I beg to move, That the Bill be now read a Second time.
I wish to congratulate the hon. Member for Harrogate (Mr. Ramsden) on the excellent reception given to his Bill, and I hope that similar success will attend its further stages. May I also appeal to hon. Members to continue to exercise the forbearance and restraint which they have shown hitherto and keep their speeches short during the discussion so that the hon. Member for Shrewsbury (Mr. Langford-Holt) may have an opportunity to move the Second Reading of his Bill?
My Bill is designed to increase the amount of wages exempted from arrestment under the Wages Arrestment Limitation (Scotland) Act, 1870. It has nothing to do with the principle of arrestment. It is concerned only with the limitation of the amount arrested. So far as I can ascertain, the matter was dealt with first in Section 7 of the Small Debt Act, 1837, and I gathered from my researches that it did not work very well. The courts were divided in their opinions regarding the amount to be allowed to the arresting creditor and various sheriffs throughout Scotland differed in their judgments. There was certainly dissatisfaction with the general run of the judgments given.
In 1868 Mr. George Anderson, a flax manufacturer, was elected as a Member of Parliament for Glasgow. A feature of his election platform was a reform in the law of arrestment, and in 1870 he introduced a Bill which became the Wages Arrestment Limitation (Scotland) Act. Thereafter, arrestment could be made only in the amount in excess of 20s. per week. Wages arrestment limitation as laid down in the Act of 1870 remained in force until the passing of the Small Debt (Scotland) Act, 1924. The Preamble to the Bill included the following Note on Clause 2
In view of the change in the value of money since 1870, when the present limitation
was fixed, it is proposed in the second Clause to raise the limit of exemption of wages from arrestment from 20s. to 35s. per week.
In moving the Second Reading, the then Secretary of State for Scotland, Mr. Adamson, suggested that if it were fair that 20s. in 1870 should be unarrestable for debt, with the change in the value of money and the increase in the cost of living compared with that time surely it was reasonable that it should be raised to the figure mentioned in the Bill. Therefore, after the passing of the 1924 Act the figure was raised from 20s. to 35s. per week as the amount which could not be arrested.
Since 1924 there has been no change in the law regarding the limitation of wage arrestment. Dissatisfaction has been expressed from time to time. Questions have been asked in this House. During my researches, I discovered that my hon. Friend the Member for Fife, West (Mr. W. Hamilton) put a Question down to the Secretary of State for Scotland on 3rd July, 1957. The Secretary of State indicated that the matter was under investigation. Obviously, as there were great changes in the value of money between 1870 and 1924, so over the past 35 years there have been similar changes and that is the main reason for this Motion.
Before finally deciding on the actual changes which I should try to make in the Act of 1870 I had discussions with various people interested in the problem; in particular, my hon. Friend the Member for Hamilton (Mr. T. Fraser) and my hon. Friend the Member for Glasgow, Govan (Mr. Rankin). I also discussed my tentative proposals with the Joint Under-Secretary of State for Scotland, the hon. Member for Dumfries (Mr. N. Macpherson), and I wish to thank him for his willing interest and help.
I also examined the Report of the Committee on Diligence, set up by the Secretary of State for Scotland in July, 1956, which reported on the whole question of diligence. I consider that that Committee, which was presided over by Sheriff Hector McKechnie, Q.C., did an excellent job, and I should like to compliment it on the clarity of its Report, which was presented to Parliament by the Secretary of State for Scotland in June, 1958.
I was interested to find that while the Committee had covered the whole field of diligence it had brought in a specific and unanimous recommendation dealing with the narrower point of wages arrestment limitation. After consideration, I decided to adopt the Committee's recommendation in my Bill. The McKechnie Committee took evidence from many organisations on the subject of wages arrestment. It stated:
Almost all our evidence on this matter was in favour of an increase in the 35s. limit.
The Committee took evidence from the Law Society of Scotland, which was in favour of the change, and it took evidence and had discussions with the Society of Messengers at Arms and Sheriff Officers which was definite that there should be a rise in the amount of 35s. The Committee had consultations with the National Assistance Board which considered that there should be an increase. The Committee stated:
The need for an increase in the 35s. limit was supported by the Edinburgh Council of Social Service who gave us details of six families for whom problems already existing had been exacerbated and hardship had been caused by arrestment of all but 35s. of the husband's wages.
