HL Deb 20 June 1928 vol 71 cc583-611

Order of the Day for the Second Reading read.


My Lords, I hope your Lordships will not consider that the bringing forward of this Bill is a matter which calls for any apology. Your Lordships have had during the last few years a number of debates on the licensing question, but we have never, of late years at any rate, had any opportunity of discussing a Bill which has approached the matter quite from the point of view of the Bill which I am bringing before your Lordships to-day. I should like to say at the outset that it is really not so much a temperance reform Bill as a public-house reform Bill, and the first point that I wish to impress upon your Lordships, quite without discussing the merits or demerits of prohibition, is that at all events that question does not arise on this Bill. There is nothing in the shape of prohibition in this Bill, either national or local, compulsory or optional, if there is such a thing, partial or complete. There is no prohibition in this Bill in any shape or form.

The justification for the Bill is the extraordinarily low standard of the public-house in this country. I venture to state that the standard of the public-houses in this country is in itself a condemnation of the system which has given rise to them. It must be borne in mind that 90 per cent. of the public-houses are either owned by or tied to brewery companies. I am not going to take up time in describing the poor class of public-house which abounds in the slum areas of great industrial towns. That is really, as I know your Lordships are fully aware, the real heart of the difficulty. I will only say that the sort of public-house which I have in mind is a house which is structurally bad, cramped in space, and in which there is no provision really for the comfort of the customers, no facilities for recreation, and very often not even sufficient seating accommodation. That is the kind of house which for short it is fair to describe as the "slum pub," and it is no exaggeration to say that something like 75 or 80 per cent. of the public-houses in this country come under that category of "slum pub." We have heard a great deal about bad housing, and I think it is very deplorable that many thousands of respectable people in this country should have no better place to which to go for a drink and a smoke in the evening than houses of this class; and it is because I believe that the only way to raise the standard is to alter the system under which the trade is carried on that I am bringing forward this Bill.

The title of the Bill is the Liquor (Disinterested Ownership and Management) Bill. Disinterested management is really the traditional policy of your Lordships' House in this matter. There was a Select Committee of this House on Intemperance in 1879, and one of the recommendations of that Committee was some kind of local option on the subject of disinterested management. In more recent years disinterested management was the subject of praise from every side of the House in 1912 and 1913, when the present Scottish Temperance Act was under discussion here. The late Lord Lansdowne described himself as a convinced believer in disinterested management, and the House inserted in the Scottish Bill a disinterested management option. It was unfortunately not accepted in another place, and when it returned here your Lordships agreed to accept the Commons Amendment, and that option was not put into the Bill. I say without hesitation that the Scottish Act would have been a very much better Act than it is if your Lordships' House had had its way and the disinterested management option had formed part of the law to-day.

But I would like to put to your Lordships two sentences which were spoken by the noble Marquess the Leader of the House in November, 1912, on the subject of that Bill. In the first place speaking on behalf of himself and his colleagues, he said: We believe that the time has come when the effort which has been made for many years towards disinterested management in a spasmodic sort of way should receive a more official sanction, and we hope that before the Bill passes into law an Amendment in that direction may be inserted. That was, as I have stated, actually done. On the next day he uttered some words which, I think, have a very excellent application to-day. Lord Salisbury said:— We care too much for the principle of disinterested management to defeat a good opportunity of promoting it merely because we do not agree as to the details. The principle of disinterested management is seen at work in the Trust Houses and the People's Refreshment House Association houses, and I have nothing but praise for the work of those houses. It is indeed to extend that work that I bring in this Bill.

I believe it is the only way to do it, because unfortunately the Trust Houses have not had as much success as we should like in dealing with the "slum pubs." The reason for that is quite simple. These "slum pubs," although they are extremely unsatisfactory from the point of view of the consumer, are a great deal more satisfactory from the point of view of revenue to their owners. The brewery companies owning them are, of course, in acute competition between themselves, and the competition between the breweries which own the great majority of these houses has forced up the value of the houses to a very high figure. The value to the brewery is, of course, the value as an outlet for its product, and the profit they make as a wholesale profit is more important to the brewery than the retail profit. You have on the one hand a great redundancy of these houses, but the high value renders them difficult to put an end to under the compensation scheme, and at the same time it makes it impossible for the Trust Houses to compete because the Trust Houses, not having the wholesale profit to benefit by, have to rely upon the retail profit, and therefore naturally cannot compete with the brewery companies. The upshot of it is that in order to get a satisfactory result or to give disinterested management a satisfactory chance you must have a monopoly of the trade in any given area. It is interesting to note that it was the original intention of the Trust House movement that it should acquire a monopoly in an area, and it is unfortunate that it has not been able to achieve that result.

But we have an example of what can be done under disinterested management, even in a difficult area, when a monopoly is achieved, and that is the case of Carlisle. Here, again, I will not waste time over history. Your Lordships all know that during the War a large munition factory was set up not far from Carlisle. Owing to the large influx of workers it became necessary for the Liquor Control Board first to put on very stringent restrictions and regulations, and when they were not observed to take over the whole business in that area. The position went on under D.O.R.A. until 1921, when it was regularised by the Licensing Act of that year. Carlisle, from the point of view of public-house reform, was not a very good subject. It is a border town, and it has on the one side the whisky-drinking Scots and on the other side the beer-drinking English, and I believe the local custom leads to a compromise. The local drink is what is known as "the chaser," and when you have a "chaser" you have first the one and then the other. I believe the order is immaterial from the point of view of the inhabitants, but it does not make for great temperance.

Then again, as a border town for many hundreds of years, Carlisle was the scene of border fighting, and it has many small courts up back streets, with an entry on two main streets or streets with a court in between, and many of these public-houses were in these courts and exceptionally difficult from the point of view of police supervision. There were a very large number of them. Carlisle is an industrial town with textiles and biscuit manufactures, I believe engineering works also and, of course, a very important railway centre. All these things contribute towards difficulty from a temperance point of view. Nevertheless, in Carlisle very great success has been achieved under the State management scheme. Of the 119 houses in Carlisle 47 per cent. have been suppressed, and better service is now rendered by the sixty-three remaining houses in the opinion of the local people than was the case before. Grocers' licences have been suppressed, the "off" sale has been concentrated in various houses and provision for food has been made wherever it is required, and much more roomy places have been provided where people can sit and play billiards, and drink or not as they like.

