§ (1) Where any person lets, or has, before the passing of this Act, let any dwelling-house to which this Act applies, or any part thereof, at a rent which includes payment in respect of the use of furniture, and it is proved to the satisfaction of the county court on the application of the lessee that the rent charged is yielding or will yield to the lessor a profit more than twenty-five per cent. in excess of the normal profit as hereinafter defined, the court may order that the rent, so far as it exceeds such sum as would yield such normal profit and twenty-five per cent. shall be irrecoverable, and that the amount of any payment in rent in excess of such sum which may have been made in respect of any period after the passing of this Act, shall be paid to the lessee.
§ (2) For the purpose of this section "normal profit" means the profit which might reasonably have been expected from a similar letting in the year ending on the third day of August nineteen hundred and fourteen.
§ Sir A. FELLI beg to move to leave out the Clause.
This is a totally new subject affecting furnished houses and apartments. It particularly affects Summer Seaside and 1913 Health resorts. There is intense feeling in the towns where this is understood. I believe in the greater part of these resorts it is not understood at all, and they know nothing whatever of this and the succeeding Clause. If they did there would be petitions and telegrams to Members begging them to vote against the Clauses. In a large number of cases the houses in these towns are of moderate size and the tenants or owners have comparatively moderate incomes which they eke out by letting their houses for a month or two in the summer at a very good rent. When they let them they have to go away and live somewhere else, and at present they naturally have to pay a great deal more. Now they find that by this proposal if they charge more than 25 per cent. more than the profit they made in 1914 they will be liable not only to refund the additional sum but will be liable to very heavy penalties, up to £100, for letting at an extortionate rent. That has to a very large extent stopped the letting of these houses altogether. They fear that they will come under this Clause and be liable to severe penalties if they let them at a reasonable rent. Doubt is felt as to what houses come within the provision of the Clause and I shall be very interested to hear what class of houses would come into it. Is it the houses of £105 a year in London? They would be let furnished at double that rent and they would be £210 a year houses. Then what is the normal profit in letting a furnished house? I defy anyone to say. You may say the normal rent in 1914, but that is not the profit. If the profit is the extra rent which the owner gets in the summer months spread over the whole 12 months it might be a certain sum and you might say that was so much more than he got normally, but it is impossible to assess the normal profit in that way when the houses can only be let for a month or two in the summer. It is quite impossible to say what is the normal rent of a furnished house and I shall be glad to hear what the explanation of that is.
There is another point. Clause 12 provides that "This Act shall not, save as otherwise expressly provided, apply to a dwelling housesbona fide let at a rent which includes payment in respect of the use of furniture." That is in direct conflict with Clause 9 so far as I and my friends can read it. Clause 12 expressly 1914 exempts houses let with furniture and Clause 9 is expressly devoted to houses let with furniture. I do not know what the explanation may be, but the two Clauses seem to be totally in conflict. My friends who are anxious about this express great anxiety as to what is the meaning of the Clause and what construction can be put upon it by the Government. So far as we can understand, it will lead to litigation in the case of every single house that is let this summer in what I may call the residential seaside places. In every case a smart solicitor may come to the tenant and say, "What are you paying for the house? I expect it is a great deal more than the landlord got for it in 1914. See if the normal rent in 1914 was not a great deal less than you are paying now. If it was 25 per cent. less you can recover. If you threaten him you will probably get a good deal of your rent back, particularly when he sees that he will be liable to a fine of £100." It is making things so difficult that the occupation of landlords and landladies will be gone for this year, as they will all be expecting litigation with respect to the rents that they get. I know a nice little house which was let before the war at 3 guineas a week. It is now let at 9 guineas, and people are tumbling over one another to get it. That is a perfectly proper and natural rent for the house. People who have made money want to live in that particular spot and do not mind what they pay. The owner of that house when he goes away has to pay a very much higher rent for the house which he occupies, or a much higher price at the hotel where he stays. Therefore, he will only make a small profit out of the letting of his house, and if he has to make renewals of furniture he will have to pay three times more than he would have paid in 1914. Furniture is a thing which may be greatly damaged by the occupier and the owner has a right to say: "I will not let my house unless I get a substantial rent for my house and furniture. If you want to take it you may do so" Under this Clause great difficulty would be created; I do not believe that the Clause has been properly considered or even the next Clause. Therefore, I hope it will be withdrawn.
