Clause 3. — (Power to hirer or purchaser to terminate contract.)

Orders of the Day — Hire Purchase (Scotland) Bill. – in the House of Commons at on 20 June 1932.

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Photo of Captain William Strickland Captain William Strickland , Coventry

I beg to move, in page 2, line 24, to leave out from the word "owner" to the second word "the," in line 27.

Before I speak upon this Amendment, I should like your guidance, Mr. Speaker, as to whether we might also speak on the Amendment standing in my name for the insertion of a new Sub-section at the end of line 37 which replaces the words proposed to be left out in this Amendment, and which reads as follows: (2) For the purposes of this section delivery—

  1. (a) to any person specified by the owner in a notice given to the hirer or purchaser and residing or carrying on business within a radius of two miles from the place where any person who acted on behalf of the owner in connection with the formation or conclusion of the contract resided or carried on business at the time he so acted; or
  2. (b) if no such notice has been given, to such last-mentioned person,
    • shall be deemed to be redelivery to the owner."

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

I think we had better take discussion on the two Amendments.

Photo of Captain William Strickland Captain William Strickland , Coventry

Thank you, Sir. Under the Bill as it stands, it is laid down that where a person has entered into a hire purchase contract and wishes to break that contract voluntarily, he can do so in certain conditions. The first of those conditions is that he should redeliver the goods to the owner, and secondly that he should make a payment of money. In the Clause which deals with the return of goods to the owner it is also laid down that the hirer may return the goods to any person who acts as agent on behalf of the owner in the formation or conclusion of the contract. It must be obvious that, from the owner's point of view, and from the hirer's point of view, this Clause inflicts some little hardship. Supposing the original agent has died or gone out of business in the interval between the formation and the carrying out of the contract, and the hirer wishes to conclude his bargain. The hirer has only one person to whom he can return the goods, and that is the owner himself, who may be many hundreds of miles away. That would entail a heavy carriage on the return of the goods to the owner in the absence of the original agent who acted in connection with the formation of the contract. It also has an unfairness from the point of view of the owner of the goods that had been let on hire, purchase. It is quite conceivable that the original agent, who acted for the owner in the formation and conclusion of the contract, has since that time behaved in such a way, for instance, that he has ceased to be the agent for the owner; but this Clause states that the hirer of the goods may return the goods to an agent who is no longer agent for the owner. There is nothing in this Bill to compel that agent either to take those goods when they are offered to him, or to be under any responsibility to the owner to return them.

The Amendment which I have put forward is a perfectly simple one, in that it merely empowers the owner to notify the hirer at any time prior to the breaking of the contract that the original agent is no longer acting as his agent, and that a new agent has been appointed in the same district as that in which the hirer originally contracted the hire purchase, that is, within two miles of the place. The proposed Amendment does give the hirer the chance of returning the goods somewhere locally, somewhere quite convenient to him and near the place where he originally bought the goods. It gives to the owner the opportunity of securing that the goods, being returned, get into the right hands, namely, the hands of the person who is responsible to him for seeing that those goods, which belonged to him during the whole time of the contract, are duly returned to the owner.

I move the Amendment for the purpose I have indicated, and not in any sense to attempt to destroy the structure of the Bill, with which most hon. Members will generally agree. The Amendment is moved with the idea of making the operation of the Clause a little smoother and easier for this trade to be conducted. It is a legitimate trade and a helpful one to the manufacturers of goods both in this country and in Scotland, and to those who desire to take advantage of the terms of hire purchase.

Mr. ALLAN REID:

I beg to second the Amendment.

Photo of Mr Wilfrid Normand Mr Wilfrid Normand , Edinburgh West

This is an Amendment which the House would do well to accept, in that it advocates cutting out entirely words which might inconvenience both the hirer and the trader. Without the Amendment the position is that the hirer who seeks to return an article, having terminated his contract, has an option of returning it to the owner who may be at some very distant place, or to the agent. If that agent dies, this Amendment gives the owner the opportunity of nominating someone else who resides near the place where the original agent resided, and to whom the hirer may conveniently return the articles. At the same time, it would be a convenience to the owner of the goods, that is to say, the trader, in the case either of the death of his agent or where for some reason the agency has been terminated. It was the intention of the Standing Committee that this matter should be further considered, and that a satisfactory solution on the lines now suggested should be brought forward if possible. For that reason, I commend this Amendment.