A very good example of a public-house in a country district under the Carlisle scheme is at Annan, where there is a house which, I believe, is called Gracey's Banking. There are now three large sections of the house, one a beer hall, the second a large billiard hall, and the third a restaurant, and outside there are bowling greens, putting greens and so on. These putting greens and bowling greens are reached before you arrive at the place where you have to buy the drink, and the local minister, who has been there 25 years, has testified that the provision of this house and these facilities has completely changed the social life of the place. Such a thing is utterly impossible except under some form of disinterested management. With regard to the temperance result I am not going to speak, because my point is the improvement of the houses. The local people are unanimous, with very few exceptions, in saying that they would not dream of going back to the old system. The Chief Constable says so, and the successive Mayors say so, and responsible local opinion appears to be emphatic on the subject. I have no doubt the Southborough Report will be referred to in this debate, and therefore I say at once that the Southborough Report testifies to the value of the experiment, which has been carried out in Carlisle. It does not recommend its immediate and universal application to the whole country—that, would hardly have been prudent; but it does recommend the continuance of the experiment, and therefore it is precisely what this Bill gives the opportunity for carrying out.

The liquor trade may say, and do say, that they could do equally well what has been done in Carlisle but for the obstruction of the licensing benches. Well, if any one is going to make that argument it will be necessary to show that prior to the War there was a single application for an improvement in a public-house in Carlisle which was turned down by the local licensing bench, and I am assured by those who have made inquiry on that score that there is not a single case on record. You have to take it that the state of affairs that existed in Carlisle before the War was a state of affairs which was perfectly satisfactory from the trade point of view. I am not blaming the trade. The trade is a business, like any other. Its first duty is to its shareholders. It has to produce dividends. Those responsible would be other than human if they did not seek to maintain a state of affairs which provided a highly satisfactory result for their shareholders.

As regards machinery, the Bill provides for polls, but there is nothing obligatory about a poll. In order to have a poll you must have a request either by the local authority or else by not less than one-twentieth of the electors in an area. The areas are the Parliamentary voting areas and the simple question will be asked: Are you in favour of the adoption of the disinterested ownership and management of the liquor trade in this area? A simple majority will carry a resolution, and if a resolution is carried it will be in force for fifteen years. That may seem a long time to your Lordships, but it is necessary in order to give the finance of the scheme a chance. You must give time in which to pay off the amounts paid as compensation. If the resolution is not carried no other poll can take place for five years. After disinterested ownership and management has been in force for fifteen years a simple majority will carry repeal and the area can go back to the existing arrangement. If disinterested ownership and management is carried, a Board of Management is appointed which will take over complete control of the retail trade in the area. Arrangements are made for the exception of hotels and restaurants, and arrangements are also made by which the Board may, in certain circumstances, take over the manufacture—that is, the breweries. The reason for that is that it would not be fair to take away the whole of the tied houses of a brewery and leave it, so to speak, in the air. You must provide in common fairness for the taking over of the whole business, and provision is made that where 50 per cent. of the products of a brewery have commonly been sold in the area the brewery may, if it wishes, demand to be taken over and the Board have no alternative.

The members of the Board of Management will be appointed by the Home Secretary. They will be paid, and membership will be a whole-time job. They will be under specific rules that no commission may be paid to their managers on the sales of intoxicants, and they must provide adequate facilities for food and must see that redundant premises are suppressed. It is also provided in the Bill, and it is put in an optional way, that they may take over premises. Therefore, so far as the Trust Houses are concerned, there is no reason whatever why the Board of Management should interfere with the carrying on of those houses or the People's Refreshment House Association houses. There is no doubt whatever in my mind that the Board of Management Would leave those houses alone and that they would carry on as at present. The Board will be subject in every way to the existing law and will be different in that respect from the present Carlisle scheme which is run by State authority. The Board will be a statutory body. It will pay all rates and taxes, and it will be subject to every provision of the existing law with the exception of the necessity to take out justices' licences. It will have to have excise licences on which it will pay the duty, and it will be subject to every other law with regard to hours and so on just as any other trader.

The Central Board, which can consist of quite few people—two or three, or even one in the beginning of the scheme would appear to be ample—will, therefore, be quite inexpensive and cannot be denounced in any way as the setting up of an expensive bureaucracy. It will be guided in each area by a local advisory committee which will ensure that local needs will be adequately met. The local advisory committee will be an unpaid body and will be nominated as to half by the local authority and as to one-quarter from their own number by the licensing justices, and there will be two nominees of the local trade councils if there are any. The remainder can be appointed by the Home Secretary. There is no wicked intention behind that provision. It simply enables the Home Secretary to appoint a representative of any interest which otherwise is not represented. There are one or two other points about machinery that I should like briefly to mention. There is the question of clubs. Existing clubs will not be interfered with beyond the imposition of certain conditions at the discretion of the Board; but a new club will have to satisfy the Board that there is a social need for a new club before it can be allowed to start. That will do a great deal to check current abuses in the matter of clubs.

Turning to the question of finance, which is one of the most important in this Bill, provision is made for the payment of full cash compensation to the interests taken over. There are, as your Lordships know, two possible methods—either that of a time limit or that of cash compensation. In the Scottish Act the time limit was adopted, but in this Bill it seemed better for good reasons to make the compensation payable in cash, and that is the method adopted. The definition of "compensation" is taken from the Act of 1910, to which, of course, it came from the Act of 1904. One trade critic has raised the question as to whether the words in the Bill actually provide for full compensation. I am advised that the Bill as drafted does in fact ensure full compensation for an on-licence; but I am prepared to say at once that if any alteration is necessary to secure that I shall be only too glad to accept any necessary Amendments. It is the real intention of the promoters of the Bill to pay the full capital value of a licence at the time of the poll, and I am satisfied that the language of the Bill does effect that purpose. Off-licences will receive a sun of not less than one or more than three years' annual net profit. Other property will be taken over by agreement or, failing that, by arbitration.

