Party. Its members are not Tories, they are Unionists. I hope that he will tell us what this really means, and how he interprets it. I hope that he will tell us how he will help his constituents when they ask for his help in dealing with Napier's and all the other private enterprise gentlemen in Scotland who have been fleecing our people.
    Can the hon. Gentleman explain what this means? Or does he, like the Under-Secretary of State, need a brief before he even begins to understand what it is all about?
    Sir John Gilmour: I began to understand it until the hon. Gentleman and his hon. Friends took part in the debate, and then they confused me.
    Mr. Ross: The confusion arises from reading Tory statutes, because all I have done is to read the Bill. The simplicity that the hon. Gentleman found in this was the simplicity of unexamined knowledge—the simplicity of ignorance. One of the troubles of the Under-Secretary
    550
    is the trouble of the Prime Minister and his speeches. It is not that he has any twists of character; he really believes what he writes. The question is: who writes what he reads?
    We get a different meaning in every subsection for an Act of Parliament that is being wiped out. Then we get the "daddy" of the lot, in paragraph (d). Having given us a different meaning in the reference in paragraph (a) we are taken to an Act that does not exist, and assigned to it is Section 21(1) of the Act of 1938, which we find is not an Act of 1938 at all but a Measure of 1964. It s Part III of Schedule 2 of this Measure. This is retrospective legislation indeed. This is to be called the Act of 1938 in Scotland, but we are enacting it for Scotland in 1964. If that is not confusing to people outside the House as well as inside it, what is?
    Paragraph (b) says:
    "if the reference is a reference to a contract to which paragraph (b) of the said section 1 "—
    that is Section 1 of the Hire Purchase and Small Debt (Scotland) Act, 1932, which we have wiped out in the last Amendment—it shall have a different meaning here. This time it relates to Clause 21(5) of the Bill, and not to Section 21(5) of the 1938 Act, which is incorporated in the Bill. We do not go to the Schedule to find out what the the terms of the 1938 Act are, but to the body of the Bill. The Under-Secretary says that this is helping the Scottish lawyers and the Scottish people, who want streamlined Tory legislation from a modernising Government.
    But then paragraph (c) gives us an entirely different meaning. It says:
    "if the context of the reference requires that it shall be construed as a reference only to a contract relating to an article within the limitation as to value specified in the said paragraph (a)…"
    I presume that that takes us back to Section 1 of the 1932 Act, which we have wiped out. Why wipe it out if all these references to it are required?
    How will we do it? In future editions of the Statutes it will not be printed. How will the Minister get over this? There is only one way he could get over it and that is by accepting the Amendment of my hon. Friend the Member for Paisley. There would then be no need for this Amendment.

    551
    Then we come to paragraph (d), which begins with words which should be enshrined on the front of the Bill:
    "for the removal of doubt…"
    The Bill should have started with those words. What will happen to the doubt that will remain after all this is finished? It will remain with the courts, which are left to sort out the tangle.
    It says:
    "for the removal of doubt it is hereby declared that except as required by the last preceding paragraph no account is to be taken of section 1 of the Act of 1938."
    Let me tell the hon. Member for Bristol, West (Mr. Robert Cooke), who has just strolled in so elegantly, that when it says the Act of 1938 it does not mean that Act. It means the Third Schedule of this 1964 Bill which incorporates the Act of 1938 for England and Wales, as amended to suit the needs of Scotland.
    11.15 p.m.
    Mr. Robert Cooke: I am much obliged to the hon. Gentleman.
    Mr. Ross: Does the hon. Gentleman wish to intervene?
    Mr. Cooke: I said that I was much obliged to the hon. Gentleman for pointing out to me the subtleties of the Act.
    Mr. Ross: These are not subtleties. These are some of the simplicities of the Act. The hon. Gentleman should have been in the Chamber earlier if he wanted to know about the subtleties. He nearly put me off what I was saying, but he need not worry. Paragraph (d) says:
    "…no account is to be taken of section 1 of the Act of 1938…"
    That Section, in its application to Scotland, says:
    "This Act shall apply in relation to all hire-purchase agreements and credit-sale agreements under which the hire-purchase price or total purchase price, as the case may be, does not exceed £2,000; and the expressions 'hire-purchase agreement' and 'credit-sale agreement' shall be construed accordingly."
    That is a bold declaration. It might appear to mean something, but anyone reading it cannot understand it without having read Clause 25 and found that
    "for the removal of doubt it is hereby declared that except as required by the last preceding paragraph no account is to be taken of section 1 of the Act of 1938."
    552
    This is indeed simplicity. I want to be fair to the hon. Gentleman of course.
    "…no account is to be taken of section 1 of the Act of 1938…in construing any such reference"
    to the Hire Purchase and Small Debts (Scotland) Act, 1932.
    If this is simplifying the provisions with which my hon. Friend had to wrestle in Committee and simplifying the provisions which the Minister refused to simplify by giving us an intelligible Scottish Statute, then I dread to think how tangled and complex they are. I certainly hope that the Government will think again about the Amendment which they turned down. They have time for repentance even before the General Election or between now and the passing of this Bill.
    We have not yet reached the Third Reading stage. Even on Third Reading the Government can hurriedly consult the Leader of the House who, I think, is the only man who understands the position of Scotland in relation to this matter for the simple reason that he tried to understand previous Bills in their application to Scotland and, realising that that was impossible, ordered the Secretary of State for Scotland to reprint the Bills. Is it not remarkable that we have to go to the Leader of the House to get what we want because we cannot get it from the Secretary of State for Scotland?
    I am sure that the Under-Secretary of State would like to agree with us and to exercise the power that he momentarily has.
    Mr. Stodart: The hour is getting on and I think that the House would wish me to reply to the specific points made. I must confess that I found my own explanation with which I moved the Amendment slightly more lucid than what has been voiced by either the hon. Member for Edinburgh, East (Mr. Willis) or the hon. Member for Kilmarnock (Mr. Ross). May I say to the hon. Member for Paisley (Mr. J. Robertson) regarding his question about credit sales and the general belief that the 1932 Act referred to them, that, in fact, it did not, because no legislation was introduced into Scotland to deal with credit sales until the 1921 Act. Therefore, what are referred to in the 1932 Act were not credit sales but what are known as conditional sales.
    Mr. Ross: 1961.
    Mr. Robertson: What the hon. Gentleman is saying just does not make sense. I must refer him to previous discussions in the House, when agreements concluded under Section 21(1,b) of the 1932 Act have always been referred to as credit-sale agreements. The hon. Gentleman is saying that under subsection (1,a) there were no such things as hire-purchase agreements, even though the 1932 Measure is called the Hire Purchase and Small Debt (Scotland) Act, but the first part of the Amendment describes what a hire-purchase agreement is.
    Mr. Stodart: I can assure the hon. Member that whether the transaction has been assumed to be a credit sale or not, the 1932 Act did not refer to credit sales, strictly, but to conditional sales—
    Mr. Ross: Would the Under-Secretary give me chapter and verse of the Act? When he referred to credit sales he spoke of 1921. I suggested that he meant 1961, but he insisted that it was 1921.
    Mr. Stodart: I am not aware that I mentioned 1921. If I did, it was a slip of the tongue. I am referring to the 1932 Act as the one that has all along dealt with conditional sales, not credit sales. Credit sales did not come within the scope of the law of Scotland until 1961. I am extremely sorry if I said 1921.
    The point was raised whether the financial limits were widely enough drawn; I am informed that they are widely enough drafted. I was asked why the definition of "instalment" had been removed. I am on record as strongly approving anything that will shorten a Bill by dropping any words that can be omitted. The reason why this definition is not included is that I do not think that explanation is now needed. The word was comparatively new in this kind of use in 1932, but I do not think that nowadays there is any doubt about its meaning.
    I am advised that we can drop the 1932 definition—and, indeed, it has never been defined in the English Acts. If we can make a small contribution to shortening the Bill, despite this very long Amendment, I think that it is a good plan.
    554
    Finally, I was asked about the meaning of the "Act of 1938". It is, of course, as the hon. Member for Kilmarnock said, the Act of 1938 as applied to Scotland.
    Amendment agreed to.
    Mr. Stodart: I beg to move, in page 27, line 31, to leave out from "Scotland" to the end of line 35, and to insert:
    "the provisions of this Act set out in the following Table shall extend to Scotland subject to the modifications specified in the next following subsection.
    TABLE

    Section 2.

    Sections 4 to 11.

    Section 13.

    Section (Notice of hirer's default).

    Sections 16 to 20.

    Section 21(20 to (5).

    Section 22.

    Section 23.

    Section 24 (in so far as it relates to the provisions mentioned in this Table).

    Schedule 1.

