MARRIED WOMEN'S POLICIES OF ASSURANCE (SCOTLAND) (AMENDMENT) BILL (Hansard, 4 July 1980)

§ Mr. Marcus Kimball (Gainsborough)
I hesitate to speak, but I had hoped that the promoter of the Bill would make a considerable speech explaining its provisions. I obtained the report of the Standing Committee debates. When I read that, I found that the proceedings basically consisted of birthday greetings to the hon. Member for Dunbartonshire, East (Mr. Hogg).

§ Mr. Douglas Hogg (Grantham)
He is not here today.

§ Mr. Kimball
No, the other Mr. Hogg. His birthday greetings were the total sum of deliberations in Standing Committee on the Bill.
However, the Standing Committee was a little more fortunate than the House of Commons is today, because at least it had the presence of the Solicitor-General for Scotland. In no way do I wish to cast any aspersion on the ability, hard work and competence of my hon. Friend the Under-Secretary of State for Scotland, who is sitting on the Front Bench, but when a highly technical matter to do with married women's policies of assurance in Scotland comes before the House the least we can expect is the presence of the Solicitor-General for Scotland.
The 5 million people in Scotland are legally extremely well represented. They have a Solicitor-General and a Lord Advocate. But the Lord Advocate is not a Member of the House of Commons and when we have two Scottish Law Officers, one of whom is not a Member of this House, I feel very strongly that one of them should be present on occasions such as this. If the Solicitor-General for Scotland was able to attend the Standing Committee in order to wish many happy returns to the hon. Member for Dunbartonshire, East, he might have at least been in the House today to help us understand the Bill.
1970 My purpose in putting down the Third Reading motion was to give the promoter of the Bill, the hon. Member for Kilmarnock (Mr. McKelvey) an opportunity to explain its full provisions to the House on Third Reading. I understand that the hon. Gentleman is prepared to do that, so I shall conclude my remarks by congratulating him on succeeding in getting his Bill as far as he has. I would not wish to see the Bill tumble at the last parliamentary hurdle. I tabled the Third Reading motion purely and simply in the hope that I would receive an explanation. The whole House wishes the hon. Member well with his Bill and congratulates him on a considerable achievement in getting it so far—particularly in this Session when people have abused the Private Members' Bill procedure. In the present climate it is an indication of the hon. Member's charm and competence, and the respect that the House has for him, that he has succeeded in getting the Bill so far.

§ Mr. William McKelvey (Kilmarnock)
I hope that I shall be able to convince the hon. Member for Gainsborough (Mr. Kimball) that I chose this Bill not for any sensation-seeking reason. It is a modest but very important Bill. I am not really the perpetrator of it but merely the catalyst by which it has proceeded.
I wish to record my thanks to the Solicitor-General for Scotland, who was very kind and helpful to me as a new Member. I sought advice from wiser and more experienced hon. Members, and they told me that if I saw the Solicitor-General for Scotland there would be some small piece of humane and desirable legislation which I could pilot through the House. I took that advice, and I am glad to be here to make these submissions. I hope that hon. Members will give the Bill a Third Reading.
The Bill is comparatively simple but important. It implements report No. 52 by the Scottish Law Commission. The main provision of this simple measure is to give women in Scotland the same right that men in Scotland have had for 100 years, namely, the power or right to take out insurance policies on their own lives under the Married Women's Policies of Assurance (Scotland) Act 1880 for the benefit of their spouses and children, or for any of them individually.
1971 The Bill achieves that by amending section 2 of the 1880 Act. The purpose of that Act was to enable a man, as the almost invariable breadwinner in those days, to give his wife an irrevocable gift in the form of a policy on his life which would not be subject to the claims of his creditors in the event of his bankruptcy or debt. It was a particularly sensible measure 100 years ago, when by law anything belonging to a wife became her husband's on marriage, and all gifts between spouses were recoverable by the donor. The Act remains useful today because a wife's property, including her money, is often closely intertwined with her husband's and may be presumed to be part of his assets—for example, in bankruptcy. Policies written under the Act provide an uncomplicated method of constituting a trust, and they will therefore continue to be of importance.
The only definition in the Bill that I should like to mention is that of "children"—the children that the person effecting a policy may have, including illegitimate or adopted children. It does not include children of his or her spouse and another person, unless they have been adopted by the person effecting the policy.