On the question of where the money is to come from, a central fund will be established into which will be paid, in the first place, the profits of all disinterested ownership and management areas, including the Carlisle area, which is made a disinterested ownership and management area; and, in the second place, the proceeds from the sale of redundant premises. Your Lordships will understand, of course, that is a very important item where redundancy is impossible to deal with when the brewers are in acute competition one with another. It becomes easy, when you have the whole area in one hand, to close the bad houses and structurally improve those which you decide to keep.

On finance it is not only theory that we have to deal with, but the proved fact of the success of the Carlisle scheme. In Carlisle houses were taken over on payment of full compensation at the time of the War in 95 per cent. of cases by agreement, and the remaining few were settled, I think, by arbitration. The full value was paid, and the whole amount that was advanced by the Treasury, amounting, I think, to £800,000 or £900,000, has been repaid out of profit in the course of eleven years. The whole Carlisle undertaking now stands free of charge to the Treasury and is at the moment a revenue-producing asset. The test applied by the liquor trade is so often that of financial success. I do not claim for a moment that the State has made as much profit out of the business in Carlisle as the liquor trade would have made had it been left in control. But the test from the point of view of the State is the satisfaction of the consumer. The State has made sufficient profit to pay its way and to avoid putting any burden on the taxpayer, and it has, undoubtedly, provided a great deal more satisfaction to the consumer than would have been the case under the old system. With regard to one other point of finance, there is no levy on the trade of any sort or kind provided for. The old levy, of course, under the 1904 Act for the suppression of redundant premises will continue in areas which go on as no-change areas; but the finance of the scheme as it stands is independent of any sort or kind of additional levy to be raised from the trade themselves.

That is a brief outline of the machinery of the scheme, and I would like to mention the only two objections which so far as I know have been raised in any quarter as criticisms of the Bill. They both come from trade quarters. In the first place, the Bill is accused of being prohibition. That, of course, to any one who looks at it with an unjaundiced eye, is pure prejudice, and I should not have mentioned it but for the fact that in one of the trade papers an article on the Bill was headed "The New Teetotal Charter." It is just an example of the way whereby any one who ventures to interfere in any way with trade matters is at once dubbed a "pussyfoot" and prohibitionist. There is no question whatever, or sign or shape of prohibition in the Bill. The second objection is really almost as flimsy. That is that this Bill is Socialism. Socialism is almost as good a cry to raise prejudice as prohibition, but the accusation of Socialism is based, of course, on the theory that this Bill is in some way nationalisation of the liquor trade. In point of fact nothing could be further from the truth. To begin with you have nationalisation at this moment. In Carlisle you have a direct State-management scheme run by a Government Department. This Bill takes the matter out of the hands of the Government Department and puts it under an independent body. Nationalisation is a very vague term. I suppose there are three characteristics which are more or less constant in a nationalised industry. In the first place there is direct Government management; in the second place the Government Department which manages the scheme is free of taxation; and in the third place the profits, if any, accrue to the benefit of the State. On all these three tests this scheme is definitely not nationalisation. There is no direct State management. The profits cannot possibly go to the State. The statutory body is entirely independent of the Chancellor of the Exchequer, and the body running the trade is subject to the same taxation as any other trader.

The only possible circumstances under this Bill in which profits could go to the State would be if every area in the country had adopted a disinterested ownership and management resolution, and the thing had been a success all over the country, and there was a surplus in the central fund. Under those conditions it would become necessary to decide what was to be done with that surplus, and legislation could undoubtedly be passed whereby the Chancellor of the Exchequer of the day could take hold of it, but, without special legislation, as the Bill stands profits go first in payment of compensation, and secondly to the extension of the scheme. If that is Socialism, all I can say is this is a Socialist Government, for there is an almost exact parallel in the Board of the British Broadcasting Corporation. If that is Socialism, I suppose my noble friends Lord Clarendon and Lord Gainford are both Socialists. But I think the accusation is entirely absurd.

There is one other point. I said at the beginning that this is not a temperance Bill. There is a temperance aspect of the matter. We have had a great improvement in sobriety of late years. By common consent the main contributory causes have been shorter hours and higher prices. Viewed from the point of view of the trade those causes which have improved sobriety have necessarily been a cause of reduced sales. That is inevitable where you have a liquor trade run for private profit. That is why, if disinterested ownership and management came into force in many areas, you would undoubtedly remove from action a force which necessarily, in its own interests, is constantly working against such restrictions as shorter hours and higher prices which do tend to reduce its own sales and output. If you approve of the principle of disinterested management, which I believe you do, you have to face the necessity that it must be a monopoly. If it is a monopoly you must have coercion of the interests at present in charge. Pay them compensation and get rid of them. If you have coercion you must have a statutory body and that is the principle of this Bill. I ask you, by giving the Bill a Second Reading, to do no more than approve the principle of disinterested management I ask the noble Marquess the Leader of the House (the Marquess of Salisbury) to say on this occasion, as he said in 1912, that he cares too much for the principle of disinterested management to try to defeat a Bill giving effect to it, just because he disagrees on questions of detail. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Balfour of Burleigh.)