    (2) The modifications referred to in the preceding subsection are as follows:—".
    This Amendment is, again, an effort to make the Clause a little easier to understand. For this purpose it divides the Clause into two subsections. The first subsection lists the provisions of Part I of the Bill that are to apply to Scotland by virtue of the Clause, setting them out in a Table for what I think makes for slightly easier reference.
    Subsection (2) contains the various modifications which have to be made to the provisions listed in subsection (1) in order to take account of the differences in Scottish legal terminology and practice. The meaning of the various provisions is in no way altered by the Amendment.
    Mr. J. Robertson: I have no desire to say a great deal about this, though I am tempted to do so. The Secretary of State for Industry, Trade and a lot other things obviously has not had much to do and he has taken words hitherto printed along a line and put them in tabular form. He must think that lawyers cannot read along a line and must have the words set as a table one below the other. What is the purpose of the Amendment? It does nothing but perhaps make it a little easier for somebody to read the words, although others

    555
    might read them more quickly in linear form. The Minister should not waste the time of the House and insult the intelligence of hon. Members by putting forward Amendments of this kind.
    Mr. Ross: I only question the logic of the procedure followed by the Under-Secretary. I entirely agree with my hon. Friend the Member for Paisley (Mr. J. Robertson) that the hon. Gentleman has made no difference with the Amendment. Where he has succeeded is in making something which hitherto encompassed four lines now occupy ten lines, and he was the man who said a few minutes ago that he wanted to shorten the Bill.
    Amendment agreed to.
    Mr. Stodart: I beg to move, in page 28, line 3, at the end to insert:
    (d) for any reference to a personal representative there shall be substituted a reference to an executor.
    It might be convenient also to take the Amendment to leave out lines 8 and 9.
    They are comparatively minor drafting Amendments. There occurs in Part 1 of the Bill the term "personal representative." This is an English legal term. The effect of the first Amendment is to substitute for it, wherever it appears, the equivalent Scottish term "executor". The second Amendment deletes a similar provision which, however, made the same modification only in the context of Clause 17 of the Bill. Because of the subsequent amendments to Part 1, the term "personal representative" does not now occur only in Clause 17. It occurs, for example, in the Clause as to notice of the hirer's default.
    Amendment agreed to.
    Mr. Stodart: I beg to move, in page 28, line 3, at the end to insert:
    (d) in section 10(3), for any reference to a condition or warranty there shall be substituted a reference to a stipulation.
    This Amendment is consequential upon the new Clause 10(3) and substitutes the one Scottish term "stipulation" for the English terms "condition" and "warranty" in the application of that Clause to Scotland.
    Amendment agreed to.
    11.30 p.m.
    Mr. Stodart: I beg to move, in page 28, line 6, at the end to insert:
    (d) in section 15, subsection (8) and paragraph (a) of subsection (7) shall be omitted.
    We have already discussed the new Clause which requires notice to be given to the hirer when he is in default. This Amendment provides that in the application to Scotland of that Clause subsection (8) and subsection (7,a) shall not apply. Subsection (8) deals with the application to the goods, in the period following the service of the notice of default, of the Law of Distress Amendment Act, 1908, and the Bankruptcy Act, 1914. I explained in Committee in a similar context that we were not applying such references to Scotland.
    Briefly, the purpose of subsection (8) of the new Clause is to ensure that goods are not, after service of a notice of default, and while that notice is still outstanding, seized to pay arrears of rent owed by the hirer or regarded as his property if he becomes bankrupt. This protects the owner of the goods. In Scotland, goods already on hire purchase are not under Common Law regarded as the hirer's property if he becomes bankrupt. To that extent, therefore, we do not need subsection (8) of the new Clause. As regards sequestration for rent, which is the equivalent in Scotland, I think, of distraint or distress for rent in England, goods held on hire purchase can be seized in Scotland, but that branch of the law, as I informed the Committee, is at present being reviewed by the Scottish Law Reform Committee, and I think we should leave the law in Scotland as it is pending its report.
    Subsection (7,a) raises an entirely different point. It provides that where a hirer has died intestate and his rights under the hire-purchase agreement have not yet passed to a personal representative, Section 9 of the Administration—
    Mr. Ross: The hon. Gentleman uses the term "personal representative". What does that mean in Scottish law? Does he mean "executor"? He took the trouble quite recently to amend the Bill because it offended by using an English term. Am I to take it that his brief was drawn up not by the Scottish Office but by someone more acquainted with English law?
    Mr. Stodart: If the hon. Member were not quite so quick he would have heard that I was going to explain that I am using the term "personal representative" in the context of an English Act.
    Mr. Ross: No relation to Scotland.
    Mr. Stodart: Section 9 of the Administration of Estates Act 1925 is not to be construed as enabling notice of default to be served on the probate judge in England, the President of the Probate, Divorce and Admiralty Division of the High Court. The effect of this section, I should explain, is to vest the estate of the deceased in the probate judge pending the appointment of a personal representative. In Scotland there is no provision corresponding to Section 9 of the 1925 Act. In practice, anyone having a claim against the estate would have to await the appointment of an executor. This would be done by the sheriff as a matter of course. We therefore do not need anything corresponding to subsection (7,a) of the new Clause about notice of default.
    Amendment agreed to.
    Further Amendment made: In page 28, leave out lines 8 and 9.—[Mr. Stodart.]
    Mr. Stodart: I beg to move, in page 28, line 17, at the end to insert:
    (v) in subsection (4), the words from "and in relation to" to the end of the subsection shall be omitted.
    This Amendment provides that in the application to Scotland of Clause 17(4) certain words which have no application to Scottish conditions shall be omitted. The printed Bill does not contain the words in question. They are added to Clause 17(4) by the Amendment to which we have agreed in page 17, line 29, which was Amendment No. 23. So far as Scotland is concerned, they now have to be removed. Put in another way, Amendment No. 23 will not apply to Scotland.
    The effect of the added words is to enable the owner of goods held on hire purchase to set up the claim that the possession of the goods by someone following the death of the original hirer is adverse to the owner. When the Bill was in Committee I had occasion, with considerable trepidation in the presence of the hon. and learned Member for Liverpool. Edge Hill (Mr. A. J. Irvine),
    558
    to touch on "adverse possession". I understand that in English law this is a necessary preliminary to certain legal actions. We in Scotland have nothing corresponding to the doctrine of adverse possession and so we do not need the words that the Amendment proposes to disapply in Scotland.
    Amendment agreed to.
    Mr. Stodart: I beg to move, in page 28, line 40, to leave out "Act of 1938" and to insert:
    "Hire-Purchase Act 1938 as extended to Scotland".
    Perhaps we could consider Amendment No. 49 at the same time, Mr. Speaker?
    Mr. Speaker: If the House so pleases.
    Mr. Stodart: These are drafting Amendments for the sake of clarity. In two places where Scottish wording is being substituted for the wording of provisions in Part I of the Bill, the words "Act of 1938" are replaced by
    "Hire-Purchase Act 1938 as extended to Scotland."
    It is just possible that in the context of Part I of the Bill there would be doubt as to the exact meaning of "the Act of 1938". We are therefore making it clear that it is the Scottish version of that Act, if I may call it so, which is meant.
    Mr. J. Robertson: One does not want to prolong this agony, but I have been looking at these two Amendments and trying to make sense of them in relation to Clause 25(4) which was not amended where "the Act of 1938" is defined. It says:
    "In this Part of, and in Schedules 2 and 7 to, this Act, the expression 'the Act of 1938 ' means the said Act of 1938 as extended to Scotland by this section."
    Clause 26 is in this Part of this Act. Therefore, the definitions, alterations and Amendments now proposed seem to me either to be superfluous or contradictory. If the need for these Amendments arises on Clause 26, it would certainly arise also in relation to Clause 25(4). The words "the Act of 1938" as used in this Part of the Bill have been defined. Do we need to do it again? If we do need to do it in Clause 26, as the Amendments propose to do, do we not also have to do it in relation to Clause 25?