§ Mr. LORDENI beg to second the Amendment.
§ Dr. ADDISONWith the best purpose in the world the hon. member (Sir. A. Fell) has, I am afraid, added to the nervousness of the landladies whom he seeks to represent. He said they were full of apprehension, and were very unhappy as to what the coming summer would have in store for them. It may comfort the landladies to know that they have been living under the operation of -this sort of Clause for several years. Not a word has been altered. Section 9 has been reproduced, without the alteration of a word. The corresponding Sections have been in operation for some years, and these good ladies are quite unnecessarily alarmed. They have not suffered dire consequences. We are only reproducing Sections of the 1915 and the 1919 Act as part of this consolidating Bill.
§ Sir A. FELLIt is since the war ended that the great rise in rents has taken place.
§ Dr. ADDISONI am doing nothing in this proposal which is new. This Clause does not apply to these landladies in the way suggested. In the first place, the ordinary lodger to whom the ladies may let furnished rooms is not a tenant and, therefore, the provisions of the Bill do not apply in that sense.
§ Sir W. JOYNSON-HICKSDoes the right hon. Gentleman mean to say that if I go with a friend to Margate for a fortnight, and we take rooms, that we are not tenants.
§ Dr. ADDISONNot tenants within the meaning of this Bill.
§ Sir W. JOYNSON-HICKSCertainly we are.
§ Dr. ADDISONI am advised by equally learned gentlemen that you are not, and that a lodger who gets a room, coal, and other things, is not, within the meaning of this Bill, tenant of the premises.
The dire consequences feared by my hon. Friend will not happen because this particular proviso does not apply. The prosperity of these people will not be interfered with in the least by this clause because they can still let their rooms to a lodger, and as regards people going to the county court if anybody takes the rooms from a landlady for a fortnight and thinks that he is charged an exorbitant rent it will take him a fortnight to get 1916 his case through and then his holiday will be up. The proviso is not for that class of case and never will be applied to it. I can reassure my hon. Friend that that is so. The proof of the pudding is in the eating. This has been in operation for some years and that has not happened.
§ Sir A. FELLI did not speak of the landlady of the rooms. I said the owner or tenant who let a furnished house, and went out.
§ Dr. ADDISONI do not know why I did not refer to a landlady. Anyhow the point is that this is not new. It is five years old and these things have not happened because they could not arise out of this class of legislation. As to the 25 per cent. profit the profit would of course have to be the amount which was left after the person had paid all expenses. That would include all the increased cost of living, the cost of labour, wages, etc. These would have to be deducted before any profit would arise and then there would be 25 per cent. increase of profit allowed. That is a very important consideration that ought not to be forgotten. For these reasons I trust that the hon. Member will be satisfied with what is proposed.
§ Mr. LORDENCan the right hon. Gentleman say which section?
Mr. E.HARMSWORTHI should like to point out to the right hon. Gentleman that he says there is nothing new in this Clause when it states that they have 25 per cent. increase on the profit and in another part of the Bill it states that it is 25 per cent. increase on the pre-war profit—25 per cent. profit on the pre-war profit. That may not be new, but I should like to ask the right hon. Gentleman if a 25 per cent. increase on the pre-war standard is what is meant by the Bill?
§ Dr. ADDISONThe whole of these Bills came in after the war began. So it must refer to a pre-war standard.
§ Mr. E. HARMSWORTHWill people owning their own houses and letting them before this Bill came into operation only get 25 per cent. over the pre-war profit?
