TEMPERANCE (SCOTLAND) BILL.

HL Deb 21 January 1913 vol 13 cc342-82

Order of the Day for the Third Reading read.

Moved, That the Bill be now read 3^a.—(Earl Beauchamp.)

LORD BALFOUR OF BURLEIGH

My Lords, before the Question is put I should like to say a word or two upon the general course of procedure in your Lordships' House with regard to this Bill, because I can already see signs that what we have done has been to a very large extent misrepresented in Scotland, and I think it desirable that at any rate the position of matters and what we have done should be put shortly and in a concise form before those who are interested. I do not deny for a moment that we have done some things which are not agreeable to His Majesty's Government, and we have done even more, I think, which is probably disliked by what I shall call the extreme teetotal section of those who are interested in this Bill. But I am here to say that in the main—I do not say universally, but in the main—the Amendments which have been made in this House have for their object to make the Bill a valuable, workable, and good Bill, and have not been, at any rate avowedly, for the purpose of snaking it difficult for the Government to accept the proposals. So far as the areas are concerned, I think we have made a distinct improvement. It is not all that I would desire. I still think there will be great difficulties in working the wards in large towns and cities. But as the Bill came up to us I venture to say that the proposals as to the areas were fit for nothing but ridicule—they would have been absolutely unworkable; and it is my honest opinion formed after the most careful consideration that, so far from making for temperance, this Bill, if it were to pass in the form in which it came to us, would place the worst difficulties of any in the way of improvement in the matter of temperance.

We have put in also the question of compensation. Over and over again we are told that the publican has not a vested interest, and so far as you use the word "vested" I am inclined not to quarrel with it; but that there is an interest which has grown up under sanction of the State and with the knowledge of all concerned seems to me a fact which is absolutely indisputable. I look at the Paper which the Government placed on the Table of this House in answer to a Question put by me. It is a short statement as to the procedure followed by the Board of Inland Revenue in ascertaining the value of estates of deceased holders of licences in Scotland. It is impossible to criticise any particular case given without knowing all the circumstances and making sure that every proper allowance has been made and the balance which remains is reduced to absolute net profit. If any of your Lordships have this Paper in your hands, you will see that in the one case which is given the yearly turnover of the public-house was £3,821; the net profits, £520; and the value of the goodwill on which Death Duties were taken was £3,000—very nearly six years of the value of the licence as ascertained for Government purposes. It does seem to me that if in these circumstances you confine the period of interest in the Bill to five years you are running the grievous risk of doing serious injustice to people who are engaged in what, after all, is a legitimate trade under the sanction of the law for supplying the requirements of their fellow-countrymen.

Again, there was the question of disinterested management, about which I shall say a word or two in a moment. I venture to make an appeal to the Government not to be guided wholly by the intolerance of a section who are hoping to pass this Bill into an Act over the heads of this House under the provisions of the Parliament Act. Most unquestionably the fact that that Act is upon the Statute Book has raised their hopes that they can get this Bill in the form in winch they think they want it without any interference from your Lordships' House. I say distinctly that if that is going to be the procedure for one, will take no responsibility for allowing this Bill to pass in the form in which it came up to us in fear of any such operation as that. I would far sooner have it laid to my charge that we had resisted the Bill for the two or three years, whatever it may be, that is necessary; because I believe that if an attempt is made to pass this Bill in the form in which it came up to us it will be the worst day's work that has ever been done in Scotland for the cause of temperance reform, which I claim to have as much at heart as anybody else.

You cannot get a cure for the evils under which we are suffering by having recourse to blank repression and to nothing else. Those whose arguments have been supplied to me somewhat copiously do not seem to have got much further than the sort of aphorism attributed to the late Sir Wilfrid Lawson, who is reported to have said that drunkenness is caused by drinking and that if you want to stop drunkenness you must stop drinking. No doubt if you stopped drinking you would stop drunkenness, but you cannot do it by repression. The thing is absolutely impossible. All that you will effect will be that you will drive it underground. You will make it worse, you will make it less easy to cure, you will make it more difficult to bring into operation those forces of moral self-control which, after all, are the foundation of character and on which in the last resort you must rely for improvement. In Scotland we have had Sunday closing for something more than sixty years. Recently we have closed public-houses both in large and small towns at ten o'clock at night, and there are some who think that they would advance matters if they could close public-houses altogether. If you go further in the direction in which these timings have gone the only effect will be that you will raise a larger number of clubs, a larger number of shebeens and secret drinking dens infinitely worse than public-houses, which are, or ought to be, in the light of day and under proper police and other supervision.

I want to say a word about the question of disinterested management. I hold in my hand a memorial from the Glasgow Presbytery Temperance Committee of the United Free Church of Scotland. It is signed by the convener and the secretary. It is in print, and has no doubt been circulated to many; but I think this copy has been sent personally to me because the signatures are autograph. I should like to say that there is almost no body in Scotland to whose views I would desire to pay greater attention or consider with greater respect than the Glasgow Presbytery of the United Free Church of Scotland. They are a very large body; they contain many distinguished men, and nothing which they say should be cavalierly or hastily put on one side. But I venture to think that this Committee, though it has a mandate from the Glasgow Presbytery to conduct its business in its own way, is not thoroughly representative at any rate of Glasgow on this particular question. They say in one of the passages— The committee has the strongest objection to the incorporation in the Bill of an option of disinterested management, for the following among other reasons. Then they say that— A measure professedly in the interests of temperance reform should put forward for the popular vote only such options as represent proved and effective methods of dealing with the evil of intemperance. They then claim for the Bill that in its original form it had been submitted to every test of public opinion in Scotland, and they go on to add— The option of disinterested management has not been submitted to any such ordeal, nor has it received any widespread endorsement. I think the committee do less than justice to the amount of argument and agitation which has gone on on behalf of disinterested management. It is thirty years since the idea was first approved of by a Committee of your Lordships' House. There was an influentially-signed memorial to Sir Henry Campbell-Bannerman, and in January of last year another to Lord Pentland; but more than that there was a recent memorial to Mr. Asquith some few weeks ago signed by 2,165 individuals, some on behalf of representative bodies such as trade unions. There were 3,300 trade unionists represented by the signatories to the memorial. In addition, more than 500 ministers and clergymen of the various Scottish Churches signed it—233 of the Church of Scotland and 213 of the United Free Church. It was also signed by nearly 300 justices of the peace, 112 doctors, and more than 800 lawyers, accountants, bankers, and merchants. In addition to that, this question of disinterested management has been prominently before the Scottish public for years. A Bill was introduced into the other House of Parliament twelve years ago backed by representatives of both political Parties; and the General Assembly of the Church of Scotland, representing over 1,500 clergy and 714,000 communicants, has repeatedly adopted a resolution in favour of a system of disinterested management, and some of the best known Scottish Members of the House of Commons are also in favour of it. After all, we are not asking to impose this system upon the people of Scotland. All that we are asking is that on a fair and representative vote, on an occasion when everybody will have an opportunity of expressing his opinion, the option shall be given of saying whether or not they will accept it.

I do not wish to detain the House long, but I refer again to the last paragraph of this memorial, in which the committee say— Divided in general politics our committee is united in this decision and in the general argument of this memorandum, which we now humbly submit to the Government in the full assurance that we have behind us the support, not only of our Presbytery and our Church, but we are confident also of the great mass of the people of Scotland. Those are bold words. I do not think they have behind them even the opinion of the people of Glasgow. After this matter had been discussed at intervals over a period of six months the Town Council of Glasgow took a plebiscite of all the electors of Glasgow. There are in Glasgow thirty-seven wards and more than 203,000 voters are upon the roll, and in this postcard plebiscite 111,000 valid votes were returned. Some few thousands of votes were returned invalidated, purposely in some cases, I am sorry to say, because expressions of opinion from some of the electors were written across the cards. But there were 111,000 valid votes recorded; of those, 59,000 voted for reduction; 15,000 for an increase; and 36,000 for no change. There were, as you see, little more than 90,000 people who did not return their card, but of the valid votes recorded 53 per cent. were for reduction, 33 per cent. for no change, and 14 per cent. for an increase. You may say there was no opportunity given to the people to vote for complete Prohibition; but surely, on a plebiscite of that kind, if there had been any large proportion of the voters who desired to do away with public-houses altogether there would have been more than 53 per cent. of the votes recorded for reduction. It does seem to me that the people of Glasgow are not in this matter adequately represented by the memorial from which I have quoted some passages. I know nothing about this plebiscite except what I have read in the public journals; but the comment upon it by the leading newspaper in Glasgow is in these words— For if this plebiscite is valueless from one point of view, in respect that it involves a remote principle and not its serious application to existing conditions, it is not without importance as proof of the immense body of opinion in this city which is in incipient revolt against the dragooning methods of too earnest philanthropists. I think that is a true comment and a sufficient answer to a good deal of what has been said in disparagement of the action of this House.

