HL Deb 15 July 1965 vol 268 cc387-98

10.5 p.m.

BARONESS SUMMERSKILL rose to ask Her Majesty's Government whether they have any proposals for relieving the financial difficulties of widows in modest circumstances immediately following the death of their husbands. The noble Baroness said: My Lords, I must apologise to the whole House for raising this subject at this time, but a little earlier in the week I was advised that the Business of the House today would be limited. I must apologise to the noble Lord, the Lord Chancellor. After all the exercise he has had today, and the wearying Business he has had to endure, I feel very guilty, but in view of the subject of my Question I am sure the House will forgive me for proceeding.

I put this Question down on the Order Paper in order to focus attention on certain aspects of the problems which a widow encounters on the death of her husband. I would remind the House that between the two extremes of the widow entirely dependent upon a State pension and living in a rented home, and the wealthy widow, there are vast numbers of widows who have been left the house in which they live but little more. These are the widows in whom I am particularly interested tonight. These women have paid their way; they have been unable to save much during their married life, and have little hard cash. It appears from Press reports that more and more people are seeking to raise a mortgage in order to buy a home—workers by hand and by brain—and these people will presumably be faced with years of anxiety and hard work before a house becomes their property. During that time the wife will either work outside the home and make a contribution to the mortgage debt from her own earnings, or she will work inside the home where—and I want to emphasise this important point—she gives her services. If there are children, she will wash; she will cook; she will clean; and for the most part she will manage her home in a thrifty manner, having in mind all the time that there is this debt hanging over the family and that it is her duty to try to make a contribution to the mortgage repayments through her services.

My Lords, I am going to illustrate one particular woman's plight—perhaps "plight" is not quite the right word, because this woman is not so hard up, but nevertheless feels she is suffering injustice—by quoting the details of her case. I have given a copy of the letter from the widow concerned to my noble friend in order that he will fully understand the position.

The case I am using as an illustration is that concerning the estate of a man who was a physicist, a teacher and a lecturer, a man who, when he died, left an estate consisting chiefly of a house. This was a man with a first-class mind, who, had he gone into the world of industry, would have been well rewarded financially. He preferred to serve the community in one of the most commendable ways, but a less profitable way in terms of money. He was a hard worker and did tutoring in the evenings and on Saturdays in order that he could pay off the mortgage on his house. He died in his fifties from coronary thrombosis, leaving a widow and two daughters. I might say I have used this case as an illustration as this man was well known to me. Many years ago he tutored my own daughter in physics. He was a very fine man.

The points I am going to raise were brought to my notice by the widow, and I want to quote from some of the information she has given me. She told me that Probate cannot be granted until the duty is paid—of course, this is well known, but I want to emphasise it. Unless the widow has private savings sufficient for the purpose, therefore, this money must be borrowed, usually through a bank at 6½ per cent.—and we are told that it may soon be 7 per cent.—interest. None of the husband's cash assets are released until the duty has been paid and Probate obtained. Even his outstanding salary is frozen and is included in the amount to be paid upon.

Then the house must be valued, and the amount agreed by the district valuer; and in the case I am quoting for a ten-minute visit by an estate agent for this purpose the woman was charged £48 11s. 3d. I have been told that there is no need to have an estate agent; that the district valuer can be invited to value the house. But that is not generally known by widows in this country: most solicitors ask them to get the local estate agent to value their house. I would point out that the valuer benefits by the prevailing high prices, and of course the widow has to pay estate duty on the high prices that obtain today. If she should sell within two years she must pay on any increased valuation, but no allowance is made if, because of the necessity for a quick sale, the value falls. My noble friend, Lady Phillips, has told me that she is not quite sure whether that is completely accurate, but I am sure that my noble friend Lord Sorensen will correct me if I am wrong.

In this case a fee of £12 was paid to obtain registration of Probate. The fee may vary with the amount involved. The solicitors' fees, even in a simple straightforward case, can easily be £100. To sum up, on an estate comprising a dwelling-house in South London valued today at £8,250, with personal effects valued at £500 and a contributory gratuity of £2,824, making a total of £12,000, the amount in hard cash to be found before Probate is granted is approximately £900, in spite of the fact that the only cash assets were only in the form of the gratuity.

