§ Clause 3, page 2, line 40, leave out from ("and") to ("the") in line 2 on page 3.
§ Clause 3, page 3, line 2, after ("date") insert ("as hereinafter defined")
§ Clause 3, page 3, line 9, at end, insert ("the vesting date shall be a date to he fixed by the Board of Trade with the approval of the Treasury not less than three months after the amounts ascertained by valuations in respect of each holding in accordance with the provisions of Section seven of this Act have been certified but not earlier than the first day of July, nineteen hundred and forty-two").
§ The Commons disagree to the above Amendments for the following Reason:
§ Because they consider that the period up to the 1st July, 1942, will be adequate for the completion of valuations and because uncertainty as to the vesting date would 844 render it impracticable to make the valuations.
§ THE LORD CHANCELLORMy Lords, the Commons disagreed to these Amendments for the Reason printed on the Paper, and Notice has been given of an Amendment in lieu thereof.
§
LORD HASTINGS had given Notice that he would move, That this House doth not insist upon its Amendments in Clause 3, in page 2, line 40, in page 3, line 2, and in page 3, line 9, but proposes in lieu thereof the following Amendment:
Schedule 3, page 73, line 19, at end insert:
20.—(1) If in the case of any valuation region the relevant certificates have not become conclusive under paragraph 17 of this Schedule at the vesting date, the claimant or any person intervening in respect of a holding in the region for which compensation is to be payable may require the Commission to make, at the expiration of each quarter thereafter until the certificates become conclusive, a payment on account under the last preceding paragraph of an amount not less than that specified in this paragraph, and, as from the date of any such requirement, the Commission shall be liable to make payments to the person entitled to the compensation for the holding accordingly.
(2) The amount of a quarterly payment that may be required as aforesaid shall be an mount equal to interest for three months at the rate mentioned in subsection (8) of Section seven of this Act on three-quarters of either—
Provided that if before the beginning of any quarter at the expiration of which a quarterly payment becomes due any payment on account has been made in respect of the holding under the last preceding paragraph otherwise than by way of quarterly payment required as aforesaid, the amount of the quarterly payment shall be reduced by an amount equal to interest for three months at the rate aforesaid on the amount of the said payment on account.
(3) In the case of a holding consisting of a reversion, if at a date on which a quarterly payment becomes due the draft valuation of the holding has not been settled, the amount of that payment shall be an amount equal to one-eighth of—
so however that that amount shall he subject to the reduction mentioned in the proviso to the last preceding sub-paragraph iu the case therein mentioned:
Provided that in a case in which there is reasonable ground for apprehending that, if a payment of the amount so ascertained were made, the aggregate of that payment and of any ether payment on account theretofore made might exceed the aggregate of the compensation for the holding and the interest thereon, the Commission may withhold that payment.
(4) In a case in which the proviso to the last preceding sub-paragraph has effect and in a case of a holding other than a reversion, if at a date on which a quarterly payment becomes due the draft valuation of the holding has not been settled, that payment shall be deferred until the draft has been settled and the amount thereof shall be ascertained under sub-paragraph (2) of this paragraph.
(5) In this paragraph—
§ The noble Lord said: My Lords, with the permission of the House, I will move the Amendment which stands in the names of my noble friends Lord Teynham, Lord Balfour of Burleigh, Lord Darcy (de Knayth) and myself. Your Lordships will recollect that the original Amendment which the House assisted us to insert in the Bill was drawn with a specific purpose. Although, on the face of it, it had the appearance of desiring to postpone the vesting date, its intention, and indeed its effect, was to cause the vesting date and the date of the payment of compensation to synchronise, so that a hiatus might be avoided during which the owner al the minerals would have been deprived of his property and consequently of the income derivable from that property, and yet would not have received the compensation, inade- 846 quate though it might be, that was due to him in respect of that property. That Amendment went down to another place and has been there described, as here, as being the most important of the Amendments remitted to another place by this House, inasmuch as it proposed to touch one of the fundamentals of the Bill; and it was there argued, as indeed we found upon the Order Paper to-day, that the Amendment could not be agreed to by another place "because uncertainty as to the vesting date would render it impracticable to make the valuations."