I am bound to say, so far as this disparagement is concerned, that one of the chief offenders is one of the colleagues of the noble Earl opposite. The Chancellor of the Exchequer was in Scotland on a political tour in the early part of last month, and in the course of that tour he made a speech at Kirkcaldy. Some things he said there seemed to me so remarkable that I sent a copy of the speech to the noble Earl in charge of the Bill and told him that I intended to call attention to some of the statements which were made. I do not object to fair criticism, and I am old enough in public life to know that there is a certain amount of licence allowed to ardent orators on Party platforms, just as there is to poets; but I think the Chancellor of the Exchequer went further than is usual even having regard to that licence. The Chancellor of the Exchequer is reported in the Scotsman to have said— Look at what is happening in the House of Lords now—nothing unusual, I admit. Your Bill is sent up there—the Bill demanded by your representatives on your behalf—up it goes to the House of Lords. They begin to tear it to pieces. They know so much better what you want to drink than you do yourselves, the quantity that you want, the opportunities that you want for it—as if a knowledge of Scotch whisky qualified a man to legislate on the question of temperance for Scotland. They— that is the House of Lords— are dictating to you what you should do about your drinks—the last thing about which you ought to meddle with a man. If he is not allowed to choose his own drinks, well, now, what can he choose? I appeal to your Lordships, Is this House, the majority of this House, interfering with a man in the choice of his drinks? If an occupant of the Front Bench in either House of Parliament had said that the Government were interfering and meddling with a man and what he should drink, there would be some truth in the charge. But is it possible that the Chancellor of the Exchequer could really have been aware of the contents of this Bill, which is pressed upon us with so much fervour by his colleagues, when he made this statement? An American orator was once reported to have answered, when challenged with something that he had said, that it was reasonably near the truth. I do not think this is even reasonably near the truth.

I do not want to say anything too strong. I do not look upon it from a strongly personal point of view. But is it not rather absurd that a man with the position and authority of the Chancellor of the Exchequer should go to a poor audience in Kirkcaldy and mislead them to the extent that this criticism must mislead? As I have said, I do not want to take it too seriously. I think that when the House of Lords is mentioned to the Chancellor of the Exchequer and when he gets up on a public platform to argue about it he is affected by a sort of religious mania, and therefore I would extend sympathy and pity rather than use any stronger term. But I do suggest that it is not reasonable, that it is not fair, to the circumstances in which we are placed that statements of that kind should be made with all the authority of the Chancellor of the Exchequer. I sincerely hope that a reasonable and temperate position will be taken up in another place with regard to these Amendments, because I am far from saying that there is nothing worth doing in the matter of temperance reform or that nothing can be done by legislation. But I do say that if you go to the length which this Bill would have gone as it came up to us, you will do infinitely more harm to the cause we have at heart than you will do good.

THE EARL OF CAMPERDOWN

My Lords, I must ask your Lordships to allow me to say a few words with regard to the manner in which this House has been misrepresented, or rather with regard to the manner in which our actions have been, if not misrepresented, at all events misunderstood. I have received resolutions, as no doubt have other noble Lords connected with Scotland, mostly proceeding from associations of persons connected with the extreme wing of the Temperance Party, and in those resolutions, all of which are in general terms, they state that this House has so mutilated and destroyed this Bill that it is not worth the paper on which it is written. If the people who have passed those resolutions have really read the Amendments and the debates which have taken place in this House on this Bill one can only say that they have failed to understand them; but I very much question whether they have even done us the favour of reading or considering the Amendments which they have condemned. Again, as Lord Balfour said, even such a person as the Chancellor of the Exchequer, in a tour in Scotland on a Saturday afternoon—I suppose having nothing very much to say—delivered a speech which had no possible reference to anything which your Lordships had done, and the people of Kirkcaldy naturally cheered and I dare say believed it to be gospel. So far from that being the case, of course, there is not a scintilla of foundation for any word in that statement by the Chancellor of the Exchequer. That being so, is it not most desirable that your Lordships should place before the country with regard to this Bill exactly what you have done and what you have not done?

This is not the Bill of the Government. It is the Bill of the extreme Prohibitionist Party which the Government adopted in toto with all its bad drafting and its bad machinery. The principle of this Bill is, of course, no licence. Your Lordships will remember that when the Bill came to this House, whilst noble Lords on this side stated that it was not a Bill which they themselves would have introduced, yet they said that in Scotland there appeared to have been for a long time a wish for something of this sort, and they said that in these circumstances they would not interfere with the principle of the Bill. Now let us consider what is the principle of the Bill. The first principle is no licence, With the exception of one alteration—a very small alteration changing three-fifths of the persons who actually voted into two-thirds—this House has not passed any Amendment which can in any way be said to interfere with the principle of the Bill. For instance under the Bill, if 30 per cent. of the electors vote in favour of no licence they have it in their power to prevent any drink being sold within the area. I have no doubt that there are many noble Lords on this side of the House who think, as I do, that 30 per cent. is far too small a proportion, but your Lordships will remember that when it was pro[...]red from this side of the House to increase that percentage to 40 or 50 your Lordships declined to make the change.

Then we come to the limiting resolution. When a limiting resolution was passed, according to the Bill as it came to this House, it was necessary that the Licensing Court should cut down the licences within the area to the extent of 25 per cent. Many noble Lords on this side of the House considered that it would be far better to leave to the licensing authority the power under that resolution to cut down the licences to anything not exceeding 25 per cent., and if I remember right an Amendment of that kind was moved by Lord Saltoun. Your Lordships, however, declined to pass that Amendment. So much for the resolutions. Then with regard to the hour of opening. The Bill came to us with the hour of 10 a.m. Amendments were proposed from this side, first to alter it to nine o'clock, and then to give the local authority power to make the opening hour any time between 8 a.m. and 10 a.m. Your Lordships declined to pass either of those Amendments.

Now we conic to the changes which this House has made in the Bill. The first change which I will mention is the substitution of ten years for five years as the period at the end of which the Bill is to come into operation. When it is considered what the purpose of deferring the beginning of the Act is, not only is that Amendment a perfectly reasonable one but I cannot help thinking that it is very likely to be approved elsewhere. What is the purpose of deferring the commencement of the Bill for several years? It is in order to enable the trade to create a reserve fund or an insurance fund by which partially to meet the additional heavy restrictions which are to be imposed on the trade by this Bill. For that purpose it seems that ten years is by no means too long a time. With regard to the changes in machinery which your Lordships have made, Lord Balfour has already alluded to the change in area and it is not necessary to say anything further about that. Your Lordships also introduced a clause by which excessive and illicit canvassing is to a large extent prohibited. With one exception those are really all the changes that your Lordships have made, but that one exception is, of course, a very important one.

Your Lordships have added an additional option to the Bill. You have not destroyed any of the three options existing in the Bill; you have simply added another option—namely, that of disinterested management; and at the same time your Lordships have added, as a corollary, a scheme of compulsory insurance without which disinterested management cannot well work. I suppose it is going to be said that this is a mutilation of the Bill. I cannot help remembering who are the persons who have been, and I believe are in their hearts at this moment, in favour of disinterested management. There is Mr. Asquith, Sir Edward Grey, the noble and learned Viscount on the Woolsack, and his predecessor (Lord Loreburn), whom we are very glad to see in the House restored to health; there is Mr. Ure, who had his name twice on Bills—three-fold option Bills, and of those three options disinterested management was one; and the present Secretary for Scotland (Mr. McKinnon Wood) when this Bill was read a third time in the House of Commons took the greatest pains to say that nobody must regard him as an enemy of a scheme of this kind. After all, how can any one say that your Lordships are mutilating the Bill by the insertion of this option? I understand that it is opposed violently by the extreme Prohibitionist Party. They cannot have much confidence in their scheme if, because another option is added to their Bill, their Bill is mutilated. Surely the electors of Scotland ought to have as fair an option as possible and ought not to be limited in the way that the extreme Prohibitionists would limit them. The Prohibitionists must be afraid that if disinterested management is proposed the electors will vote against them. That is their reason for opposing it so bitterly. But as for calling it a mutilation of this Bill it is nothing of the kind, and I shall he surprised if any one in this House will attempt to maintain that it is. We do not know what is going to happen to this Bill elsewhere. We must wait and see. But in the meantime I desire to enter an emphatic protest against the misrepresentation of the action of this House which has been published, not only by Prohibitionists, but also by a member of His Majesty's Government.

THE EARL OF LYTTON

My Lords, I wish to add a word to what has been said by my two noble friends. It is quite true that this Bill has been altered; but if we are to be told that this House is never to make any alteration in a Bill, however reasonable, however moderate, which does not meet with the entire approval of the Government of the day or of any particular section of its followers, then all the proceedings in this House are a mere farce, and it is entirely misleading and deceptive to say we have a Second Chamber in this country. The Bill has been altered, and if we are to regard merely the number of words which have been added the alterations have been considerable. But, my Lords, there is no particular merit in mere brevity in an Act of Parliament. Very often brevity may be conducive to want of clearness, to complexity and misunderstanding in a Bill. Therefore it is not to the words but to the substance of the changes which your Lordships have made that we have to look, and when we regard the substance of the changes which have been made in this Bill they really only amount to three.