§ Sir W. DAVISONThe reason this has not become a matter of moment before was that during the war Ramsgate, Margate and Scarborough were continually being bombed by the German aircraft 1917 and naturally people were not very keen on going to live there. Yarmouth and other places that will jump to the minds of Members of their own accord were in a similar position. The people owning houses in these places, who went through very severe times, were told that the profiteers who were in safer places at that time would swoop down in their thousands after the war to take over these houses which these people were keeping together with great fear and trembling and with great risk. Now we are told they shall not have the opportunity of earning the money earned by people making munitions and in other ways and which they are only too ready to pay to people who have suffered during the war. I agree with my right hon. Friend, I do not see how this is to be calculated. Take the place recently in our minds, Ascot. People who own property there will let it to people who agree to give it up for one week in the year for half the rent they could get for the whole year. There are certain periods at certain places which for a time command very high rents, much more than 25 per cent. of the annual rent. Therefore it seems to me quite impossible to fix a definite sum subject to a penalty as suggested in this Clause and I hope my right hon. Friend will agree to withdraw it.
Mr. C.PALMERMany of these coast towns, particularly on the East coast, have suffered very severely during the war. They are hoping now to make a legitimate profit on the letting of their houses. I can imagine a case where the house is not let for a fortnight, but let as a furnished house for three months. Is it to be suggested that they shall not make a profit of more than 25 per cent. above the normal in pre-war days? Surely that is putting on them rather a hard restriction, and I would ask my right hon. Friend to consider whether, without eliminating this Clause altogether, he might give them a little more latitude and profit than the 25 per cent. in this Bill.
§ Sir P. LLOYD-GREAMEI hope my right hon. Friend, if he is considering anything of that kind, will exercise great care in these hard cases from the watering places, for they seem to be in danger of cutting out the whole point of the Bill. Of course, if you interfere at all with the ordinary law of supply and demand you 1918 will create hard cases somewhere, but it is in the interests of ordinary tenants that we passed these Acts originally and are now carrying them on. You have to be thorough in doing this. It is no good saying that a landlord is not to raise his rent if a tenant who lets the house furnished is able to put a premium on it and, if he likes, sub-let it. That is what it would mean if what hon. Members are proposing to do were agreed to. If rents of these houses below £105 are to be stabilised for this period you cannot go behind it and make exceptions to it. You must stabilise it both as regard the furnished and the unfurnished house. I hope that my right hon. Friend will be very careful before he makes any variation lest he should be knocking the bottom out of his own Bill.
§ Mr. SEDDONI would like to ask the right hon. Gentleman this question. If persons leave their houses for a period of one, two, or three months, do they cease to become the tenants when they come back again? They are still tenants according to the rating authority. Or can there be two tenants of one house? Is not this a question of the wrong terms being used at the present time? The incoming person for a period of holiday is not the tenant of the house according to the rating authority.
§ Sir W. JOYNSON-HICKSI wish to ask a legal question. It appears to me on reading this Clause that the hon. Member for Yarmouth is perfectly right. It is no good to say the Clause is in the Act of 1916 and has not been put into operation. If the Clause really does catch within its meshes the cases put by the hon. Member for Yarmouth, we ought to know. The Clause is perfectly clear—
Where any person lets, or has, before the passing of the Act, let any dwelling-house to which this Act applies or any part thereof.That means anybody—any landlady—whether my hon. Friend likes being treated as the friend of the landladies or not. Anybody who lets a part of the house again comes perfectly clearly within the provision of this Clause. I am not prepared, with the greatest deference, to accept my right hon. Friend's statement to the contrary unless he is fortified by one of the Law Officers of the Crown. I should like to 1919 know how the definition Clause—Clause 12—applies, for it saysthis Act shall not, save as otherwise expressly provided, apply to a dwelling-housebonâfide let at a rent which includes payment in respect of board, attendance or use of furniture.What is the difference between that Clause and the Clause we are now discussing? Clause 9 says any person who lets a dwelling house is under certain liabilities. Under Clause 12 any person who lets a dwelling house with furniture is exempt from the provisions of the Bill, except where otherwise provided. What is the object of putting in this Clause and taking it out under Clause 12? The main point on which I would like to ask the advice of a Law Officer—the Secretary for Scotland is a Law Officer—is whether it is not perfectly clear that the hon. Member for Yarmouth was right and that this Clause applies to anybody who lets houses for any time?