§ I do not accept that argument as wholly conclusive, for the reason that the Central Valuation Board is under obligation to make rules for the governance of the valuations, and it would not be by any means impossible for rules to be drafted, providing instructions to the valuers for dealing with the date which was not inserted to be fixed. But I have to admit that it is the Bill which is before the House, and not the rules, and in so far as the Bill stands, it is perfectly true—as has been said both by the President of the Board of Trade elsewhere and by Government spokesmen in this House—that so far as the Bill stands our Amendment would make valuation exceedingly difficult, if not impossible. It is to nobody's interest to create such a situation. On the other hand, there is the grave danger—not the certainty, because it is impossible to say that the valuations would not be complete by July 1, 1942—that the mineral owner would be left in the position which I described when I first began to move this Amendment.
§ It strikes me—and I say it without apology—as not very creditable either to His Majesty's Government or to their departmental advisers that a Bill should have been permitted to come to this House, much less to have reached this stage, without making provision for the avoidance of such an impossible situation. I think that it ought not to have been left to those of us who have been watching this Bill very carefully to insist upon the elementary justice which is desired surely not only by ourselves but by every member of this House and of another place. However ill-disposed His Majesty's Opposition in another place may be to the royalty owners, however ready the Government have proved themselves to be to throw their own supporters to 847 the wolves, I find it impossible to believe that a measure of that kind would receive acceptance either in this place or in another. It was clearly impossible to leave the owner of this compulsorily acquired property with all his commitments still due from him, and with neither income from his property nor income from his compensation money available to meet those commitments, and it was with the express intention of avoiding that impossible situation that the House placed the Amendment in the Bill which has now been returned to this House.
§ If I were to be forced to the conclusion that in fact both the Government and another place had so small regard for elemental justice as to desire this condition to continue, then indeed I would have taken the advice of the noble Lord, Lord Snell, and myself, with the aid of my friends, have fought this issue to the last, quite regardless of any political consequences that might arise from it. But it would be folly to make war where peace can be had for the asking, and if it is possible to achieve what we do desire, or even the greater portion of it, without joining battle upon the form of words which previously commended themselves to us, then it would not speak well for our intelligence if we did not accept that alternative. And it will be obvious to the House that there always were two alternatives. Indeed, so long ago as the Committee stage an Amendment appeared upon the Paper in the name of my noble friend Lord Teynham which did seek to apply the second alternative to the situation which was developing; but inasmuch as the Amendment which then stood in the name of my noble friend Lord Balfour of Burleigh took precedence by reason of the fact that it was on the Paper first, and that the House assisted him to place that Amendment in the Bill, it then of course became automatically impossible to deal with the following Amendments because the greater absorbed the less.
§ But there is reason now, having regard to what has taken place in another place, to reconsider what might be done with that particular alternative that had already been in our minds on the Committee stage. There were indications then, and there have been stronger indications since, that the Government might not be unwilling to agree to that alterna- 848 tive if words could be found which were agreeable to them and to ourselves. Now the principle embodied in this very abstruse and long Amendment which appears in our names is this, that there should be a compulsory payment of interest during the period which may elapse between the fixed vesting date and the date that the compensation itself becomes payable. To the dispossessed mineral owner it is not a matter of very grave account whether he has received his compensation money, which he himself is able to invest, or receives a reasonable rate of interest upon a properly computed estimation of compensation, and is thereby enabled, out of that interest, to meet the commitments to which reference has already been made. This particular Amendment is drawn to enable, indeed to compel, the payment of a rate of interest computed in the way which will be found by reference to the Amendment itself.
§ The Bill contains provisions for the making of payments on account, but the option of making these payments vests in the Coal Commission, and it certainly would be a matter of the gravest difficulty to insert mandatory provisions in the Bill in respect of making payments of capital on account. It is definitely easier to deal with the matter on the basis of interest payments. In Clause 7 (8) of the Bill it will be found that provision is made for the payment of back interest by a special method of computation when the compensation itself is actually paid; but of course the payment of back interest when the compensation is paid will not assist the individual who has to meet commitments between the vesting date and the date of the payment of compensation, so that that particular subsection did not help us in this matter very much. It is now proposed that, not sums on account of capital, but the interest, shall be payable at short intervals immediately after the vesting date.