Three main changes of substance have been made in the Bill in this House. The first is a change in the period of the time limit. The period of five years at the end of which this Bill was to come into operation has been extended to ten years. But is that a wrecking Amendment? Is that an Amendment contrary in any way to the principle of the Bill? Will anybody representing the Government tell me that he would rather lose the Bill altogether than wait five years longer to see it come into operation? The second change which your Lordships have made has been to add a fourth option in favour of disinterested management. Well, but that is an extension and not a diminution of the principle of the Bill. It is giving more freedom and not less freedom to the people of Scotland to work out by experiments a licensing system of which they approve. The noble Earl in charge of the Bill told us, I think during Committee, that every member of the Government did homage—at any rate, he used the words "we all do homage"—to the principle of disinterested management. No one, therefore, can say it is opposed to the principle of the Bill that we should have inserted this option. We have merely given an opportunity to the people of Scotland to do homage to the principle also, and to do homage to it in a practical way if they feel so inclined. Then, again, we have put into the Bill machinery for a scheme of compulsory insurance, whereby those whose business will be interfered with by this Bill will be able to provide themselves with compensation out of their own pockets. Can that be described as a wrecking change in the Bill? Can it be described as a change in any way hostile to the principle of the Bill? It establishes no vested interests in licences, it in no way interferes with the absolute discretion of the Licensing Courts or with the popular votes which will be recorded under this Bill. It will, it is true, mitigate to a certain extent the hardships which in the public interest this Bill will inflict upon those who are engaged in a perfectly legitimate, if perhaps an undesirable, trade; but it will do that without imposing any burden on the persons who will benefit from this change, without placing any charge whatever on public funds, and, in short, without inflicting any injury either upon individuals or upon any principle. I defy any member of the Government, I defy any noble Lord opposite, to say that this Bill has received at your Lordships' hands any but the most considerate and the most sympathetic treatment.

Then if I am told that the objections which the Government have to the Amendments which we have made in this Bill are not to their principle but to their form, I would ask, What assistance have we received from the Government in framing these changes and Amendments? If they object to the form of these Amendments, why have they not chosen the form for themselves? After all, it is their Bill. Why have they not put into their Bill the principle to which they tell us they all do homage? The noble Earl in charge of the Bill told us on the Report stage that the form in which the disinterested manage- ment option had been inserted in the Bill would not find favour with the existing organisations in Scotland interested in disinterested management. I do not know on what authority he said that. I can only say that throughout these proceedings I have been in constant and close touch with all those in Scotland who are interested in the question of disinterested management, and I can say that none of these changes have been made without their full knowledge and entire approval. I do not think, therefore, the noble Earl had any justification for saying that the change had I been made against the wishes of existing disinterested management organisations in Scotland.

I repeat there is not a single Amendment made by your Lordships in this Bill which can be described as either unreasonable or opposed to the principle of the Bill. It is entitled a Temperance Bill, and its object is to promote temperance in Scotland. I have just as strong an interest in the cause of temperance as any noble Lord opposite or as any noble Lord in this House, and it is because I believe that the Bill will to a large extent promote the interests of temperance in Scotland that I have welcomed its introduction and should have deeply deplored any attempt on the part of this House to diminish the power of this Bill to work in the interests of temperance; but I say emphatically that no change has been made in this Bill by your Lordships' House which will in any way diminish the power of the Bill to promote the cause of temperance in Scotland. Therefore if the Government act upon the suggestions which have been made that your Lordships have been actuated by wrecking motives, if they reject the Amendments that you have inserted in the Bill and refuse altogether to consider the question of compromise, then I say they will be acting, not on account of any zeal for the cause of temperance, and not from any concern for the interests of Scotland, but merely out of contempt for this House and simply out of a desire to misrepresent and to quarrel with everything which is done by it.

THE FIRST COMMISSIONER OF WORKS (EARL BEAUCHAMP)

My Lords, although the noble Lord who first spoke this evening was kind enough to give me private notice of his intention to raise the question of the speech which was made by my right hon. friend the Chancellor of the Exchequer at Kirkcaldy, I had not expected such a fusilade as we on this Bench have had to undergo during the last three-quarters of an hour. It has been none the less a very interesting and instructive debate to those of us who [...] followed the fortunes of this Bill since it first appeared in your Lordships' House. As I heard one noble Lord after another speak in dulcet tones of your Lordships' small Amendments which ought to have met with our approval as they were not opposed to the principle of the Bill, I rubbed my eyes and wondered whether, after all, I was not mistaken in thinking that this House had sat three evenings in Committee on the Bill, during which a series of Amendments were moved to which our reply constantly was that they were hostile to the principle of the Bill as we understood it. Yet I am supported by the records of the House. Therefore I was the more surprised at hearing this evening these attempts to minimise the alterations which undoubtedly have been made.

Let me take first the remarks of the noble Earl who spoke last. Will he allow me to say that I have, perhaps, particular sympathy with him because this is not the first time that he has had much the same experience as that of which he complains on the present occasion. If I remember right, he took an active part when a Licensing Bill was introduced into this House by noble Lords opposite when they occupied these Benches. He was anxious at that time that they should introduce into their Bill, which afterwards became an Act, a number of Amendments, and I am afraid that he was received just as unsympathetically on that occasion as he feels that he has been received on the present occasion. In these circumstances, having been treated first by one side of the House and then by the other in this unsympathetic way, I hope he will allow me to offer him my sympathy. But let me say that when I referred on the Report stage to the point to which the noble Earl has just alluded—an expression of opinion on the part of bodies interested in disinterested management against the principle as it was then in the Bill—what I referred to was a letter which had appeared in the Pall Mall Gazette, in which there was considerable opposition taken to the scheme, I quite admit on the ground very largely that no compensation should be paid. The writers thought that no compensation should be paid, and they disapproved of the idea of disinterested management with compensation payable—compensation which is now introduced into the Bill.

I turn to the Amendments which have been introduced and the changes which have been made in this Bill. Noble Lords who have taken part in this debate have not, I think, mentioned all the alterations which have been made. I hope they will forgive me if I touch briefly on the various Amendments in turn. First of all, there is the introduction of the principle of disinterested management. On that I am sure your Lordships are all interested to see the Amendment which has been put down for discussion this evening by my noble friend behind me Lord Courtney. That Amendment, I think, goes a good way to remove the particular objection to which some noble Lords on this side laid stress, which was that the introduction of disinterested management as a further option would go far to destroy the general balance of the Bill and confuse the temperance vote. I am sure that those of us who are anxious to see progress made in the direction of temperance in Scotland will support Lord Courtney's Amendment, because it is more likely to attain the object than if we were to leave the less perfect scheme of voting as it is at present in the Bill.

Not only has disinterested management been introduced, but also a payment of compensation to the licence-holder—a payment of compensation after the expiration of the time limit; and that, I think, is the special point to which Lord Balfour of Burleigh has more than once directed the attention of your Lordships' House as being inconsistent with the best principles of licensing reform. Then we come to the question of the alteration of the numbers, to which Lord Camperdown especially referred, and which was an Amendment introduced I think by the noble Earl, Lord Dunmore. The difference between two-thirds and three-fifths is not necessarily a considerable one in itself, but it goes beyond the experience of the Legislatures of our various Dominions, who have never gone so high as the figure which has been put into the Bill on the motion of the noble Earl. We think it would have been amply sufficient if we had followed the experience of our self-governing Dominions and had been content with the figure which they introduced. Further, there has been a scheme of compulsory insurance introduced into the Bill. These various Amendments in their cumulative effect have made a most unfortunate impression upon His Majesty's Government, and we are somewhat gloomy as to the prospects of the Bill. I do not think that it would have been impossible to your Lordships to have introduced a series of Amendments to which it would have been perfectly easy for His Majesty's Government to agree, and which might have allowed this Bill to pass as an agreed measure during the present session; but I am afraid that the way of agreement does not lie in the direction of the Amendments which have been introduced during our discussions of this Bill.

LORD BALFOUR OF BURLEIGH

Is that all that the noble Earl is going to say about the statement of the Chancellor of the Exchequer?

EARL BEAUCHAMP

I beg the noble Lord's pardon. I am quite prepared to defend my right hon. friend. The complaint, if the noble Lord will allow me to say so, does not seem to me to amount to very much. The point is this. The people of Scotland wish one kind of meddling with their drinks, and your Lordships' House thinks that another kind of meddling would be more suitable. How far that constitutes a ground of complaint against my right hon. friend I am afraid I cannot quite understand.

THE MARQUESS OF LANSDOWNE

My Lords, we all admire the dexterity and good humour with which the noble Earl in charge of this Bill does his business in your Lordships' House, but it wanted a little more than dexterity and good humour to meet the indictment of my noble friend Lord Balfour, supported as it was by my noble friend Lord Camperdown. The noble Earl knows perfectly well that the reason why he did not attempt a defence of his colleague was that he knew there was no defence to make. The noble Earl tells the House gravely that the Chancellor of the Exchequer's speech at Kirkcaldy did not amount to very much. The noble Earl must be aware that the speech must have been made in ignorance of the contents of the Bill which the Chancellor was discussing, and that the views of the Chancellor were, not for the first time, distorted by the feelings which he never fails to exhibit towards your Lordships' House.

Let me again point out, in reply to the noble Earl's statement that the speech did not amount to much, how 'completely it misrepresented the facts. The Chancellor of the Exchequer stated deliberately that the Scottish people knew better than we did what opportunities they wanted for drinking. My noble friends have pointed out that this Bill does not touch the question of opportunities, still less does it touch the question of the selection of the particular beverage which the people of Scotland may most affect. The effect of the changes which we have made in this Bill has not been to restrict the opportunities of the Scottish people. It has been to enlarge their opportunities by giving them an option which a great many of them desire, and which the Bill as it stood did not afford. About that there can be no controversy, and I am not surprised that the noble Earl did not attempt to defend his colleague. The matter is a serious one because it is quite clear that throughout Scotland the groundlings will take their cue from the speech and repeat the statements which it contains.