My Lords, I rise to move the rejection of the Bill, but before I enter upon arguments against it, I would like to raise a point of order. Clause 13 of the Bill deals with finance. I will refer to that at greater length later, but for the present I will read what is said in the Bill:— The loan shall be made at the minimum rate allowed for the time being for loans out of the Local Loans Fund. Then it says:— Such sums as may from time to time be required by the Treasury for fulfilling any guarantee given under this section shall be charged on and issued out of the Consolidated Fund of the United Kingdom or the growing produce thereof. Therefore the money which has to be raised is a charge, upon the taxpayer. The Consolidated Fund Bill, as your Lordships know, is the foundation of security for all Government loans, such as Consols, the War Loans, and other loans of that description. They are charged upon the Consolidated Fund, and, therefore, this is a charge upon the taxpayer. In addition to that it says:— The Public Works Loan Commissioners may lend to the Board any money required by the Board for the purposes of this Act, and any loan so made shall be made from the Local Loans Fund in manner provided by the Public Works Loans Act, 1875 If your Lordships will turn to Erskine May's "Parliamentary Practice," 13th edition, page 564, you will find that the Commons resolved on July 3, 1678:— That all aids and supplies, and aids to His Majesty in Parliament are the sole gift of the Commons; and all Bills for the granting of any such aids and supplies ought to begin with the Commons; and that it is the undoubted and sole right of the Commons to direct, limit, and appoint in such Bills the ends, purposes, considerations, conditions, limitations, and qualifications of such grants, which ought not to be changed or altered by the House of Lords. There is a foot-note which says that the Nullum Tempus (Ireland) Act, 1876, Amendment Bill was withdrawn in the Lords, on July 20, 1893, "because it affected the public revenues." On page 565 it is stated that:— The privilege claimed by the Commons has also been held to include legislation affecting the Local Loans Fund … Again, if you look at the foot-note in the 12th edition—I cannot find it in the 13th edition—you will see it says:— The Land Purchase (Ireland) Bill, 1888, placed a limitation on the total amount to be advanced to any one purchaser. When the Bill was considered by the Lords an Amendment to restrict this limitation was withdrawn on the expression of opinion by the Lord Chancellor of England and the Lord Chancellor of Ireland. Therefore, I hope that when I sit down we shall hear from the Lord Chancellor of England what his opinion is upon this question.

I am afraid that I am not very cognisant of the rules of order of this House, but I have some knowledge of the rules of order in another place, and if this Bill was unfortunately to receive your Lordships' assent, what would happen would be that the Speaker would call the attention of the House to the fact that the House of Lords had infringed the privilege of the Commons. It is true that the Commons may waive their privilege, but they have not very often done that. Presuming for the sake of argument that they did waive their privilege, unless the Government intend to take up the Bill—I hope there is no chance of that—the Bill could not proceed when the financial clauses were reached unless a Financial Resolution had been moved.


My Lords, I do not want to interrupt my noble friend, but it is rather important that he should not be under a misapprehension. There are two totally different things—points of order and points of privilege. As far as I know a point of privilege is never a point of order. If it were a point of order it would be the duty of the majority of your Lordships, in accordance with the rules of our House—we keep order ourselves—to say whether there was a breach of order or not. As regards a breach of privilege, that is undoubtedly a matter for argument which my noble friend may advance. But really it is the affair of the House of Commons not of ourselves. It is their business. Whether it would be wise to allow the Bill to leave your Lordships' House, if it were agreed to, with a breach of privilege in it, is another matter. But there is at the end of the proceedings in your Lordships' House a proceeding by which Privilege Amendments are made and the Bill could be sent without these particular clauses to the House of Commons. My noble friend knows the orders of the House of Commons. I would point out to him that in your Lordships' House points of privilege are never points of order.


I am much obliged to the noble Marquess for informing me as to the rules and customs of this House, in which I am sorry to say I am not so well up as I ought to be. The point which I was going to explain was that apparently the Bill could not proceed because of a point of privilege. I have given two instances to your Lordships and I have given them also to the Lord Chancellor. I do not want to press that matter any further except to say—I hope I am not misrepresenting my noble friend—that assuming the question of privilege is raised, should the Bill receive the assent of your Lordships, then it will be sent down without any financial clause in it. That is a nice sort of Bill to be sent down. Here is a Bill which depends entirely for its working upon the financial clause and there is to be no financial clause. That is to be left to somebody else, and in another place a financial clause cannot be inserted except on the Motion of a Privy Councillor who has the leave of the King. Therefore, what it amounts to is that nobody except the Government can insert a clause dealing with finance. In those circumstances I venture to say it is useless to proceed with a Bill which cannot have any effect whatever unless there are funds for buying out the various interests of which the noble Lord, Lord Balfour of Burleigh, does not approve.

Now I would like to raise another question. The noble Lord, Lord Balfour of Burleigh, says that it is not a temperance reform Bill; it is a public-house reform Bill. Of course it is not a temperance reform Bill. It has nothing to do with temperance. I have always been opposed to any legislation which will interfere with the liberties of the country. If a man or woman—as I think very foolishly—chooses to get drunk, it is his or her own look-out and it is not our business to deal with what they ought to do. I would quote the words of a well-known prelate—if I quote him wrongly the right rev. Prelate on my left will correct me—who said he preferred to see England free to England sober. That was said, I think, by Archbishop Magee. I personally agree with him. I can quite understand that there are certain people who are concerned with putting other people right, who really do honestly and sincerely think that it is their duty to see that nobody ever gets drunk or drinks too much spirits. Therefore they bring in temperance legislation. My noble friend, I think, has distinguished himself in supporting temperance legislation.

Why do they suddenly turn round and drop all temperance legislation and propose to do this? I wrote down some words which the noble Lord used when he was speaking. He said: "If this Bill is passed there will be a better place to go for a drink and a smoke in the evening." Here is the noble Lord, of all people, advocating that there should be a better place to which people can go to get a drink and a smoke in the evening. The noble Lord, of course, has never experienced the temptation of getting a drink. If a man gets one drink he is very likely to get another, especially if he is a smoker, because smoking, as I understand it—that is one reason why I do not smoke—makes you thirsty and consequently the more you smoke the more you want to drink. Here you are, in a pleasant place, with everyone surrounding you nice and pleasant, and the result will be, not that there will be less drinking but that there will be more drinking. There is another point with regard to that. There are to be no advertisements anywhere. Everything is to be perfectly plain. Walking along a street you will see a blank space. You will not see a public-house with Messrs. Whitbread's ales advertised or anything of that sort. You will see a blank space. It looks quite respectable. I believe the result will be that more people will go into public-houses because I believe a good many people are rather ashamed of going into a public-house when everybody can see they are going into a public-house. I believe that they will not mind going in if this change is made and that the result will be that there will be more people going into public-houses than there are at the present time.