§
Inasmuch as I have great reason not only to hope but to expect, from what the noble Earl the Leader of the House said when he was speaking a few moments ago, that the Government will find themselves able to accept this alternative, it is now due to those who are intimately concerned in the matter and who assisted us to insert this in the Bill in the first instance, that I should explain, at least in brief, what this Amendment actually
849
means. On page 2 of the Amendment paper it reads that
at the expiration of each quarter thereafter until the certificates become conclusive, a payment on account under the last preceding paragraph
shall be made. That would seem to be exactly the contrary of what I have been endeavouring to explain hitherto, because here is the use of the words "payment on account" instead of "payment of interest." The purpose of that is abstruse but none the less quite intelligible.
§ Inasmuch as under Clause 7 (8) the royalty owner is entitled to claim back interest when his compensation is paid to him, it would be better that any payments made to him in respect of interest should be counted as payments on account, because it is then open to the mineral owner to treat these payments either as payments on account of capital or utilise them as interest if he so desires. If they are made as payments on account, he would not be liable to the payment of Income Tax on these payments, and he would not pay the Income Tax on these payments until he reclaimed the eventual interest due to him when the full compensation was paid. He would then pay Income Tax on the interest charged to him. There is, therefore, a specific reason for inserting these words, "payment on account." They would be treatable under these terms either as capital or income at the option of the particular recipient of the moneys.
§ Turning over the page, it will be found that these payments are to be made in certain circumstances on the basis of three-quarters of the draft or certified valuation. I have to admit that it would not be possible to make interest payments upon the whole, either of the draft or the certified valuations, for the very reasons which led me to follow the Lord Chancellor a few moments ago—namely, that these properties are not being valued by themselves, but are being valued in relation to other people's property, and it is not known to what extent these individual valuations will be scaled down until the last valuation has been completed. Therefore, 75 per cent. is not unreasonable in these peculiar and particular circumstances. In respect of a property which has been the subject neither of a draft nor a certified valuation, there is no possible reference other 850 than to the rents received in the previous year, and under the particular provisions of this Amendment the individual owner would receive interest on 5o per cent. of the rents received by him in the previous year. There is nothing said about that in the Amendment, I quite admit, unless you know exactly what it is that is meant by this abstruse wording. It says here that it "shall be an amount equal to one-eighth of." One-eighth, curiously enough, works out at 5o per cent., because these payments are to be made quarterly, and one-half of a quarter is one-eighth, and of course that works out at one-half of the whole. Inasmuch as draftsmen seem to prefer to cloud their best efforts in the way that is here envisaged and seen, I can only assure your Lordships that I am satisfied that in this case one-eighth means one-half.
§ There is one other peculiarity here. There is reference to "a holding consisting of a reversion." Your Lordships' ideas of what a reversion normally means are not at all what a reversion means in this Amendment. In this Amendment "reversion" is used in the sense of an individual who is entitled to rent, and later on it will be seen that the individual who has no such reversion is only an individual who is the owner of coal which is not in lease and consequently was not in the year before the vesting date receiving any rent. Inasmuch as he was receiving no rent, though presumably he will receive compensation, for his property, he will not be the poorer by reason of receiving no amount between the vesting date and the date of the payment of compensation. In effect it means this, if the valuations are not complete by July 1, 1942, that every royalty owner, every owner of minerals, on demand that it should be paid, will be paid compulsorily—that is to say, he will have the right to payment. He will be paid interest upon either 75 per cent. of his draft or certified valuation, less any sum which he will have received in respect of capital payments on account at an earlier date; or, if his property has not been the subject of a draft or certified valuation, he will receive interest on 50 per cent. of his previous year's rents.
§ That is not what we had hoped for. We had hoped to be able, not to postpone the vesting date for the vesting date's postponement's sake, but we had hoped 851 to make sure that the owner should be actually in possession of his compensation previous to the date when he was compelled by law to convey his property. That would be merely placing the mineral owner in identically the same position as has hitherto been the position of every owner whose property is being compulsorily acquired. I think the Lord Chancellor would not be disposed to dispute that it has hitherto been an accepted practice, and indeed is the law of the land, that a conveyance does not take effect until the purchaser is ready with his cash to acquire the property which has to be conveyed. It is only because His Majesty's Government have accepted an astounding method of valuation, which only can be described as valuation by courtesy, that these peculiar necessities have arisen. It is impossible to apply either common law or common practice to a method which I suggest is, at any rate at the moment, neither legal nor ordinary. And this is only the first of the many inconveniences and injustices which are bound to arise by reason of the acceptance of this astonishing method of valuation.