    559
    There is a contradiction here. Need we get into this kind of muddle and difficulty about words? Why do we have to accept this proposal in one context and reject it in another?
    Mr. Stodart: I think that there is the possibility of ambiguity. In the English Part of the Bill, reference is to the principal Act, and in the Scottish Part it is to the Act of 1938. As regards the hon. Gentleman's questions about the difference between Clause 25 and Clause 26, Clause 25 does not refer directly back to Part I of the Bill whereas Clause 26 does, and I am assured that the Amendment is not, therefore, anomalous.
    Mr. Robertson: Clause 25 does refer back to Part I of the Bill, and many of the matters which we have been discussing in relation to Clause 25 were taken in that context. I am not disagreeing with these Amendments, but I am saying that, if they are necessary in Clause 26, they must equally be necessary in Clause 25(4). It has been my complaint that we have taken some parts of the 1938 Act and called them the 1938 Act and we have taken other parts and called them the 1964 Act. We have been through all this before. Cannot we have another look at it and see whether the thing can be rectified?
    Mr. Ross: My hon. Friend the Member for Paisley (Mr. J. Robertson) has a point here. The Government ought to take note of what has been said. The Under-Secretary of State said that, for the purpose of preventing confusion which might arise—that was the understatement of the day—it would be better, instead of talking of the Act of 1938, to talk of the Hire-Purchase Act, 1938, as applied to Scotland. My hon. Friend took us back to Clause 25(4), which reads:
    "In this Part of, and in Schedules 2 and 7 to, this Act, the expression 'the Act of 1938' means the said Act of 1938 as extended to Scotland by this section".
    Would it not be better to make this Amendment in relation to Scotland wherever it is necessary, rather than just in two places? Will the Government amend the reference in the Schedule to make it equally clear? If it is necessary for simplicity in one place, it should be done in all.
    560
    The whole trouble, of course, arises because of the utterly ridiculous way in which we are having to legislate. No one who has listened to the debate can fail to agree that it is thoroughly unsatisfactory. It is not very likely that hon. and right hon. Members opposite will have another opportunity to legislate about Scotland on major issues even during the remaining weeks of this Parliament, but if they were to do so, I doubt very much that anyone, after the experience of this Bill, the Housing Bill, the Police Bill and the rest would commend this way of doing it. Hon. Members on the Government back benches have set a very bad example. They have taken it all in silence. They now expect that this should be common form.
    Captain Walter Elliot: Nonsense.
    Mr. Ross: I am sorry if the hon. and gallant Gentleman objects to being kept here listening to our complaints. Responsibility for that rests on his own side of the House. This was his Government's way of doing it. Even when this Bill was supposed to be simple and easy to understand, we now have, at this point in the Report stage, Amendment after Amendment to clarify matters and remove doubt. The doubts and difficulties arise because of the way we are legislating. I am sure that there is not an English hon. Member who would be prepared to stomach this kind of treatment if it were English legislation being wrapped up in a Scottish Bill. I do not see why we should accept it in silence.
    11.45 p.m.
    Mr. Stodart: I have asked the hon. Member for Kilmarnock (Mr. Ross) three times this evening not to misrepresent me. I have never said that this was simple. I have repeatedly said that I had not said it was simple; just that it was not nearly the heavy weather he has been turning it into. The general complaint of the hon. Member and other hon. Members opposite has been that this is not simple, and with that I entirely subscribe. I have given the House the explanation, which I repeat, that in this case there will be an ambiguity if the Amendment is not accepted.
    Amendment agreed to.
    Further Amendment made: In page 29, line 21, to leave out "Act of 1938" and to insert:
    "Hire-Purchase Act 1938 as extended to Scotland."—[Mr. Stodart.]
    Mr. Stodart: I beg to move, in page 29, line 25, at the end to insert—
    (iii) in paragraph 6(2), for any reference to an assignment there shall be substituted a reference to an assignation.
    This is a drafting Amendment. By an Amendment which we have still to reach—No. 119, to Schedule 1—it is proposed to add a new paragraph (6), which defines "buyer" and "seller" in conditional sale agreements and which twice uses the word "assignment". In the context in which it is used, this is an English legal term which requires to be translated for Scottish purposes as "assignation". I have consulted the larger Oxford Dictionary and I can assure the House that there is nothing of substance here.
    Mr. Willis: I should not have thought that the larger Oxford Dictionary was the right reference book to consult for a definition of a Scottish legal term. There must be Scottish legal reference books which would have helped the Under-Secretary.
    I agree with the hon. Gentleman about the use of the word "assignation" in Scotland, but this Amendment shows that in addition to the scores of alterations to the Bill we have already discussed in relation to Scotland, we continue to discuss them. This indicates the hopeless muddle the Government landed themselves when they agreed to this business of putting Scotland in this Bill in this fashion. All these alterations would have been unnecessary had the Government accepted our suggestion and given Scotland a Bill of our own. I must, once more, protest at this procedure being adopted by the Government.
    Mr. Stodart: One point slipped my notice. I should have asked, Mr. Speaker, if it would be convenient for the House to discuss Amendment No. 119, to which I referred when moving this Amendment, at the same time, for it has entirely the same purpose. Might I ask that now?
    Mr. Speaker: Not now because we have already had a speech on the basis
    562
    that we were discussing this Amendment only.
    Amendment agreed to.
    Mr. Stodart: I beg to move Amendment No. 51, in page 29, line 29, at the end, to insert:
    (iv) paragraph 8A shall be omitted.
    The purpose of the Amendment is to exclude from Schedule 1 in its application to Scotland a paragraph which is not needed in Scotland. This is the paragraph which is proposed to be included by Amendment No. 64. In relation to England and Wales, the Schedule does not fully cover one matter, namely, the right in respect of a breach of condition. I do not want to anticipate more than necessary, but I should, perhaps, explain that the difficulty arises from Section 11 (1,c) of the Sale of Goods Act, 1893, under which the buyer under a conditional sale agreement might lose at the time of delivery of the goods his right to reject them for a breach of condition.
    In England, because of Section 11(1,c), a buyer's protection under a conditional sale may be less good than it is under a hire-purchase transaction, but that Section of the Sale of Goods Act does not apply to Scotland. Instead, Section 11(2) does so apply. Under it, a failure by the seller to perform a material part of the contract of sale is a breach of contract which entitles the buyer within a reasonable time after delivery to treat the contract as repudiated. The new paragraph 8A to Schedule 1 will not, therefore, be required in relation to Scotland.
    Mr. Ross: This is getting more and more confusing. I have been trying to follow the Amendment Paper. I read that paragraph 8A was to be omitted. I traced it back and discovered that it was paragraph 8A of Schedule 1. I turned to Schedule 1 and read that there was a paragraph 8, but I found no trace of 8A. It came out in the explanation given by the Under-Secretary that we are anticipating acceptance by the House of a future Amendment, but that we do not want that Amendment to apply to Scotland. Since it will not be applied to Scotland, the hon. Gentleman gave us a full explanation of its meaning.
    I do not know what its purpose was. We would not have doubted had the hon. Gentleman said, "We do not want

    563
    this to apply to Scotland and we do not need it." In view of the lateness of hour, he might have spared the explanation of a paragraph which we do not want and do not need. This is the second occasion when we have anticipated the agreement of the House to an Amendment. I hope that if we make Amendment No. 51, we will reach Amendment No. 64 tonight or some other night and that the Government do not decide to withdraw it after further consideration. In that event, we would be in the position of having accepted on behalf of Scotland a reference to an Amendment and to a paragraph which will not appear in the Statute.
    This is a chancey way of doing things. Once again, it arises because of the crazy way we are legislating. It is impossible to follow what is happening. Some hon. Members had the advantage of serving on the Standing Committee. They probably know all the difficulties involved, but those of us who, on Report, have tried to follow matters certainly have not been helped by the way things have been done.
    If we are to have future legislation like this, when an Amendment is put down in this way and, to understand it, reference to a future Amendment is required, as well as putting down the number of the Amendment we are discussing we should be referred to the Amendment from the reading of which we can make sense. I am, however, happy with the Under-Secretary's explanation although it was absolutely unnecessary.
    Amendment agreed to.

    Clause 27.—(SPECIAL PROVISIONS AS TO REGISTRATION AND LICENSING.)
    Mr. D. Price: I beg to move, in page 29, line 33, to leave out Clause 27.
    It might be for the convenience of the House to take this Amendment with Amendments Nos. 53, 54, 55 and 56 which deal with the same point.
    These Amendments deleting the existing Clauses of Part III of the Bill are consequential upon the House's acceptance of the new Clauses 1, 2 and 3, dealing in a different way with the problem of the fraudulent disposal of motor vehicles subject to hire-purchase agreements.
    Amendment agreed to.
    Further Amendments made: In page 31, line 41, leave out Clause 28.
    In page 33, line 3, leave out Clause 29.
    In line 10, leave out Clause 30.
    In line 41, leave out Clause 31.—[Mr. D. Price.]

    Clause 36.— (MINOR AND CONSEQUENTIAL AMENDMENTS AND REPEALS.)
    Mr. D. Price: I beg to move, in page 36, line 34, at the end to insert:
    (3) For the removal of doubt it is hereby declared that no account is to be taken of section 1 of the principal Act, or of section 2 of this Act, for the purpose of construing any enactment whereby (however the enactment is expressed) it is provided that in the enactment (or, if the enactment extends to Scotland, in the enactment in its application to England and Wales) "hire-purchase agreement", or any similar expression, has the same meaning as "hire-purchase agreement" has in the principal Act or the definition of "hire-purchase agreement" in the principal Act is otherwise applied for the purposes of the enactment:
    Provided that this subsection shall not affect the construction of—

    (a) any enactment (not contained in this Act) which expressly refers to hire-purchase agreements "to which the Hire-Purchase Act 1938 applies", or

    (b) any reference in this Act to hire-purchase agreements to which the principal Act applies.

    This Amendment makes it clear that, in any enactment which provides that the expression "hire-purchase agreement" used in that enactment is to have the same meaning as in the Act of 1938, the reference is to be taken to be the definition given in Section 21(1) of the 1938 Act, without any monetary limit and whether or not a body corporate is the hirer of the goods.
    The Amendment is entirely for clarification.
    Amendment agreed to.

    Clause 37.—(TRANSITIONAL PROVISIONS.)
    Mr. D. Price: I beg to move, in page 37, line 4, at the end to insert:
    (3) The provisions of Part III of this Act—

    (a) shall have effect in relation to hire-purchase agreements and conditional sale agreements made before, as well as in relation to such agreements made after, the commencement of this Act, but

    (b) shall not have effect where the disposition by the hirer or buyer which is referred to in subsection (1) of section (Protection of purchasers of motor vehicles) of this Act was made before the commencement of this Act.

    565
    This new subsection enacts the transitional provisions for the new Part III of the Bill. It is purely consequential in its effect.
    Amendment agreed to.

    Clause 39.— (SHORT TITLE, CITATION AND EXTENT.)
    Mr. D. Price: I beg to move, in page 37, line 33, to leave out subsection (4).
    This Amendment again is consequential upon the House's acceptance of the new Clauses.
    Amendment agreed to.
    12 m.