Amendment agreed to.

Mr. ALLAN REID:

I beg to move, in page 2, line 33, to leave out from the word "which" to the end of the Clause, and to insert instead thereof the words: the respective proportions hereinafter referred to, of the total payments stipulated for in the contract by way of instalment, exceeds the cumulo amount of the instalments due at or prior to the aforesaid date.The proportions of value of the article required to be paid on redelivery, in pursuance of the provisions hereof, shall be as follows:In respect of articles purchased or hired for sums of fifteen pounds up to twenty pounds four-twelfths, for sums of ten pounds or more and under fifteen pounds five-twelfths, and for sums below ten pounds six-twelfths. Before addressing myself to the Amendment, I would wish, as a new Member making his maiden speech, to receive on my own behalf the same kindly consideration and sympathy, which have been extended to all my predecessors, old and young alike. Indeed, I think the old, like myself, need it more than the young, since youth has time to retrieve its errors, and age has not. I would seek to justify the intervention, in this essentially Scottish Debate, of one who was born south of the Tweed, and to placate the feelings of any Scottish Member who might otherwise somewhat resent that intervention, by telling the House that both my parents and likewise all my forebears were Scottish and, that, as I sometimes teasingly tell my English friends, the place of my birth was not my fault; it was my misfortune. But for that, I should be at ease in approaching this subject.

As a lawyer, I have taken more than a slight interest in this Measure, because when it was first brought up in the House, it became quickly obvious to me that it was necessary, in relation to hire purchase, that something should be done for Scotland in that respect, not only to re- dress a very legitimate grievance, but also to afford such facilities in Scotland as have long been existent in hire purchase in England, and so approximating one practice to the other. In England, so far as concerns the right of a hire purchaser to return, in certain circumstances, an article to the owner, the practice has been made the subject of a contract at common law. With regard to imprisonment for debt as such, that is, of course, an anachronism to-day. This Bill seeks to impose a condition in relation to the return of an article to the owner, and give it statutory force, but it seems to me to be very rigid and unyielding, and therein lies the danger. The Committee will agree that the system of hire purchase has come to stay, and has justified its existence, since it is only through the medium of hire purchase that humble folk of very limited means can acquire things, not only desirable to possess, but which in many cases are essentials, for example, a bicycle, which is eminently the poor man's vehicle for easy, and fairly rapid transport.

