HC Deb 30 July 1923 vol 167 cc1148-55

(1) No increase of rent which becomes payable by reason of an Amendment of a notice of increase made by order of the County Court under this Act shall be recoverable in respect of any rental period which ended more than six months before the date of the order.

(2) Any sum paid by a tenant or mortgagor which, under Sub-section (1) of Section fourteen of the principal Act, is recoverable by the tenant or mortgagor shall be recoverable at any time within six months from the date of payment but not afterwards, or in the case of a payment made before the passing of this Act, at any time within six months from the passing of this Act but not afterwards.

(3) Nothing in this Section shall affect the operation of the Rent Restriction (Notices of Increase) Act, 1923.


I beg to move, "That this House doth agree with the Lords in the said Amendment.'

This is a new Clause upon which comment has already been made. It carries out what I think was very much desired by some hon. Members, namely, that you should not have the possibility of an attempt at recovering sums which are irrecoverable under the Bill for an indefinite period. It limits, therefore, the time within which the arrears can be recovered to six months, and the first Sub-section deals particularly with Clause 5 of the Bill whereas the second Sub-section is general in character. I think, in view of what was said on Report and Third Reading, hon. Members opposite will accept it.


I think the House will welcome the Amendment in substance, but I want to ask a question. I am not quite clear about the wording. I ought to explain that I am not a lawyer and consequently I have to bring a lay mind to bear on the subject. I wonder what does rental period mean? Would it mean that, taking the last six months, if a 12 months' rental period ended in the last six months the retrospection in this case would be 18 months and not six months? If the answer is in the affirmative this retrospection clearly can go very much beyond the six months. In fact, it could go over two or three years. You might have a rental period of, say, 12 months or two years, and it would not be a six months' retrospection.


I listened with great interest to what the right hon. Gentleman said. He referred to the limitation put upon the retrospective action of Section 5. I think he should be thanked for having secured that alteration in the other House, although he will perhaps remember that we could not persuade him here in the course of the Report stage to consider that Amendment to be necessary. I tried to put before him then the consideration that, whilst we were to have retrospection it was most. unfortunate that we should have it for practically an unlimited period, and the right hon. Gentleman's answer was that we could rely on the good sense of the County Court. I think he was inclined to weigh our objection very lightly. I was hoping he would be able to explain this evening what argument it was that influenced him in the interval since the Bill passed through the Report stage here. No criticism was brought to bear upon it in the other House. After the Third Reading there had been some little time for reconsideration, and he had been able to see the reasonableness of the arguments used on this side of the House, which had not been quite apparent at the time they were used. But it is the second part of the Amendment I should like to have some information upon. When this was dealt with in the Lords and this substantial change was made, that is, the change that limits the right of the tenant who has improperly paid an amount, it may be illegally demanded, to the period of six months there was again no request for that change. It was not discussed in the other place. Et was an Amendment introduced by the Parliamentary Secretary to the Ministry of Health at no one's request apparently, as the result of no criticism, and I want the right hon. Gentleman to explain why it was that this substantial change should have been effected in another place and not introduced here. Surely this was the place where we should first have had the opportunity of considering the wisdom of this Amendment. After all some argument is needed to justify it. Here is a landlord, we will assume, who has demanded improperly from the tenant some amount which the tenant ought not to have paid. According to all the ordinary tests, that tenant ought to be able to recover from his landlord what he never should have paid and what the landlord should never have demanded. Although the landlord has improperly demanded and the tenant, who may have had to pinch himself to meet this im- proper demand, has made the payment, yet the landlord is limited as far as his liability is concerned and the tenant is deprived of his ordinary legal remedy. If two ordinary citizens have a claim against each other, you cannot limit the claim simply to the last six months; but in the case of a tenant he is only to be able to go back six months. Why should we say to the tenant that he should only be able to go back six months, when any ordinary citizen having a claim against any other member of the community can go back for the whole period of six years? It may be that there is some reason for this Amendment, but no reason for it has been advanced this afternoon, and no reason was advanced in the other place. Seeing that we are asked to agree to what is a fundamental alteration in the Bill, I hope that some reason will be advanced.


Under the Rents (Notice of Increase) Act, 1923, the tenant was precluded from recovering moneys paid by him for a further period back than the 1st December, 1922. The reason given for that was that you were making an inroad upon the ordinary law, under which moneys overpaid could be recovered for six years, because a special feature attached to the 1st December as being a date subsequent to the time when a speech of the Prime Minister gave notice of the position. A special reason had to be given for limiting the period over which ordinary arrears could be recovered under that Act. Now we find the same thing imported into this Bill, and we are told that, apart from the special ground upon which the tenant's right to recover w as limited by the Rents (Notice of Increase) Act, he shall also be limited under this Bill, for what reason I do not know. If I have overpaid my butcher for the last six years and I discover it, I can recover the money from him. If I have overpaid my landlord and I am a poor tenant, I cannot recover from him further back than six months. I do not see any reason for that distinction, and I hope the right hon. Gentleman will explain the matter.


This Amendment will be regarded with some concern in the East End of London. There is such a shortage of accommodation and people are in such a desperate condition that they are ready to pay almost any rent to get accommodation. There is reason to believe that a large amount of key money is being paid and other bribes are being paid in order to get accommodation. If it gets about that the Government is weakening on the question of increase of rent, and if by some means or other the landlords have taken advantage of the house shortage and the needs of the tenant and it becomes known that the tenants will not be able to recover the extra rent which should not have been charged, after six months, it may cause very serious disquietude in the East End of London.