§ But things being as they are, and the stage having been reached when it is quite impossible again to raise that point—we have debated it more than once and we have divided upon it—we have to accept things as they are and do the best we can with them, and, inasmuch as I hope and believe His Majesty's Government are prepared to accept and recommend to another place the acceptance of this alternative Amendment, I am not disposed to attach too much importance to the wording of the Amendment with which another place have disagreed, and in its place to move the Amendment which now stands in the names of my three noble friends and myself. I beg to move.
§ Moved, That this House doth not insist upon its Amendments in Clause 3, in page 2, line 40, in page 3, line 2, and in page 3, line 9, but proposes in lieu thereof the said new Amendment.—(Lord Hastings.)
§ LORD CROMWELLMy Lords, I would not rise at what some of your Lordships might think a sixth reading debate on this Bill were it not for the fact that an indication has been given by the 852 noble Lord, Lord Hastings, that he at any rate does not attach too much importance to the wording of the Amendment with which another place has seen fit to disagree. If I understood him rightly, he went on to say that he thought that the Amendment which he has just moved would in all probability be acceptable to His Majesty's Government. Be that as it may, I think it is only fair that I should state how the matter appears to me. The Amendment just moved has in my view no bearing whatever on the Amendment with which the Common, have seen fit to disagree. The noble Earl the Leader of the House, in his introductory remarks, said, if I quote him rightly, that something like 117 Amendments were sent from this House to another place, and that all but three of those had been agreed to, though some of them had been agreed to in a modified form. It is surprising, to say the least of it, that in spite of that, at this very late stage in the Bill, if the noble Lord, Lord Hastings, is right in thinking that the Government are prepared to accept this Amendment, we have here another Amendment of several pages in length which it has been left for him to place upon the Order Paper rather than for the Government draftsmen to place in the Bill at the very outset.
I would say in this connection—and I do not think it can be contradicted—that if some such Amendment as this does not appear in the Bill, the Bill itself is completely unworkable if certain conditions take place. If when the vesting date which will appear in the Bill comes to pass, the valuations are not then completed, there will be a gap in which the owners of coal will not be in receipt of any income whatsoever. If this Amendment is agreed to then that gap, it is true, will be bridged by payments of interest on account. But that does not, as I have said before, deal at all with the Amendment with which the Commons have disagreed. I have read the debates in another place, and I see that everyone there had to be very particular not to use words used in this House, and the obstacle was got over by some of the more intelligent members of that House referring to what had been printed in the Press as having been said in this House. I do not intend to refer to the actual words used in another place, but I do think from what was said there that one 853 can quite correctly come to the conclusion that a very bad principle has been adopted—namely, that property which is compulsorily purchased is being taken over before the party purchasing it is in a position to pay for it. This Amendment, if agreed to now, will do nothing to eradicate that very bad principle. It is true it was said in another place that there were precedents for it, but they left me, at any rate, quite unconvinced that they were applicable in this case.
I do not think I shall be breaking the rules of the House if I make this reference to what was said in another place. It was stated at the very outset that the question was a matter of Privilege in that it touched a question of finance because the Government or the State was guaranteeing loans. Well, I would not try to dispute that in any way, but it is a very roundabout way of preventing the natural course of justice which this House wants to bring about. I think we are being asked to sacrifice principles in order that a very badly framed Bill can go through without some necessary clause in it, because it appears at this stage to be impossible to put in that clause which would make it just. The noble Lord, the Leader of the Opposition, said that some members of your Lordships' House had made threats. I should like to say that I have heard of no threats made in this House, and certainly if he was alluding to anything that I myself have said I have made no threats. He went on to say that he hoped that the battle of Hastings would not be re-enacted. Now that the question of Privilege has been raised there is no alternative other than to follow out the procedure indicated. The noble Lord, Lord Hastings, is not himself prepared to have another such battle, and, even if my namesake removed the bauble to achieve his ends, I am not prepared to follow his example in this case. Before I sit down, let me illustrate again the difficulty of understanding this Bill. A new difficulty has now come into it. We have been told that "unification" is nationalisation; we have been told that "in perpetuity" means fifteen years; and now we have to swallow that "one-eighth" means a half.