In regard to Sub-section (2) it will be observed that, apart from the fact that the hirer must return an article in the same condition as he had it, subject to fair wear and tear, he must also pay something, and in the Bill this figure is a flat rate of a third of the original value of the article. It is in that sense that I can fairly describe it as rigid and unyielding. My Amendment proposes a graduation of the amount which shall be payable by the hirer, having some relation to the value of the article. Taking this flat rate of a third in the case of a bicycle, to borrow an illustration which has been used by my lion, and gallant Friend the Member for Coventry (Captain Strickland) a place so intimately associated with this trade, a bicycle is hired for six pounds, and the instalments arc payable at the rate of half-a-crown a week. In 16 weeks the hirer has paid £2, that is to say, one-third of the total value of the article. In the contract made between the owner and the purchaser, save in regard to reasonable wear and tear, there is no limitation of the use of that bicycle, and it might well be that during that period of 16 weeks the bicycle has travelled anything between 1,500 and 2,000 miles. It must be obvious to the House that that bicycle, if returned after the payment of only £2 upon it, is of very little use to the owner, and there is also this ironical feature, that the hirer may repeat the process; he may get a new bicycle and likewise use it for 16 weeks on payment of only £2. So far as the English traders are concerned, I have good reason to know that they strongly object, particularly in relation to the lower-priced articles, to that flat rate of one-third, and, indeed, if this Amendment be not accepted, the only way in which they can protect themselves is by imposing, either a more or less substantial payment on deposit., or an increase of the instalments payable over a portion of the period of hire. Perhaps it would be convenient if I read out the Clause as it would stand if amended as I suggest: (ii) paying (a) any instalment due at, or prior to, the date of such redelivery, and unpaid at that date, and (b) the amount, if any, by which the respective proportions hereinafter referred to, of the total payments stipulated for in the contract by way of instalment, exceeds the cumulo amount of the instalments due at or prior to the aforesaid date.The proportions of value of the article required to be paid on redelivery, in pursuance of the provisions hereof, shall be as follows:In respect of articles purchased or hired for sums of fifteen pounds up to twenty pounds four-twelfths, for sums of ten pounds or more and under fifteen pounds five-twelfths, and for sums below ten pounds six-twelfths. It will be noticed that I have kept the denominator of the fractions the same in all cases, so that the provision may be more easily understood by anyone not familiar with the Statute. The result would be that, in a case such as I have suggested, the bicycle would not be returnable until the hirer had paid £3. Even that would not compensate the owner, but it might have the effect of deterring the purchaser from doing what I have described. On the other hand, in the case of more expensive articles, the purchase prices of which might range from £15 to £20, a proportion of one-third, as provided in the Bill, is reasonable, and the increase is very little more in the price of articles midway between the cheapest and the dearest; it means the addition of another twelfth. I submit that the suggestion contained in the Amendment is not unreasonable, but is fair and equitable. If this Bill becomes a Statute, and if it is to be worked in the interests, not only of the different trades which supply these articles, but of the hire purchasers themselves, it is far better that every provision of it should be fair and equitable as between the parties, and, if this Amendment should meet with the approval of the House, I would respectfully but strongly urge the Secretary of State for Scotland that he should accept it. As I have said, I think it to be in the best interests of all the parties. If I have been, perhaps, rather insistent or vehement in pressing the Amendment, my excuse must be that I am really anxious that this new departure in relation to hire purchase in Scotland should not only be the success that it ought to be in adjusting difficulties and removing hardships, but that every Clause of it should be fair and equitable. In conclusion, I should like to thank the House for the sympathy, patience and courtesy with which they have listened to me.

Photo of Captain William Strickland Captain William Strickland , Coventry

I wish to sun port this Amendment, because I think that it is, perhaps, one of the Amendments most needed in the whole Bill. If the original intention, of the promoters of the Bill were carried into effect, and if, in the case of the smaller type of articles, the only possible return that the manufacturer could hope to get in the event of voluntary cancellation of the contract were to be the goods plus one-third of their original value, there would be, according to the; evidence that I have been able to collect from those most interested in the trade, an entire revision so far as Scotland is concerned in regard to the goods which are supplied in such large quantities from this country. I do not know whether the House is aware of the extent of the hire purchase trade and the manner in which it has grown in recent years. I believe that something like 80 per cent. of the pianos sold in this country are sold on hire purchase terms, while over 50 per cent. of such articles as wireless sets, gramophones and other amenities of life are supplied on those terms, and the trade is one which has grown very much of recent years. In this Bill we are not either condemning or supporting the principle of hire purchase; that does not come within the purview of the Bill; but we have to decide whether we are going to take a step to- night which must strike a very heavy blow at the trade. I was twitted, in the Committee that examined the Bill, with being an Englishman interfering with Scottish matters. I have not noticed any reluctance on the part of Scottish Members to interfere in English matters, but in this particular instance—

Photo of Captain William Strickland Captain William Strickland , Coventry

In this particular instance, the effect of the Bill on the purely English trade is most alarming. My hon. Friend has just quoted a case which, perhaps, affects my own constituency the most—the case of a bicycle. To any business man in this House, indeed, to anyone who cares to give the matter a thought at all, it must be obvious that it would be impossible to carry on that trade with Scotland, whatever may happen in this country, under the conditions of the Bill. To suppose that the manufacturer of a bicycle could let it out on hire purchase with the knowledge that it could be retained for use for four months and then returned on his hands, and that he could have any expectation that he would be able to place it on the market again as a second-hand bicycle and make £4 out of it, is absurd. I am speaking of a bicycle of the value of £6.

