Clause 69. — (Application to Scotland.)

Orders of the Day — War Damage Bill. – in the House of Commons on 12th February 1941.

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Photo of Mr Thomas Cooper Mr Thomas Cooper , Edinburgh West

I beg to move, in page 49, line 10, to leave out from "shall," to the end of line 11, and to insert: extend to Scotland subject to the modifications specified in the following provisions of this Section.

Photo of Mr George Garro-Jones Mr George Garro-Jones , Aberdeen North

I do not wish to prolong unduly the consideration of this Clause, and of the rest of the Bill, but it would serve a useful purpose if the Lord Advocate would now make the general statement which has been awaited with interest.

Photo of Mr Thomas Cooper Mr Thomas Cooper , Edinburgh West

I had intended to make the statement on the next. Amendment, which is the central feature of the Clause.

Amendment agreed to.

Photo of Mr Thomas Cooper Mr Thomas Cooper , Edinburgh West

I beg to move, in page 49, line 17, at the end, to insert: (2) The expression 'proprietary interest' means, in relation to any hereditament or property, the estate or interest of the person entered or entitled to he entered in the ordinary valuation roll as the proprietor of the land comprised in the hereditament or in any part of that land:Provided that—

  1. (i) where the person so entered or entitled to be so entered is a lessee under a lease the stipulated duration of which is more than twenty-one years, or in the case of minerals more than thirty-one years from the date of entry, the lessor, the owner of the fee simple and any intermediate lessors shall also be deemed to be owners of proprietary interests in such land or part;
  2. (ii) where a lessee is so entered or entitled to be entered in pursuance of the Lands Valuation (Scotland) Amendment Act, 1895, in respect of erections or structural improvements on the subjects let, he shall be deemed to be the owner of the fee simple in such erections or structural improvements; and
  3. (iii) where a lessee or a landholder within the meaning of the Small Landholders (Scotland) Acts, 1911 to 1931, has made or acquired erections or structural improvements in respect of which he is not required to be so entered by reason only that the erections or improvements fall within one of the classes specified in paragraphs (1), (2) or (3) of Section four of the said Act of 1895, he shall be deemed to be the owner of the sole proprietary interest and of the fee simple in such erections or improvements."
This Amendment is the central feature in regard to the application of Part I of the Bill to Scotland. I should like to say a few words in explanation of the method we have adopted for achieving what, I think, everyone will agree is the difficult task of dovetailing the scheme of the Bill into two entirely different systems of law, the English law and the Scottish law. I was fortunate in having the assistance of the legal societies in Scotland; and, while the solution now proposed is only one of many possible solutions, it is one which met with the unanimous approval of those experts who gave the matter their consideration.

The main purpose of the Amendment is this. The provisions of Part I, so far as they are applicable to England, are very properly framed with a special eye to leasehold tenure, to the ground landlord and to a succession of lessees and sub-lessees. This is a special feature of English law. Scotland has no real counterpart to leasehold tenancy, except to a very limited extent. The counterpart is found in Scotland only in the very rare cases of long leases, which are of 31 years' duration, or, in the case of minerals, 31 years' duration. Accordingly, for Scotland, we have proposed to adopt as the foundation of the liability to contribute and the right to payment under Part I the very familiar principles of the Scottish valuation law, under which the proprietor is the only person who will be bound to contribute; and the only person entitled to receive payment in the event of damage will be, if I ignore certain exceptions, the proprietor or the tenant under a lease for more than 21 years, or, in the case of minerals, 31 years from the date of entry. By adopting the machinery and principles of the Valuation Acts, with which all lawyers and most other people in Scotland are familiar, we leave the arena of leasehold tenure, and all the directions with regard to direct and indirect contributors except for the limited purpose of the long lease.

The effect of the Clause—which, of course, has to be framed in somewhat technical language—is, in accordance with this general principle, in the first portion of the Amendment, to provide that the expression 'proprietary interest' means, in relation to any hereditament or property, the estate or interest of the person entered or entitled to be entered in the ordinary valuation roll. Perhaps the Committee will take it from me that the provisos which follow are designed to deal with certain not very common cases which have to be provided for in relation to such matters as erections or structural improvements made by tenants, and particularly by agricultural tenants. These are minor details, but the broad principles are as I have indicated.

I think that I may claim that with this adaptation of Part I of the Bill to Scotland, the Bill will work even more simply than in England and will achieve on both sides of the Border substantially identical treatment. As has been said more than once by my right hon. Friend, I cannot claim that justice will be done in every conceivable case which can be stated, but I am sure that every Member of the Committee who has been taking part in these proceedings has long since realised that, if we aimed at ideal justice in every conceivable case, this discussion would never come to an end. I am confident in advising the Committee that with this adaptation not only will similar or substantially identical results be secured, but, in the vast majority of cases, the scheme as outlined by my right hon. Friend the Chancellor of the Exchequer will operate equitably.