    Schedule 1.— (APPLICATION OF ENACTMENTS TO CONDITIONAL SALE AGREEMENTS.)
    Amendment made: In page 38, line 23, at end insert:
    (2) In accordance with the preceding subparagraph (and without prejudice to the generality thereof) in section 4(1) of this Act the reference to a document which, if executed by or on behalf of another person as owner of the goods to which it relates, would constitute a hire-purchase agreement to which the principal Act applies shall be construed as including a reference to a document which, if executed by or on behalf of another person as seller of the goods to which it relates, would constitute such a conditional sale agreement as is mentioned in section 21(3) of this Act.—[Mr. D. Price.]
    Mr. Price: I beg to move, in page 38, line 38, to leave out from "Where" to the end of line 44 and to insert:
    "goods have been sold under a conditional sale agreement and the property in the goods, having become vested in the buyer, is transferred to a person who does not become the buyer under the agreement, the buyer shall no longer be entitled to determine the agreement under section 4 of the principal Act.
    (2) Subject to the preceding sub-paragraph, where a buyer under a conditional sale agreement determines the agreement under section 4 of the principal Act after the property in the goods has become vested in him, the property in the goods shall thereupon vest in the person (in this sub-paragraph referred to as 'the previous owner') in whom it was vested immediately before it became vested in the buyer".
    This is simply a technical tidying up of language. I shall be happy to give the House an explanation if that is desired.
    Amendment agreed to.
    Mr. Price: I beg to move, in page 39, line 4, at the end to insert:
    566
    6.—(1) The definitions of "buyer" and "seller" in section 21(1) of the principal Act shall not apply to conditional sale agreements.
    (2) In this Part of this Schedule—

    (a) "buyer", in relation to a conditional sale agreement, means the person who agrees to purchase goods under the agreement and includes a person to whom the rights or liabilities of that person under the agreement have passed by assignment or by operation of law;

    "seller", in relation to a conditional sale agreement, means the person who agrees to sell goods under the agreement and includes a person (other than the buyer) to whom that person's property in the goods or any of that person's rights or liabilities under the agreement has passed by assignment or by operation of law.
    Perhaps it would be convenient at the same time to take the next Amendment.
    Section 21(1) of the 1938 Act states that the expressions "buyer" and "seller" have the meanings assigned to them by the Sale of Goods Act, 1893. These Amendments substitute revised definitions in relation to conditional sale agreements so as to include a person to whom the rights or liabilities of the original buyer or seller have passed, and in the case of a seller to include a person to whom the seller's property in the goods has passed. I hope that at this late hour the House will regard that explanation as satisfactory.
    Amendment agreed to.
    Further Amendment made: In page 39, line 11, at end insert:
    "and 'buyer' and ' seller ' have the meanings assigned to them by paragraph 6 of this Schedule."—[Mr. D. Price.]
    Mr. Price: I beg to move, in page 39, line 18, at the end to insert:
    8A.—(1) Section 11(1)(c) of the Sale of Goods Act 1893 (whereby in certain circumstances a breach of a condition in a contract of sale is to be treated only as a breach of warranty) shall not apply to a conditional sale agreement.
    (2) A breach of a condition (whether express or implied) to be fulfilled by the seller under a conditional sale agreement shall be treated as a breach of warranty, and not as grounds for rejecting the goods and treating the agreement as repudiated, if (but only if) it would have fallen to be so treated had the condition been contained or implied in a corresponding hire-purchase agreement as a condition to be fulfilled by the owner.
    (3) In this paragraph "corresponding hire-purchase agreement" means a hire-purchase agreement relating to the same goods as the

    567
    conditional sale agreement and made between the same parties and at the same time and in the same circumstances and, as nearly as may be, in the same terms as the conditional sale agreement.
    To ensure that the safeguards provided for hire-purchase customers under provisions of the 1938 Act and Part I of the Bill cannot be evaded by the use of conditional sale agreements, Clause 21, together with Schedule 1, applies those provisions to conditional sale agreements in the same way as they apply them to hire-purchase agreements. One matter is not covered as the Schedule stands—namely, the right in respect of a breach of a condition, and the Amendment will remedy this.
    Amendment agreed to.
    Further Amendments made: In page 39, line 26, at end insert:
    "as well as a reference to payments in respect of two or more conditional sale agreements."
    In line 34, at end insert—
    "or both are conditional sale agreements."—[Mr. D. Price.]

    Schedule 2.— (EXTENSION OF HIRE-PURCHASE ACT 1938 TO SCOTLAND.)
    Mr. Stodart: I beg to move, in page 40, line 10, after "1938", to insert: (a).
    I think that it might be convenient to discuss with this Amendment, Amendments Nos. 68, 69, 72, 87, 88, 94, 95, and 96.
    I do not know whether at this hour the House wishes a long explanation of the purpose of these Amendments. In Scotland the owner of goods let on hire-purchase is required by common law to apply to the court to re-possess the goods even if one-third of the hire-purchase price has not been paid. These Amendments seek to ensure that the adoption for Scotland of Section 11 of the Hire Purchase Act, 1938, shall not prejudice that requirement.
    Mr. J. Robertson: I accept the limited intention behind these Amendments, but it seems to me that Amendment No. 72 goes rather further. I am not clear about the significance of paragraph (b) of that Amendment. It seems to amend certain provisions relating to court procedures. If that is so, it makes the situation extremely difficult. One of the problems is that by previous Amendments we have repealed the 1932 Act
    568
    with the exception of Sections 6 and 7, which link up with small debt court procedures.
    The hon. Gentleman's brief explanation has not satisfied me that the Amendments will achieve what he hopes to achieve. This is all very well in theory, but in practice the situation is rather different from that envisaged in the 1938 Act even as extended to Scotland. Indeed, it is so different from the English custom, from which it is derived, that it has little relevance here.
    The small debt court procedures offer great scope to finance companies to bring actions against hirers, if not in the way suggested, then in some other way. In other words, they can attain their objectives even with the protections which are now suggested.
    We should have had a more detailed explanation of this extremely complicated part of the Bill. I appreciate, of course, that there are difficulties. It is completely wrong at this time of the day, and in this part of our proceedings—when we have no further opportunity to look at what is being done—that so many Government Amendments, of such significance and complication, should be brought up.
    It is not being fair to Scottish Members, and I ask the Under-Secretary whether we could not have a little further explanation of the various Amendments to which he has referred.
    Mr. Stodart: I can only say, by way of mitigation, that the hon. Member for Paisley (Mr. J. Robertson) was not in his place when I moved the Amendment and referred to the other related ones. I then asked whether a long explanation was required, and I was greeted more or less with a prayer by the hon. Member for Sheffield, Hillsborough (Mr. Darling) that I should not be unduly long. But for the sake of the record and for the sake of the hon. Member for Paisley, I will expand my previous explanation.
    Section 11 of the Hire Purchase Act, 1938, which the Bill applies to Scotland, provides that in a hire-purchase agreement, after one-third of the hire-purchase price has been paid, the owner shall not enforce any right to recover possession of the goods except by application to the court. In the resulting action the court may allow the hirer to keep all

    569
    the goods on payment of the balance due as directed by the court, or may allow him to keep some of them without further payment, having regard to what he has already paid.
    In Scotland, at common law, the owner is required to go to the court if he wishes to repossess goods let on hire-purchase, whether or not one-third of the hire-purchase price has been paid. We nevertheless need Section 11 of the 1938 Act, because we want to confer on the Scottish courts, where one-third of the hire-purchase price has been paid, the very wide powers which are contained in Sections 12 to 14 of the 1938 Act and which follow on applications under Section 11. At the same time, we want to make it clear that the owner is still under obligation to go to the court if he wishes to repossess in a case where one-third of the hire-purchase price has not been paid, and that is the object of these Amendments.
    I can assure the hon. Member for Paisley that none of them has anything to do with altering the powers of the courts in any way.
    Amendment agreed to.
    Further Amendments made: In page 40, line 12, leave out "and" and insert:
    (b) at the end of subsection (1) there shall be added the words:—
    "Provided that nothing in this subsection, shall be taken to confer on an owner any right to recover, otherwise than by action, possession of any goods let under a hire-purchase agreement where one-third of the hire-purchase price has not been paid or tendered as aforesaid"; and (c).
    In line 14, leave out from "1938" to "for" in line 16 and insert:
    (a) for subsection (1) there shall be substituted the following subsections—
    "(1) The following provisions of this section shall apply, in a case to which the last foregoing section applies, where the owner commences an action to enforce a right to recover possession of any of the goods from the hirer after one-third of the hire-purchase price has been paid or tendered as aforesaid.
    (1A) After such an action has been commenced the owner shall not take any steps to enforce payment of any sum due under the hire-purchase agreement or under any contract of guarantee relating thereto, except by claiming the said sum in the said action"; and (b).
    —[Mr. Stodart.]
    Mr. Stodart: I beg to move, in page 40, line 25, after "Act", to insert:
    "and the words 'and in section 14(1) of the Hire-Purchase Act 1964'".
    Amendment No. 114, in Schedule 4, page 59, line 24, at end insert:
    In section 19(1), after the words "this Act", in the third place where they occur, there shall be inserted the words "and in section 14(1) of the Hire-Purchase Act 1964".
    which we have not yet debated, proposes that a reference to Clause 14(1) of the Bill should be included in Section 19 of the Hire Purchase Act, 1938. Since Clause 14 of the Bill does not apply to Scotland, no reference to it is required in Section 19 of the 1938 Act, as it applies to Scotland. This Amendment therefore excludes, for Scotland these words.
    Amendment agreed to.
    12.15 a.m.
    Mr. Stodart: I beg to move, in page 40, line 28, to leave out from beginning to "which" in line 30 and to insert:
    19A.—(1) Subject to the following provisions of this section, where goods have been let under a hire-purchase agreement to which this Act applies and the owner brings or institutes an action to enforce a right to recover possession of any of the goods from the hirer, the action shall be brought or instituted in the sheriff court for the district in which the hirer resides or carries on business or resided or carried on business at the date on which he last made a payment under the hire-purchase agreement.
    (2) No cause, action or proceeding on or arising out of any hire-purchase agreement to which this Act applies or credit-sale agreement to which this Act applies.
    Perhaps it might be convenient to discuss Amendment No. 91 together with this Amendment.
    Mr. Deputy-Speaker: If that is the wish of the House.
    Mr. Stodart: There are two main provisions of the Bill which deal with the jurisdiction of the Scottish courts in relation to actions arising out of hire-purchase and credit-sale transactions. Section 12 of the Hire-Purchase Act, 1938, provides that where one-third or more of the hire-purchase price has been paid, the owner of the goods, if he wishes to repossess them, must bring an action in the sheriff court for the district of the hirer's residence or place of business. After the action has started, any subsequent money claim relating to