§ Mr. Douglas Hogg
I have read the Bill with considerable interest and I should like clarification on one point from the hon. Member. Am I right in thinking that the chief benefit that is likely to flow from the Bill is that a married woman will be able to write a policy in favour of her children, with the effect that on her death the benefits payable under the policy will not form part of her estate for the purposes of capital transfer tax?

§ Mr. McKelvey
That is not my understanding of the Bill. The Bill provides only that such a policy of assurance can be taken out in Scotland, as happens at present in England. That is what the Bill seeks to provide. It seeks simply to amend the law to remove the anomaly of the differences between England and Scotland.

§ Sir Ronald Bell (Beaconsfield)
I follow that. In the case of a spouse, capital transfer tax does not arise nowadays. However, it would in the case of children, and, as I understand it, the Bill will not affect that position.
1972 May I ask the hon. Member for Kilmarnock (Mr. McKelvey) about illegitimate children? Do I understand him to say that they would have to be adopted before they attained the exemption which his Bill confers? The Bill refers to "illegitimate or adopted children". In the case of a man, that could give rise to a very odd position, could it not? In the case of a woman, it may be known who her illegitimate children are, but how is one to know where the category is drawn in the case of a man?

§ Mr. McKelvey
I have some difficulty in following the hon. and learned Gentleman's train of thought. The Bill seeks to give a woman the power to make out a policy of assurance, and she would know her illegitimate children. The Bill seeks to go no further than that. As for what the husband would do in those circumstances, the power under the 1880 Act is that husbands in Scotland can make policies of assurance.

§ Sir R. Bell
I see that, but paragraph (c) of clause 1 gives the following definition: …'children' includes children that the person effecting the policy has or may have, including his or her illegitimate or adopted children". Can the hon. Gentleman assure me that in relation to husbands the definition clause which he is putting in makes no change?

§ Mr. McKelvey
I can give that assurance. That is my understanding.
While in Scotland this facility has been available to a man insuring his wife and in England and Wales it has, since 1882, been available to a woman for insuring her husband, the Scottish Law Commission feels that it is high time Scotland came into line and that this example of sex discrimination was removed from the law.
I think that all hon. Members will appreciate that that is a humane point of view and that this anomaly in Scottish law should not remain after this incredibly long time. Scottish women should be given the same facilities, rights and powers as their counterparts in England and Wales. I agree fully with the findings of the Law Commission, and this Bill is the result.
The other provisions of the Bill are concerned with minor amendments to the 1973 1880 Act to clarify the position of trustees under the Act, the rights of beneficiaries and the power of the Court of Session to approve and authorise variations of trusts.
I hope that I have outlined in sufficient detail the important facility of this Bill. I ask hon. Members to appreciate and accept the spirit and intention behind the measure.

§ Mr. Douglas Hogg (Grantham)
I am glad to be able to play a part in this rather important debate. I am grateful to my hon. Friend the Member for Gainsborough (Mr. Kimball) for putting down a motion giving us the opportunity to raise this matter on Third Reading. I take the view that this is an important Bill, and I should like to echo the views expressed by my hon. Friend.
I congratulate the hon. Member for Kilmarnock (Mr. McKelvey) on having carried the Bill through the rather complicated processes of this House. As a new Member, I hope that I do not sound patronising when I say that it is a remarkable achievement. I am far from certain that I could have done it. I am sure that I would not have been bold enough to undertake the task. I think that the whole House—all 15 of us—wish to say to the hon. Gentleman that his work deserves commendation from us all. If I may say so, he is following in the very high traditions established by his predecessor.
My hon. Friend the Member for Gainsborough referred to the absence of the Solicitor-General for Scotland. As I say, I am a new Member, and I am a very humble member of the Conservative Party at that. That being so, I express criticism of my betters with a degree of modesty and circumspection. However, I feel that this House would have benefited from the distinguished and learned advice of the Solicitor-General for Scotland. After all, his abilities in the courts are well known, his learning in the law is appreciated by this House, and this is an important Third Reading debate. We are discussing subjects of considerable complexity.
Unfortunately, there are not that many hon. Members representing Scottish constituencies who happen also to be lawyers.
1974 The converse is true of England and Wales. It may be that some hon. Members take the view that there are too many lawyers in this House representing English and Scottish seats. In the earlier debate this morning no fewer than four lawyers intervened. As there were only about seven hon. Members present, that was a remarkable proportion.
We are in some difficulty today. We are discussing rather intricate provisions affecting tax and trust law, and we do not have the presence of the Solicitor-General for Scotland.

