CLAUSE 5.—(Power to Recoup Losses.) (Hansard, 14 August 1919)

§ Mr. CLYDE
I beg to move "That this House doth agree with the Lords in the said Amendment."
This Amendment in like manner was inserted in the English Bill on Report, and the object is merely to ensure that a house erected by a local authority shall be let at a reasonably sufficient rent.

§ Sir D. MACLEAN
I must ask my right hon. and learned Friend for more explanation than he has given. The regulations which the Board are empowered to draw up will, when they come into operation, be binding upon the local authorities. The Bill says, "Provided that the regulations shall include provisions (1) for the reduction of the amount of the annual payment in the event of a failure on the part of a, local authority or county council to secure due economy in the carrying out of a scheme," and then there comes the proposed Amendment to insert the words "to charge sufficient rents." It is quite obvious, in fact it is common ground, that there is no hope for years,' at any rate for four or five years, that economic rents can be 1760 charged. We are all agreed on that. I should like to know a little more particularly whether the words "sufficient rents" would in any way compel the local authorities to charge what may be an economic rent. If so, the whole scheme breaks down. I am a little bit troubled about the use of the word "sufficient." To what does the word "sufficient" relate? Is it in relation to the interest, however low it may be. on the money expended, or is it sufficient in relation to what a reasonable man would deem to be all the circumstances of the case at that particular time in that particular locality. I hope my right hon. Friend will agree with me that the word "sufficient" in that way may be open to argument and open to misconstruction and misconception. I can quite imagine that a local authority might say, "We have to charge a sufficient" rent and they might say that "sufficient" rent must give a reasonable return on the. money expended. My right hon. Friend is a lawyer of great eminence, and I have no pretensions at all in that way. I should like to have a little more explanation from him. Would he give us out of his vast store of legal learning and experience a little more light?

Lieut.-Colonel MURRAY
This Amendment alters the whole idea of the Subsection. The regulations referred to are regulations regarding schemes to be drawn up under Sub-section (5) of Clause 1. What is the scheme? The scheme as I understand it is a scheme to provide houses for the working classes. It is proposed under this Amendment to insert the words "to charge sufficient rents." That will alter a scheme for the provision of houses to a scheme to charge Sufficient rents. That alters the whole object of the proviso.

Dr. MURRAY
Like my right hon. and my hon. and gallant Friend I am doubtful about the significance of this alteration. It seems to me to be a symptom of the reaction which is going on in the country. When the war was over there was great talk about a spasm of generosity for providing the people, and especially the men returning from the war, with decent houses. It was then agreed that there would be a considerable loss so far as money was concerned in the provision of the houses. As a result of the reaction we see letters in the Press about the tremendous cost these schemes will be to the country, and there is an 1761 attempt to stampede and frighten Parliament over the tremendous raids which are to be made on the Treasury in connection with these housing schemes. Here is an attempt so far as I can see on the part of those who represent this reaction in another place to get the reaction crystalised in this Bill, so that it will have an effect upon the housing policy of the country. There is a good deal to be said for charging a sufficient rent, but under present conditions we cannot charge a sufficient rent for the houses. There is a good deal in this Amendment which requires explanation from the Lord Advocate. If it is to be a sufficient rent to pay the full interest it will destroy the whole scheme. A "reasonable" rent would have been a more suitable word. "Sufficient" rent is a very unfortunate phrase to use, and if adopted, may have effects which the House of Commons never intended. I hope the Lord Advocate will assure us that this is a more innocent thing than it looks.

§ Mr. JOHNSTONE
It is essential that in the housing schemes which are to be provided by the local authorities, and submitted to the Local Government Board for their approval, due economy should be exercised, and if they do not exercise due economy they should be penalised accordingly. But with regard to the charging of "sufficient" rent I agree with my right hon. Friend Sir D. Maclean that the term leads to ambiguity. What is a sufficient rent? In my own country, we are advised that the economic rent required for an ordinary class of house built under these schemes will be about £45 per annum. We are also advised that the very utmost that working class people could afford to pay for the houses, taking into consideration their income and comparing these houses with the houses occupied by others, is about £22 10s. per annum, which would be half what the economic rent would be. Would that mean the Local Government Board, with their legal advisers and their experience, would regard that £22 10s. as sufficient rent to be charged by the local authority? If it means an economic rent, the thing is out of the question. But I am assuming that the view of the Local Government Board would be that if the local authority, acting under advice and taking into consideration all the circumstances of the case, the class of people to be provided for and their conditions and income, thought that the utmost they 1762 could charge would be £22 10s. for a £45 house, that would be regarded as a sufficient rent

§ Mr. CLYDE
Certainly.

§ Mr. JOHNSTONE
In many of our villages there are rents of £14 or £15 charged, but the houses in those cases are not so good as the houses that are going to be provided by the local authority, and it has been taken into consideration by the local authority in fixing the rent at £22 10s. that the tenant must pay a little addition for increased accommodation and better conditions. I gather from what the Lord Advocate has indicated that it would be regarded as a sufficient rent if the local authority will go carefully into the matter and fix upon the very utmost rent that they could expect to get from the tenants of those houses, and that it does not therefore mean that the rent to be charged for a house of this kind should be a strict economic rent to provide for the actual cost of the house, and if the Lord Advocate can give an assurance to that effect then we may be satisfied.

§ Mr. CLYDE
It is extraordinary how easy it seems to be to raise misconceptions with regard to very innocent matters of language. From what has been said one would imagine that a local authority are not to spend more than half the necessary amount without losing some of the privileges under the Bill, and, on the other hand, are not to get these privileges if they do not charge an economic rent. The idea that it means that the local authority are to lose their privileges unless they charge an economic rent, is a complete misapprehension. The change does not mean, and cannot and will not be interpreted to mean, anything of the kind. The purpose of the provision is that a local authority, if there were such a local authority, who do not exercise economy, but on the contrary use extravagance in the carrying out of schemes, would be liable to lose the advantage under the Bill, and when it came to be a question of giving the ordinary assistance, an authority that did not charge the rent, that can reasonably be got from the class of tenant for whom these houses are provided, in other words, were guilty of nepotism at the public expense, would also lose the advantages under the Bill. The question of the wording has been carefully considered, both with regard to the 1763 English Bill, where it was adopted for the same purpose, and this Bill, and I have no doubt whatever, and I give this assurance to the House, that the word "sufficient" does not carry the connotation of economic rent, but means nothing more or less than this, that if the local authority could not get more than £22 10s. for a £45 house, £22 10s. is a sufficient rent.

§ Sir D. MACLEAN
Does the right hon. Gentleman think that the use of the word "sufficient" there would connote that the rent to toe asked would be a rent which in all the circumstances of the ease might be deemed to be a reasonable rent to ask?

§ Mr. CLYDE
The conception, in my mind, is a rent which in the circumstances can be obtained from the class of tenant to be provided for. No doubt everything ought to be reasonable and fair, but I do not think that those words are as well adapted to express precisely what the duty of the local authority is, as the words selected. That is, you are not entitled to give it for nothing or less than it is worth if you can get it. But you are undoubtedly limited in what you exact by the capacity of the tenant.

§ Sir D. MACLEAN
Is there any objection to adding the words "sufficient in all the circumstances of the case"?

§ Mr. CLYDE
Anything that is sufficient is never sufficient, unless it is sufficient in the circumstances of the case.