What is going to happen? You will have in Scotland a number of young people just going out to work, who have some distance to travel to their work, and have not sufficient capital to buy a bicycle outright. To them the hire purchase trade comes as a godsend. It enables them, for a small payment of half-a-crown a week, to overcome their transport difficulties and within 12 months to become the possessors of bicycles. But this provision of the Bill must of necessity mean that the manufacturer, in order to protect himself, will have to add to the cost of his bicycles at least 50 per cent., so as to recover for himself at any rate half the original value. That means that, for the sake of the comparatively few people who meet with misfortune and have to break their contracts, the vast number of people to whom hire purchase is of the greatest advantage, and particularly those of whom we hear so often in this House, the poorest of the poor, who are only represented, apparently, on the opposite benches—[Interruption.] I said "apparently."

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

The hon. and gallant Gentleman will surely remember that in the Scottish Grand Committee the keenest speakers against the Bill were opponents of his own. He must give them proper credit.

8.0 p.m.

Photo of Captain William Strickland Captain William Strickland , Coventry

I was trying to pay a compliment to hon. Members opposite, as appearing to be the only people who represent the poorest of the poor, because of the number of times that we hear that sacred phrase from them. I claim to represent the poor quite as much as hon. Members opposite. If this Clause is passed in its present form, the people who are going to be hit are just the working-class people of Scotland who mostly want this type of hire purchase, because it will mean that, if they want such a bicycle, they will have to pay £9 instead of £6 for it, whereas the graduated Amendment which has been so excellently proposed by my hon. Friend would avoid that, and would give the trade a chance. The same thing applies with regard to other commodities, of which I would like to mention one, as showing the necessity for a change in the wording of this Clause. I refer to such things as wireless sets. Everybody knows that the wireless industry is an industry which is perpetually changing. Improvements are made, and old wireless sets are obsolete in a very short time. What is going to happen under this provision is that a man will be told that he can have a wireless set for £6 or £8, he can keep it for a short time until it becomes obsolete, and he can then return it on to the manufacturer's hands, paying him one-third of the original value, without the manufacturer having the slightest ghost of a chance of placing the set on the market again. To anyone who considers that position for a moment, it must be obvious that it is unfair. One thing which I want to emphasise above everything else is that the hire purchase trade is indeed what it pretends to be; it is a hire purchase; that is to say, a person hires goods for a certain period of time, and whatever payments he makes from time to time, by the month or by the week, are paying for the hire and the use of those goods until he has completed a certain period of hire; and at the end of that time usually he purchases the goods by the payment of a small sum; but the advantage is indeed with the hirer in the great majority of cases, because he enjoys the use of those goods, for which he has not had to put down his capital in the first place. He pays the hire, month by month or week by week, for the use of them. When you come to a case of a man who wants to break that contract which he has made, it does seem to mo a little unfair to say that he may break the contract into which he has entered, and which he intended to carry out but possibly has not been able to carry out, by merely returning the goods and paying one-third of their value. I do suggest that unless you want to cut this trade out from Scotland, the House should accept this Amendment.

I am not speaking without my book; I have here some 20 letters from leading London houses, all of whom proclaim exactly the same thing; that if this Bill is passed in its present form they will either have to cut out the Scottish hire purchase trade up to the value of £20, or they will have to increase their charges over and above those made on the English side of the border. They will have to charge Scotland more than England for the smaller goods, and that charge will hit just the very people whom the hire purchase trade was originally intended to help, such people as the young artisan who has served his apprenticeship, who has earned very little wages during the time while he has been apprenticed, and now wants a set of tools to start in life. He cannot get that set of tools unless he has a chance of getting them through such a system as hire purchase, by which he can pay a small sum per week and start on his work. If you exclude that trade you are going to do an injury not only to those people who find in the hire purchase system a chance of obtaining goods which are of use to them and which add to the enjoyment of life, but you are also going to strike a blow at industry and trade itself, which is very largely dependent upon the hire purchase system.