§ Mr. Deputy Speaker (Mr. Bernard Weatherill)
I am sure that the Under-Secretary of State for Scotland can deal adequately with any questions which may arise. I do not think that we need the presence of the Solicitor-General for Scotland.

§ Mr. Hogg
I take your rebuke, Mr. Deputy Speaker. I have said that, as a very modest and humble Member, I make my criticism with some hesitation and circumspection. Therefore I pass on, confident that my hon. Friend the Under-Secretary of State will be able to explain fully these rather complicated matters which perplex the House.
We are venturing into a very subtle area of tax and trust law. The general proposition which lies behind the Bill is a valuable one, namely, that it is wrong in principle that a distinction should be drawn between men and women when it comes to the ability to write polices of assurance. One could advance that proposition more broadly. It is wrong that the law should ever impose a discrimination which is against one or other sex. There should be equality and parity in legal rights. Therefore, the proposition behind the Bill is an extremely valuable one.
The Bill is also of increasing importance because one of the characteristics of modern society is the way in which more and more women are obliged to go out to work. That is of significance to this debate because, going out to work, women have financial resources which they would not have had, say, 20 years ago. Therefore it is right that this House should introduce what is, after all, a fairly major measure of reform whose purpose is to enable married women who happen to be 1975 working to pass on some part of their earnings to subsequent generations.
Here I come to a problem, and I look forward to clarification from my hon. Friend the Under-Secretary of State about the effect of these policies of assurance. My understanding is that when a husband writes a policy of insurance in favour of his wife and children, and the moneys are payable under that policy when he dies, those capital moneys would have been already transferred to the children because they were already in trust for the children or for the wife and therefore did not fall within the deceased husband's estate for the purposes of capital transfer tax. I have always understood that that was one of the perfectly legitimate measures for passing on capital sums to subsequent generations. I hope that my hon. Friend the Minister will tell the House whether that is correct. It is important that we know what we are doing. If I am right, it may cause the hon. Member for Kilmarnock some alarm to know that the proposals that he has sponsored—

§ Mr. John Ward (Poole)
My hon. Friend said that because a married woman is now earning money she will be able to purchase policies for the benefit of her husband. Is he suggesting that only those women who go out to work could pay for such policies? I presume that it would be perfectly in order for a husband to give the money to the wife, possibly in a joint account, so that she would not necessarily be driven out to work if she wished to ensure the well-being of her husband.

§ Mr. Hogg
That is a valid point. I am sorry if in some way I have misled the House. It was not my intention to do so.
This is an opportune moment to introduce this piece of social reform because many wives go out to work and have the financial resources that they may wish to dispose of in the manner contemplated by the Bill. It is especially appropriate to introduce the measure now because many more wives go out to work now compared with 20 years ago and have the financial resources to undertake policies or assurance. It is desirable that we should give them the ability so to do.
It is an important matter and I would like to understand what we are about. We are putting man and wife in the same position, which is perfectly proper, and 1976 the measure will enable wives to pass money to their spouses and children free of capital transfer tax. I should like my hon. Friend the Minister to give us some specific guidance on that matter.
One other point that arises on the Bill was touched on briefly by my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell), namely, that the definition of the word "children" includes adopted and illegitimate children. That is right and proper. For all purposes the word "children" should always include illegitimate and adopted children. Problems always arise on titles of honour.

§ Mr. Kimball
I wish that my hon. Friend would use the term "love child" rather than "illegitimate". It is more attractive.

§ Mr. Hogg
I agree that it is more attractive, and I do not intend to argue with my hon. Friend about that. If he wishes me to use the term "love child" I shall do so. The general law on this subject is that the word "children" should include love children—

§ Mr. Deputy Speaker
Order. The term "love child" does not appear in the Bill.