§ Dr. ADDISONI happen to be in charge of the Bill, and will answer this question—that this Bill does not apply to a house let as lodgings save as otherwise provided. The hon. Gentleman asks why that is so. We have provided all kinds of contradictory things already—so much in respect of mortgages, so much in respect of rents, various qualifications affecting the landlord. It had nothing to do with the letting of lodgings and therefore you could not apply the Bill lock, stock and barrel to furnished lodgings. You must add a qualification, therefore we say, "save as otherwise provided," and that means Clauses 9 and 10.
§ Dr. ADDISONIt refers to furniture. It includes these. Clause 9 says where any dwelling-house or part thereof is let at a rent which includes payment in respect of the use of furniture. That is the qualification referred to in Clause 12. Clause 12 provides that this class of house is under the operation of this Bill in respect of Clauses 9 and 10. That is what it means. I would like to say in support of what my hon. Friend behind me says, that there is nothing new in the 25 per cent. We are limiting 1920 the landlord. Why should we not limit the tenant? They do earn a living—I hope they will earn a decent living—but if they get a 25 per cent. profit after all outgoings have been met, with the increased cost of prices and materials and labour, they will have done very well. We have treated them more leniently than we have treated the landlord.
§ Sir W. JOYNSON-HICKSMay I ask you, Mr. Speaker, if any Law Officer of the Crown will offer an answer to the question whether Clause 9 does not apply?
§ Mr. SPEAKERYou have had an answer to that already.
§ Sir W. JOYNSON-HICKSI have not had an answer.
§ Mr. SPEAKERYou have had an answer though you may not be satisfied with it.
§ Amendment negatived.
Colonel NEWMANI beg to move, in Sub-section (1) to leave out the word "twenty-five" ["more than twenty-five per cent."] and to insert instead thereof the word "forty."
I suggest to the Government that they might give us this Amendment. Undoubtedly there is going to be trouble, whatever the Government may say, over the letting of these furnished houses. I want to put this case to the right hon. Gentleman who is in charge of the Bill: Imagine a house which is let furnished at £300 per year. It is perfectly obvious that the rateable value or the net rent of that house would be far less than £300 per year. It would be something like£80 or £90 per year. Therefore that houses would come within the terms of this Bill. I take it that the 25 per cent. is put in because the landlord is allowed 25 per cent. back on repairs, and that is the reason of the 25 per cent. But surely it is not quite the same thing. Here we are dealing with damage done to such goods as curtains, inkstains on carpets, damage to knick-knacks, breakages of china, and so forth. The other case is that of whitewash, paint, and so on. Surely the two things are perfectly different. My amendment would deal with that matter. Then the cost of replacing these things has vastly increased from 1915 to the present day. What you 1921 could do then you cannot do now; therefore, the landlord or the landlady who lets the house to the tenant has the right to more than 25 per cent. Let us increase that from 25 per cent. to 40 per cent. We shall be giving these people a chance, we shall avoid unnecessary law suits, and the Bill will be made a good deal easier.
§ Mr. E. HARMSWORTHI beg to second the Amendment.