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

I hope the hon. and learned Gentleman the Solicitor-General for Scotland is not going to accept this Amendment. We discussed this matter at very great length in Committee. On my side of the Committee we had the strongest objection to the Sub-section being there at all. When a hire purchase trader enters into a contract with a customer he weighs up all his difficulties. A man may have failed to make good his contract at some point and failed to pay all the instalments, but he may have paid regularly up to that point. The trader has received those instalments. There comes a point when the customer cannot' continue; and provisions are laid down in the Bill for the way in which the contract can be terminated: The customer has to hand the article back in good condition; and a very large proportion of the articles which we are considering are capable of reconditioning and capable of sale as new. In addition the customer has to pay any instalments outstanding at the date of return; and in addition to that, after very close and prolonged discussion in Committee, we allowed it to go that he should in addition pay one-third of the difference; we agreed to item (b) in the Sub-section.

I had almost forgotten to congratulate the hon. Member for Derby (Mr. Allan Reid) on his first intervention in Debate in this House. I am glad to hear his voice, and I hope that on the next occasion he will get a greater opportunity than the somewhat limited one which was afforded to him here. I hope that on the next occasion he will be on the right side; but I congratulate him on his trial run, and I have no doubt that on the next occasion he will interest the House as much as he has done to-day.

We agreed in Committee on that one-third, our side of the House agreeing with great reluctance. I think that my hon. Friends on the Labour benches, and some of the Conservative Members also, felt that in granting this item (b) in the Sub-section we were going a very long way in the interests of the trader. The hon. Member for Coventry (Captain Strickland) was unfair to the Scottish Members, I think, when he talked about our objection to Englishmen intervening in Scottish affairs. Surely his opportunities in the Scottish Standing Committee, where he was surrounded by Scotsmen, were as great as any Member of this House ever had at any time or at any place, and he certainly had a full opportunity to argue this Amendment to an unlimited extent.

Photo of Captain William Strickland Captain William Strickland , Coventry

I hope the hon. Member will also repeat to the House the protest which was raised at the very beginning, that while he did not object to Englishmen being on the Scottish Committee, he did very much object to their trying to tell Scotland what it ought to do.

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

I do not remember that protest. I remember several protests from my group, not because of the hon. and gallant Member for Coventry was an Englishman, but because he seemed to be voicing the claims of the trader solely, without regard to the customer. That was the protest which came from our side when he was too voca1 in defence of the bicycle makers. We understood, and excused, but we protested. Here he comes forward again, after we have debated and, as I understood it, reached agreement, and says that one-third is not enough, that it must be more. He is not demanding the whole pound of flesh, but he is not content with four-twelfths; he wants five-twelfths and six-twelfths, respectively. Speaking for my friends, I do not feel that we can agree to that, and I hope the Secretary of State for Scotland and the Solicitor-General for Scotland do not propose to agree, otherwise we will be forced to put up an opposition to the Bill which we had not contemplated at this stage.