§ Mr. Hogg
I should not digress on titles of honour, but they are interesting exceptions to the general proposition.
There is one lacuna in the definition clause of the Bill to which, even at this late stage, the House may wish to pay attention. The matter worries me. At the top of page 2, at the end of the interpretation clause, there is the following provision: but does not include children of his or her spouse and another person, unless they have been adopted by the person effecting the policy. That raises an important point, and I shall dwell upon it. Since 1973—and I cannot remember the English statute— it has been held that children of one spouse to a marriage are to be deemed to be the children of the family for all purposes unless there is some evidence that the other spouse, who is not the parent of the child, has renounced responsibility. There is a new concept in English law that is not the same as the concept of adoption but is the concept of a child of the family.
1977 When parties marry who have children by a previous relationship, those children are brought into the new relationship and are deemed by that statute to be children of the family. The House would appreciate guidance on that matter. As I understand the interpretation clause, that important category of children is being expressly excluded from the scope of the policy. I find it difficult to believe that the House would wish to make such a distinction between Scottish and English law. It is quite wrong that a wife should not be able to execute a policy of assurance in favour of children who are not her natural children but who are the children of the family in the sense that they are the children of her present husband, have been brought into the marriage, and for whom she has accepted responsibility.
That is an important matter. I am sorry that it is being raised on Third Reading. I am sorry that the Solicitor-General for Scotland is not present because he might have wished to comment on that question. I hope that my hon. Friend the Minister will not let the debate end without giving us clear guidance about whether I am right in saying that children of the family are being excluded.

§ Mr. Nicholas Lyell (Hemel Hempstead)
Having listened to the question of benefit to young people from the policies of assurance, it crosses my mind that if they have the benefit of such policies they may not need so badly the provisions of the Youth and Community Bill which might be discussed later today.

§ Mr. Hogg
That is a valuable suggestion. My hon. Friend is always helpful on these points. I entirely agree with him. If we get this Bill right today, the urgency for considering the Youth and Community Bill will be greatly diminished. We shall move on to that Bill and give it our detailed consideration because it is an important Bill, but we must get this Bill right. It would be wrong—

§ Mr. Deputy Speaker
I am sorry to interrupt the hon. Gentleman again, but there is no chance of amending this Bill on Third Reading. We cannot do that today. Let us deal with the general principles of the Bill and not seek to suggest amendments.

§ Mr. Hogg
I am grateful to you, Mr. Deputy Speaker, and I would not dream of arguing with that helpful direction. We must concentrate on the position which will obtain when the Bill becomes law in its present form. That in no way precludes the House from returning to the question and introducing amending legislation.
I return to the important point about children of the family. If I am right in saying that they are excluded from the benefit of this Bill—and I hope that my hon. Friend the Minister will make this point clear—the House should contemplate amending legislation. It would be helpful if my hon. Friend would consider whether amending legislation could be introduced. If he thinks that it could be introduced, I am sure that he would want to tell the House that this morning.

§ Mr. Donald Dewar (Glasgow, Garscadden)
We have had one or two minor surprises this morning, including the fact that the hon. Member for Grantham (Mr. Hogg) described himself as a humble Member of the House. The hon. Gentleman's speech was interesting, but it did not show a great knowledge of the law of Scotland. Perhaps that was because he is not a Scottish lawyer.
The Bill is a modest, but important, measure. I do not believe that it will greatly change the face of the legal profession in Scotland, but we should be grateful to my hon. Friend the Member for Kilmarnock (Mr. McKelvey) for having introduced it. The Scottish Law Commission report No. 52, which is implemented by the Bill, was published in July 1978. Thanks to the individual enterprise of my hon. Friend we have managed to get through some law reform in Scotland in a fraction of the normal time that elapses between proposition and legislation.
The Bill amends the Married Women's Policies of Assurance (Scotland) Act 1880. We need not go into detail about its consequential effects. I understand that it merely puts a wife in the same position as her husband in the law of Scotland and gives the women of Scotland a right that has long been available in the concurrent legislation covering England. There are no far-reaching changes.
1979 I fail to follow the point made by the hon. Member for Grantham about children in the family who are the children of an earlier marriage or of a relationship of the spouse in whose favour a policy is being made. Under the law of Scotland, and I imagine that the same is true in England, unless those children are formally adopted, they do not have rights upon the estate of the spouse who is not their natural parent. For example, they would not rate in the intestate succession under the law of intestacy in Scotland. If we changed that provision, it would have far-reaching social consequences that would be well beyond the scope of the Bill.

§ Mr. Douglas Hogg
What the hon. Gentleman says is correct, but it is also true that, if a woman has children by a previous relationship, the husband of a subsequent marriage becomes, for all purposes, the person liable to maintain the children of the first relationship, because they become children of the family.
It is odd that there should be a discrimination between children of the family for those purposes and children of the family for the present purposes, so that they cannot be beneficaries under a policy of assurance.