Photo of Mr Robert Gibson Mr Robert Gibson , Greenock

It is right and proper that on this side of the Committee there should be some endorsement of the remarks of the Lord Advocate with regard to the work which has been done by the special committee of the Faculty of Advocates and by the legal societies in Scotland in applying their minds to the question of the adaptation of this Bill in its application to Scotland. The Bill presented to these committees a very big problem indeed. The conveyancing law of Scotland is by itself a highly technical branch of law, but the problem in this Bill was the adaptation to Scottish procedure and Scottish law of a very big and important scheme couched in the terminology of English law. What has been done has been most valuable. It was an arduous task undertaken at very short notice, and it was put through in a very short time. I concur in the remarks which have been so ably made on that topic by the learned Lord Advocate.

In taking the valuation roll as the basis for the scheme in Scotland, we have given testimony to the work and efficiency of our Valuation Appeal Court in Scotland. People in Scotland are very familiar with the valuation roll and with the practice, procedure, methods and results of the work in that court. It would be right that the Lord Advocate should himself be thanked for the way in which he has met all the objections and suggestions that have been put forward. The work of harmonising these different suggestions was indeed very great, and the thanks of Members from Scotland on both sides of the Committee and of many bodies in Scotland have been abundantly earned by the Lord Advocate. We are well justified in recording our deep sense of gratitude to him in the matter.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and Eastern

I would like to join in congratulating the Lord Advocate on the very thorough way in which he has tried to cover all the objections and propositions put forward by the various bodies in Scotland. I confess that, although I have tried, I have not been able to comprehend the relation of all the new Amendments to the Bill itself, and, therefore, I cannot say definitely that all the points that have been conceded are satisfactory. It would be advisable if the Lord Advocate could give an assurance upon one point which is felt very strongly in Scotland. The valuation roll in Scotland differs, I understand, from the Schedule A valuation on which the tax is to be levied in England, inasmuch as under Schedule A deductions are made from the gross annual value in respect of owners' rates and repairs, whereas in Scotland it is the gross amount which comes into consideration. In Scotland it is felt that this means that actually a higher tax is to be paid on the whole than is to be paid in England; that they are having to pay on gross value and that in England it is going to be on the net value, which is regarded as being an injustice to Scotland which requires to be voiced in this House. I should like the assurance of the Lord Advocate—and I am sure that he will do his best to protect us—that he has protected that point.

There is another point. In Scotland local authority properties, in many cases hospitals and schools, have no deductions made from their annual value comparable to the deductions made in England. I would like to know whether allowances are to be made in these Amendments to bring the Scottish local authority hospitals, and other public utilities or organisations, into line with those in England? Will adjustments be made to public utilities in Scotland to bring them in on a par with the English assessment? I understand that, with regard to the war damage authority, the term "drainage authority" does not apply to Scotland, and I have tried to check up whether the Lord Advocate covered that point, and have not succeeded. There is another point in regard to the question of the mortgages. There does not seem to be anything dealing with pari passu bonds which are common in Scotland.

Photo of Mr Thomas Cooper Mr Thomas Cooper , Edinburgh West

As regards the question of the meaning attached to the words net annual value, I am glad to be able to inform the hon. Member that I have already protected Scotland from injustice in this respect by an Amendment which appears lower down on the Order Paper. The question does not arise on this Amendment. The question to which the hon. Member referred of the local authorities in regard to schools is under examination. It is not covered by these Amendments. The hon. Member will be aware that it is rather a complicated problem both in England and Scotland, and I think that the matter might be allowed to rest there with the assurance of my right hon. Friend. Drainage authorities are not referred to, for there are none in Scotland. As regards mortgages the position is dealt with in Clause 19 of the Bill, and it will be in the recollection of hon. Members that a very considerable difference of opinion developed on the consideration of that Clause. My right hon. Friend indicated more than once that he desired to look at the matter afresh in the light of representations that had been made. Having that in view, I have not attempted in this Clause to put down Amendments dealing with the problem until the wider issue has been further considered and possibly made the subject of further proposals.

Amendment agreed to.

Further Amendments made:

In page 49, line 20, after "of," insert: a security by way of ground annual and.

In line 31, after "utile," insert: or, in the case of property, other than feudal property, of the owner.

In line 42, leave out from "either" to the end of line 2, on page 50, and insert: a farmhouse occupied in connection with any agricultural land or an agricultural cottage so occupied which is on or contiguous to that land.

In page 50, line 10, leave out "of this Act."