    571
    the same agreement must be brought in the same action, and therefore in the same court.
    Section 19(A) of the 1938 Act says that any action arising out of a hire-purchase or credit-sale agreement which can competently be brought in the sheriff's small debt court must be brought in that court, subject to the sheriff's power to remit to the ordinary roll any action brought in the small debt court.
    There are two reasons for making the linked Amendments that we are now considering. The first is this. We have just dealt with a series of Amendments to preserve the common law rule in Scotland whereby repossession of goods held on hire purchase requires an application to the court. Two of these Amendments modified Section 12 of the Hire-Purchase Act, 1938, and, in doing so, took out the words which say that where one-third of the hire-purchase price has been paid an action for repossession must be brought in the sheriff court of the hirer's residence. We want to put those words back.
    Secondly, when the new Clause which now appears as Clause 14 of the Bill was adopted in Committee I promised that Scottish provision corresponding to subsection (1) of that Clause would be made on Report. That subsection provides that where the owner brings an action to repossess goods where one-third of the hire-purchase price has not been paid, he must raise that action in the county court of the hirer's residence or place of business. We do not, incidentally, need anything corresponding to subsection (2) of Clause 14, because there is no upper limit to the sheriff's jurisdiction.
    What the Amendment does is to combine, as a new subsection (1) of Section 19(A) of the Hire-Purchase Act, 1938, the two provisions which prescribe the court in which actions for repossession are to be brought. If an owner brings an action to enforce a right to recover possession of goods let on hire purchase, whatever portion of the price has been paid, he must bring the action in the sheriff court for the district in which the hirer resides or carries on business or resided or carried on business at the date when he last made a payment under the agreement.
    Amendment agreed to.
    Further Amendment made: In page 41, line 6, at end insert:
    13. In the Schedule to the Act of 1938—

    (a) in the second paragraph 1, the words from the beginning to "has been paid, then]" shall be omitted; and

    (b) in the second paragraph 2, after the word "If", in the first place where it occurs there shall be inserted the words "*[after (here insert an amount calculated in accordance with the provisions of sections 11 and 19 of this Act) has been paid]"; and after the word "court", in the second place where it occurs, there shall be inserted the words "(under powers conferred by the Hire-Purchase (Scotland) Acts 1938 to 1964)".—[Mr. Stodart.]

    Mr. Stodart: I beg to move, in page 41, line 27, after "which", to insert:
    "on being signed as mentioned in subsection (2)(a) of this section".
    Perhaps it might be convenient to discuss with this Amendment, Amendments Nos. 74, 75, 78. 80 and 81.
    Mr. Deputy-Speaker: If that is the wish of the House.
    Mr. Stodart: These Amendments are consequential upon an Amendment to Clause 3(4) which we have already discussed. Clause 3(4) empowers the Board of Trade to make regulations as to the space in which the hirer's or buyer's signature is to be inserted in a hire-purchase or credit-sale agreement, the words surrounding that space, and their location and prominence. The effect of the Amendment to Clause 3(4) was to ensure that the Board will have power to make regulations in relation to a document which is not yet a hire-purchase or credit-sale agreement at the time it is signed by the hirer or buyer, but will become such an agreement when it is signed by all the parties.
    These Amendments make similar provision in relation to Scotland. The pair of Amendments in pages 41 and 45 make the main Amendment. The other four Amendments make similar alterations in relation to credit-sale agreements in Section 3(3) of the 1938 Act as it will apply to Scotland.
    Amendment agreed to.
    Further Amendments made: In page 42, line 4, after "reference", insert "to paragraph (a) or".
    In line 5, after "reference", insert:
    "to paragraph (a) or, as the case may be,".
    In page 45, line 14, after "which", insert:
    "on being signed as mentioned in subsection (2)(a) of this section".—[Mr. Stodart.]
    Mr. Stodart: I beg to move the Amendment in page 46, line 27, to leave out "a" and to insert "the".
    With great respect, I think that this is the easiest Amendment I have had to introduce this evening. It corrects an error, which I much regret, in line 26 of page 46. The indefinite article appears where the definite article should be used.
    Amendment agreed to.
    Further Amendments made: In page 47, line 6, after "reference", insert "to paragraph (a) or".
    In line 7, after "reference", insert:
    "to paragraph (a) or, as the case may be.".
    In line 19, at end insert:
    Provided that, if the court is satisfied in any action that a sum less than the amount by which one-half of the hire-purchase price exceeds the total of the sums paid and the sums due in respect of the hire-purchase price immediately before the termination would be equal to the loss sustained by the owner in consequence of the termination of the agreement by the hirer, the court may make an order for the payment of that sum in lieu of that amount.
    In line 46, leave out from "is" to "or" in line 2 on page 48 and insert:
    "(apart from any liability which has accrued before the termination) subject to a liability to pay an amount which exceeds whichever is the lesser of the two following amounts, that is to say, the amount first mentioned in section 4(1) of this Act and an amount equal to the loss sustained by the owner in consequence of the termination of the agreement".—[Mr. Stodart.]
    Mr. Stodart: I beg to move, in page 48, line 20, to leave out "£20" and to insert "£30".
    The Amendment rectifies an omission. When the Bill was in Committee it was decided that the lower limit of value of credit-sale agreements to which certain safeguards apply should be fixed at £30 and not £20 as the Bill originally proposed. In making the resulting string of Amendments we overlooked this one. The context of the Amendment is Section 6 of the Hire-Purchase Act, 1938, which will, as amended, lay upon the seller in a credit-sale agreement, worth more than £30 and not more than. £2,000, a duty to provide the buyer, on request, with certain information
    574
    as to his current financial obligations under the agreement.
    Amendment agreed to.
    Mr. Stodart: I beg to move, in page 49, to leave out lines 27 to 30 and to insert:
    (2) Where the hirer, whether expressly or by implication,—

    (a) has made known to the owner, or to a servant or agent of the owner, the particular purpose for which the goods are required, or

    (b) in the course of any antecedent negotiations has made that purpose known to any other person by whom those negotiations were conducted or to a servant or agent of such a person,

    there shall be an implied stipulation that the goods shall be reasonably fit for that purpose.
    Section 24 (2) of the Hire-Purchase Act 1964 shall apply for the purposes of this subsection as it applies for the purposes of Part I of that Act.
    This Scottish Amendment is consequential on the previous Amendment to Clause 12(2), which was in page 13, line 3. Section 8(2) of the Hire-Purchase Act, 1938, provides that where a hirer in a hire-purchase transaction makes known the particular purpose for which the goods are required, there shall be an implied condition that the goods shall be reasonably fit for that purpose. This Amendment, like the earlier one to which I have referred, provides that the implied condition of fitness shall follow if the hirer makes known the purpose for which the goods are required to the owner, his servant or agent, or to any person who has conducted negotiations which induced the hirer to conclude the agreement. The protection for the hirer in this case is therefore enlarged.
    Mr. J. Robertson: The question arises whether the Amendment is required. In Committee we had a discussion on similar lines to this, though perhaps in a different context. I believe that I said on that occasion that the law in Scotland on hire or purchase was that there was an implied stipulation that the goods hired or bought would be fit for their purpose. But it was also I believe the common law of Scotland that the owner would have an opportunity in such a situation, prior to an action being raised, to make any alterations within his power to alter or repair before the contract would be declared void. It seems to me that this was a very useful condition.
    A motor car might break down and this, under the common law of Scotland,

