(1) The principal Act, as amended by this Act, shall apply to any premises used for business, trade, or professional purposes, or for the public service, as it applies to a dwelling-house, and as though references to a "dwelling-house," "house," and "dwell-
ing," included reference to any such premises, but the principal Act, as amended by this Act in its application to such premises, shall have effect subject to the following modifications:
(a) The following paragraph shall be substituted for paragraph (c), Subsection (1), of Section two of the principal Act:
(b) The following paragraph shall be substituted for paragraph (d)of Subsection (1) of Section five of the principal Act:
(c) The following paragraph shall be added after paragraph (g)of the same Sub-section:
(d) Paragraph (i) of the same Sub-section shall not apply;
(e) Sections nine and ten of the principal Act shall not apply.
§ (2) The application of the principal Act, as amended by this Act, to such premises as aforesaid shall not extend to a letting or tenancy in any market or fair where the rent or conditions of tenancy are controlled or regulated by or in pursuance of any Statute or charter.—[Mr. Rhys Davies.]
§ Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
The House will remember that in 1920 a Select Committee was appointed by this House to inquire into the agitation, which was conducted in some parts of the country, with the object of including in the Rent Restrictions Act of 1920 business premises, lock-up shops, offices and buildings of that kind. Strangely enough, in spite of the fact that the Committee reported that these buildings ought to be included, the Government of the day, which is not the present Government—though there is not very much difference between the two I agree—took no heed of the recommendations of the Committee. I may refer to a few passages from those recommendations. The Committee said:Your Committee are satisfied upon evidence that a substantial number of tenants are being compelled to submit to what appears to be an unconscionable 1006 increase of rent in order to retain possession of their business premises, and in a number of cases they have been dispossessed of business premises without being given any option whatever to retain them for themselves.I confess that the Amendment is moved partly because of two specific cases of hardship which have been brought to my notice. I hope that hon. Members on the other side, who are probably even more in touch than we are with little shopkeepers who are struggling against adversity in trying to build up a business, will take note of these cases. In the city where I live a man built up a chemist's business and occupied a lock-up shop for 15 years at a rental of £400 per annum. When those 15 years came to an end the landlord offered to renew the lease on condition that the tenant would pay him a premium of £2,000 down, and the renewed lease was to be for not more than seven years. £2,000 divided up into seven years, taking interest into account, meant an increase of rent to that chemist of 100 per cent. In other words, his rent, instead of being £400, would have been £800. The local assessment committee, of course, would then take into account the increased value of the premises, and the rates would increase proportionately. No hon. Member on the other side will for a moment stand up and argue in favour of a transaction of that kind. This man to whom I refer could not find the £2,000 and he was compelled to give up the business in which he had secured a decent living for 15 years.
I could give another case quite as bad. I know that I shall be told by some hon. Members who know the law better than I do, that an action at Common Law could be taken in a case of that kind. I do not know whether it could or not One thing is obvious, to me, at any rate, and that is that the owner of property of that kind is not justified in swooping down upon a shopkeeper tenant when he has built up a business by diligence, by thrift and by capacity, to ask £2,000 premium for the renewal of the lease. If the Amendment is carried it will relieve many cases of that kind. [An HON. MEMBER: "It will not touch that case at all."] It would have a salutary effect on cases of that kind. Such cases are occurring every day. I have another case in mind which would fall within the category which may be in the mind of my interruptor. We are prepared to 1007 accept any wording which the Minister can suggest in order to meet the cases we have in view. Strangely enough, it has fallen to the Labour party to deal with these cases. I thought that hon. Members on the other side were sent to this House to deal with such cases. The people for whom we are speaking are not working folk in the ordinary sense. They have started businesses on their own account. They are struggling within the capitalist system, but, so far as I am concerned, when a small capitalist is bullied by a big capitalist, I mean to stand for the little capitalist. That is the intention of the Amendment. I feel sure that I shall have the support of hon. Members opposite, except, of course, that of hon. Members who represent big capital.
There is a very serious point in the proposal which I am making. I know a case that is now in dispute, where two ladies have built up a business; they are to be evicted simply because they cannot afford to pay the increased rent demanded by the owner of the property. The point I wish to make is this: Whenever a person enters into business on his own account he creates a goodwill in that business, and under the law as it stands that goodwill is destroyed for ever when the landlord increases the rent beyond the capacity of the tenant. The shopkeeper in this case is not allowed an opportunity to make arrangements with an incoming tenant to transfer the goodwill. I trust that I have made that point clear to the House. I shall be told from the other side that the case of the small shopkeeper is not worse than the case of the ordinary tenant of a dwelling-house. But it is. There are at any rate some new houses being built for tenants of ordinary dwelling-houses, but so far as I know there are few, if any, shops being built anywhere in the land. Consequently, the small shopkeeper has no chance whatever of getting alternative accommodation. I trust that the House appreciates the fact that these people are being called upon to pay increases of rent, not according to what is stipulated in the 1920 Act, namely, 40 per cent., but in some cases twice or three times the amount of rent that they paid before the War. I plead for those tragic cases where people who have built up little businesses are being evicted.