I should like to have a number of points considered—these are questions which this woman has asked me. First, is it equitable that a widow should be taxed on the family dwelling-house? Even if she is not a wage-earner, her contribution to its acquisition in service throughout the lives of the husband and wife surely cannot he disregarded. Is it right that she should be taxed on the contents of the family house, which, even if in law they are regarded as the husband's property, have, in fact, been jointly acquired through her careful management? I defy anybody to go into a house and say, "That chair or that sofa has been bought simply by the husband's earnings", when it may be that, in a thrifty home, if the woman had not been the careful manager no extra chairs or sofas would have been bought, because the husband would have been unable to afford it.

We cannot assess these things in such a cut-and-dried fashion, and I would ask my noble friend to consider a new approach to the family possessions. In my opinion, these are jointly acquired. The husband may bring the money into the house, but the woman is giving of her services. Is it right that she should pay on a contributory gratuity or, in the absence of this, on a life insurance, which obviously has been entered into for her protection? This woman told me that 6 per cent. of her husband's salary went towards this. What he was doing, in effect, was saying, "I will give 6 per cent. of my salary to my wife, almost as a form of savings, in order that when I die she will have a little nest-egg". I find it difficult to believe, in view of this, that it is equitable to tax this amount.

Why is it necessary for the probating of a simple will to be so complicated and so lengthy a process, requiring solicitors' fees, estate agents' fees and probating fees and borrowing charges to pay the duty before Probate is granted? Why cannot the duty be paid when the cash assets arc available? And why cannot the property be valued officially in the first place by the district valuer? And, if this can be done, why are not widows and solicitors throughout the country told that this can be done? If a widow is unable to earn, why should the foregoing conditions be allowed to force her to part with her family home? These hard facts apply to any widow of any age left with a house and contents but of course the difficulties vary in every case according to age and responsibilities; and no doubt my noble friend who is going to follow me will know of some of these cases.

Finally, I want simply to say this: it seems to me that the situation of the widow in this country is infinitely worse than in the United States of America and many European countries where community of property exists. Can the noble Lord who is to reply hold out any hope that the Government will give consideration to this aspect of marriage, which will affect an increasing number of women as house ownership becomes more widespread? I would make a plea to my noble friend not only to tell me what his Department has told him, but to speak from his heart on marriage, a subject about which I know he knows a great deal.

10.17 p.m.

BARONESS PHILLIPS

My Lords, for a few moments I thought that this was going to be the first occasion when I could say "My Ladies", because we appeared to be the only sex here. This is one of the subjects upon which, as we all know, my noble friend has spoken so often and so eloquently, as she has done on many other subjects affecting women; and I am most grateful to her for again giving us the opportunity to voice some of the problems of the widow. Widows have no organised voice other than through the women's organisations, and if there is one thing we learn in this rather complicated society of ours, it is that if you are not organised to speak, on the whole your problems and your grievances are not dealt with quickly.

As the General Secretary of a women's organisation, I have for many years now been confronted by widows' problems—widows being one of the many groups of women who need some help. I will not touch on the question of pensions, because I am confident that the present Government are going to remedy some of the difficulties with which women at present have to contend. All I will say is that I feel that it is quite unjust that a widow of 49 years of age should be debarred from a pension just because she is not 50 at the time of her husband's death. This is a consideration which should not weigh at all, particularly as she will have to wait until she is 65 to receive a pension. However, as our present Minister has already removed the anomaly of the earnings rule, I am confident that this will be the next thing to go.

This evening we are particularly concerned with the question of Probate and estate duties. Having fairly recently been widowed, I have been able to experience some of the rather laborious processes which seem to attend this state. As my noble friend has so rightly said, the amount of money seems to have no bearing on the complications which the law can impose on a widow. I would particularly question why a house has to be assessed at market value. If the widow is living in the family dwelling-house and intends to remain there in any case, because she has no money to go elsewhere, it seems to me completely unfair that the house should be assessed for duty at market value. On my own house I had to pay estate duty at the highest price which could be obtained for it in the open market. One can get the highest prices only when certain conditions are present, and it does not necessarily follow that these would be present if the widow wished to sell her house.

On the question of the time taken to obtain Probate, there is little doubt that it is too long. It seems to me singularly strange that, even after Probate has been granted, the State may still return to ask for more money. I understand from one widow that she had been involved in questions of unpaid tax over a period of years. She said to me, rather wittily, that if her husband had been a burglar she would have been called upon to serve his prison sentence if they had not caught him while he was alive. If one deals with a business house there is a reasonable period of time in which matters of debt have to be dealt with. I feel that it is not unreasonable to ask that the State also should be subject to some period of time, particularly as I recently read in a newspaper that a widow who claimed for provision under her husband's will presented her case out of time—in other words, after the six months' period was up—and was therefore refused by the judge, who pointed out that the fact that the legal profession had bungled her case (he did not put it quite like that, but that was in fact what had happened) did not mean that she would not be refused because she was out of time. Surely it is not unfair to ask that with the State also there should be a period when it is out of time.