The noble Lord said that the Southborough Report would be alluded to. I am going to say something about the Southborough Report. On page 17, in paragraph 44, the Southborough Report says:— The evidence before us was conflicting upon the question whether the schemes have reduced drunkenness in the areas in which they have been applied. Then, on the next page, they say:— A comparison of the records of convictions for drunkenness in different towns is of doubtful value owing to the variation in conditions as between one town and another, but so far as this comparison can be made, it does not appear that any greater reduction in the number of convictions for drunkenness has been achieved in recent years in Carlisle than has been achieved in many other cities and towns. Therefore, the example of Carlisle, to which the noble Lord has alluded, shows that—


May I interrupt? I did not say anything about a reduction of drunkenness. What I said was that it had improved the public-houses in Carlisle.


Oh, I see. The noble Lord has completely changed his attitude from that of a year or two past when right rev. Prelates brought in Bills to prevent anybody drinking anything. Now the noble Lord wants to encourage people to drink. He wants to improve the appearance and the amenities of the public-house in order that more people may go in and drink. Let me deal for a few moments with the Bill. The local authority may have a poll. You cannot tell what on earth a local authority will not do. A good deal depends upon the people who were appointed to it at the election when they were last chosen. They may determine that a poll of the electorate shall be taken and then— If a majority of the votes polled are in favour of the resolution, the resolution shall be deemed to be carried"— and it is to last for fifteen years. The noble Lord alluded to this and said that it was necessary because we must have disinterested management for fifteen years in order to find sufficient money to pay compensation. You must go on making money for fifteen years from that accursed thing, the drink trade! If the thing is wrong, it does not seem to me that it makes very much difference whether the profit is made by the State or by private individuals.

Then Clause 4 says:— The requisition for a poll shall be in the form set out in Schedule I to this Act and shall be signed by not less than one-twentieth of the electors in the area and shall be lodged in the month of March in any year with the returning officer, who shall thereupon insert in not less than two newspapers circulating in the area a notice of the receipt of such requisition and shall allow inspection of the requisition by any elector for the space of one fortnight after the same has been lodged; but after the requisition has been so lodged no signatures thereto may be withdrawn. Evidently the promoters of the Bill think that a good many people will sign the petition without thinking and will then want to withdraw, and they take very good care that they shall not withdraw if it can be helped. The proportion is to be one-twentieth. What would happen? Take an area of 20,000 electors. One thousand are persuaded to sign a requisition for a poll, and the notice is inserted in two newspapers circulating in the area. That means some little local rag (may I call it?) which circulates in the particular area and which, in all probability, nineteen-twentieths of the people will not see. The consequence will be that nobody will know what has taken place and probably the majority of them will not know that there is a poll at all or take any notice of it. What is going to happen? At this moment the finances of the State are not in a very good condition and what we require is the reduction of expenditure and the cessation of borrowing. But here a small number of electors, quite innocently and without in any way realising what they are going to do, may commit the State to a vast expenditure which may or may not result in a profit. I will deal with that point a little later when I come to disinterested management.

How you are going to get profit out of any business run by disinterested people I do not know. I have had some connection with large undertakings—nothing to do with the brewing trade; what was in my mind was the Great Northern Railway—and my object was not to say to my officials: "Do not care anything about what is going on; be quite disinterested as to whether anybody uses the trains or whether they are punctual or not." What would have been the result of such an attitude as that? It would have been ruin. And yet you say that you are going to run public-houses and breweries in a disinterested way. How on earth do you expect to get enough to repay the money that has been advanced by the unfortunate taxpayer, who is already overburdened by an enormous weight of taxation? Then comes a provision that premises in the area shall be closed on polling day. I do not very much mind that. I do not quite know why it is put in, but I cannot see that there is very much objection to it. The expenses of the poll are to fall upon the rates of the district. At the present moment the Government are endeavouring to reduce the rates, and here we are going to put more upon the rates and so render ineffective the efforts of His Majesty's Government to reduce them.

When we come to the Board of Management I really do not know what words to use to describe these proposals. There are to be more officials and more paid officials. If we are ever going to get economy and a reduction of expenditure the first thing to do is to reduce officials. But under this Bill we are to have more. Clause 5 says:— The Board of Management … shall … be a body corporate, and … shall consist of a Chairman and such other members as the Secretary of State may from time to time appoint. You are going to give power to the Secretary of State to appoint an undefined number of people, who will be paid. You are going to increase his patronage, and this, I venture to say, is a very wrong thing to do, especially at this moment. Then the clause says:— Provided that the Board, or any member thereof, shall be removable from office by the vote of both Houses of Parliament. I do not quite understand what that means, but I rather think that you are going to put the Chairman and "such other members as the Secretary of State may from time to time appoint" into the position of His Majesty's Judges. I see a noble Lord close to me who is a distinguished Judge, and I think I am right in saying that no Judge can be removed except by a vote of both Houses of Parliament. You are going to put these gentlemen in exactly the same position as His Majesty's Judges. That practically means that they are appointed for life; for how on earth are you ever going to get a vote of both Houses of Parliament on a subject of this kind? Accordingly we are going to appoint more officials, we are going to take care that they are always to be there and that we cannot reduce them, and we are going to pay them a certain sum.