The hon. Member for Westhoughton (Mr. Rhys Davies) put a question about the meaning of the words, "rental period." The point is that you can only go back six months in the recovery of sums which ought never to have been charged. Therefore, if during the period preceding that six months the tenant had paid less than he ought to have done the landlord cannot recover from him the difference. With regard to the question of the hon. Member for Bodmin (Mr. Foot), he says that I have done what he asked me to do on the Report stage or on the Third Reading. He remembers that I said then that I thought it would be quite safe to trust to the good sense of the Courts to see that the landlords were not allowed to go back beyond a certain reasonable time. I still think so. I think the Courts could be depended upon to do what is fair and reasonable, but in my anxiety to meet the fears which had been expressed by the hon. Member and others, when an Amendment was put before the Government in another place to deal with this particular point, I was not unwilling to accept it.


The Amendment was proposed by the Government in the other place.


It was proposed on the representation of others, and we had to put it in proper form. Amendments are sometimes put by hon. Members opposite, but not always in the form which one can accept, for some reason or other, but we accept the principle and then we have to find a better drafting.

I do not know why the hon. Member for South-West Bethnal Green (Mr. Harris) thinks that this will cause disquietude in the East End of London. There is no reason why it should give rise to any anxiety or to the idea that the Government is weakening upon the question of increase of rent. I am not sure that I have gathered what he meant by our weakening in regard to increase of rent. This has nothing to do with increase of rent, but merely deals with cases where the wrong amount has been charged—it may be too much or it may be too little. It is limited on both sides. You cannot go back more than a certain time to recover arrears, and surely it is only reasonable to put in a similar limit on the other side.


There is a house famine and we are in a desperate position. That is the difficulty. Tenants are ready to pay almost any price for accommodation.


This is not a new idea. It goes back to the Courts Emergency Act, 1917. I had that Act before me when I considered this Clause, and if hon. Members will refer to Section 5 of that Act they will find a very similar provision there. I do not quite follow the hon. Member's argument about the shortage of houses. That is not the question here. The question is not what increase of rent should be allowed, but what arrears of rent can be recovered if there has been a mistake in the amount which has been charged.

Captain BENN

I do not quite understand the effect of the right hon. Gentleman's answer to the hon. Member for Westhoughton. We were under the impression that these arrears were only to be collected in so far as they were arrears for the preceding six months, but when you read the form of the Amendment it says In respect of any rental period which ended more than six months before the date of the Order. The rental period may be six months or 12 months. It would appear that under this Amendment, so far from limiting the collection of arrears to the six months' period, it only limits it to the rental period terminating six months before the date of the Order. Therefore it may be possible for a landlord to go to Court and to get arrears of rent spreading over a period of 18 months before the application. I know that that is not the intention of the Ministry, and if necessary we ought to alter the words in such a way as to show that the period for which these increases were permitted to be collected was to be a six months' period, and no more.


This Amendment is not quite so innocent or so advantageous as the right hon. Gentlemen suggested when he addressed the House upon it. There are two things brought together in the Amendment. The right hon. Gentleman spoke as if this Amendment was mainly concerned with cases where the Court had corrected the notice of increase, and that in these cases where the Amendment has been made on the notice of increase, the period in which the increase could be recovered was limited to six months. As the hon. Member for Westhoughton and the hon. and gallant Member for Leith (Captain W. Benn) have said, the period over which the increase may be recovered may be much greater than six months. Take a very frequent term of letting, namely, three months. You may have the three months terminating inside the six months, and, therefore, it would be possible to recover to the extent of nine months under Sub-section (1). That is a case that would very frequently arise, especially in regard to the higher rented houses, which come within the principal Act.

Sub-section (2) deals with a matter which is totally different. It deals with the case where money was made recoverable under the principal Act. There, if any premium was charged or any consideration whatever was given in connection with the giving up of a house, that money under the principal Act was recoverable at any time. It is in this connection that the point raised by the hon. Member for South West Bethnal Green deserves attention. If such an illegal payment is only recoverable within six months, the landlord has a much greater inducement to make such a charge, in the hope that the six months may pass before the tenant will endeavour to recover the money. He will know that under Subsection (2) of this new Clause, if six months passes, the tenant has no chance of recovery. He will, therefore, make the charge in the hope that the tenant will stay in occupation for six months, and if he is in occupation during the whole of the six months, no attempt will be made to recover. After the period of six months has elapsed, the landlord will be in full possession of the money which he has illegally obtained. I think a mistake has been made in limiting the period within which the money can be recovered in these circumstances, and that the limitation of the period is a direct encouragement to those who have houses to let to insist on these illegal payments, because they will have a better opportunity of retaining them. It is unfortunate that the two things have been coupled. In respect of Sub-section (1), I think the period should be extended much beyond six months.


I am not sure that at first I fully apprehended the meaning of the question put to me by the hon. Member for Westhoughton, but I understand it now. Where the rental period is a short one, obviously no hardship arises. The case which the hon. Member has in mind is where the rental period is a long one, and where it ends within the six months, and he suggests that the arrears may be recovered for that longer rental period because it ended within the six months. I think that is correct, but I would remind the hon. Member that the whole thing is covered by the provisions of Clause 5, which give the Court power to amend these arrears and supply any omissions on such terms and conditions as respects arrears of rent or otherwise as appear to the Court to be just and reasonable. So there is protection given by these words to the person whose rental period -comes within the six months.