§ Mr. WALLHEAD
I beg to second the Motion. A short time ago, by the courtesy of the House, I had the honour of introducing a small Bill which had for its object the protection of leaseholders. I have been astonished at the number of letters I have received from, all over the country wishing me success with the Bill, and referring to cases of hardship either of my correspondents or of some persons known to them. This Clause is a belated attempt to do some slight measure of justice to people who in many cases have been very harshly treated. Many Members, perhaps, do not realise the state of terror almost in which many of this class of people live. Many men have been positively ruined because of the conditions under which they are compelled to renew leases as an alternative to eviction. An hon. Member interjected the question a moment or two ago, "What about the co-operative societies?" I challenge the hon. Gentleman to point out to me a single instance where a co-operative society has entered into competition with any tradesman of a given trade and treated him harshly. It is the practice of a co-operative society—as distinct from that of the monopolists and the multiple shops, who dump themselves in the neighbourhood of a competitor and crush him out of existence—to offer a tradesman reasonable terms, to buy his goodwill, to take over his lease, and to offer him the post of manager of the branch. Such a man can earn as manager as much as he earned as a shopkeeper, for many little shopkeepers to-day are in the position that they are practically tied like publicans or managers of public houses. This Amendment is designed particularly to protect that type of person.
Anyone listening to the Mover and Seconder of the Amendment would imagine that they had been spending laborious hours in drafting this complicated sentence in order to do justice to a much-abused class of person. As a matter of fact, this Clause is copied out of the Act of 1920 word for word, except that at the end of the Clause in the 1920 Act there was a Sub-section which provided that it should come to an end on 24th June, 1921. Why did hon. Members opposite not put down this Amendment for the Committee stage? For some reason they did not think fit to move it then.
The hon. Member for Westhoughton (Mr. Rhys Davies) was there, and was not restrained by his modesty, I am sure, from moving the Clause in Committee. Why it should be considered necessary on the Report stage I cannot imagine, unless it is to get a little more publicity for those who desire to appear as the champions of a particular class. There is really no justification for the Amendment. It was an anomaly in the first instance to put business premises into the Act, which was designed to protect the tenants of dwelling-houses, and not businesses. Business premises were put into the Act for a time. They have been decontrolled for two years, and there is no real evidence of any serious hardship being caused. To go back now to the Clause in the 1920 Act would be a retrograde step.
§ Mr. J. H. THOMAS
The defence of the Minister of Health is an astounding one. He says that this is a bad Clause because it was copied from the 1920 Act.
§ 7.0 P.M.
§ Mr. THOMAS
The right hon. Gentleman proceeds to lecture my Friends on the ground that the Clause happens to be a copied Clause. I would put it to him that if, in the wisdom of the then existing Government, this Clause was devised, and we feel that it is necessary to-day, he has certainly no right to complain merely because it happens to be copied. It would be much better for him to point out why the Clause is not necessary. The right hon. Gentleman complains that we did not move the Clause in Committee. No one knows better than he how this Bill was rushed through Committee. There are many Members on the other side who have been in previous Parliaments, and they know perfectly well the time that a Bill of this length occupies in Committee, and that very much smaller Bills often occupy a much longer time. The right hon. Gentleman also knows that there were sitting simultaneously a number of Committees of which my hon. Friends were Members. At all events, I submit two points to the right hon. Gentleman. He says that this Clause is unnecessary, but my hon. Friend has given me two cases. Case 1 was where advantage 1010 was taken by a landlord of the shortage of business premises, due to the absence of building during the War. The landlord takes advantage, and puts a premium of £2,000 on the tenant, who is faced with this situation. He has developed his business, formed a connection, and had given his time and money. Then the landlord comes along and says, "I know perfectly well that you cannot remove from the district. I know perfectly well that you have built up a connection." What right, we ask, has the landlord to take advantage of the situation because the tenant has built up a business? [An HON. MEMBER: "He would still do it if your Clause were put in."] My hon. Friend interrupted the previous speaker, and said he did not believe this Clause was watertight. If it is not watertight, what we are concerned with is with removing the grievance, mere words are a detail. It is not sufficient merely to criticise the wording of the Clause if you wish, or are agreed, that a remedy ought to be found. [An HON. MEMBER: "I voted for it."] That being so, I am quite sure that my hon. Friend will not only vote for the principle, but will urge the Government to remove the anomaly. I put it to my right hon. Friend the Minister of Health that it hardly rests with him merely to twit us about electoral advantages. There are many hon. Members on that side of the House who need not talk in that way, because the difference is that their action has not been limited to trying to get party advantage by moving Amendments in this House. They know perfectly well that they are past-masters of the art of making promises at election times which they never fulfil. It is hardly fitting for them to lecture us on the question of electoral advantage. At all events, I will put it to my right hon. Friend that it was under the late Government that this Clause was inserted, in 1920.