Then the clause goes on to say:— The Board may employ such managers and servants as they may consider necessary for the efficient conduct of the business entrusted to the Board, Just consider what that means. I presume that the noble Lord, Lord Balfour of Burleigh, desires that this Bill should be a success if it becomes an Act. Not only are you going to appoint officials with, I presume, high salaries, who cannot be removed except by the vote of both Houses, but you are going to appoint, if the Bill is a success, an enormous number of people who will be paid by the State. What happens at an Election when there are a large number of people paid by the State? I have had some experience of Elections—I do not think that the noble Lord ever stood for Parliament—and I remember the circumstances in 1906, when I was standing for Peckham. One of my canvassers said to me: "There is a postman in such-and-such a street who has always voted for you"—I had been Member for fourteen years—"but he is going to vote against you this time. He is a very nice fellow and you had better go and see him." I went to see him and said that I hoped that I should have the honour of receiving his vote. He asked: "Will you vote for an inquiry into our wages, so as to get our wages raised?" I said: "No, I will not; there have already been two or three inquiries, and they have always resulted in certain things being decided, and postmen and Post Office officials have always said: 'That is not enough, we want more.' Therefore I shall not vote for an inquiry, because it would not be a proper thing to do." He then said: "I am very sorry to vote against you, I have always voted for you for the last fourteen years, but 1s. a week is more to me than anything else, and unless you do this I shall vote for the Radical." And he did. Here you are going, not to achieve temperance but to enable people to go to a place where they can get more drink, and perhaps be happier, to create a large number of people who will put pressure upon the Secretary of State to have their salaries increased, and who will act upon that at Election time. You have 26 millions of electors, and I hope your Lordships will pause before you put such a temptation in the way of the large number of people who will have to be appointed if this Bill becomes a success.

The clause also says:— Provided that no such remuneration shall be by way of commission in respect of sales of intoxicating liquor. What is the good of that except as eyewash? Supposing that no liquor is sold, how are you going to get the money to pay the interest on your borrowed money? And if no liquor is sold there is nothing for these people to do. Are you going to keep them there at the expense of the State, and pay them wages? Of course they must see that people will come into their places to buy what they have to sell, unless you are going to say to them: As long as this does not produce anything, we will pay you a salary, but if you try to sell liquor, and there is anything for you to do, we will get rid of you. Then Clause 6 says that:— no person shall without the authority in writing of the Board or except in accordance with any conditions attached by the Board under this Act to such authority sell or distribute any intoxicating liquor in the area, and no licence for the sale of intoxicating liquor shall without such authority be granted or renewed in respect of any premises within the area: I do, I must admit, have a whisky and soda for dinner, and in order to have a whisky and soda you must have some whisky, but in the area in which I live, as I read the clause, nobody would be able to sell me a bottle of whisky.


May I point out to the noble Lord that line 5 of this clause says: "without the authority in writing of the Board."


But what is there to compel the Board to give authority? The Board may refuse to give authority. Why should I be dependent upon the authority of some Board appointed by some Secretary of State for whom I have no regard? Then the following proviso is rather contradictory, because it reads:— Provided that nothing in this section shall be deemed to prohibit the holder of a wholesale or manufacturer's licence in the area from selling intoxicating liquor in pursuance of such licence to a trader in the area for the purposes of his trade… Again I congratulate the legal profession, because I can see a considerable amount of litigation as to what these provisions mean. There is a new crime created, because I may draw the attention of Lord Balfour of Burleigh to subsection (2) of Clause 6, which says:— If any person sells or distributes any intoxicating liquor without such authority or in breach of any of the conditions attached to such authority as aforesaid he shall be liable on summary conviction to a fine not exceeding two hundred pounds… And the authority may be revoked. The noble Lord has had some experience of business, I know, but how would he like to conduct a business in which he has a Board with authority and a committee which consists of persons, two at least of whom must be women, nominated by the local authorities in the area, and by the licensing justices, two persons nominated by the local trades council and such other persons as the Secretary of State may select? These people are to give advice to the Board, and the Board is to take into consideration any advice or recommendation, or other representation, submitted or made by any local advisory committee. Their time will be wasted, instead of attending to their business, in listening to what this committee have a right to suggest to them. Really the Bill is so very bad that it is necessary to expose some of its wickedness.

Subsection (2) of Clause 9, as I read it, gives the Board power to buy up all the hotels. There is nothing to prevent the Ritz Hotel being bought up by the Board. Where they are going to get the money from I do not know, but there is nothing to prevent it. The noble Lord says the Bill is not nationalisation. What you are going to do is to provide that the Secretary of State may appoint certain people who may buy up all the breweries, all the hotels, and all the public-houses, and run them in a disinterested manner. Whether they will ever be able to pay the interest on the sums they have borrowed, and whether the taxpayer will not have to put his hand in his pocket, is, I think, extremely doubtful. There are other clauses which are so evidently bad that I do not think I need refer to them. Then there comes the financial clauses, to which I have already alluded. They provide that the State shall provide the money, and yet the noble Lord says this is not nationalisation. First the State provides the money and makes the interest a charge upon the taxpayer, then people who administer the property are to be appointed by the Secretary of State and are not to be removable except by votes of both Houses of Parliament. If that is not nationalisation, I do not know what is the meaning of the English language.

I must call attention to the compensation, because it is simply confiscation. The Bill says:— The compensation payable shall be a sum representing the value of the premises calculated on the basis that the same were not licensed premises at the date of the taking of the poll, together with such additional sum as represents the increased value of the premises by reason of their being licensed premises, calculated as if the licence were subject to the same conditions of renewal as were applicable immediately before the passing of the Licensing Act, 1904: The effect of that is to give them no compensation at all except for the value of the house as if it was a house without any licence—because that was the position before 1904. In 1904 an Act was passed which did provide for some compensation. Now the noble Lord repeals the Act of 1904 and goes back to the conditions which were in existence before then.