I venture to say that this charge of tearing the Bill to pieces or mutilating the Bill breaks down absolutely and entirely. I think your Lordships must have listened with approval to what was said by my noble friend Lord Lytton as to the duties of this House in dealing with a measure of this kind. If we are not to have the right of revising Bills, what rights are left to us? It is our business to revise Bills, and the only complaint that it is open to noble Lords opposite to make is that our revision has exceeded the limits of reasonableness. That has been fully dealt with by my two noble friends who have preceded me. The noble Earl opposite went through a recapitulation of the changes which we have made in the Bill. What does it come to? The important changes are really two in number. We have introduced disinterested management. That is a principle which appeals to a great many of the noble Earl's colleagues and supporters. The principle of disinterested management has been tried in other countries and has succeeded triumphantly. Bills have been introduced into our own Parliament in 1908 and 1909 containing a disinterested management option and supported by the Lord Advocate and the Scottish Secretary. In the House of Commons Committee disinterested management was defeated by a very narrow majority—I think a majority of five votes. How can the noble Earl tell us that we are mutilating and mangling this Bill merely because we have introduced into it the principle of disinterested management?

The second change is that we have introduced compulsory insurance. We introduced compulsory insurance into the Bill with the hope of mitigating—partially mitigating, because we could not mitigate it entirely—the great hardship done to persons engaged in this trade by the Bill as it stood. Does the noble Earl contend that no hardshipis done? Has he forgotten—again I quote the Lord Advocate—has he forgotten the Lord Advocate's description of the licensee's interest in his certificate? Let me remind him of the words— We all know that a licence is for one year only, but we know also that a practice has sprung up by which a new licence every new year is granted almost as a matter of course wherever the publican has conducted his business with propriety. Has the noble Earl forgotten the memorable decision of Lord Adam to the effect that the landlord or the tenant of licensed premises has a valuable asset to sell? That asset was to be confiscated. The licensee was given five years in which to turn round and that was all, and that in spite of the fact that the same Government which thus proposed to confiscate the licensee's property taxes the licensee and treats that valuable asset as proper matter on which to levy taxation. The hardship was glaring and flagrant, and I think your Lordships would have been culpable if you had not made some attempt at all events to meet it by an amendment of the Bill.

I would entreat your Lordships to remember this also. Not only is this principle of compulsory insurance desired by the trade itself, but a great many of those who are the strongest advocates of Prohibition desire it also, and for this reason—that they know there is so much spirit of fairplay left in the country that they stand no chance of carrying a Prohibition resolution if the terms are glaringly unfair to the person deprived of his licence. That has been said by supporters of the Government. Again let me quote what the Lord Advocate had to say on that point. On the Second Reading of the Bill in the other House the Lord Advocate said— The question of compulsory insurance has always presented itself to me in two aspects—first, as an indispensable act of justice to a dispossessed publican; and secondly, as a method of smoothing the path to the passing of a no-licence resolution. There you have the thing supported on the ground of expediency and on the ground of justice. That is, I venture to say, the attitude which every man of moderate opinions would hold towards this question.

Then, my Lords, what do the other changes come to? We altered the time limit; we were obliged to alter the time limit because without an alteration of the five-year limit it would have been impossible to construct a scheme of compulsory insurance. That is to my mind by itself a quite adequate reason. As to the other alterations, does the noble Earl really think it fair to describe them as wrecking or mutilating Amendments?—such Amendments, for example, as those of my noble friend Lord Dunmore, who proposed a change in the fraction of persons whose votes were to be necessary in order to carry one resolution or another? Why, a well-known supporter of the Government, a gentleman who has made a special study of this subject—I refer to Mr. Sherwell—stated in the House of Commons that under the Bill as it was introduced a majority of, I think it was as low as five per cent. of the total population, or nine per cent. of the population over twenty years of age, would have been sufficient to carry a no-licence resolution. Surely that is at any rate an arguable case, and we are not open to the charge of wrecking merely because we have endeavoured to make the machinery of the Bill a little less unfair.

I must, with all the earnestness that I can command, protest against this attempt to fasten upon us a charge of desiring to wreck the Bill. A great many of us do not like the Bill; a great many of us do not like the principle of transferring from the licensing authorities to a majority of the electors the control of this licensing business; but in deference to the statement that this change in the law was desired in Scotland we did not press our objection. We accepted the Bill, and we have sincerely attempted to make it a fair and workable measure. If for doing that we are to be attacked, either as the Chancellor of the Exchequer has attacked us in Scotland or by the more moderate remonstrances of the noble Earl opposite, then I say we shall believe that His Majesty's Government are taking advantage of this Bill in order to fasten a quarrel upon this House.

On Question, Bill read 3^a.

Clause 2:

Poll of Electors on Resolutions submitted.

2.—(1) If, in the manner hereinafter provided, a requisition demanding a poll under this Act in any area is found by the local authority to have been duly signed, the local authority shall cause a poll of the electors in such area (hereinafter called "a poll") to be taken in accordance with the provisions of this Act.

(2) The questions to be submitted to the electors at a poll shall be the adoption in and for such area of (a) a no-change resolution, or (b) a disinterested management resolution, or (c) a limiting resolution, or (d) a no-licence resolution.

(3) On a poll in any area—

1. (a) if two-thirds at least in number of the votes recorded are in favour of a no-licence resolution, and not less than thirty per cent. of the electors for such area on the register have voted in favour thereof, such resolution shall be deemed to be carried; or if
2. (b) a majority of the votes recorded are in favour of a limiting resolution, or of a disinterested management resolution, as the case may be, and not less than thirty per cent. of the electors for such area on the register have voted in favour thereof, such resolution shall be deemed to be carried; or if
3. (c) a majority of the votes recorded are in favour of a no-change resolution, or if no other resolution is carried, a no-change resolution shall be deemed to be carried; and

any such resolution so carried shall come into force on the twenty-eighth day of May immediately following the taking of the poll.

(4) An elector shall not be entitled to vote for more than one of the resolutions submitted at the poll.

(5) Any such resolution if carried shall remain in force until the resolution is repealed or superseded as hereinafter provided.

LORD COURTNEY OF PENWITH

After the kindly references which were just now made to the Amendment I have on the Paper, I hope my very moderate suggestion will secure quiet consideration. I ventured somewhat irregularly last week to give your Lordships an account of the Amendment which I am now about to propose. It simply makes the local option, which is the principle of the Bill, an effective and a real expression of the desire of the majority of the voters who will be called upon under the operation of the Bill, if it becomes an Act, to vote on the question of licensing within their areas. As I explained last week, your Lordships altered the Bill in the form of allowing the voter to have four options as to the question whether there shall be no licence, whether there shall be disinterested management, whether there shall be a limited number of licences, or whether there shall be no change at all. Each question is put separately, and the decision of each under the Bill as it now stands would be taken separately; the result is you might have a majority of the voters in favour of a change and yet an utter failure to secure any change at all.

The illustration which I venture to recall to your Lordships' memory is this. Supposing 40 out of 100 electors vote for a no-licence resolution, 30 for disinterested management, and 20 for limited licences, leaving 10 to vote for no change at all. Taking these figures, which are of course quite arbitrary but which may be taken as an example of what might occur, the result would be that the desire of the 10 would prevail, while the desire of the 90 in favour of some change would not prevail at all. I propose that the voting paper shall be modified so that the voter shall be able to express not only his first choice, whatever that may be, but his second preference among the options proposed, and, if he desires it, his third and even his fourth. If the result of the first vote is that no decision is arrived at because the proposition fails to secure an adequate support, then the votes given to the most stringent proposition—namely that of no licence at all—shall be taken and examined, and if those voting papers express a preference for any other, the first proposition of no licence failing, it shall be passed on according to the preference expressed on the papers to the next choice indicated. So, in the example I suggested, if 40 vote for no licence and there is not an adequate majority to carry their desire, the 40 papers should be examined and the votes on such of them as express a second desire, whether for disinterested management or limited licence or no change at all, should be passed on in support of such proposition. In that way it would be possible for the opinions of the voters to be brought together and ultimately prevail in favour of some one thing, be it no licence, or disinterested management, or a limited licence, or no change at all, in a manner which would express the opinion of the majority of those voting.

This is a recurrence, no doubt, in some measure to what was in the scheme of the Bill as it started. In the Bill as brought up to us it was proposed, if the no-licence vote failed, that all the votes given for a no-licence resolution should be transferred at once to the limited licence resolution on the presumption that everybody who voted for no licence would be in favour of limited licence. That is a transfer by assumption that every one who, in the first category, voted for no licence at all, would, in the second order of preference, be in favour of the limitation. That is a very dangerous form of procedure in any case, and not at all to be trusted as a real representation of the opinion of the electors. My proposition is in principle the same that the desire of the majority shall prevail, and only those voting papers shall be passed over in support of a second preference if the voter expresses such a desire on his paper. I venture to suggest that this process is a very simple one and easily managed—extremely simple on the part of the voter, and involving no difficulty on the part of those who have to examine the papers. It is connected with some propositions of which I am known to be a partisan, and which do, I admit, involve some difficulties in their manipulation, where you have the transfer of surpluses and the proportions in which certain papers shall be transferred to this or that second preference. But here you have nothing of the kind. All the votes in favour of no licence shall be taken and, without any question of surplus or proportionate distribution to the other questions, the papers shall be passed on as the desire is expressed upon them. It is one of the simplest operations possible, and it would be, I think, a great reflection on the education and mental capacity of the electors and of the presiding officers at such elections in Scotland to suppose that they would be at all incapable of carrying out this machinery.