Photo of Mr Wilfrid Normand Mr Wilfrid Normand , Edinburgh West

I feel unable to recommend the House to accept this Amendment. The present plan of the Bill is to enable a hirer to terminate his contract upon the return of the article in good condition, and upon paying all the instalments due or one-third of the total sum of the instalments, whichever is the larger. That conforms to the recommendation of Lord Fleming's Committee, which gave this question very great consideration, and all aspects of which they very carefully weighed. The matter came before the Scottish Standing Committee, and while there were Amendments which would have raised, the proportion payable by the hirer, there were also Amendments which would have materially reduced them. The Government in this matter kept what, I think, is a moderate course between the two extremes, and we are here on the findings of Lord Fleming's Committee. It is undoubtedly true that if you deal with a hire purchase con- tract which contemplates an even level of instalments throughout the whole course of its currency, any figure, whether it be one-third or one-half, may have unfortunate results for either party. I agree that if you have the case of a bicycle, which rapidly deteriorates in use, so that there is a high rate of depreciation, and if your contract provides that it shall be paid for at the rate of half-a-crown per week for, say, 48 weeks, then if the Contract remains unaltered the trader suffers some prejudice on a breach of the contract.

But then, what about the hirer in the case of articles which slowly depreciate?. He has to take his risks also. I think it is the duty of hon. Members to consider first of all the interests of both sides to the bargain, and secondly to bear in mind that nothing in this Bill prescribes an even level of instalments during the currency of the contract, and accordingly, as the hon. and learned Member for Derby (Mr. W. Reid) pointed out in his lucid speech recommending this Amendment, what the trader may do, and what he would have to do in the case of bicycle contracts, is slightly to increase the initial instalments. There is no reason either in principle or economics why he should not do so. The hirer of a new bicycle ought naturally to be con tent to pay a rate of hire greater in the ordinary way than the hirer of a bicycle a year old, and if it is truly a hire contract, then it is quite natural and reasonable that the early instalments should be on a higher scale than the instalments towards the end of the currency of the contract. Therefore, there is not only an easy way but a way entirely consistent with the true principles of fair dealing, in which the trader may protect himself. Wherever you draw the line difficulties may arise, but at all events the trader can in every case protect himself against any unfortunate economic effects of such a line.

I cannot help thinking that there is great exaggeration in saying that this is going to work any great disaster to the bicycle or any other industry. What is the position to-day? You are assuming in these discussions that somebody has entered into a contract which he finds himself unable to fulfil. What happens in such an event to-day? One knows that what happens to-day is that he ceases to pay the instalments and the trader gets nothing more except a damaged bicycle. This provides that when a man seeks to determine his contract he shall pay all the instalments due, or one-third of the total instalments, whichever is the larger. I agree that the probability is that there may be cases with which it will be difficult to deal; there may be cases where the hirer declines to pay any more instalments, and the operation of subsequent Clauses which we shall have to consider will have to come into operation. But the essence of the thing is that wherever you draw the line there will be people on each side of it who may have reason to complain if they have a hard-and-fast contract; but if traders desire to enter into this trade they can meet all the difficulties, and therefore I suggest that the Amendment should not be accepted.

Photo of Sir Patrick Hannon Sir Patrick Hannon , Birmingham Moseley

I intervene only for a single moment to ask the hon. and learned Member the Solicitor-General for Scotland whether he has brought his mind to bear upon this point: Under existing contracts for the hire purchase of bicycles—in which I have an interest as representing a division of Birmingham, and also as being a director of a company which is a very large producer of bicycles—is it not a fact that at the present moment, if the hirer ceases to pay his instalments, the vendor of the bicycle, whether it is a company or an agent, can proceed against him in law for the recovery of the balance? Under this Bill, as I understand it, the amount which the hirer, notwithstanding the condition of the article, is called upon to pay, is the amount of one-third set forth in this particular Clause which we are now discussing. Will the hon. and learned Gentleman also say who is to determine the condition of the article when it is returned? If the vendor says it is not in good condition and the man who has used it for four months and got all the excellent qualities out of it says it is, who is to determine between the two?