The other case I should like the Government to consider is the question of the widow where there is no will. This frequently happens, because few of us think that we are going to die, or to be ill, or unemployed, or will have any other things happen to us: it always happens to "the other fellow." I have met many widows whose husbands have died intestate. In such cases, as your Lordships know, in 1925 widows were given their husbands' personal possessions and the first £1,000 of any estate, and it was enacted that any residue was to go to the children equally. The amount going to the widow has been increased twice, and is now, I understand, £5,000. But because of inflation the law is once more out of date. Many small houses are valued at more than £5,000, and the widow may find herself in the absolutely ridiculous position of owning half her house while the rest belongs to the children. As the noble Baroness has said, many wives work after marriage in order to pay off a mortgage, and it is an extraordinarily difficult position if a widow in this position is left at the mercy of her children, who may or may not be helpful when the occasion arises.

It would appear that a simple amendment could ensure that the family dwelling-house went to the widow. If another figure were inserted in the Act, surely in less than a year it would again be out of date. One of the weaknesses of our law is the great enthusiasm for inserting figures which are so rapidly found to be out of date. These are the facts which I am presenting this evening. This is a subject which I hope we shall be able to raise again, because there are so many problems and so many anomalies. If we could have some assurance that even these simple matters will be looked into and remedied, I feel that our wait this evening will not have been in vain.

10.25 p.m.

LORD SORENSEN

My Lords, when I first came to this House after long experience in the other House, which sometimes has all-night sittings, I confess I was rather amused when round about seven o'clock some noble Lords referred to "this late hour" It is now twenty-five past ten, and I do not know what adjective one should choose at this time. At least that reminds me, as I speak now, that I must be brief, not only in view of the hour but also because of the admonitions given to us by noble Lords only a couple of days ago. Therefore, I am afraid that I cannot give the full reply to the noble Lady which perhaps I would have done had we more time before us.

I must confess that at first I thought the Question the noble Baroness had put down covered a rather wider matter and would deal with the general position and condition of widows and the hardships which they have to endure. But in listening to her I speedily realised that the reference to "widows in modest circumstances" meant that she was referring to a specific form of hardship. Quite evidently, she has had in mind certain particular cases and she quoted one. Indeed, a letter concerning that is in my possession and I have been scrutinising it more than once today. But I would point out that the term "in modest circumstances" is a relative one. What precisely do we mean by "modest"?

I ask that because we have to appreciate, as has been mentioned, that on estates of the value of £5,000 or under no duty is paid; on estates of the value of round about £6,000 only some £60 duty is paid; and, indeed, even on estates valued at £8,000 only some £240 is paid. This, I think, has to be borne in mind because the category of widows to which the noble Lady has been referring is relatively small. That does not mean to say, of course, that the case is not a grave one, or indeed that it should not be remedied, but we must get this matter in proportion, for I repeat again that we are dealing here with a certain small category of widows who undoubtedly suffer hardship in the way that has been described.

I would point out that, according to my information—for I am not a lawyer and not very well versed in these matters—normal Probate is secured not after the lengthy passage of time that has been mentioned tonight, but within about three months. I was quite startled when, for instance, the noble Lady referred to years of waiting before the house becomes a widow's property. This must be a very exceptional case.

BARONESS SUMMERSKILL

My Lords, the noble Lord misunderstood me. I was talking about the years of waiting before the mortgage was paid off.

LORD SORENSEN

My Lords, perhaps the fault is entirely mine that that matter was not clear. In any case, I am certainly a little astonished to be informed that sometimes there are many months of waiting, because I understand that the average period is about three months and, indeed, in many cases it can be less when there are very urgent circumstances.

I think, too, that we must discriminate between, on the one hand, the specific case which the noble Lady may have in mind—and other cases which other noble Lords and noble Baronesses may have in mind—and the general principle, on the other. If we take the general principle—and I shall have a few words to say about that—we can possibly seek remedies, but in regard to the specific case some of the information that has been given to the noble Lady, and which I have read, seems to me questionable and therefore needs further investigation. It certainly seems extremely strange that someone should be charged nearly £50 for a ten-minute interview. It seems to me that such matters as this are so unusual that they need specific scrutiny and examination. I do not propose, therefore, to deal with the particular case to which reference has been made, but would suggest to the noble Lady that she might follow this up direct with the Chancellor of the Exchequer or the Treasury, bringing this particular case and any cases like it to their attention, so that scrutiny can be made to see what may have gone wrong.