§ Mr. THOMAS
I know, and the only difference is that the Welsh Prime Minister seemed to have been good enough for a large number of English people to get in on his back.
§ Mr. THOMAS
No one could resist the temptation of the interruption of the right hon. Baronet, who, I frankly admit, was never one of the ardent supporters of the late Prime Minister, although the majority of the House certainly were, I content myself, however, by again urging the Minister of Health to observe two things. This Amendment is moved because we still believe that it is unfair to take advantage of the housing shortage to penalise the small business man. We believe that the Clause in the 1920 Act was intended to remove that difficulty. We submit this Clause to-day, with the same object, not being tied to the mere form of words. We shall be content if the Minister of Health and his supporters, who so often talk about being the champions of the small business man, will practise this afternoon what they preach by going into the Division Lobby in support of this Clause.
§ Mr. GERALD HURST
I happen to have been one of the members of the Select Committee to which my hon. Friend who moved this Clause referred. He spoke about the Report of that Committee, but he did not bring before the House what is, after all, the salient distinction between the condition of the country at that time and its condition now. What influenced us when we were members of that Committee were two facts: first of all, that business was so good that there was tremendous pressure on the accommodation available for business premises. The result of that was that business men who were evicted or dispossessed had nowhere to turn. They could not get alternative accommodation for love or money. The other point was that there was a liability to oppression by unscrupulous landlords, who had tenants absolutely at their mercy. In those circumstances we did advocate the temporary prolongation of the protection which the Act then gave to business premises, which paid rents of £78 a year and under in the provinces and £105 in London. That was a very different thing from advocating the permanent protection which the Mover of this Amendment tells us he is doing, and from suggesting the 1012 protection of business premises at rentals of over £100 a year.
§ Mr. WALLHEAD
This Clause would only last so long as the principal Act is operative. It is not a permanent thing at all.
§ Mr. HURST
My contention is that the pressure has quite passed away. Now that we have had bad trade, the liability to oppression on the part of landlords is very much less, and it is much easier to get business premises to-day. The real problem in passing this Bill is quite distinct. What we want in order to increase the accommodations for business tenants and ultimately to bring down the rents of business premises, is more construction. There are two ways of doing that. You can reconstruct existing premises, so as to utilise building sites to greater advantage than they are being utilised at present when leases fall in. What we want to see is the erection of larger buildings, with more offices and accommodation than the buildings contain which we have now. The other way to meet this need is by extending the building sites in the great towns, so as to cover residential portions in the suburbs, which are very often now largely filled with slum property. It would be to the national advantage if those slums were swept away, and buildings erected for business purposes. You can never get this until you pursue two courses of action—reconstruction and the utilisation of fresh building sites. You will not encourage people to put their money into fresh building operations, and nobody will finance new buildings, or go to the trouble of putting up new business premises, unless they are absolutely unfettered by Statute. Therefore, any Clause of this sort will undoubtedly operate to deter those new building operations which everybody desires. Another great disadvantage to this scheme may be that where you want to erect business premises in place of the existing buildings, you may have all the reconstruction held up by reason of one or two small offices which may be at the top of the premises, and which are paying less rentals than the rest, and come within the Rent Restrictions Act. I therefore feel that the real cure for high rents for business premises, and for the shortage of accommodation, lies in free trade in houses.
§ Mr. PRINGLE
I have been very much interested in the speech of the hon. and learned Member for Moss Side (Mr. Hurst). It is quite true that he was a Member of the Committee to which reference has been made, and that that Committee made certain recommendations. I have consulted the OFFICIAL REPORT, and I find that the hon. and learned Member was prepared to go further than the Committee. Not only was he in favour of the restrictions applying to houses within the rentals specified in the Bill, but he was in favour of the restriction applying to business premises of all rentals, and he moved an Amendment to that effect. More than that, he did not contemplate the pressure coming to an end, as he now assures us it has, and his Amendment proposed that those restrictions should continue on all business premises until Parliament otherwise determined. My reading of his speech then is, that he argued, at that time, with equal ardour of conviction, on behalf of the oppressed people with a rental of £400, as he now appears to be doubtful of it. His Amendment was as follows:Provided always that the restriction on the right of possession imposed by Section five shall apply to all business premises of whatever rent until otherwise provided by Parliament." — [OFFICIAL REPORT, 21st June, 1920; col. 1948, vol. 130.]Therefore, it was not simply for the period within the original Act; it was to go on much longer.