    575
    might be considered to be contrary to the implied stipulation, but the saving grace of the common law was that the agent, or owner through his agent, would have the opportunity of effecting the necessary modifications or repairs to the goods to bring them into a condition which would fit them for their purpose. I may not be explaining this matter very well because I have not had time to have another look at what was then said, but this is my recollection.
    12.30 a.m.
    What is concerning me is that what we are now trying to do is to bring into the law of Scotland what is really a purely English concept. I am wondering whether we would really be better off—or worse off. This Amendment lays down certain conditions before a stipulation as to fitness can be implied. I do not think that that is very good. I should imagine that the existing situation where any owner of goods either sells or hires them to someone else, and where there is immediately, in that transaction, an implied stipulation, is the desirable position. By this Amendment the hirer has to make known to the owner the particular purpose for which the goods are required. What would be the interpretation of this if it were appealed? Would he have to state exactly how the vehicle was to be used, the place where it was to be used, and so on?
    I may be splitting hairs, and I may be drawing too wide a picture. Nevertheless, the questions arise. At the moment, under Scottish law, according to my understanding of it, the questions would not arise, and both the hirer and the owner would be adequately protected. Indeed, the owner would have a rather better protection than that which is provided in this Amendment. I do not object to this Amendment provided that it does not in any way alter the existing Scottish Common Law in regard to implied stipulations where a hiring or a sale has taken place.
    Mr. Stodart: May I just reassure the hon. Gentleman? I well remember the discussion we had in Committee on this and the doubts which the hon. Gentleman expressed. If I recollect rightly, he quoted Gloag on the Scottish
    576
    law. I undertook then to examine whether or not his fears had any ground. I can assure him that I have gone into the matter with considerable care, and I can assure him that we are doing nothing by these Amendments to interfere in any way with the established practice of Scottish law.
    Amendment agreed to.
    Further Amendments made: In page 50, line 38, at end insert:
    Provided that nothing in this subsection shall be taken to confer on an owner any right to recover, otherwise than by action, possession of any goods let under a hire-purchase agreement where one-third of the hire-purchase price has not been paid or tendered as aforesaid.
    In page 51, leave out lines 4 to 15, and insert:
    12.—(1) The following provisions of this section shall apply, in a case to which the last foregoing section applies, where the owner commences an action to enforce a right to recover possession of any of the goods from the hirer after one-third of the hire-purchase price has been paid or tendered as aforesaid.
    (1A) After such an action has been commenced the owner shall not take any steps to enforce payment of any sum due under the hire-purchase agreement, or under any contract of guarantee relating thereto, except by claiming the said sum in the said action.—[Mr. D. Price.]
    Mr. D. Price: I beg to move, in page 54, line 24, to leave out "comprising those goods" and to insert:
    "relating to the whole or any part of those goods (with or without other goods)".
    It may be convenient to the House to take the next following Amendment, and that to page 59, line 15, together, because they all deal with the same point.
    Mr. Deputy-Speaker: If the House pleases.
    Mr. Price: The third of these Amendments is in Schedule 4, page 59, line 15, at the end to insert:
    In section 15, for the words "comprising those goods" here shall be substituted the words "relating to the whole or any part of those goods (with or without other goods)", and for the words "as from the commencement thereof" there shall be substituted the words "as if in section 11(1) of this Act the words from 'and one-third' to 'any guarantor', and in section 12(1) of this Act the words 'after one-third of the hire-purchase price has been paid or tendered as aforesaid', were omitted".
    That Amendment makes two small changes to Section 15 of the 1938 Act.

    577
    First, it makes clear that, in order to qualify for the protection of Sections 11 and 12, as extended by Section 15, a further hire-purchase agreement relating to goods which have already been subject to one agreement between the same parties under which one-third of the price has been paid need not comprise the whole of the goods in the earlier agreement and may comprise other goods as well. This, in layman's language, deals with the situation in relation to what are known as "add to" agreements.
    Section 15 states that the protection of Sections 11 and 12 of the Act shall apply in relation to such a further agreement
    "as from the commencement thereof."
    What is intended is that it is not necessary for one-third of the hire-purchase price on the further agreement to have been paid before this protection operates, and I am advised that it is desirable to clarify the position as this Amendment does, to cover the case of "add to" agreements.
    Amendments Nos. 89 and 90 make the consequential Amendments in Part III of Schedule 2, which sets out the 1938 Act as it applies to Scotland.
    Amendment agreed to.
    Further Amendments made: In page 54, line 26, leave out "from the commencement thereof" and insert:
    "if in section 11(1) of this Act the words from ' and one-third ' to ' any guarantor ' and in section 12(1) of this Act the words 'after one-third of the hire-purchase price has been paid or tendered as aforesaid ', were omitted".
    In page 55, line 1, leave out from beginning to "which" in line 2 and insert:
    19A.—(1) Subject to the following provisions of this section, where goods have been let under a hire-purchase agreement to which this Act applies and the owner brings or institutes an action to enforce a right to recover possession of any of the goods from the hirer, the action shall be brought or instituted in the sheriff court for the district in which the hirer resides or carries on business or resided or carried on business at the date on which he last made a payment under the hire-purchase agreement
    (2) No cause, action or proceeding on or arising out of any hire-purchase agreement to which this Act applies or credit-sale agreement to which this Act applies.
    In page 56, line 45, after "Act", insert:
    578
    "apart from the proviso to subsection (1) of section 4".
    In line 45, at end insert:
    "unless the court determines that a smaller sum would be equal to the owner's loss".
    In page 57, leave out lines 10 and 11.
    In line 15, after "If", insert:
    "* [after (here insert an amount calculated in accordance with the provisions of sections 11 and 19 of this Act) has been paid]",
    In line 16, after first "court", insert:
    "(under powers conferred by the Hire-Purchase (Scotland) Acts 1938 to 1964)".—[Mr. D. Price.]

    Schedule 4.— (ENACTMENTS AMENDED.)
    Mr. D. Price: I beg to move, in page 58, line 45, at end insert:
    In section 5, in paragraph (c), for the words from "subject to a liability" to the end of the paragraph there shall be substituted the words "(apart from any liability which has accrued before the termination) subject to a liability to pay an amount which exceeds whichever is the lesser of the two following amounts, that is to say, the amount first mentioned in section 4(1) of this Act and an amount equal to the loss sustained by the owner in consequence of the termination of the agreement or bailment".
    This Amendment is consequential to the Amendment made in Committee by which Clause 1(5) was added to the Bill.
    Amendment agreed to.
    Further Amendment made: In page 59, line 15, at the end insert:
    In section 15, for the words "comprising those goods" there shall be substituted the words "relating to the whole or any part of those goods (with or without other goods)", and for the words "as from the commencement thereof" there shall be substituted the words "as if in section 11(1) of this Act the words from 'and one-third' to 'any guarantor', and in section 12(1) of this Act the words 'after one-third of the hire-purchase price has been paid or tendered as aforesaid' were omitted".—[Mr. D. Price.]
    Mr. D. Price: I beg to move, in page 59, line 24, at the end to insert:
    In section 19(1), after the words "this Act"; in the third place where they occur, there shall be inserted the words "and in section 14(1) of the Hire-Purchase Act 1964".
    This Amendment is consequential upon Clause 14, which deals with the jurisdiction of the county courts.
    Amendment agreed to.
    Mr. D. Price: I beg to move, in page 59, line 39, at the end to insert:
    In the Schedule, in the first paragraph 2, after the word "Act", there shall be inserted

    579
    the words "apart from the proviso to subsection (1) of section four", and at the end there shall be added the words "unless the court determines that a smaller sum would be equal to the owner's loss".
    This Amendment is consequential upon the Amendment made in Committee by which Clause 1(5) was added to the Bill.
    Amendment agreed to.
    Further Amendment made: In page 59, column 2, leave out lines 45 to 52.—[Mr. D. Price.]

    Schedule 6.— (TRANSITIONAL PROVISIONS (ENGLAND AND WALES).)
    Amendment made: In page 61, line 44, leave out from "the" to end of line and insert:
    "coming into operation of that order".—[Mr. D. Price.]
    Mr. D. Price: I beg to move, in page 61, line 44, at the end to insert:
    (2) In relation to any such agreement as is mentioned in the preceding sub-paragraph, whether made before, on or after the date on which the Order comes into operation,—
    (a) section (Notice of hirer's default) of this Act shall apply, except in the case of a default committed before that date.
    This Amendment relates to hire-purchase or conditional sale agreements which may be brought within the scope of the 1938 Act in future by an Order in Council made under Clause 1(3) of the Bill. It provides that the provisions of the new Clause dealing with notice of hirer's default shall apply to all such agreements immediately, including those concluded before that date, but not where the default was committed before that date. In other words, and briefly, this is a transitional arrangement for notice of hirer's default.
    Amendment agreed to.

    Schedule 7.— (TRANSITIONAL PROVISIONS (SCOTLAND).)
    Mr. Stodart: I beg to move, in page 63, line 1, to leave out "and 15" and to insert "15 and 19A(1)".
    This is one of a group of drafting Amendments. Schedule 7 contains the Scottish transitional provisions. Paragraph I lists various provisions of the Hire-Purchase Act, 1938 and of the present Bill which are to apply as soon as the Bill comes into operation on 1st
    580
    January, 1965. They will, therefore, bite upon hire-purchase and credit-sale agreements made before the coming into operation of the Bill.
    Paragraph 2 provides that later provisions of the 1938 Act and of the Bill are not to apply to contracts made before the Bill comes into force. The same pattern is repeated in paragraphs 3 and 4 of the Schedule for the situation where, in future, the limit of value controlling hire-purchase and credit-sale agreements is raised by Order in Council.
    Amendment agreed to.
    12.45 a.m.
    Further Amendments made: In page 63, line 13, after first "Act" insert section 25(4) of this Act".
    In line 33, leave out "and 15" and insert "15 and 19A(1)".—[Mr. D. Price.]
    Mr. D. Price: I beg to move, in page 63, line 46, at the end to insert:
    (2) The preceding sub-paragraph shall apply to any such agreement as is therein mentioned, whether the agreement was made before, on or after the date on which the Order comes into operation.
    This is a drafting Amendment consequential on Amendment No. 103, which we have passed. It is designed to apply the wording, suitably adjusted for Scotland, of the English transitional provisions which we have just inserted into Schedule 6.
    Amendment agreed to.