I appeal to the noble Earl in charge of the Bill to look favourably on this suggestion as it is a recurrence to the original principle of the Bill in the way of transference of votes. But I wish to appeal to him on other grounds. The Government are responsible now for the introduction of another measure which will soon be before us containing provisions which involve a good deal of expression of second and third preferences, and I think it would be well in this simple matter to popularise, if possible, the principle of marking on a voting paper a second or third preference with regard to any electoral expression of opinion. If the Government are not misrepresented they have also in mind some method for the solution of the difficulty in regard to three-cornered elections, and I suggest it would be well to have this principle of preferential voting put into practice and popularised by means of this Bill.

There is only one observation in connection with the machinery of my Amendment which I must dwell upon for a moment. I have taken the no-licence votes, whether the greatest number support it or the lowest number, as the votes which must be first considered and transferred if any second preferences are indicated on the papers, and I base that on the suggestion that you must deal with the most stringent form of proposal first. If the most stringent form of proposal fails, then ask the supporters of that most stringent form what is the next milder alternative they would favour, and it is easy to imagine that, failing the attainment of their desire for no licence, they would support limited licence or disinterested management. It is not easy to conceive that the person in favour of a limited number of licences, would, on the failure of that desire, go in for no licence at all. I propose, therefore, that the transfer should proceed from the more stringent to the less stringent. I do not think any one would object to dealing thus in the first place with the no-licence vote. A question might arise as to whether you should next take votes for disinterested management or for a limited number of licences. I venture to think you should take the disinterested management next if it is necessary. Of course it might not be necessary, because you might on the first transfer get a majority of the voters in favour of one option; but, if necessary, I think you should take disinterested management next because it really is the next more stringent, more away from our ordinary practice, and a more striking introduction of a variation in the existing methods than that of fewer licences. But this is a matter on which, I confess, I do not entertain any very strong opinion, although I think the reason I have given is an adequate and sufficient one for the order of preference I have taken in drawing up the clause which I have ventured to submit for your Lordships' approval.

There is only one other observation I think I ought to make before I conclude. Reference has been made by Lord Balfour of Burleigh to suggestions in connection with the future fate of the Bill, and it is impossible not to remember, however disagreeable it may be, that we are living under the régime of the Parliament Act. It may be that this Bill will have to be dealt, with, if it is thought necessary so to deal with it, under the Parliament Act; and in connection with that there is a point to be rioted which is of some importance in respect to this Bill, and may be of very much greater importance with respect to Bills of larger scope. If I read the Parliament Act aright, when a Bill goes from this House to the other House the other House can take any Amendment which has been made in this House and incorporate it in the Bill without the Bill losing its identity. The privileges attaching to the Bill are maintained although any Amendment made by this House is incorporated by the other House in the Bill; but the other House, after the Bill has gone back to them, cannot put in any Amendment of their own not suggested by this House, however useful or desirable they think that Amendment might be. The other House, in order to preserve the identity of the Bill and therefore the privileges attaching to its identity, must send the Bill up here a second time or a third time altered, if altered at all, only by the incorporation of such Amendment or Amendments as your Lordships may have chosen to pass and send down for their consideration. If that be the true reading of the Act, then it becomes very desirable that in sending back a Bill to the other House which might come under the operation of the Parliament Act you should incorporate into it every Amendment which you think desirable as improving the Bill, because it depends on your putting it in whether it comes back with that Amendment. If you trust to the other House to put it in, the other House is absolutely disabled from doing so, because if they did the identity of the Bill would be lost and the privilege of applying the Parliament Act to it would be taken away. On this ground I think, if your Lordships are inclined to believe that this is a useful and a simple Amendment, it would be desirable that it should be put in in order that it may form part of the machinery which may ultimately become law. I apologise for the length at which I have entered on the explanation of this comparatively simple provision. I hope, after what has been said, that it will receive the support of His Majesty's Government, to whom it will certainly be recommended as tending to make the principle of local option, which is the original principle of the Bill, more effective than it is in the form in which the Bill now stands. I beg to move to add to subsection (4) the words standing in my name.

Amendment moved:

Page 2, line 15, after ("poll") insert ("An elector in giving his vote— (a) must place on his ballot paper the figure (1) in the space opposite the resolution for which he votes; but (b)may in addition place on his ballot paper the figure (2) or the figures (2) and (3), or the figures (2), (3) and (4) in the spaces opposite the other resolutions in the order of his preference. If on a scrutiny it is found that no resolution has been carried in accordance with the conditions above prescribed, the no-licence resolution shall be deemed to have been negatived and the papers marked (1) against such resolution shall be examined and transferred in accordance with the preferences, if any, expressed upon them to the new resolution or resolutions marked (2) on such papers; and if after this transfer no one of the three remaining resolutions is found to have been carried, the resolution in favour of disinterested management shall be deemed to have been negatived, and the voting papers which either originally or by transference support this resolution shall be examined and transferred in accordance with the preferences, if any, expressed upon them. If the limiting resolution is then found not to have been carried, the no-change resolution shall be deemed to be carried ").—(Lord Courtney of Penwith.)

EARL BEAUCHAMP

Although my noble friend behind me has been kind enough to speak of me as the noble Earl in charge of the Bill, I am afraid the distinction is merely a titular one. As a matter of fact, as your Lordships know, this Bill, through the Amendments that have been introduced into it, has become a Bill more endeared to noble Lords opposite than it is to us, and therefore we cannot take the same interest in the Amendments which are moved as we should have been able to do in other circumstances. We naturally are unable to assume the responsibility for putting into the Bill various Amendments which are necessary when we disapprove of the principle of those Amendments, and therefore it is only in a secondary way that I can venture to speak with regard to this Amendment. However, I venture to express the opinion that it is an improvement upon the Bill as it stands at the present time, although my noble friend behind me must not take this modified approval of this particular provision as being a precedent for the action of His Majesty's Government in the future with regard to other Bills.

THE MARQUESS OF SALISBURY

I regret the tone of the observations which have just fallen from the noble Earl. I do not want to go back to the discussion that we had just now on the Third Reading of the Bill, but I think your Lordships must have appreciated that we on this Bench, especially my noble friend who leads the Opposition, altogether repudiate the idea that we have transformed this Bill or indeed in any way injured the principle of the Bill. But this interesting assumption of paternity of the Bill is rather amusing on the part of the Government considering that they were not originally the father of the Bill at all. The paternity—although I believe there is some doubt about it—belongs to some private Member of Parliament. His Majesty's Government adopted it and brought it up to your Lordships' House, and now it is so sacrosanct that even Amendments which do not injure the principle of the Bill are looked upon as little less than rank blasphemy in the view of the noble Earl. As regards this particular Amendment I understand he approves of it on behalf of the Government, and undoubtedly I think the noble Lord who proposed the Amendment is justified in saying that it carries out more perfectly the principle of local option, which is the root principle of the Bill. I think it would be an exaggeration to say that it will effect an accurate representation of what the minds of the electors might be, because, as the noble Lord himself I think showed, there are contingencies which the form of his Amendment does not cover. He realised that it was rather difficult to say in what order of stringency the various options ought to be ranked. I think it quite possible, for example, that an elector might say, "I prefer a limiting resolution because I think the effect of that will be to get rid of the worst public-houses in the district; but if I cannot have a limiting resolution I will have a disinterested management resolution, under which all the public-houses in the district will be well conducted." That might be a reasonable view to take, but the noble Lord's Amendment does not provide for a contingency of that kind. It is open to other suggestions. However, I suppose if he had covered all the cases his Amendment would have been so complicated as certainly to have been unpresentable at the stage of the Bill we have at present reached, and I therefore do not propose to criticise it too minutely. The Government have accepted it, and we on this Bench shall not resist it.

On Question, Amendment agreed to.

Clause 3:

Effect of resolutions, if carried.

3.—(1) For the period during which a no-licence resolution remains in force in any area, no certificate shall be granted therein; except that the licensing court may, on being satisfied that under the special circumstances of the case any certificate is reasonably required notwithstanding the fact that a no-licence resolution is in force in the area, grant one or more certificates for an inn and hotel or for premises structurally adapted for use and bonâ fide used or to be used as a restaurant: Provided that any certificate so granted shall be deemed to include the conditions that there shall be on the certificated premises no drinking-bar or other part of the premises mainly or exclusively used for the sale or consumption of exciseable liquors, and that such liquors shall be sold therein by retail only and to none but persons lodging or residing in the inn and hotel, or persons taking a meal on the premises of the restaurant or (if the court so sanction) of the mn and hotel, for consumption with such meal; and provided further that it shall be a condition of the renewal of any such certificate in any year after the year in which it is first granted under the provisions of this section that the applicant shall satisfy the court by production of an excise licence or otherwise that he is entitled to a reduction of duty in terms of section forty-five of the Finance (1909–10) Act, 1910.

(2) For the period during which a limiting resolution remains in force in any area, without prejudice to the other powers or discretion of the licensing court, it shall not be lawful for the licensing court to grant a greater number of certificates in such area than the nearest integral number which shall not exceed seventy-five per cent. of the number of certificates in force at the date at which such resolution is carried.