In regard to the general position, I have only these brief comments to make. I could spend a much longer time on this matter, because I have a great mass of stuff here which I have tried to digest, but at this late hour I feel that I should confine myself to more general comments. In regard to the alleged high cost of obtaining Probate, for instance—and, criticism was made of this in the letter to which the noble Lady referred—the comment I have to make is that while Probate fees are charged on a scale basis, by reference to the value of the estate, the amount of work required to be done in the Probate Registry does not necessarily vary directly with the size of the estate, and the small fees charged in the smaller cases are not commensurate with the work involved.

The need to obtain Probate is a safeguard provided in the interests both of those who hold the assets and of the beneficiaries in the estate, and the period required for the Registry to carry through its functions does not normally exceed three weeks. I have already said that the whole process before Probate is obtained takes approximately three months, but the other period, the registration period, is some three weeks. As for the other costs, they need not be incurred for a small estate. Probate can be obtained by personal application without the need to employ a solicitor, and the valuation of the house can be left to the district valuer. The noble Lady herself expressed surprise that apparently, in the instance which she cited, much more was done than need have been.

The other question that has been raised is the need to pay duty before Probate, and certainly one can appreciate the substance of this grievance, particularly with the mounting cost of borrowing money. Again, this is an essential safeguard to the Revenue, but it should not be onerous in the type of case mentioned. The requirement of payment before Probate relates only to personal property. The duty on a freehold house does not become payable until a year after the death, and can be paid by instalments over eight years. In other words, it is not necessary to pay the full duty it can be extended over a whole year, and can even be paid by instalments during that period. So that eases the situation. I grant that meanwhile, in (shall we say?) three months or so, it may be necessary for the widow to secure cash by which she can pay the duty, and it may be that she would have to go to the bank for that purpose and pay interest of 6½ per cent. or more, but again I am informed that this need not be for more than approximately three weeks.

Further, I would say this. The case which the noble Baroness has in mind. as I say, requires definite investigation. On the general issue, there is much sympathy, I am sure, in this House, and there would have been more if more noble Lords and noble Baronesses had been present. But the mere fact that the noble Baroness has raised it tonight will, I am certain, bring this matter more impressively and more emphatically to the attention of the Chancellor of the Exchequer and of the Treasury. All I can say, therefore, at this moment, is that I hope very earnestly that what she has said will be considered very carefully in the right quarter, but she must not expect me to give any sort of statement tonight as to what would or should be done. After all, I am only an assistant to a Minister. I am three times removed from the Minister himself; and the noble Baroness must not try, with her charming blandishments, to tempt me out of my true function and behave in a way that I would not, married man, for nearly fifty years, as I happen to be. I cannot quite see the relevance of the fact that I have been happily married to these other matters which she is pressing upon me, including this attempt to seduce me from the function I am fulfilling tonight.

Nevertheless, I thank the noble Baroness very much indeed, as I am sure we all do, for raising this matter, a matter of poignant interest and significance. All I can say, again, is that I hope that she herself feels that, by raising it, together with her noble friend and colleague, she has performed a great service to widows in this country, and that in course of time the grievances she has outlined will be remedied.

BARONESS GAITSKELL

My Lords. before the noble Lord sits down, I wonder if he could consider this matter in relation to the case which the noble Baroness, Lady Summerskill, brought up. Of course, I am entirely in sympathy with the idea of helping the widow in these circumstances referred to, but what is the position of the widow who has a rented house? She will lose out if anything is done to help the Position of the widow who has a rented house? She will lose out if anything is done to help the widow who owns her own house. She will get no special relief. It will be the widow who owns her house who will get the special relief. I am all for raising the level of tax-free income for a widow in these circumstances, but not with regard to her own house.

Lord SORENSEN

My Lords, with the leave of the House may I say that perhaps the two noble Ladies can discuss this matter together, because the issue that has just been raised by the noble Baroness goes rather beyond the particular province that I myself explored during my ten-minute speech. I hope that that particular point will be borne in mind, and perhaps I can arrange that a reply be sent by letter to the noble Lady on the specific instance she raises.

House adjourned at twenty-five minutes before eleven o'clock.