The Bill, with this limited provision, will inflict a very severe blow upon English trade in relation to Scotland. We have supplied Scotsmen from time immemorial with English products at the lowest possible price. There is not a Scotsman of this or any other generation who will not admit that this country has been conferring perennial benefits upon Scotland, and yet they bring in a Bill to deprive the English vendor of articles supplied to Scotsmen of a fair return for a period of hire of that article if at the discretion of the Scottish hirer, he determines to pay no further instalments. Any Member of this House projecting his mind into the mentality of Scotland can see multitudes of occasions on which Scotsmen will find a good, solid, substantial Scottish reason for seeking to pay instalments. That being so, surely something must be done to safeguard the interests of the vendor. I am certain that, by the limitation imposed in this Clause, you are doing serious injury to British manufacturers of certain articles customarily sold on hire purchase in Scotland. With reference to the interchange of amenities between the hon. Member for Bridgeton (Mr. Maxton) and my hon. and gallant Friend the Member for Coventry (Captain Strickland), I always hold that a Member for an English constituency is perfectly entitled to take part in any Debate affecting |Scotland. Scotsmen have profited so much by association with this country—

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

Will the hon. Member explain what he means by saying that I have profited from my association with this country?

Photo of Sir Patrick Hannon Sir Patrick Hannon , Birmingham Moseley

I was not making any personal allusion to the hon. Member, and I apologise if my remark could be interpreted in that way. I think the House ought to accept the Amendment. It is only a matter of fair play to English manufacturers who provide articles to make the daily life of the Scottish people more comfortable, happy and genial. To place this limitation upon manufacturers in this country for the benefit of persons who refuse to pay hire purchase instalments is an abuse of legislation.

Photo of Mr James Reid Mr James Reid , Stirling and Falkirk District of Burghs

I rise as a Scottish Member to support the Government and to oppose the Amendment, which seems to me to be entirely ill-conceived, and conceived in the interests of one trade alone. Let me give one example to show how it would work out in practice. We have been told that a £6 bicycle is let out at 2s. 6d. per week. At the end of the first week the person who hires it may find that it does not suit him, or that he does not need it, or that he can- not afford the £6. It is true, as has been said, that in the old days that man was in a difficulty, because he either had to go on with the bargain or sacrifice the £6 and the bicycle, unless he could come to an agreement. The object of the Bill is to avoid difficulties and to enable a man in that position to get out of the bargain, I think to the mutual advantage of both parties. As the Bill stands, that man will have to pay, in addition to his first week's hire of 2s. 6d., £l 17s. 6d., which, it seems to me, is quite sufficient to pay by way of a penalty for having rued your bargain. On the other hand, under the Amendment he would have to pay £2 17s. 6d. in addition to the 2s. 6d. It seems to me that that is a most monstrous sum to require him to pay. I cannot believe that my hon. Friend's bicycles axe so bad or so over-priced that after a week's use they have depreciated to half their value. It seems to me that any goods for which hire purchase can reasonably be applied ought to be of a reasonably durable character and, if they are of a reasonably durable character and are not over-priced, one-third fully represents the initial depreciation and, if that is so, the justice of the case is met.

Photo of Sir Patrick Hannon Sir Patrick Hannon , Birmingham Moseley

Will my hon. Friend substitute two or four months for one week? Can he conceive of a Scotsman being tired of a bicycle in a week?

Photo of Mr James Reid Mr James Reid , Stirling and Falkirk District of Burghs

My answer is that he ought to be charged a reasonable sum for hire. If an article depreciates rapidly, as bicycles apparently do, to charge only 2s. 6d. a week for a machine that costs £6 is an entirely vicious method of doing business. It means that you are charging too little for even the hire of a bicycle, let alone the purchase.

Photo of Captain William Strickland Captain William Strickland , Coventry

Do we correctly understand my hon. Friend to be arguing in favour of the workers of Scotland being charged more for what they have enjoyed at a lower price?

Photo of Mr James Reid Mr James Reid , Stirling and Falkirk District of Burghs

Certainly not as to total price, but, if a bicycle depreciates at the rate of more than 2s. 6d. a week, obviously the instalment ought to be more than 2s. 6d. a week, but it should not go on for so long. If my hon. and gallant Friend's constituents are getting business by spreading the instalments 'over too long a time, that is a vicious system. Hire purchase ought never to be in such a state that the instalments are less than the amount of the weekly depreciation, otherwise the thing is not a proper commercial contract at all. If people choose, in order to get business, to enter into contracts under which they are willing to take smaller instalments than the weekly amount of depreciation, it is their own fault if they do not get paid at the end of it. I do not think that those sellers who trade on proper commercial principles ought to be penalised in order to advantage cycle makers who apparently, in order to get business, are willing to accept too small instalments.