(3) If a limiting resolution is carried the licensing court shall, before the first day of February following the poll, meet for the purpose of preparing a scheme for carrying out in the area the requirements of the resolution, which scheme shall give the particulars of any premises the certificates of which the court propose to withdraw, and every scheme prepared as aforesaid shall forthwith be advertised by the clerk to the licensing court in a newspaper circulasing in the area and shall be open to the inspection of the public for three weeks before the first day of March following the poll at a place to be stated in the advertisement.

(4) Before the general half-yearly meeting of the licensing court held in April, the licensing court shall meet for the purpose of hearing the parties interested in the said scheme and adjusting the said scheme for consideration at the said April meeting, and the licensing court shall at that meeting or at any adjournment thereof take the scheme so adjusted into consideration, and after hearing parties interested therein, so far as not already heard, and, if they modify the scheme, after hearing parties interested in any modification, shall decide upon the certificates to be withdrawn.

(5) For the period during which a disinterested management resolution remains in force in any area no certificate shall be granted therein except to an authorised public company: Provided that a certificate shall not be so granted unless the company has given such security, either by way of deposit or otherwise as the licensing court requires, for the payment by the company, by way of annual or other periodical instalments to the Scottish Licence Holders Central Insurance Board established under this Act, of one-half of the total declared value of the certificates in the area, as insured in accordance with die Third Schedule to this Act, which have been withdrawn in pursuance of the disinterested management resolution; or where applications for certificates within die area are entertained from more than one authorised public company, security for the payment of such proportion of half the total declared value aforesaid as may be fixed by the licensing court. The liability imposed upon any authorised public company in pursuance of the foregoing provision shall cease and determine if and when the disinterested management resolution, in pursuance of which the liability was imposed, ceases to be in force.

(6) The Scottish Licence Holders Central Insurance Board shall apply the sums received in pursuance of the provisions of the immediately preceding subsection towards the payment of the claims of the licence holders in the area in respect of the withdrawal of whose certificates such sums are payable.

(7) An authorised public company means a company registered under the Companies (Consolidation) Act, 1908, one of whose objects shall be the sale of exciseable liquors and whose memorandum and articles of association shall have been approved by the Secretary for Scotland. The memorandum and articles of association shall make provisions for such matters as the Secretary for Scotland may prescribe either generally or with reference to any particular authorised public company and shall provide, among other things—

1. (a) that, subject to the payment of all sums required in pursuance of this section to be paid by the company to the Scottish Licence Holders Central Insurance Board, the whole of the profits, after payment of interest at not more than four per centum on the paid-up capital, and after making provision for the formation of a reserve fund equal in amount to the paid-up capital upon such terms as may be fixed by the memorandum and articles of association, shall be paid to the Secretary for Scotland, and shall be applied by him in making grants to local authorities to be expended upon such works of public utility as he may in each case prescribe;
2. (b) that no profit or advantage from the sale of exciseable liquors shall accrue to the shareholders or directors of the said company, beyond the aforesaid dividend, and the salary or remuneration of the managers or employees of the company shall not be dependent on, and shall not be subject to increase or decrease in proportion to, the sale of intoxicating liquors in any licensed house under the control of the company;
3. (c) that the accounts of the company shall be submitted to an annual audit by an auditor to be approved by the Secretary for Scotland, and that the report of such auditor, with an abstract of the accounts, shall be published in a newspaper circulating in each area in which the company holds a certificate. The auditor so appointed shall disallow and surcharge upon the interest on capital all unreasonable payments for rent, salaries and liquor, and any use of the profits otherwise than as hereinbefore provided. The licensing court shall also have power to appoint an auditor who shall have the right to inspect the books of the company at any reasonable time;
4. (d) that no person who, under section nine of the Licensing (Scotland) Act, 1903, is debarred from acting as a member of a licensing court shall be eligible to be a member or director or shareholder of an authorised public company within the meaning of this Act; and
5. (e) that it shall be competent for such authorised company to apply to the licensing court for the provisional grant of one or more such certificates without slating in the statutory application where the premises are severally situated or the proprietor's or factor's name and designation, and the licensing court shall make such provisional grants accordingly, but such provisional grants shall not be valid until declared to be final by the order of the licensing court to be made whenever the court is satisfied that the premises selected by the authorised company are suitable.

(8) Nothing in this Act shall entitle an authorised public company to apply for or to obtain a greater number of such certificates in any area than the number of certificates in force in such area at the date on which this Act came into operation; but it shall be competent for such authorised public company to apply for and to obtain a smaller number of such certificates than the number in force as aforesaid.

(9) Before any grant is made by the Secretary for Scotland to a local authority under this section, a draft scheme shall be laid before both Houses of Parliament during the Session of Parliament specifying the local authority to whom the grant is proposed to be made, the amount of the grant and the works of public utility upon which the grant is to be expended, and if within the next thirty days upon which that House has sat either House passes a resolution against the scheme or any part thereof, no further proceedings shall be taken thereon, without prejudice to the making of any new draft scheme.

(10) The Licensing (Scotland) Act, 1903, as amended by this Act, shall apply to any application by an authorised public company for the grant or renewal of a certificate and in addition to any terms or conditions imposed under the Licensing (Scotland) Act, 1903, as amended by this Act, a certificate granted to an authorised public company shall be granted and held subject to the conditions specified in this section, and to such provisions in the memorandum and articles of association of the company as may have been required by the Secretary for Scotland to have been inserted therein, and those conditions and provisions shall be taken to be within the terms and provisions of the Licensing (Scotland) Act, 1903, and any breach of those conditions or provisions shall be an offence within the meaning of the Licensing (Scotland) Act, 1903, against the terms and conditions contained in the said certificate.

(11) Unless within three months after a disinterested management resolution is carried an authorised public company has made an application in writing to the licensing court of the area stating that the company is desirous of carrying on business in the area in accordance with the provisions of this section, and has satisfied the licensing court that the company is able and willing to undertake the liability for payments to the Scottish Licence Holders Central Insurance Board imposed by this section, the disinterested management resolution shall be void.

(12) The decision of the licensing court in refusing certificates in pursuance of a no-licence resolution or, except where the grant of a certificate is refused to an authorised public company, in pursuance of a disinterested management resolution shall not be subject to appeal, but where any certificate has been withdrawn to give effect to a limiting resolution an appeal shall lie front such decision as in the case of the refusal of the renewal of a certificate under the provisions of the Licensing (Scotland) Act, 1903: Provided always that if the result of any appeal or appeals under this provision is to render the certificates in existence in the area in excess of the number allowed by the limiting resolution, the licensing court shall, before the next general half-yearly meeting of the licensing court, prepare a scheme for the reduction of the certificates to the aforesaid number, and shall notify the same in manner similar to that prescribed in respect of the original scheme and shall proceed to give effect thereto.

(13) It shall not be competent for a member of a licensing court to sign a requisition for a poll under this Act.

THE EARL OF CAMPERDOWN

I do not propose to move the first three Amendments standing in my name to Clause 3. But I do move the Amendment providing for a penalty, because no penalty at the present time appears in the Bill. The words which I propose are an addition to paragraph (d) of subsection (7).

Amendment moved— Page 5, line 15, after ("Act") insert ("and every person who shall knowingly or wilfully offend against any of the provisions aforesaid shall forfeit and pay the sum of fifty pounds, to be recovered before the sheriff within six calendar months next after the offence has been committed.")—(The Earl of Camperdowm.)

On Question, Amendment agreed to.

THE EARL OF CAMPERDOWN

I propose, after "resolution" at the end of subsection (11), to insert "and the poll at which the resolution was carried." The object of that is this, that if a resolution is simply repealed, it may not be clear what consequences will follow. It is desirable that there should be a new poll, and therefore if the resolution is made void it is necessary that the poll should be made void too.

Amendment moved— Page 6, line 25, after ("resolution") insert ("and the poll at which the resolution was carried").—(The Earl of Camperdown.)

On Question, Amendment agreed to.

Clause 4:

Resolution at further polls.

4.—(1) Where a poll has been taken, and such poll, or the declared result thereof has not become void under the provisions of this Act, or has not been declared void in terms of this Act, a further poll shall not be taken before the month of November in the third year from the date of the last poll.

(2) Such further poll may be taken—

1. (a) if a no-change resolution is in force, or a limiting resolution or disinterested management resolution, or no-licence resolution has been repealed, for the following options, that is to say, for a further no-change resolution, or for a no-licence resolution, or for a disinterested management resolution, or for a limiting resolution;
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2. (b) if a limiting resolution is in force, for the following options, that is to say, for the repeal or continuance of any such resolution, or for a further limiting resolution, or for a disinterested management resolution, or for a no-licence resolution;
3. (c) if a disinterested management resolution is in force for the following options, that is to say, for the repeal or continuance of any such resolution, or for a limiting resolution, or for a no-licence resolution;
4. (d) if a no-licence resolution is in force, for repealing the same or for a disinterested management resolution.

(3) The provisions of section two of this Act, except as regards the questions to be submitted to the electors, shall apply to such further polls, provided that where a further poll is taken in any area where a limiting resolution or a disinterested management resolution, or a no-licence resolution is in force and the majority of the votes recorded is not in favour of the repeal of such resolution, such repeal shall not be carried.

THE EARL OF CAMPERDOWN moved, after "if a no-change resolution is in force or," at the beginning of paragraph (a) of subsection (2), to insert the word "if."