The Committee also dealt exhaustively with changes in wage rates and money value. I do not want to go over all that evidence and to delay the House, but I should like to deal with the final paragraph on that subject. In paragraph 85 of the Report on Diligence, presented in June, 1958, the Committee said:
It seems to us that changes in weekly wages rates are more significant for our purpose than changes in the purchasing value of the pound, though we considered the latter in relation to the former. The standard of living of employed persons in Scotland has improved vastly since 1870 and so the weekly sum required for the minimum alimentary needs of a family has risen more steeply than the value of the pound has declined. The minimum alimentary needs of one family are normally related to the size of the wage earner's usual pay packet.
The Committee of Inquiry, in summing up, said:
We decided that in practice what is required can be met only by a standard rate assessable in all cases by the employer but which takes some account of the worker's usual weekly wages on which his way of living must be assumed to be based. Yet this rate must be sufficiently stiff in its effect to encourage the debtor to make an arrangement with his creditors.
The Committee then recommended:
We recommend that this should best be done by replacing Sections 1 and 2 of the 1870 Act by a provision that allows arrestment of wages only to the extent of one-half of the amount by which the wages exceed a specified sum which we suggest should be £4 a week.
The Committee recommendation I have just read is embodied in Clause I of the Bill.
I believe this Bill would lead to a great step forward in Scotland and would put the law of arrestment in Scotland into a much more favourable position than it has been in the past. I sincerely hope the House will give the Bill a Second Reading. It gives me very great pleasure indeed to commend the Bill to the House.
I beg to second the Motion.
I very sincerely congratulate my hon. Friend the Member for Central Ayrshire (Mr. Manuel), both on his good fortune in having been successful in the Ballot and on his choice of this Bill. It might seem to many hon. Members a small Measure, but it is, in fact, difficult to estimate just how many people would be affected by it. Looking through what information is available, the nearest I could get to an estimate is that perhaps between 20,000 and 30,000 people in Scotland have their wages arrested. That is on the basis of information available in 1957. It would seem from my experience and the experience of many hon. Friends that there are likely to be many more affected now than was the case in 1957. The relief which would came from this small Bill would be very great indeed.
Perhaps I can bring this out more dearly to hon. Members opposite, who may not know of this type of condition in Scotland, if I mention an experience I had last Friday when I returned to my home. Almost immediately on my return there was a telephone call from a young miner who told me that his wages had been arrested. I arranged to go to see him, and when I saw him I discovered that both he and another miner living a few doors away had had their wages arrested for the same debt. The miner who had telephoned me was what is known as a guarantor. He had guaranteed to meet the obligation of the other fellow. The actual debtor had gone to see the firm concerned and made arrangements to pay £3 a week to meet the debt, but he had fallen short by only one week. The very next week his wages were arrested together with the wages of the guarantor.
Both those young men were married and each had three children; yet all that was left to them was 35s. My first reaction was to tell them to go at once to the National Assistance Board. No one in this country is permitted or expected to live below the National Assistance scale, which is very much more than 35s. a week. I subsequently learned what I should have known—this is an example of how we miss many things—that one cannot get National Assistance if one is in receipt of full-time earnings. I know that under special circumstances it is possible for the Board to make a special payment which subsequently can be recovered, and on some occasions it does so, but the actual position is that where a man, no matter what family he has and even if he is left with only 35s., is in receipt of full-time earnings, the Board would actually be acting contrary to the law in giving him assistance.
It is very difficult at this stage to estimate how many people are affected, but, as my hon. Friend the Member for Central Ayrshire mentioned, there is a statement in the Report of the Committee on Diligence that in 1957 nearly 90,000 cases were brought before small debt courts in Scotland. It seems that that practice has been growing rapidly since 1957. It is very cheap to bring a small debtor before a small debt court. When the decision is given against a small debtor and powers are given for arrestment of wages an interesting little development takes place. I was rather astonished by this, but again I understand it is according to existing law, and we are not challenging this point here. The arrestment of wages order and bringing a person to court costs a small sum of money, and that sum of money is added to the debt which the debtor has incurred.