Clause 9 affects a great number of people. It may have been in force before, but that does not alter the fact that it is very unjust to quite a number of people, especially those in seaside resorts and residential resorts of that description. Especially also is it unjust to the East coast, for the reason that the East coast during the war was the scene of bombardment and air raids, which caused people to fly from the East coast further inland, especially to the West coast. Persons owned house property which they let furnished, and perhaps lived entirely on the income they got from those houses which were left entirely empty, and those poor people had their income entirely taken away from them. Such persons to whom I am referring were retired people, women, and permanent invalids and such-like. They were left entirely without any income whatsoever, and they had to mortgage these furnished houses right up to the hilt in order to live. When the war ended they were left in the position that these furnished houses were mortgaged up to the hilt and the rent coming in barely sufficed for their needs. Certainly it did not suffice, and it does not suffice at present, to pay off their mortgage which they had during the war, and which was not their fault. It was owing to the war. The East coast, or a large part of it, was, during the war, really a war area, though never officially so named. These people cannot get reparation money, although these furnished houses were empty entirely owing to the war. I would suggest to the right hon. Gentleman that he should make some exception in the case of the East coast. I know it is very difficult to make exceptions, but I would point out that, during the war, there were exceptions for the rest of England, and I do not see any reason why the East coast should not be an exception in a different manner in a Bill of this kind.
§ Captain W. T. SHAWI beg to support this Amendment. The people who take these houses have gone for a holiday, and, after all, a holiday is more or less of a luxury. People who do not take holidays appear to be those who live the longest. I think people who want luxuries like holidays should be prepared to pay 40 per cent.
§ Dr. ADDISONWhile I sympathise with the purpose of my hon. Friends I think they must recognise that we cannot have legislation for selected east coast towns. We all sympathise with them in the losses they had incurred during the war, but they suffered in common with other places, and they also got some considerable compensation from national funds. Other areas suffered during the war, some from air raids, and other things and it is very difficult, if not impossible, to frame our legislation to meet particular sets of cases which occurred during the war. What is the main duty? We are trying to limit the tenant of a house, in regard to letting, on a scale parallel to the limitations which are imposed upon the owner. In this particular case the tenant would get 25 per cent. profit. We have not guaranteed anything of that kind to the owner. We have given him 25 per cent. in order to enable h:m to meet the cost of repairs—a very different thing from profit. The allowance to the owner of the property, if he does Es duty by his property, will vary with the amount of his outgoings, but in this case it is a clear profit of 25 per cent. after all outgoings have been met. It is vastly different from the 40 per cent. which we allowed to the landlord in order to enable him to spend money on the premises. This is an allowance which has worked fairly for some time past and I think no case has been made out for the Amendment.
§ Sir A. FELLI entirely support the suggestion of 40 per cent. I can assure the right hon. Gentleman that rents have been raised 100 per cent. throughout the whole of England on these furnished premises, and that it is not excessive. Rents have been at least doubled, and the people do not grumble at having to pay double what they paid before the war, because they know that that is a fair rent. They tumble over one another to get these houses at this 100 per cent. increase. This Bill is intended to protect tenants from being turned out of their houses and prevent your increasing the, 1923 rent of a man who is in possession, and thus putting him to great hardship, because he must either pay the rent or be turned out. This Clause applies to people who gladly go down to the seaside and pay these large rents. It is no hardship to them to pay them. What is the hardship to a man who says, "I want to be on the front, I don't mind what the rent is, I will take the place." What this Bill does is to prevent people already in houses from being turned out or having to pay excessive rents. It cannot be suggested that an increase of 40 per cent. will keep any of these people away; they will pay 100 per cent. If this provision is not made we shall find that these houses have been let at 100 per cent. increase, and then we shall have litigation in the county courts and there will be nothing but litigation.
Mr. PALMERI entirely support the Government. We have had quite enough of profiteering in these seaside towns. There are thousands of people who want to go to the seaside and do not want to be bled at every turn, and I am of opinion that if they have 25 per cent. profit they have got all that is necessary. That is what the House does not seem to realise—that it is 25 per cent. profit. Any man who is a man of small means finds it very difficult to take a holiday at the seaside, and I hope the Government will stick to their decision.
§ Amendment negatived.