Amendment moved— Page 7, line 9, after ("or") insert ("if").—(The Earl of Camperdown.)

On Question, Amendment agreed to.

Clause 6:

Insurance of certificates.

6.—(1) There shall be established in accordance with the provisions of the Third Schedule to this Act a Scottish Licence Holders Central Insurance Board and also a Scottish Licence Holders Mutual insurance Association or Associations, and every holder of a certificate shall insure in such an association in respect of each certificate held by him.

(2) The insurance of certificates shall be carried out in accordance with the provisions set out in the Third Schedule to this Act.

(3) A person from whom a certificate is withdrawn in pursuance of a resolution under this Act may, in accordance with the scheme set forth in the Third Schedule to this Act, recover the moneys payable to him thereunder: Provided always, and it is hereby expressly declared, that any claim in respect of the declared value of the certificate shall be enforceable only if, and in so far as, moneys for the payment of such claims are available under the said scheme.

(4) No excise licence for the sale by retail of exciseable liquor shall be granted by the Commissioners of Customs and Excise or by any officer of Customs and Excise except upon the production by the person authorised to hold the licence of a receipt for the insurance of his certificate and for any levy for the year to which the licence relates.

(5) The section shall take effect as from the passing of this Act.

THE MARQUESS OF SALISBURY

I move to leave out the words "and for any levy" towards the end of subsection (4). This is very little more than a drafting Amendment, but there is a certain amount of substance in it. The provision of the Bill as it stands now is that the licence will not be granted except upon the production of a receipt that the contributions to the insurance fund have been paid. It might be necessary also for the working of the insurance scheme that certain levies should be made by the local association in order to make up the sum required, and those levies might be paid in the course of three years. It is clear that as that is the case the words which I propose to delete should come out at this point, because the licence has to be granted at once.

Amendment moved— Page 10, line 16, leave out ("and for any levy"). —(The Marquess of Salisbury.)

LORD SHEFFIELD

I should like to ask the noble Marquess a question. I do not see in this Bill any obligation on any association to accept any insurer. Disinterested management publicans might be so unpopular with the general body of publicans that the latter might say "We will not accept you"; yet these disinterested managers could not be recognised as the holders of licences until they could produce their receipt for their contributions. I should like to ask how that is dealt with.

THE MARQUESS OF SALISBURY

The noble Lord's point is a perfectly sound one. If he will look on the Paper he will find that I have an Amendment to Schedule III which covers it.

On Question, Amendment agreed to.

TEE MARQUESS OF SALISBURY then moved, as a consequential Amendment, to add words at the end of subsection (4).

Amendment moved— Page 10, line 17, after ("relates") insert ("and for any levy under the provisions of the Third Schedule to this Act").—(The Marquess of Salisbury.)

On Question, Amendment agreed to.

Schedule II:

FORM OF BALLOT PAPER.

(Ballot Paper for [here insert name of area].)

Counterfoil No.		NO-CHANGE RESOLUTION
1	(means that the powers and discretion of the licensing court shall remain unchanged).
	DISINTERESTED MANAGEMENT RESOLUTION
2	(means that certificates for the sale of exciseable liquors shall only be granted to an authorised public company, and that the surplus profits of such company, after the payment of specified charges, are to be paid to a fund for use for public purposes throughout Scotland in accordance with the provisions of this Act).
	LIMITING RESOLUTION
3	(means that the number of certificates for the sale of exciseable liquors shall be reduced by one quarter in accordance with the provisions of the Act).
	NO-LICENCE RESOLUTION
4	(means that no certificate for the sale of exciseable liquors shall be granted except for inns and lintels or restaurants in special cases in accordance with the provisions of the Act).

Indicate your vote by making a X in the right-hand space opposite the resolution for which you vote. You have one vote, and may vote for one resolution only.

Amendment moved— Page 18, amend the Schedule by striking out the figures ("1") ("2") ("3") ("4") on left-hand side of form of ballot paper.—(Lord Courtney of Penwith.)

On Question, Amendment agreed to.

LORD COURTNEY OF PENWITH also moved two Amendments in the instruction at the bottom of Schedule II.

Amendment moved— Page 18, line 29, after ("by") leave out ("making a X") and insert ("marking the figure (1)").—(Lord Courtney of Penwith.)

On Question, Amendment agreed to.

Amendment moved— Page 18, line 30, leave out ("for") and leave out from the first ("you") to the end of the schedule and insert ("most prefer. You may further mark the figures (2) (3) and (4) opposite the other resolutions in the order of your choice").—(Lord Courtney of Penwith.)

On Question, Amendment agreed to.

Schedule III:

1. Before the twenty-eighth day of May next after the passing of this Act, every holder of a certificate shall become a member of a Mutual Insurance Association (in this Schedule referred to as "an association") which shall be an association not carried on for profit and shall be registered under the Companies (Consolidation) Act, 1908, or the Friendly Societies Acts. The affairs of an association shall be subject to the absolute control of its members and one of the objects of an association shall be the insuring of every member of the association against loss arising from the withdrawal of his certificate by reason of a resolution under this Act. An association shall have a membership of not less than—

1. (a) in the case of an association insuring only "on" licences persons holding in the aggregate not less than one thousand such licences; or
2. (b) in the case of an association insuring only "off" licences persons holding in the aggregate not less than five hundred such licences; or
3. (c) in the case of an association insuring both "on" and "off" licences persons holding in the aggregate not less than one thousand "on" licences and persons holding in the aggregate not less than five hundred "off" licences.

2.—(1) The application to become insured in an association shall be signed by the applicant, and shall contain a declaration of the value in accordance with rules made by the Scottish Licence Holders Central Insurance Board (hereinafter called "the declared value") of the certificate to be insured.

(2) The declared value shall be an amount not exceeding seven years purchase of the net annual profit from the sale of exciseable liquors carried on under the certificate, ascertained on the average of the three preceding years.

3. The premium payable to an association in respect of the insurance of a certificate under this Act shall he an annual premium payable in advance and inclusive of the expenses of administration shall be at such rate not exceeding one half per centum of the declared value as the central board (established under this Schedule) may determine.

4.—(1) As soon as may be, but not later than four months after the passing of this Act there shall be constituted a Board to be styled the "Scottish Licence Holders Central insurance Board" (in this Schedule referred to as the "Central Board").

(2) The Central Board first constituted shall be elected by holders of certificates and shall consist of nine members of whom four shall be "on" licence holders, two "off" licence holders and the remaining members a brewer, distiller, and wholesale dealer respectively, who may act with a quorum of three and shall hold office for not more than two years.

(3) The Central Board shall be a body corporate with a common seal, and shall elect a chairman from their own number.

(4) The Secretary of the Licensed Trade Defence Association of Scotland shall receive nominations for membership and proceed to the election of a Central Board within three months after the passing of this Act, which election shall be decided by the holders of a majority of the certificates voting for a representative of each of the several classes of constituent members of such Board, and the expenses of such election shall be a charge against the first premiums payable in respect of insurance trader the provisions of this Act.

5. The Central Board shall within twelve months after the passing of this Act, and from time to time thereafter if occasion arises, may make mules prescribing amongst other things—

1. (1) The conditions on which the declared value of certificates may be ascertained, approved, modified, or re-adjusted, and the method of verification of declared value if a certificate is withdrawn;
2. (2) The manner of subsequent election and the number of members of the Board, which shall not exceed twenty-one, the quorum, the duration of their office and the basis of representation: Provided that at least nine members shall be elected in the same proportions and in the same manner as in the Central Board first constituted, and in addition, each association may elect one member to the Central hoard for every one thousand certificates insured with such association;
3. (3) The furnishing of receipts by secretaries of associations for premiums or levies;
4. (4) The mode in which claims and payments in respect of claims are to be made;
5. (5) Any matters incidental to the proper conduct of the affairs of the Board and to carrying oat the provisions of this Act:

Provided always that no such rule shall contain anything inconsistent with the provisions of this Act, and every such rule shall be subject to time approval of the Secretary for Scotland.

6.—(1) On or before the thirtieth day of June in each year every association shall pay to the Central Board eight shilling and sixpence per centum of the declared value from the amount of the premiums received by the association under the provisions of this Act.

(2) The amounts received in respect of premiums paid by holders of certificates for on-licences and by holders of certificates for off-licences respectively, shall be carried by the Central Board to two separate accounts to be called respectively "The On-Licence Holders' Insurance Fund" aid "The Off-Licence Holders' Insurance Fund." No part of the "On-Licence Holders' Insurance Fund" shall be applied to the payment of any claim relating to an off-licence and no part of the "Off-Licence Holders' Insurance Fund" shall be applied to the payment of any claim relating to an on-licence. The Central Board shall have the management of the said funds, and the investment thereof, and the whole of the said funds shall be applied to the payment of claims as provided by this Act.

(3) The necessary preliminary and office and administration expenses of the Central Board shall be contributed by each association in proportion to the total declared values of the certificates insured by said associations: Provided that the fees to members of the Central Board shall not exceed an aggregate of one thousand pounds in any one year.

7.—(1) When a certificate is withdrawn by reason of any resolution carried under this Act, a claim upon the appropriate fund to an amount not exceeding the declared value shall thereupon arise, provided that no such claim shall be enforceable against the Central Board except in respect of the year in which such certificate is withdrawn.