Photo of Mr Douglas Jamieson Mr Douglas Jamieson , Glasgow Maryhill

I, too, should like to say a word in opposition to the Amendment. If it is accepted, it seems to me that it will go a long way to defeat two of the main objects for which the Bill was introduced. One was to make sure that, where a hire purchaser had been persuaded to take an article which he could ill-afford to pay for, he should be entitled to return it on fair and equitable terms. The other reason was that people have entered into these contracts and soon afterwards become unemployed and find themselves totally unable to pay. It was in the interests of them as well as in the interests of the trader that Clause 3 was introduced; so that the hirer might be relieved of his contract and the trader might be entitled to get back his article if it was in good condition.

If the Amendment is accepted it will mean that to a very large extent these two main objects of the Bill will go by the board. In their report, Lord Fleming's Committee said that they were very much impressed by the number of cases which had come before them where at the time the contract was entered into the hirer was actually unemployed or soon afterwards became unemployed. It is to meet those cases that the provision was made for re-delivery if the article was in good repair. The hon. Member for Moseley (Mr. Hannon) asked who was to decide if the article was in good repair? It is very simple. If the hirer tenders an article back and the trader says, "I am not going to accept it; it is not in good order," the latter will sue for his instalments. The defence to such an action would be that the article had been tendered back, and it would be for the court to decide whether or not it was in good repair or whether the tender was a good one. The committee recommended that one-third was a fair amount, but it is suggested in the Amendment that in some cases as much as two-thirds should be paid.

8.30 p.m.

Photo of Mr Douglas Jamieson Mr Douglas Jamieson , Glasgow Maryhill

; I do not think that my arithmetic is at fault. I am afraid I am not up-to-date. As the Amendment was originally tabled I understood that it was a larger sum. But take the case of a person who has a gramophone or a wireless set which he does not want, or for which he cannot afford to pay. If the article is in good condition when the return of it is tendered, surely a third of the whole is a fair amount to pay. if as much as half were exacted it would render the redelivery Clause useless. I do not think that the hon. and gallant Member need be afraid that the English traders will lose their business if the Clause is passed in. its present form. He suggested that the English traders might add 50 per cent. to their present prices. If they do so I think that they will probably find enterprising Scottish traders ready to supply the needs of the country at present prices. It seems to me that the whole of the difficulty can be met by a very slight adjustment of the contract by putting more upon the initial instalments and less upon the later. I would welcome that being done, because I believe that it would be in the interests not only of the people who take the articles but of the traders themselves. It would lead to what I call legitimate trading. Articles would be hired when they were wanted and not because a canvasser had been round and pressed them upon people who did not want them. The result would be that only contracts would be entered into where there was a reasonable chance of their being fulfilled. That would not only be in the interests of the hirers but in the interests of those who wanted to place their goods upon the market. I am glad that the learned Solicitor-General for Scotland has said that the Government are not prepared to accept the Amendment.

Amendment negatived.

Photo of Captain William Strickland Captain William Strickland , Coventry

I beg to move, in page 2, line 37, at the end, to insert the words: (2) For the purposes of this Section delivery—

  1. (a) to any person specified by the owner in a notice given to the hirer or purchaser and residing or carrying on business within a radius of two miles from the place where any person who acted on behalf of the owner in connection with the formation or conclusion of the contract resided or carried on business at the time he so acted; or
  2. (b) if no such notice has been given, to such last-mentioned person,
    • shall be deemed to be redelivery to the owner."
The Amendment is consequential on the first Amendment which I moved, in which we deleted certain words, and therefore I do not propose to take up the time of the House any further.

Amendment agreed to.