That brings me to another point, in which, I think, the Minister of Health has not quite fairly dealt with the House. When the Clause was passed on the Report stage, there was no limitation to its operation. The right hon. Gentleman points triumphantly now to the limitation of its operation up to June, 1921, but that was not in the Bill as it left the House of Commons. The House of Commons passed it on the footing that the restriction on business premises should last as long as the other restrictions. There would have been no break, and no interruption, such as has now occurred, had it not been for an Amendment introduced into another place, to which this assented—
§ Mr. PRINGLE
That commends the other place to the tight hon. Baronet. It 1014 makes us all wonder why he is so reluctant to go there. I do not think the provision which commends itself to the right hon. Baronet, recommends itself to the rest of the House. The question is whether there is a case for the restriction on business premises now. The argument of the hon. and learned Member was that the pressure which existed then, which convinced the Committee, and which so impressed him at that time, when he was going to give protection for ever, until Parliament otherwise determined, no longer exists. It is quite true that in many parts of the country the condition of trade has brought that pressure to an end. If the pressure is at an end, then landlords cannot raise the rents. There is no inducement for them to evict. What is happening is that tenants are giving up the shops, but we wish to legislate for those places where those conditions do not exist. There are still many places where there is keen competition for business premises, and where tenants of business premises are being forced to pay higher rents, with the threat of eviction, and of losing their businesses, and the fruits of their labours. If it can be proved—as I hold it can be proved—that such cases do still prevail on a considerable scale in many parts of the country, that is an absolute case for the new Clause. An hon. Member for one of the Divisions of Bethnal Green informs me—I am sorry he is not in the House at the moment—that in his division in Bethnal Green that is going on at the present time. There are a large number of small cabinet-makers there — many small capitalists—who are suffering.
§ Mr. PRINGLE
I am not thinking of the kind of Cabinet we have before us to-day. This is a legitimate business. These are small men, who deserve encouragement. They are having their profits filched from them by unscrupulous landlords, but the Government will not step in in their defence. There is a case which only applied to a limited number of people, and it may not be possible to win or lose a bye-election on their votes. They are so few. We know that the Government capitulate when a large class is concerned. In cases like Willesden or Mitcham, it is hands up with them and they are on the knee at 1015 once. But when a comparatively small class, even though it is a deserving class, is suffering from a grievance, then the Government consider that these poor people can be ignored. We ask the House to deal with this question on its merits. We say, if there is a case for these provisions in regard to dwelling houses, there is equally a case for the smaller people engaged in business. It is on that ground that we support the Clause, and I hope we shall have the support of hon. Gentlemen opposite, many of whom supported the Clause on the last occasion on the basis that it should continue until the expiration of the original Act, while others supported the hon. and learned Member for Moss Side (Mr. Hurst) in his desire to include all business premises for ever. I find there are some still Members of the House. The hon. Member for Southport (Lieut.-Colonel Dalrymple White), for instance, where is he? There is another hon. and gallant Member for Manchester. I do not recollect his Division, but he is absent from his place. There is also a Member of the Government—I think the Parliamentary Secre-
§ tary to the Board of Trade—who was so impressed by the arguments of the hon. and learned Member for Moss Side that he went into the Lobby against the Government on that occasion. Then there is the hon. and gallant Member who so efficiently represents the Scottish Board of Health; he was equally ardent on that occasion and wanted to protect business men, not only small but large business men, for ever. Is he going to allow his present responsibilities and emoluments to interfere with the strong convictions which he then entertained? I hope not. I could quote others, but I do not wish to expose them. I have no doubt that those who are not trammelled by official connections will be true to their old convictions and will, as on a previous occasion last week, vote as they voted before, giving their votes solely with a view to the public interest, and with no fear of any of the terrors of the Government Whips. In these circumstances we may look for a favourable verdict from the House.
§ Question put, "That the Clause be read a Second time."
§ The House divided: Ayes, 155; Noes, 224.1019
§ Mr. SPEAKER
The new Clause on the paper in the name of the hon. and learned Member for South Shields (Mr. Harney)—(County Court Judge to have power to create controlled tenancies)—is outside the scope of the Bill.