  Title
  Mr. D. Price: I beg to move, in line 3, to leave out from "make" to "let" in line 5 and to insert:
  "provision with respect to dispositions of motor vehicles which have been"
  This rather curious Amendment arises consequentially on our acceptance of the new Clauses dealing, in a different way, with the problem of the fraudulent disposal of motor vehicles subject to hire-purchase agreements; and we can regard it as a purely consequential Amendment.
  Amendment agreed to.
  Bill read the Third time and passed, with Amendments.

  RAILWAYS (BEXHILL, WEST-CROWHURST LINE)
  Motion made, and Question proposed, That this House do now adjourn.— [Mr. Batsford.]
  12.47 a.m.
  Mr. Bryant Godman Irvine: According to my calculations, since midnight we have dealt with 56 Amendments of the Hire-Purchase (No. 2) Bill. Many of them dealt with Scotland and it may be that the Minister will derive more benefit from that than I have.
  I now ask the House to turn its attention to the problem of the closure of the Bexhill, West-Crowhurst railway, and to the four matters which I wish to raise with the Minister.
  I raised the first with him at Question Time a short time ago. Since then he has been good enough to write me twice at some length about the points I put to him on that occasion. I must briefly refer to them again, because the Answers so far given to me are not entirely satisfactory to my constituents and it would be helpful if these matters could be explained more clearly.
  On 12th February, in reply to a Parliamentary Question, my right hon. Friend the Minister of Transport divided the possibility of the announcements which were to follow from the proposals for closures of railways into two classes, when he said:
  "The Railways Board are likely to propose for closure in the next few months a number of passenger services to holiday resorts."
  He went on to say that in three cases
  "…my consent will not take effect before 1st October."
  The other category he dealt with in this way:
  "Closure proposals which have already been published by the Board are at various stages of consideration. In making my decision on each of these I shall bear in mind its possible effect on holiday travel arrangements this summer."—[OFFICIAL REPORT, 12th February, 1964; Vol. 689, c. 70.]
  Thus, in neither of those categories did he refer purely to closures; in the first he referred to proposals for closure and in the second to closure proposals.
  By 12th February there was no doubt whatever that there was a closure proposal for this railway. On 3rd March,
  582
  the Minister issued a statement concerning the first set of closures which he was announcing. That statement included these words:
  "The Minister had recently agreed with Dr. Beeching that rail closures affecting holiday resorts published after 12th February would not come into effect until after the holiday season was over."
  The difference between that statement and the earlier statements which had been given in answer to Questions was that the statement of 3rd March referred quite clearly to rail closures, whereas the other two statements referred to proposals for closure and closure proposals.
  My constituents felt that when the Minister referred to rail closures, that meant the announcement of a closure. When the announcement came for this railway to be closed, they felt that it fell under the statement the Minister made on 3rd March as a rail closure which would not come into effect until after the holiday period was over. They felt, and some of them still feel, that the Minister had gone back on the word which he gave on 3rd March and that this closure should not in any event have taken place until after the holiday period was over.
  The second point which I ask the Minister to consider is that there are still a number of my constituents who feel that the appearance before the transport users' consultative committee was purely a matter of endorsing a decision which had already been taken by the Minister. They feel that the committee was a rubber stamp for the Minister and that even after the committee had found, in this case, that there was hardship, the Minister overruled what the committee recommended to him and decided that, although there was hardship, he would, nevertheless, close the railway.
  I have had a little experience in dealing with the question of hardship before the courts. I find it difficult to decide what the Minister is looking for in these cases. There might be serious hardship for one person or for a small body of people, but the problem which the Minister has to decide is whether it is hardship of the degree for which he is looking. There are constituents of mine who feel that although hardship was found by the consultative committee, the Minister disregarded that finding.

  583
  The third point to which I should like the Minister to direct his attention is that at these hearings it is impossible for questions of finance to be raised. We know that advice has been given to the Minister by a distinguished accountant and that the figures provided at the inquiry were in his view adequate for the purpose of the inquiry. There is, nevertheless, the strong feeling that if it were possible for the figures to be challenged at the hearing, if they could be dealt with as in a court, with cross-examination and, possibly, alternative suggestions of how the railway might be managed or what economies might be effected, the deficiency in this case could have been reduced to such small dimensions that either the Minister would have been driven to the conclusion that the railway should not be closed or, alternatively, that it would be of such a nature that, possibly, with the help of the Bexhill Council or in some other way, the deficiency might have been met.
  The last thing that I would like to ask the Minister is just to look at the memorandum which was left at his Ministry on 11th June by a deputation from the Season Ticket Holders' Association. A letter has been received saying that many of these points may be dealt with tonight, or in the alternative that those not dealt with tonight will be dealt with in subsequent correspondence. Therefore, it would be quite wrong for me to try to introduce into this debate any of the details set out in that memorandum.
  On this, there are just two things I would like to say. One is that some of the evidence which has been obtained by the transport users' consultative committee since the closure took place makes it rather difficult to discover just what has happened to the people who were travelling on the railway. At the inquiry the evidence was that 44 people were travelling on the 4.20 train; on 18th June only six apparently appeared at St. Leonard's, and there is no indication as to what has happened to the remainder.
  Secondly, I would like to ask the Minister to bear in mind the following views which have been expressed in a letter to me from the secretary of the Season Ticket Holders' Association. He says:
  584
  "When the handling of coal or other freight is 'rationalised' at one centre, every effort seems to be made to keep the traders happy. When passengers are 'raionalised', car parks are not available at the outset, reasonable bus services to all parts of the town are not in operation, the change-over stations are not made ready to cope with the new traffic, and connections by rail are not provided for passengers living near the other two local stations in the town."
  These are the four points I want to bring to the attention of the Minister, and I hope that he may be able to deal with some or all of them in the time which is available.
  12.58 a.m.
  The Parliamentary Secretary to the Ministry of Transport (Mr. T. G. D. Galbraith): As my hon. Friend the Member for Rye (Mr. Godman Irvine) has said, tonight's debate is really a continuation of the exchange which took place between us at Question Time on May 13. My hon. Friend then suggested that my right hon. Friend had made a pledge to close no lines affecting holiday resorts until after the summer, and he has repeated that tonight.
  I tried to explain to my hon. Friend that he had got this wrong, but he was not satisfied and so here we are tonight again debating the Bexhill, West-Crowhurst line. My hon. Friend has been very persistent in his campaign to keep this line open, and, clearly, his constituents have a doughty champion who is always on the alert to protect their interests. He raised the matter, first of all, as far back as 30th April last year, during the two-day debate on the Beeching Plan, and since then he has been very active in the representations he has made. Curiously enough, this is actually a help to us because it makes it doubly certain that my right hon. Friend is fully aware of every aspect of the situation when he comes to make up his mind.
  Before I deal with the details of the Bexhill, West-Crowhurst line, I want to say a word about the suggestion which has been made that in allowing this, or indeed, any other holiday line, to close before the summer, my right hon. Friend has been guilty of a breach of faith. This was really the most important point in the remarks made by my hon. Friend.
  This suggestion seems to me not to stand up to examination. As I told my hon. Friend in answer to his question, the idea of a breach of faith must be based on a complete misunderstanding of the