§ Mr. Dewar
The husband has a general duty to maintain the children and there are legal consequences in terms of the social security Acts but not in terms of, for example, the law of succession or the law of trusts. The hon. Gentleman is attempting to drive us into a dead end. I cannot see the parallel that he is seeking to draw. The hon. Gentleman's interest is probably dictated by later matters on the Order Paper. If he were interested in the law of Scotland he would realise that he is inviting us, under the cover of a modest Bill, to remodel the theory of the law of succession in Scotland.
The Bill allows a wife to make a policy of assurance in favour of her spouse and children in order to create a trust with ease and financial efficiency. It will not be an expensive process. The amount of trust work in Scottish legal practices has been declining in recent years and I do not imagine that the Bill will reverse that trend. Not many of us in the solicitors' profession will regret that.
1980 It was a striking anomaly that women should not have the rights that were open to their counterparts in England and to their husbands in Scotland. The Scottish Law Commission held its hand for some time before making the recommendation, because it was thought that the changes in capital transfer tax might have eliminated the potential advantage that the Bill attempts to confer.
On consideration, the Commission found that there were still advantages in making such policies of assurance, despite the changes brought about by CTT. It properly decided that the law ought to be extended so that Scottish women are not left in an inferior position compared with those in other parts of the United Kingdom.
The Commission's report refers to the principal differences between English legislation and Scottish law and says: it will be clear that important facilities or advantages are presented by the English Act which are not presented by the Scottish Act. We consider that these disparities cannot be justified and we understand that they have caused persons who have their domicile or habitual residence in Scotland to have recourse to the English Act rather than to the Scottish Act, a situation which we think highly undesirable. That is a fair point. There are examples of people who would normally be inclined to use the Scottish legislation being forced to shelter artificially under the umbrella of English law. In those circumstances, and quite apart from the general point of equity, it is clearly time that the matter was put right.
The Scottish Law Commission report recommended that the right should apply not only to a spouse but to those who were intending marriage but had not married. That has been omitted from the Bill, because, as I understand from my hon. Friend the Member of Kilmarnock, it would have complicated the measure.
I welcome the power of a beneficiary to deal with his interests, which appears in paragraph 21 of the Scottish Law Commission's report and removes the lingering doubts that the Commission felt still existed following cases such as Scottish Life Assurance Company Ltd. v John Donald and Edinburgh Life Assurance Company v Balderstone.

§ Mr. Douglas Hogg
I am not sure that the hon. Gentleman is correct when 1981 he says that that recommendation has not been implemented in the Bill. The definition section in the Bill refers to a spouse: who becomes the spouse of the person effecting the policy". Therefore, a wife or fiancée could properly write a policy of assurance in favour of an intended husband who, when following the marriage, would be a spouse for the purposes of the definition section.

§ Mr. Dewar
That is in an interesting point, but I understand that the Bill is not intended to implement the Commission's recommendation on the extension of the measure to unmarried persons. I presume that there would be problems if the person who was to become a spouse did not become a spouse. Presumably, he would not fall within the terms of the Act. It may be that Law Lords will have to decide at some time whether the interpretation of the hon. Member for Grantham is correct. If that degree of flexibility could be supported by the text of the statute it would be an advantage and would largely follow the spirit of the Scottish Law Commission's recommendation. But I understand that the intention was that that recommendation should not be implemented.
There have been lingering doubts, following the cases that I mentioned, about the power of a beneficiary to deal with his interest once be becomes of age. That has now been dealt with, which is useful in tidying up an area of the law that is arcane and technical and where there have been undoubted problems for the Inland Revenue and the insurance profession. I imagine that they will welcome the Bill.
I certainly welcome the measure. My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) is unfortunately unable to be here today, but he has asked me to indicate that the Opposition welcome the Bill and are glad that it has reached its final stages and is about to arrive on the statute book. The Opposition support the Bill. I congratulate my hon. Friend the Member for Kilmarnock and I hope that in the next few minutes the Bill will be through safely.