LORD BALFOUR OF BURLEIGHMy Lords, as the original Amendment was in my name I would like to say one or two words on the Motion before the 854 House. First of all I wish to say quite frankly and candidly to your Lordships that I admit that there is force in the Reason which another place has given for disagreeing with our Amendment. I go further and say that the force of that objection was not apparent to me when I moved the Amendment. I do not think that is really a very damaging admission because I have re-read the debate and I find that that argument was not advanced in the House by the spokesman of the Government in objecting to the Amendment. I think we can admit that even the most learned members of your Lordships' House may possibly have learned something about the Bill while it has been in progress through the House. I certainly do admit it, and quite frankly say that I recognise that there is an objection to an indeterminate valuation date. But that does not reconcile me to acceptance of the principle in the Bill. I have spent a considerable time in trying to devise something which I could have offered to your Lordships as an alternative to the Amendment which I am forced to see abandoned. I have failed. I think the objection is more theoretical than real. I think that if the Bill had been better drafted and better conceived in the first instance this difficulty would not have arisen, and I do regret very profoundly the fact that we have to let this Bill go through with this vesting date which will occur at a time when the valuation may not be complete. I regret it because I think it is a profoundly wrong principle.
Various enactments have been suggested as illustrating that this is not a precedent—the Land Clauses Act, the Acquisition of Land Act, and so on—but I think I am right in saying that those Acts have reference to compulsory acquisition by a statutory authority who would require the property for immediate use or occupation. That is some justification for taking a property and paying for it when the valuation is settled. But in a transaction of this kind, which the Government maintain is not compulsory acquisition at all, it does not seem to me right that that should happen. After all, these transactions are enshrined in the Bill as being between a willing seller and a willing buyer. I do not think the debates in your Lordships' House have supported the view that there is very much willingness on the part of the seller, but still that is the legal fiction to which 855 the Government are adhering. Still less in that case is it right that the conveyance of the property should take place until the valuation is settled and the purchaser is willing to pay the money. So much for that. We have to let that go. My noble friend has adequately described to your Lordships the contents of this Amendment, but I cannot agree with one thing that was said by my noble friend Lord Cromwell. I think this has everything to do with the vesting date. I think it is the only possible alternative, and it is closely connected with it; but it is not necessary for me to labour that.
The only other thing I would like to say is that I am very grateful to the noble Earl the Leader of the House for what he said in initiating this debate. That was something which needed saying. I have listened to some of the debates in another place and I have read the whole of them. I am bound to say to your Lordships that I came away from reading and hearing what I did with a feeling of sadness. I agree with the noble Earl the Leader of the House that I do not think your Lordships will lose any sleep by hearing what members of another place may think of us, but I think it must cause some of us to feel rather sad that there should be so many members in another place who approach their conception of their public duties so blinkered by prejudice that they are incapable of seeing what this House is trying to do. I think it is not untrue to say that ninety-nine per cent. of the speeches from the Opposition Benches were an essence of envy, hatred, malice and all uncharitableness. There was no real argument, nothing but vulgar abuse. While I am saddened by that spectacle I have this reflection, that at all events it will not be lost upon the country, and that members who approach their public duties in that frame of mind are, and will long remain, unfit to form an alternative Government.
§ EARL STANHOPEMy Lords, the noble Lord has dealt with great frankness with the Amendment which stood in his name on the Paper and which it is proposed we should not insist upon now that the Bill has come back to your Lordships' House. Perhaps I was partly responsible for not putting the matter as it should have been put on the Committee stage. I have just looked up the debate and the remarks that were made led me away 856 to a consideration of the length of life of collieries and the question of global valuation and individual valuation and similar questions. The noble and learned Lord on the Woolsack when he took up the case made it abundantly clear that the Government were prepared to accept the Amendment standing in the name of the noble Lord, Lord Teynham. That is almost identical—for all practical purposes it is identical—with the Amendment which now appears in the names of the four noble Lords.