(2) When either of the funds of the Central Board is insufficient to meet the claims of members of associations in any particular year, the appropriate fund shall he divided among such members in proportion to the declared value of the certificates.

8.—(1) Where in any year the respective amounts paid by the Central Board are insufficient to pay in full the respective claims arising in that year of "on" or "off" licence holders, a claim shall thereupon be enforceable against an association by any member thereof whose claim against the Central Board in respect of a certificate insured by such association has not been paid in full, and the directors of an association shall impose upon the on-licence holders or off-licence holders (as the case may require) who are members of the association a levy not exceeding one and a-half per centum of the declared value of each certificate.

(2) If the proceeds of the levy are insufficient to pay in full the claims in respect of which it was made, the unpaid balance of the claims shall be carried forward for the two following years, and in each of these years, if necessary, the like levy shall be made and the proceeds thereof shall be applied to the payment of all outstanding claims, and to no other purpose.

(3) After the distribution in the third year all claims against an association in respect of a certificate which has been withdrawn shall be deemed to have been discharged.

9. The holder of a certificate who has paid the premium payable in respect of the insurance of the certificate or a levy under section eight of this Schedule shall be entitled to deduct from the interest on any loan advanced to him under any agreement, undertaking, or covenant binding him to obtain a supply of exciseable liquor from the lender a sum bearing such proportion to the said premium or levy as time loan bears to the declared value of the said certificate: Provided that the lender shall have a right to any sums receivable under this Schedule, proportionate to the premium or levy paid by him, and in default of agreement the amount of premium or levy to be deducted or the sum due to the lender shall be determined by the sheriff.

10. All sums duo by an authorised public company under the provisions of subsection (5) of section three of this Act shall be paid to the Central Board, and shall be applied by the Central Board towards the payment of the claims of the licence holders in respect of the withdrawal of whose certificates such sums are payable.

11. The clerk of a licensing court shall, on request in writing, furnish to the Central Board or to an association or before the constitution of the Central Board to the secretary of the Licensed Trade Defence Association of Scotland a list of all the persons who have obtained certificates for the sale by retail of exciscable liquor in the district within the jurisdiction of the licensing court for the current year, in conformity with time conditions set out in section twenty-five of the Licensing (Scotland) Act, 1903, which shall apply with the necessary modifications.

12. In this Schedule, unless the context otherwise requires— The expression "on licence" means a licence for the sale of any exciseable liquor for consumption on the premises. The expression "off licence" means a licence for the sale of any exciseable liquor not to be consumed on the premises.

THE MARQUESS OF SALISBURY moved to leave out the first word of the Schedule—namely, the word "Before"—and to substitute "Every holder of a certificate shall before." The noble Marquess said: This Schedule provides that every licence holder must become a member of an association in order to earn the benefits of the Act, but as it is drawn no provision is made for those licence-holders who obtain their certificates after the passing of the Act. It only deals with the case of existing licence-holders. A small Amendment is therefore necessary to cover the case of licence-holders who obtain their licences after the passing of the Act, and this Amendment and the one that follows it are in order to carry out that object.

Amendment moved— Page 19, line 2, leave out ("Before") and insert ("Every holder of a certificate shall before").—(The Marquess of Salisbury.)

LORD SHEFFIELD

Would the noble Marquess read how the Schedule will begin after both his Amendments are put in?

THE MARQUESS OF SALISBURY

The Schedule will begin, "Every holder of a certificate shall before the 28th day of May next after the grant to him of the certificate become a member," and so on.

LORD SHEFFIELD

Yes; but I gather from the Bill as I read it that the acceptance of the member is at the discretion of the association. What is to happen if the association refuses to take a member?

THE MARQUESS OF SALISBURY

If the noble Lord looks at the Paper he will see that I propose to insert a new subsection which covers the point to which he refers. It will run, "Every holder of a certificate shall be entitled to become a member," and so on, and a penalty is provided.

LORD SHEFFIELD

I am much obliged to the noble Marquess.

On Question, Amendment agreed to.

Amendment moved— Page 19, lines 2 and 3, leave out ("passing of this Act every holder of a certificate shall") and insert ("grant to him of the certificate")—(The Marquess of Salisbury.)

On Question, Amendment agreed to.

THE MARQUESS OF SALISBURY

I now move to insert a new subsection. Lord Sheffield will see that this new subsection covers the point he raised. It provides that every holder of a certificate shall be entitled to become a member of the association, and provides a remedy if the association fails to carry it out.

Amendment moved—

Page 19, line 23, at the beginning of paragraph 2 insert the following new subsection: (1) Every holder of a certificate shall be entitled to become a member of an association, and an application for the insurance of a certificate shall not be refused by an association except on the ground that the certificate in respect of which such application is made is already insured under the provisions of this Act, and an association which refuses or fails, except as aforesaid, duly to give a receipt for a premium paid or tendered in respect of the insurance of a certificate shall be liable, in the event of the withdrawal of such certificate by reason of a resolution under this Act, to pay to the person whose certificate has been withdrawn the full declared value of such certificate."—(The Marquess of Salisbury.)

On Question, Amendment agreed to.

THE MARQUESS OF SALISBURY

I move a further new subsection. The declared value on which the insurance depends is calculated on the average of three years, and therefore it cannot be certainly known for three years; but it is essential for the licensee to produce the evidence to that a process should be gone through in order that he should obtain his licence, and that process depends on the declared value. As the declared value cannot be ascertained definitely for three years it is essential to make a provisional arrangement until the declared value can be definitely ascertained. The precedent for such provisional arrangement is to be found in the working of the Death Duties, where a provisional arrangement is made as to the value of the estate of the deceased for the purpose of paying Death Duties although it takes a considerable time really to carry the valuation out. That works perfectly satisfactorily, and an adjustment is made finally in the case of the Death Duties when the proper time comes. There is no difficulty in working it, and such an arrangement is necessary in this Bill in order to make the scheme absolutely watertight.

Amendment moved—

Page 19, line 31, after ("years") insert the following now subsection: (3) When the declared value of a certificate has not been ascertained a receipt for the insurance of such certificate shall be issued by an association to the holder thereof on payment of the premium upon a provisional estimate of the declared value made by the holder of the certificate, and such receipt shall be sufficient for the purposes of subsection (4) of section 6 of this Act provided that an adjustment of the premium to be paid by the holder of the certificate to an association shall be made when the declared value has been ascertained, and failure to pay the sum by which the premium paid falls short of the full amount due shall be sufficient ground for withholding a receipt for the premium paid in the succeeding year, and any over payment by the holder of the certificate in respect of a provisional estimate shall be retained by an association as part payment of the premium in respect of the declared value in the succeeding year."—(The Marquess of Salisbury.)

LORD SHEFFIELD

Again I should like to ask the noble Marquess, as this tax is proposed to be levied on all licence-holders including the holders of disinterested management licences, will the value in the case of disinterested management houses be taken on the business other than alcoholic? The object of these disinterested management places is to diminish the sale of strong drink and to stimulate the development of what I may call the temperance side of a public-house. But supposing considerable profits are made by mineral waters and teas and dinners, will that be an element in the value on which the levy will be paid to the publicans who mainly sell strong drink?

THE MARQUESS OF SALISBURY

If the noble Lord will look at Schedule III of the Bill, Clause 2, subsection (2), he will see that, "The declared value shall be an amount not exceeding seven years purchase of the net annual profit from the sale of excisable liquors carried on under the certificate, ascertained on the average of the three preceding years."

On Question, Amendment agreed to.

THE MARQUESS OF SALISBURY

I have one more Amendment. It is in Clause 7, subsection (1), of the Schedule. The noble Earl in charge of the Bill called attention to the ambiguity which the drafting shows in the proviso to the first subsection of that clause, and the drafting is certainly rather insufficient. The idea is that the insurance should be paid out of the accumulated funds in the central fund at the time the insurance becomes due. That may be insufficient; but notwithstanding that we do not allow the ejected licensee to have a continuing claim on the central fund. Further, future accumulations after that particular year must be allotted in order to pay the insurance of future withdrawals; and therefore it is necessary to provide, as it were, that the claim of the ejected licensee shall not go further than the accumulated funds at the moment or the amounts which are owing to the fund at that moment. There is one exception—namely, the case of the sum of money paid by a disinterested management company in respect of compensation for the licences which they are going to take over. Under an earlier provision of the Bill that sum of money must be spread over a great number of years, and that would be, as the noble Earl pointed out, inconsistent with, or apparently inconsistent with, the terms of Clause 7 of the Schedule as it at present stands. This Amendment is drafted with a view of covering that point and making it perfectly clear what funds at the command of the central insurance fund the ejected licensee has a claim over, and that he should have his full rights and no more.

Amendment moved— Page 21, line 21, leave out from ("except") to the end of line 22 and insert ("in respect of funds in the possession of and sums clue to the Central Board at the time when the claim arises and sums due to the Central Board before the expiration of the year in which such certificate is withdrawn, and where the certificate has been withdrawn in pursuance of a disinterested management resolution, in respect also of sums received by or due to the Central Board under the provisions of subsection (5) of section three of this Act ).—(The Marquess of Salisbury.)

On Question, Amendment agreed to.

Moved, That the Bill do now pass.—(Earl Beauchamp.)

On Question, Bill passed and returned to the Commons, and to be printed as amended. (No. 194.)

House adjourned at ten minutes past Six o'clock, till To-morrow, a quaeter past four o'clock.