  585
  situation, and although, in a way, I am sorry that he did not accept what I said then, at least tonight he has given me another opportunity to spell out the facts and, I hope, once and for all remove the sense of grievance which still seems to exist.
  I should like to begin by quoting what my right hon. Friend said on 12th February in reply to a Question from his hon. Friend the Member for Antrim, North (Mr. H. Clark):
  "I recognise that many people will want to be certain of their holiday travel arrangements in advance.
  The Railways Board are likely to propose for closure in the next few months a number of passenger services to holiday resorts. Owing to the requirements of the statutory procedure I should not in any case be able to announce my decision on these proposals until well into the summer. I have accordingly arranged with the Board that where, after studying the T.U.C.C. report and all other relevant factors, I consent to any such proposal, my consent will not take effect before 1st October. This is of course without prejudice to whether I grant or refuse my consent in any particular case.
  Closure: proposals which have already been published by the Board are at various stages of consideration. In making my decision on each of these I shall bear in mind its possible effect on holiday travel arrangements this summer."—[OFFICIAL REPORT, 12th Feb., 1964; Vol. 689, c. 70.]
  That is what my right hon. Friend said, and from this it is clear that all he was stating was that proposals made by the Board after 12th February would not result in a closure at the earliest until 1st October, but that for proposals made before 12th February my right hon. Friend had complete freedom of action to agree to a closure at whatever date he thought right. In other words, a distinction was made between proposals which were in the pipeline on 12th February and those which were not.
  As my hon. Friend knows, the Bexhill, West-Crowhurst proposal was published as long ago as 8th June, 1963. There was, therefore, no question of its closure coming as a surprise. Holiday makers had ample notice, and for this reason it is in an utterly different category from new proposals made after 12th February which might give intending holiday makers little warning and no time to make alternative arrangements.
  But in spite of this, it has been suggested that even if the statement made by my right hon. Friend in the House
  586
  drew a clear distinction between cases in the pipeline before 12th February and those proposed after this date, the handout, to which my hon. Friend referred, which was circulated at the Press conference held on 3rd March, when my right hon. Friend announced his decision on a bunch of railway closures, did not repeat this distinction and made holiday resorts feel that, irrespective of when the proposal was made, there would be no closures this season. This was the interpretation which my hon. Friend was seeking to read into this hand-out.
  What that statement to the Press of 3rd March said was:
  "He"—
  that is, my right hon. Friend—
  "had recently agreed with Dr. Beeching that rail closures affecting holiday resorts, published after 12th February, would not come into effect until after the holiday period was over".
  If this were the first statement on the subject I can see that it is just possible that it might be taken as referring to closure decisions and not closure proposals. But when my right hon. Friend had made a categorical statement of his policy in the House a few weeks before, I find it very difficult to understand how people could believe that the whole policy would be completely reversed—because that is what that interpretation means—in a casual Press hand-out when the original basic statement had been announced formally in the House.
  However, let me make quite clear what the position was and what the position is—because there has been no change. Holiday resorts are divided into two classes—those where the rail closure proposal was made before 12th February and those where it was made after 12th February. If the proposal was made after 12th February, then there could be no closure until 1st October at the earliest. If, on the other hand, the proposal was made before 12th February, then my right hon. Friend has complete freedom to agree to the closure at an earlier date if on the merits he thinks that that is right, and it is into this category, the pre- 12th February category, that my hon. Friend's line falls.
  I do not consider that the holiday aspect of the case in respect of Bexhill is a very good one, because this closure does not deprive Bexhill of a railway at all. As my hon. Friend is well

  587
  aware, the train service from London to Bexhill, Central, via Hastings, is still in use, and holiday makers can get to Bexhill much as they have always done. The suggestion that the closure of the Bexhill, West-Crowhurst branch line makes Bexhill less accessible to tourists and less attractive is, if I may say so, something of a red herring.
  Mr. Godman Irvine: I follow that, but that is not what my constituents understood the Minister to be saying. What the Minister was saying was that resorts would find that their railways would continue until the end.
  Mr. Galbraith: What my right hon. Friend was saying was that holiday resorts would be treated in a particular way according to whether the proposal had been made before or after 12th February.
  I was pointing out that I did not think that Bexhill was a holiday resort. I say that because the number of travellers on the branch line that is closed did not show the summer peaks customary with holiday resorts. There was a steady load throughout the year, indicating that the line catered for commuter traffic rather than for holiday makers.
  So much for the allegation that there was a breach of faith. There was not, and I hope that my hon. Friend will accept that. If there was any misunderstanding, I am sorry about it, but there has been no change in the Government's or my right hon. Friend's policy on this matter.
  I turn now to another of the points raised by my hon. Friend, about finance. This is something which is raised in many other cases. It is said that the grounds for closing the line could not have been sustained if the full financial figures had been made available. I think that my hon. Friend knows what the procedure is. First, the railways on their own initiative—and I must stress that it has nothing to do with the Minister or with the Government—decide in the light of their own commercial judgment which lines they wish to close. The calculations which lead to this decision are clearly a function of management which the Transport Act, 1962, laid fairly and squarely on the shoulders of the Railways Board. It is the Board's responsibility,
  588
  and nobody else's and it has freedom to exercise this responsibility as it thinks best.
  Nevertheless, in spite of that fact, and in view of the public's interest in the financial aspect of closure cases, the House will recall that last year my right hon. Friend appointed a distinguished accountant, Sir William Carrington, to carry out an independent investigation. My hon. Friend referred to this in his speech.
  In his report, a copy of which is in the Library, Sir William said that the method of calculation used by the Board was in principle soundly based and that the figures were entirely appropriate for the T.U.C.C.'s purposes. I should say what has often been said before, that the figures are given to the T.U.C.C. because it asks for them, not because it is under any statutory duty to investigate them, but because it wants them as a kind of background information giving a sort of indication of the size of the problem against which it can measure the cost of any alternative services which it might be considering.
  Just as the railways are free and independent to make a commercial judgment on the finances of the situation as they see it, so the T.U.C.C. is free and independent to make its assessment of hardship, and that is its only duty. It has nothing to do with finance, but purely hardship. The T.U.C.C.s are the creatures neither of the railways nor of my right hon. Friend. They do not endorse the Minister's decisions, because the Minister has no view at all on any closure proposal until he gets the T.U.C.C.'s report. This means that the T.U.C.C.s cannot endorse the Minister's views, because he has not got any.
  As for rubber-stamping, I have read about 100 T.U.C.C. reports and I can assure my hon. Friend that the last thing that a T.U.C.C. does is to rubber-stamp anything. I wish people would not use that expression so much with regard to these closures. It is not true to say that the T.U.C.C.s rubber-stamp the Minister's views, or Dr. Beeching's views. The T.U.C.C.s go about their task with a great sense of responsibility, and in the most searching way. They consider every objection lodged with them—those in writing just as much as those made

  589
  orally by objectors at the public hearings—and they make the most careful assessment before reporting to the Minister.
  On the Bexhill, West—Crowhurst proposal, the T.U.C.C. made it quite clear that there would be difficulties for certain travellers if the closure went through. It was as a result of this, and of his own examination, that my right hon. Friend decided that he could allow the closure to take place only if certain conditions, designed to remove the difficulties as far as possible, were fulfilled.
  Now I want to say something about those difficulties which the T.U.C.C. highlighted, and which were also referred to in the memorandum sent to my right hon. Friend—to which my hon. Friend has referred—by the Season Ticket Holders' Association from his area. I shall not be able to deal with all the points, some of which are detailed, and refer to management matters, but I shall see that as full an answer as possible is sent to this organisation by letter.
  One of the most important points raised, which was also raised by the T.U.C.C, was the increased journey time for commuters to London. As originally proposed this would have meant, on average, an extra hour's travelling each day, using Bexhill, Central and changing at Hastings. We thought that this was too long, especially as 130 of the 250 season ticket holders lived at Sidley and points even further from Bexhill, Central.
  So the conditions laid down by my right hon. Friend ensure that at peak hours the train journey between Bexhill and London will not take more than an extra 12 minutes, and by providing two additional buses in the evening the increased travelling times on the peak hour trains amount to between 28 minutes and 16 minutes only from London to Sidley. When we remember that those who commute from Bexhill to London have been prepared to put up with substantially longer journeys than is usual for commuters—about two hours each way—I do not think that these additions of a few minutes are much out of the way.
  590
  Then there is the question of the extra cost. I admit that people travelling from Sidley to London will have to pay 7d. each way for a bus to Bexhill, Central. Over a year this amounts to about £15 extra, but on top of a season ticket, which costs £128 a year anyway, this increase of just over 10 per cent. is not very substantial. In any case, had the Ministe r decided, on grounds of hardship or for any other reason, to refuse permission to close the line, the railways would almost certainly have considered increasing the fares. That must be borne in mind.
  Nevertheless, we decided that the effect on season ticket holders should be cut down as much as possible. For this reason we welcome the various undertakings by the Board to do this. They help the season ticket holders. This shows clearly that the Board, the T.U.C.C. and the Minister, in their respective functions, pay very close attention to the needs and difficulties of local users when they are considering proposals which, if carried through, will save taxpayers a considerable sum of money. What is never really appreciated is that the Board does not propose closures unless there are substantial sums of money at stake. Here the railways expect closure to save them over £28,000 a year, a very substantial sum of money.
  This amounts to a subsidy of £47 per year per person using the line, and when sums like this are at stake I think that my right hon. Friend is quite entitled to agree to alternatives even though these make the journey a little longer and a little more expensive. But though this may be inconvenient, by no stretch of the imagination can these extensions be held to amount to hardship.
  The area is not denuded of trains and, indeed, there is a good public transport service, perhaps not ideal for commuters but for the general traveller very serviceable indeed. I therefore think that my right hon. Friend has discharged his duties fairly. Decisions in these matters are never easy and ideal solutions are never really possible, but I would like to assure my hon. Friend that his constituents' views have been considered most sympathetically. Indeed, if he had any doubt on that, the very length of time that it has taken to reach

  591
  a decision should prove that they have been gone into very carefully.
  We weighed the various conflicting interests. My hon. Friend said that his constituents did not understand how the decisions were reached. We had to weigh the conflicting issues, the financial position of the railways, the possible hardship to the traveller—that is where the transport users' consultative committee comes in—and the wider economic and social consequences for the district, and that is the point where the Minister and the Government come in, and we took the views of other Ministers.
  This is not something that my right hon. Friend the Minister of Transport decides on his own. We took into account the views of other Ministers on the result that closure might have on the district. It was only after a great deal of thought that we decided in the national interest that the continued
  592
  existence of this branch line could not be justified when the alternatives provided were so good, when judged by any reasonable objective standard.
  I quite agree that my hon. Friend's constituents would not see it in this light, but I hope that this explanation will help my hon. Friend and will show his constituents that their views were not ridden over roughshod, but were very carefully considered. I do not, as I say, expect them to agree with everything that I have said, but I hope that I have explained to them how we have reached our decision and that it is a fair one.
  The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at eighteen minutes past One o'clock.