The noble Lord, Lord Hastings, said that the whole object of their Amendment was that the vesting date and the date of compensation should synchronise, but he did not tell the whole of the story. I think your Lordships know that one of the considerations that arose when this Bill was being drawn up was how the money was to be raised to meet the global figure, and what was to happen to it between the time it was raised and the time it was paid over to the various royalty owners who were to receive compensation. Quite naturally the Government felt that it was very injudicious that this money which might have to be raised at a certain period should remain sitting in cold storage, if I may put it that way, until the vesting date arrived. Therefore the Government suggested that part payment should be made and the people who prevented that proposal being put into the Bill were the royalty owners themselves. No doubt they had quite adequate reasons, but the fact that compulsory payment of instalments was not made was not the fault of the Government. No doubt it is partly as a result of that that a provision of that kind did not appear in the Bill when it was first before your Lordships.
We did not feel that it was wrong in principle that property should pass until payment for it had been made. It is not by any means a new principle because I understand that in many cases of compulsory purchase, where no doubt certain provisions have to be agreed to, you can enter into premises as soon as notice to treat has been given, a very long time before actual compensation has been paid. Therefore it is not an unknown provision. But let me say at once that the Government had no intention of following a principle of that kind. We always intended that as soon as the property passed pay- 857 ment should be made. The date put in, the vesting date, was a date which was believed to be such that by then the valuations would certainly have been completed. We recognise that there may be a possibility that some of the valuations will not be finished and therefore we are quite prepared to accept the Amendment which appears in the names of the four noble Lords. We think that would meet the situation. We think, indeed, that it goes further than is necessary because we do not believe there is any possibility of at any rate a draft valuation not being made. But, as some noble Lords seem to think that there might be that possibility, we are quite prepared that it should appear in the Bill. That is why sub-paragraph (3) appears under which payment is to be made up to fifty per cent. of what was received in the previous year.
I must point out to your Lordships the reasons why another place resisted the Amendment which was put into the 13i11. Only one reason has been given by the noble Lord, Lord Balfour of Burleigh, and that was that an indeterminate date made valuation quite impossible. I do not know how much your Lordships recognise what would actually occur if any one individual in the whole of Great Britain for some reason hung up the valuation. Valuation over the whole of Great Britain would then be stopped and could not be completed in any single region. Take a mine with a short life remaining, say a life at the present moment of ten years: in four years' time there would be six years of that life left, and therefore the valuer would determine that there were six years of life for that colliery which he had to value. But if you change your date from August 1, 1942, to some other date, then it ceases any longer to be six years and has to be x years, according to the actual date to which you have postponed your vesting date.
The result, of course, would be that that mine would have to be revalued to show that it had—whatever it was: four and a half years, five and a half years, or whatever the number of years' purchase, left when the actual vesting date occurred. Then every other valuation would have to be reconsidered also, because in each region, if you reduce the amount which is paid to one individual 858 for the short life of his mine, then of course you must alter the figure payable to everybody else in that region. The result would be that almost as soon as you had reached the new vesting date, and the new date on which the valuation should take place, you would find yourself in the difficulty of all these things having to be done again, and once again you would go over your vesting date and have to postpone it. The Government, therefore, felt that to put off the vesting date would create chaos. However patriotic royalty owners and everybody else may be, they are liable to have black sheep among them, like any other class of the community.
§ LORD HASTINGSIncluding the Government.
§ EARL STANHOPEIn view of the fact that it is obviously in their interest to postpone the vesting date, one or two people would certainly have held up their own valuation, with the result that the whole of the vesting and valuation would have been held up throughout the country. For these reasons, of course, it is quite impossible for the Government to accept the Amendment. I am afraid, as I said, that it was my fault that this was not made clearer at an earlier stage of the Bill, but I am glad that noble Lords now realise that the offer we made on that stage was a fair offer, and that we are now agreed that this is the best thing we can do to meet the situation as we now see it.
§ On Question, Motion agreed to.
§ LORD HASTINGSMy Lords, I beg to move a consequential Amendment.
§
Amendment moved—
In the Lords Amendment in page 73, line 21—
In line 3 leave out ("the last preceding paragraph") and insert ("paragraph 59 or 20 of this Schedule").—(Lord Hastings.)
§ On Question, Amendment agreed to.