In line 10, at the end, add: () section fourteen shall have effect as if

  1. (a) for any reference to a net annual value shown in a valuation list there were substituted a reference to a gross annual value entered in a valuation roll less any sums on which relief would have been allowed under Rules 1, 4, and 7 of No. V of Schedule A if an assessment based on such gross annual value had been made under Schedule A; and
  2. (b) the proviso to Sub-section (2) were omitted.
() Section twenty-five and the definition of 'land' in Sub-section (1) of section forty-one shall have effect as if the Acts and the Order therein respectively mentioned applied to Scotland;() In relation to a harbour, quay or pier undertaking to which Part III of the Harbours, Piers and Ferries (Scotland) Act, 1937, applies, the appropriate department for the purposes of section thirty shall be the Secretary of State instead of the Minister of Transport.() Section thirty-two shall have effect as if for any reference in Sub-section (1) thereof to a net annual value there were substituted a reference to a gross annual value.

In line 11, leave out "of this Act."

In line 21, leave out "of this Act."

In line 25, at the end, add: () In Sub-section (2) of Section sixty-five for any reference to a rating authority there shall he substituted a reference to a county or town council charged with the duty of causing a valuation roll to be made up;() Where a value payment is made in whole or in part in respect of a proprietary interest that was subject immediately before the occurrence of the war damage to a trust within the meaning of the Trusts (Scotland) Act, 1921, or to an entail or to a life-rent, the sum so paid shall be held and applied in like manner as if the proprietary interest had been acquired under compulsory powers and the said sum were the purchase money or compensation therefor;() Payment of contributions in respect of any contributory property by an heir of entail shall be deemed to be expenditure on improvements within the meaning of the Entail Acts;() A county or town council shall have power to borrow such sums as may be necessary for the purpose of paying contributions or premiums under this Act:Provided that such power shall not be exercised except with the consent of, and subject to such conditions as may be prescribed by—

  1. (a) the Minister of Transport as regards highways, omnibuses, tramways, trolley vehicles and garages therefor;
  2. (b) the Electricity Commissioners as regards electricity undertakings; and
  3. (c) the Secretary of State in any other case.
() An order by a referee as to the costs of any appeal or reference to him under Section seven or Section ten where the amount of the valuation as determined by the Commission, or the value payment, as the case may be, does not exceed five hundred pounds, may be enforced by leave of the sheriff."—[The Lord Advocate.]

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire Eastern

I beg to move, in page 50, line 25, at the end, to add: (i) for the purpose of determining the amount of a value payment to be made by the Commission in respect of any hereditament comprising dwelling-houses to which the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, applies or applied, no regard shall be paid to any increase of owners' rates paid by the owner of such hereditament over the amount of owners' rates paid for the year ending Whitsunday 1920. My only object in moving this Amendment is to give the Lord Advocate an opportunity of saying a word or two which I hope will contain some concession to those owners of dwelling houses in Scotland who are very seriously affected under the Bill by the Scottish rating system. I know we are anxious to get on, so I do not propose to elaborate in any way the Scottish rating system, but its effect under this Bill is that the value of houses in Scotland which are rent controlled is very much less than similar houses in England. I am quite sure that those who prepared this Bill, coming from England, must have been shocked to learn of the difficulties of the Scottish rating system, and one can only hope that, as a result of the inquiries which the Government Departments and Treasury must have made in connection with this Bill, sooner or later something will be done to remove these anomalies from Scotland. The object of this Amendment is to eliminate altogether the effect of the Scottish rating system upon value payments in the case of rent-controlled dwelling-houses. English Members may not be particularly interested and Scottish Members fully understand it, and I know that the Chancellor and the Lord Advocate fully appreciate what is at the back of the Amendment.

Photo of Mr Thomas Cooper Mr Thomas Cooper , Edinburgh West

I rather gathered from the terms in which my hon. and gallant Friend moved this Amendment that he did so, not with the idea of its being accepted in the form in which it is drafted, because I am sure he would be the first to agree that a Bill having for its object the provision of a scheme for making compensation for war damage should not be used to rectify the grievances of the Scottish rating system. I think an Amendment designed to that end might almost come within your Ruling, Colonel Clifton Brown, as being out of Order. I would like to say this: My right hon. Friend and I are, of course, well aware of the special features which apply to controlled property in Scotland, particularly in the Glasgow area. We are well aware of the special difficulty which arises, not so much from the Scottish system of rating, as from the provisions of the Rent Restrictions Act, 1920; in their application to Scotland. Those special cases seem to provide good ground for special consideration of that class of property from the standpoint of Clause 19, and the distribution of liability for contribution as between the owner of the property and the mortgagee or bondholder. That is a question which will he before my right hon. Friend and myself in reviewing the position under Clause 19. But when my hon. and gallant Friend proposed that the matter should be dealt with, not from the angle of allocating liability for contributions, but from the angle of making provision in this Bill for repaying to the owners of property in Scotland 20 years' purchase of owners' rates, which they have been paying since 1920, I think the Committee will agree that that would be distorting this Bill from its true function.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire Eastern

In view of what the Lord Advocate has said, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause, as amended, ordered to stand part of the Bill.