If noble Lords will look at Clause 17 they will see again repudiation and the breaking of contracts. It seems inseparable from these Bills. The clause says:— In apportioning any such compensation among the holders of shares, stock debentures or other securities … the Commissioners of Inland Revenue … shall not be bound to give effect to the priorities subsisting under the regulations of the company or otherwise as between different classes of shares, stock, debentures or securities. What does that mean? A very large number of breweries have borrowed money at a very low rate of interest. I should say that in the case of the majority of debenture stocks borrowed by breweries the interest has not been above 4 per cent., and in some cases lower. I remember a brewery 4 per cent. debenture stock being issued not long ago above par, and I think you may take it that 4 per cent. is the interest which the people who have advanced the money are receiving.

What does that mean? A, on behalf of the shareholders in a brewery, says to B: "Will you lend us money? We will only pay a small rate of interest, but we will give you excellent security. Your security shall rank in front of everything, and should any misfortune befall this brewery the proceeds of the sale of the brewery shall first go to pay you your money." Now, the noble Lord comes and says "No." The money having been lent on that understanding some person appointed by the Secretary of State, or somebody else, is to say: "No, we do not agree with that. We will give the debenture holders"—who have only been receiving 4 per cent.—"a certain amount, and the rest we will give to the shareholders"—who have been receiving 10, 15 or 20 per cent., and who borrowed the money which has enabled them to receive that 10, 15 or 20 per cent. on the condition that if they paid it off they would pay the whole amount in full. All that undertaking is broken, and the unfortunate debenture holders are to receive what they can get, while the other people who have no claim whatever on this money are to be paid some of it. I think that clause alone is sufficient to induce your Lordships to reject the Bill. I beg to move.

Amendment moved— Leave out ("now") and at the end of the Motion insert ("this day six months").—(Lord Banbury of Southam.)


My Lords, the noble Lord who has just spoken has made merry rather at the change of attitude of my noble friend who moved the Second Reading. I congratulate my noble friend Lord Balfour of Burleigh on what I conceive has been his courage in bringing forward a measure of a very moderate character which was not likely to be supported by those with whom he has previously worked in this matter of licensing reform. There are two or three very notable changes in this measure as contrasted with the Bills which have previously come before your Lordships' House. One is that there is no compulsory poll, there is no question of prohibition, and also there is a fairer term for disinterested management than the word "reorganisation" which was employed in the Bill of a year or two ago. Lord Balfour of Burleigh said it was not so much a temperance measure as a change of licensing policy, particularly in view of the elimination of the poor "pub."

He was good enough some time ago to send me a pamphlet with a synopsis of this measure, in which he explained that it was not a Licensing Amendment Bill but a Bill to facilitate the reproduction in other areas of the main features of liquor sale, management, and control which has strikingly justified itself in the City and district of Carlisle and other smaller areas in Great Britain. I have often said in your Lordships' House that I am not an opponent of disinterested management as a possible policy, so long as it can be proved that it is likely to be effective in improving the conditions of public-houses. I can remember being at a public meeting in Glasgow under the presidency of the noble Lord's distinguished father when this subject was discussed, and I myself am connected with a Trust Company which also employs as managers those who have no immediate interest in, and receive no commission from, the sale of alcoholic liquors. Therefore, I am no enemy of disinterested management in itself, if it can be proved serviceable. I also obtained the appointment, of the Southborough Committee to examine what is known as the Carlisle system to see whether it was working fairly and equitably, and after a great deal of difficulty I also got the publication of the Report of that Committee. I only say this to show that I am not hostile to disinterested management as a possible policy.

The Report of the Southborough Committee says:— Whether this form of management is, in fact, disinterested is open to question, and was questioned by much of the evidence which we heard. It was urged that any system of management of public-houses must aim at conducting its business on a commercially remunerative basis; if it undertakes to supply intoxicating liquor it must be with a view to making a profit on that supply, and to this extent it must necessarily be interested. Therefore the Southborough Committee is very dubious as to whether there is any such thing as disinterested management in itself. Of course, this system obtains in Trust Houses, and in many public-houses nowadays I understand the manager gets no profit on the sale of alcoholic drink. People seem still to believe that it is in the interest of the public-house keeper for a man to drink as much as he can. There is no person who has more cause to discourage drunkenness than the manager of a public-house, who knows that he may get his licence suspended, or a black mark put against him.

My noble friend Lord Banbury read to your Lordships a paragraph from the Southborough Report showing that drunkenness had not been reduced in Carlisle in any greater proportion than it had in any other town of a similar character. My noble friend might have read the next paragraph, which says:— As regards the consumption of intoxicating liquor in Carlisle, it does not appear to us to be established that the reduction of public-houses by approximately 50 per cent. and the improvement of those retained has led to a reduction in the quantity of intoxicating liquor consumed beyond that common to the rest of England, Scotland and Wales in the post-War period. That would seem to show that the very elaborate system in Carlisle—the good intentions of which one fully recognises—has not produced any particular result as regards increased temperance in that area. I might quote a paragraph in the Report of which my noble friend Lord Balfour of Burleigh made rather light; because he said that the Southborough Committee did not suggest that the whole country should be brought under the operation of any such system as the Carlisle system. May I call his attention to the words of the Report— We are not satisfied that a case has been established for the extension of the schemes to any other particular area or place. Not to the whole country but to any other particular area or place. That rather looks as though there is sufficient justification for saying that there is really no need for the introduction of a measure based on the Carlisle experiment.

The noble Lord had to admit what every one else who is a slight observer of human nature admits—that sobriety in this country has increased of late years in an extraordinary way. Mr. Snowden, at a Band of Hope Union breakfast, an occasion when people, I imagine, do not indulge in exaggerated statements, said he really believed that there was a boom in temperance at the present time. If he has only just discovered it I think he is rather slow in the exercise of his powers of observation. Everybody knows that there is an extraordinary increase in sobriety. In pre-War times there was a tendency for temperance to increase in every class of the population, and that has markedly developed since the War. Yet time after time you see it stated that £300,000,000 a year are spent in drink and what a calamity it is that it should be so! People who make that statement forget that the State takes a large proportion of that sum. In 1925 a sum of about £315,000,000 was spent on alcoholic liquor; but the Government took £141,000,000 of that by way of Customs and Excise duties. That made a terrific hole in what was represented as a ghastly drink bill of £315,000,000.