§ Sir Ronald Bell (Beaconsfield)
I am brought to my feet by the description of my hon. Friend the Member for Grantham (Mr. Hogg) of himself as a humble 1982 and circumspect Member. That gives me the opportunity to congratulate the hon. Member for Kilmarnock (Mr. McKelvey) on getting his Bill advanced so quickly and on getting it through at such a late stage in the Session.
I do not wish to detract from those congratulations, but I see the Bill in a different light from hon. Members who have spoken so far. It seems to be the general belief nowadays that if we assimilate the law relating to men and women and husbands and wives we are doing something good which is worthy of praise. However, the Bill extends to women the right, which has been enjoyed by men, to defraud their creditors. That is what the Bill is about. It is not about taxation. Capital transfer tax will not be much affected by it.
The purpose of the Bill is to allow a person to take out a policy of assurance the proceeds of which will be exempt from action by creditors. That is what it is, let there be no mistake about it. The Bill extends to the wife the device of defrauding creditors. It assimilates the law; and everybody says that that is a fine and creditable thing to do. Husbands have been able to defraud their creditors in that way for a hundred years and now the wife will be able to do the same.
I may be old-fashioned, but I believe that tradesmen who have supplied goods have a better claim on a person's resources than that person's children—or bastards or love children, whatever one cares to call them. Why are we so dedicated to the cause of cheating the honest tradesman or supplier of goods and services? What is virtuous about that? By all means let us assimilate the law but not in the way proposed in the Bill. The law could be assimilated by depriving the husband of that right so that people pay their honest debts and do not establish fictitious trusts.
The Bill does not deal with a straightforward trust, but trusts are much misused for the defrauding of creditors. To extend the provision to life assurance policies opens up yet another avenue through which people can avoid their just debts. I realise that the hon. Member for Kilmarnock is carrying out a recommendation of the Law Commission and I congratulate him, especially since he is a relatively new Member of the 1983 House, on the success of his legislative project. However, we should always look behind the simple argument of assimilating the law for men and women and husbands and wives. We should ask about the effect of such measures. We should ask whether it is good or bad. Making the law the same for everybody is no answer.

§ Mr. John Ward (Poole)
I venture with some trepidation into a jungle of lawyers. I regret the fact that no Scottish lawyers are present. I spent about four years of my education in Scotland and learnt a little of the caution with which the Scots traditionally approach any respect of English law before they embrace it.

§ Mr. George Foulkes (South Ayrshire)
The hon. Gentleman is wrong to say that no Scots lawyers are present. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is a well-known and well-respected Scots solicitor.

§ Mr. Ward
I am grateful for that correction.
I understand that Scottish law sets out how the estate of a husband shall be divided among his children and wife. The Bill might complicate that provision. I hope that the Minister will indicate how that provision will be affected. My hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) is right to say that we should understand what we are doing, however few of us are present.

§ Sir Albert Costain Folkestone and Hythe)
I believe that the Bill should be debated on Third Reading. I have sponsored Private Members' Bills and realise the difficulties involved in having a Bill properly prepared. I do not pretend to know anything about Scots law. The more I look at it the more I wonder how it is understood by an intelligent race.
How does the Bill affect English people who retire in Scotland? For how many years must an English person live in Scotland before the Scottish law applies? There is a tendency for people, as they approach death, to look round the world to see where they can afford to die. There is a tendency to go to the Isle of Man or the Channel Islands.

§ The Under-Secretary of State for Scotland (Mr. Russell Fairgrieve)
We have had an interesting, if unexpected, debate. I am glad that six Scottish Members, which is more than half the number that occupied the Chamber during the debate, are present. I am glad to see that the right hon. Member for the Western Isles (Mr. Stewart) made the long journey over seas to be with us for this important debate on an important Bill.
My hon. Friend the Member for Gainsborough (Mr. Kimball) said that the Solicitor-General for Scotland should be here. My hon. and learned Friend is a busy man and we must try to get on without him. Had the Solicitor-General been here, my hon. Friend would have had correct legal answers, humour and various other surprises. However, that is not to be and my hon. Friend will have to put up with the more humble and mundane replies that I shall give.
My hon. Friend the Member for Grantham (Mr. Hogg) made a considerable number of points. I do not know whether there is an ulterior motive for his sudden interest in the law of Scotland. Whether I like it or not, and whatever the reason, I am duty bound to answer some of his questions to the best of my ability. He said that this was a complex matter that perplexed the House. He posed a number of highly technical questions. He asked whether the provision was a means of avoiding capital transfer tax on married women's estates. It depends on the source from which the premiums are derived. Generally speaking, there should be few CTT advantages. My hon. Friend the Member for Grantham also asked if other children who were not adopted—hon. Members went into deep and difficult areas of illegitimate, natural, love children and even some other non-parliamentary words—

§ Sir Ronald Bell
The word "bastard" is not unparliamentary. It is the ordinary word. The others are simply genteelisms.