I have a particular firm in mind but I do not intend to mention its name this afternoon. It not only charges the cost of bringing the debtor to the small debt court and the cost of arresting his wages and adds that to the debt, but it charges compound interest on that cost. It seems astonishing, but that is actually going on. This is the kind of practice which has developed in Scotland. It is undoubtedly causing very considerable hardship to many people, not only the debtors themselves, but the guarantors. Many people are induced to sign a guarantee without having any knowledge of what they are doing, and they involve themselves in very serious consequences.
The fact that my hon. Friend has introduced this small Bill, which will result in a man being able to draw a substantially larger sum as his wages—£4 plus 50 per cent. of his wages above £4—will cause many of these hire-purchase firms to be much more careful about inducing people to assume debts of this kind which they cannot afford to meet. The ease with which this type of firm is enabled to collect these debts, despite the hardship it causes, in my opinion and in the opinion of my hon. Friends makes for a lack of concern among them as to whether the people who are signing these contracts have any chance of meeting their obligations. I am sure that no one will oppose the Bill.
I compliment my hon. Friend on bringing forward this small but valuable Measure. I sincerely believe that there must be a welcome on both sides of the House for a Measure so genuinely concerned with alleviating a hardship which in many cases is inexcusable.
I am sure that the House wishes to join the hon. Member for Motherwell (Mr. Lawson) in congratulating the hon. Member for Central Ayrshire (Mr. Manuel), not only on his good fortune in the Ballot, but also on his choice of a Bill and on the very lucid manner in which he has explained its purpose to the House.
The House has already heard why the Bill is desirable and what it does. I should like to add my support to the hon. Member in this matter. He was kind enough to say that we have had talks about it. Bringing forward the Bill was entirely his idea, because I think I am right in saying that during his absence in the wilderness the Report of the McKechnie Committee had escaped his attention, and it was only after he had thought of the Bill that he read the recommendations of the McKechnie Committee. I agree with him entirely that it was a very wise course on his part to adopt the recommendations set out in that Report.
I want to take this opportunity of thanking the chairman and members of the Committee which reported on diligence for the work which they did in preparing so comprehensive a report. The hon. Member will have noticed from his researches that this is an extremely difficult field for research. This Report is an original piece of research in a way that few reports are. The review which the Committee undertook covered a wide and highly technical subject covering both law and practice, and the fact that the hon. Member has chosen to devote his success in the Ballot to this Bill on arrestment of wages shows the social importance of one of the Committee's most important recommendations.
I do not want to take up the time of the House but merely to make one or two points for the record. In paragraph 65, the Committee stated the general principle of Scots law:
It is a general principle of Scots law that funds held for a debtor are not arrestable to the extent that they are alimentary.
That means the extent to which they are needed for the minimum requirements of living. That has been the general principle of Scots law. It is curious to find how a great advance such as the 1870 Act can itself in due course act as a brake, and in a sense we have departed from the principle of Scots law because of the figure written into the 1870 Act, even though it was amended in the 1924 Act.
The Government welcome the Bill because it will prevent the hardship which can arise, and which often does arise, when a debtor is left with no more of his week's pay packet than the 35s. allowed by the 1870 Act, as amended in 1924. I am sure that there will be general agreement throughout Scotland that if 35s. was the right figure in 1924, it is certainly inadequate today. The House will also agree that the hon. Member was wise to adopt the Committee's recommendation that only half the amount by which a wage exceeds £4 should be subject to arrestment. I think that the hon. Member was also wise to fallow his first inclination and to confine what he is trying to do to this point. On the previous Bill today an hon. Member said that one of the advantages of a Private Member's Bill is that it can make a limited advance, one step at a time, in a sense that the Government generally cannot do. The Government are, however, continuing their consideration of the many recommendations made by the McKechnie Committee, but I can make no further statement today as to what may be done about these matters.
The Bill as it stands does not deal with the two particular cases which are already exempted from the 1870 Act—arrestment for alimentary debts and arrestment for rates and taxes. That is a matter which we shall have to study in dealing with the general aspects of the McKechnie Report.
I congratulate the hon. Member on the expedition with which he has signified his return to the House and on his choice of a subject for the Bill.