I should like to draw your Lordships' attention to some figures showing the amount of beer and spirits consumed in different years. It must be remembered, of course, that money differs very much in actual value in the periods given. In 1913 35,000,000—I leave out the hundreds of thousands—standard barrels of beer were consumed. In 1921 there was a consumption of 24,000,000 standard barrels of beer, a drop of 11,000,000 barrels. The number of proof gallons of spirits consumed in 1913 was 31,000,000, while in 1921 it was 18,000,000. Coming to the post-War period and taking only Great Britain and Northern Ireland, in 1922 20,000,000 standard barrels of beer were consumed and in 1925 22,000,000. In 1923—I have not the actual figures for 1922—the consumption of spirits was 14,000,000 proof gallons and in 1925 16,000,000 proof gallons. Those figures show a small increase; but it must be remembered that the population of the country increased during that time and presumably, therefore, the consumption was greater. My noble friend, Lord Balfour of Burleigh, said that the increase in temperance was, no doubt, largely owing to shorter hours and higher prices.


Hear, hear.


No doubt those were large factors; but the temperance movement began long before those two new factors were introduced into our licensing system. It must be remembered also that the strength of spirits is enormously reduced and I fancy that of beer also, but I am not quite certain. It would seem, therefore, that the present system is working extraordinarily well in the direction of sobriety, and that a very strong reason indeed is necessary for the making of a vital change in that system. The Association with which I am connected advocates the improvement of public-houses—which is really the object of this Bill—thereby to increase temperance. It is owing in many instances to the action of the licensing justices that such improvements have not been carried out. The Southborough Report mentions that fact in these terms:— We are satisfied from the evidence submitted to us that many brewing firms are anxious to improve the public-houses owned by them, but are prevented from doing so by the attitude taken up by licensing benches in many parts of the country, who refuse to give their sanction to plans for improvement and enlargement of premises and in some cases insist that the licensee shall be a tenant and not a manager. I need not trouble your Lordships with it again but the Committee points out in another paragraph how essential it is that improvements should be made by brewers in public-houses with the permission of the licensing justices.

That seems to me to be very strong testimony to the policy that I and others have followed for many years, and if we could only influence the licensing benches in that direction a great deal could be done under the present system. I hope it will be possible for the Government to introduce some day or other legislation with that object. Encouragement must also be given to the owners of public-houses to improve those houses. Again, the noble Lord's Bill gives very considerable support to that object because it provides that if any district adopts disinterested management as its licensing system it should be given fifteen years so as to afford a reasonable opportunity for the liquidation of initial capital expenditure. It applies also—I will be quite fair to the noble Lord—to the provisions for compensation. It must be recognised, of course, that improvement cannot be expected in public-houses unless some support and encouragement is given to the owner, and that is really what I and others have advocated for a long time past.

I object to the passing of this measure, or rather to the adoption of this system, because the holding of the suggested local elections every five years would infuse a spirit of bitterness into the community. As soon as the questions of drink and temperance are raised, everybody seems to be infected with the virus of excitement and of hostility one to another. I believe that the gain would be very small, and it is a question whether it is desirable to have a local election so often as every five years. I do not see why if you have fifteen years for one purpose you should not have a similar period for the other. The noble Lord, Lord Banbury, attempted a definition of nationalization, and I think my noble friend Lord Balfour of Burleigh admitted that if the whole country adopted this principle it would be nationalisation.


I did not make any admission of that kind. I would not agree to that for a moment.


I must leave the noble Lord and the noble Lord, Lord Banbury, to fight out what constitutes nationalisation. The experience in that direction which has been obtained by two other countries shows that the policy has had no very good effect. I congratulate my noble friend on introducing what is comparatively a very moderate measure of this character. I am afraid I could not vote for the Second Reading for reasons which I have already given, but, as he may imagine, I am not hostile to him for bringing forward this measure, for I think the principle is one which ought to be considered and discussed. For that reason I would not vote against the Second Reading, but if the Bill should go to Committee there are many points upon which I feel I must oppose my noble friend Lord Balfour of Burleigh.

I do not understand why he is so insistent upon a monopoly. I can understand powers being given to a local authority to enable them to run a public-house, particularly in a poor quarter where it would not be remunerative for the brewer or the owner of the house to undertake the great expenditure of improving that house. If my noble friend took away the monopolistic character from the Bill I should be much more inclined to support him. I have always understood that before we make any departure from our present licensing system it was thought in all quarters that it was desirable there should be another very thorough examination of the whole question of licensing both in this and other countries, so as to find out the best way of promoting those improvements which we wish to see carried out in order to bring about a reduction of excessive drinking. However moderate my noble friend's 'Bill may be, I do not think he has sufficiently made out a case to warrant its being passed. At the same time I should not vote against it, because it introduces for discussion a principle which I think is well worthy of examination.


My Lords, at this hour of the evening my intervention will be of the briefest character. I rise for the purpose of pointing out in a sentence the position of those with whom I am associated in licensing matters in Wales. The Bill relates to England and also to Wales, and my purpose in rising is to remind the House that for 50 years and more Wales has claimed special treatment in licensing reform. Welsh Licensing Bills have been introduced in the House of Commons Session after Session and have been supported by overwhelming majorities of the Welsh Parliamentary representatives. Further than that the claim of Wales to special licensing treatment has already been recognised by special licensing legislation relating to Wales. Whatever may be the merits or the demerits of the central principle of this Bill, there is in Wales an acute difference of opinion and the largest body of licensing opinion in Wales is against, at all events, the principle of this Bill in its present form. The noble Lord will therefore not be surprised if I say to-day that in the event of the Bill reaching the Committee stage it will be my duty to move the exclusion of Wales from its operation.


My Lords, I beg to move that this debate be now adjourned.

Moved, That the debate be now adjourned.—(Viscount Sumner.)

On Question, Motion agreed to, and debate adjourned accordingly.

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