§ Mr. Fairgrieve
I knew that my hon. and learned Friend would correct me. I thank him for so doing. Whatever those terms are, I should like to answer the point. This would involve a substantive change in Scots law which would not be proper in this modest Bill. There is no 1985 universal rule in United Kingdom legislation that children of the family have the same rights as illegitimate, adopted, love children or bastards. I understand that this is the case only in relation to social security payments.
My hon. Friend the Member for Grantham asked whether it was normally the case that the funds should go directly under the trust to the children. The situation is explained in paragraphs 5 and 6 of the Scottish Law Commission report, which I shall read to my hon. Friend for his enlightenment: The possibility of setting up a trust under the Act was seen to have considerable further advantages under the estate duty provisions of the Finance Act 1894. A policy under the 1880 Act was, as soon as it was effected, deemed to be a trust to the benefit of the assured's wife and children, and consequently was in law, property in which the deceased did not have an interest. It followed that the policy did not fall to be aggregated for estate duty purposes with the deceased's other property passing on his death. This advantage was very considerable and such policies were much used in order to save estate duty until their advantages were reduced by legislation in 1954 and 1968. The possibility of using policies of assurance for the purpose of obtaining the benefits of exemption for 'transfers of value' specified in Schedule 6 of the Finance Act 1975 remains and it appears likely that policies written under the 1880 Act will continue to be of considerable importance as providing a simple method of constituting a trust. My hon. Friend asked why children of the family are not in the same position as illegitimate or other types of children who have been mentioned. This legislation does not need to cover these children, as it is always available to the assured to take out a trust policy in favour of the child involved. Such a trust policy does not have to be written under the Married Women's Policies of Assurance Act. The final question of my hon. Friend the Member for Grantham was as to why the Bill did not extend to prospective spouses, as mentioned in the Scottish Law Commission report to which the hon. Member for Glasgow, Garscadden (Mr. Dewar) referred. The policy does not become a protective trust until the parties marry. To introduce precise definitions of prospective spouses would destroy the principal advantage of a policy under the 1880 Act—simplicity and clarity.
1986 The hon. Member for Garscadden made a useful intervention, with his legal knowledge, and I appreciate the message he gave from the right hon. Member for Glasgow, Craigton (Mr. Millan) that the Opposition support the Bill. My hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) mentioned the Bill as one way of allowing wives to defraud their creditors as husbands had. In England and Wales since 1882, apparently, wives have been defrauding their creditors. While this facility has been available in Scotland only to men, it is a fact that, south of the Border, there has been this facility since 1882. We feel that we should get in on the act. Section 2 of the 1880 Act says: Provided always, that if it shall be proved that the policy was effected and premiums thereon paid with intent to defraud creditors, or if the person upon whose life the policy is effected shall be made bankrupt within two years from the date of such policy, it shall be competent to the creditors to claim repayment of the premiums so paid from the trustee of the policy out of the proceeds thereof. I shall make sure that married women in Scotland now know how their counterparts in England and Wales have been able to proceed for the past 100 years and see if we can catch up more quickly.
My hon. Friends the Members for Poole (Mr. Ward) and for Folkestone and Hythe (Sir A. Costain) both spoke in the debate. I do not think that their remarks affect the position on Third Reading.
I wish to take this opportunity to express the Government's thanks to the hon. Member for Kilmarnock (Mr. McKelvey) for the able manner in which he has steered the Bill through its various stages in the House. He was kind enough to pay respect to my hon. and learned Friend the Solicitor-General for Scotland for the help that he received from him. Tho two of them, especially the hon. Member for Kilmarnock, have played a notable hand for Scotland today. The hon. Gentleman has played a valuable part in furthering the work of the Scottish Law Commission in its formidable task of reviewing Scots law. There is no need for him to look so shy and bashful. He has done a great job in his first year in Parliament. The Government support the Bill and its objective of according to women a right that men in Scotland have 1987 enjoyed for a century. The hon. Member for Kilmarnock has displayed a clear grasp of the essentials of the Bill and is to be congratulated on handling his first Private Member's Bill with such aplomb.