HC Deb 19 February 1926 vol 191 cc2382-8

Order for Second Reading read.


I beg to move, "That the Bill be now read a Second time."

I am sure all hon. Members in the House will have some sympathy with me in having to introduce this Measure at a quarter to Four on a Friday afternoon. The objects of the Bill, as stated in the Memorandum, will, I think, make it pretty clear what we who are promoting the Bill are asking the House to agree to. They are as follow:

  1. "(i) compensation for improvements made by them which increase the value of the premises occupied by them;
  2. (ii) compensation for unreasonable disturbance of their occupancy;
  3. (iii) continuation of possession of their premises on reasonable and fair terms."
I should like to point out that, this Bill is largely based on principles which have already been, accepted by Parliament in previous Acts, notably the Town Tenants (Ireland) Act, 1906, the Agricultural Holdings Act, the Rent Restriction Acts, and similar Statutes passed with a view to adjusting on an equitable basis the position of tenants in relation to their landlords. The history of this movement is as follows: In 1906 a Town Tenants' League was formed to try to bring about reform in the conditions attached to the granting of leases as between the owner of property and the tenant. This has always been a nonparty Measure, supported by Members in all quarters of the House, and in all probability that is why it has never reached the Statute Book, because, in another place, the Noble Lord the Earl of Birkenhead, speaking on another Bill Whicth also was a non-party Measure, gave that as the very reason why it had never been passed into law. It had too many friends, and, therefore, had never had a real chance.

In 1913, the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) took this matter up very seriously, and we who were then working on behalf of this league thought that we were really going to get something done. The right hon. Gentleman gave it his blessing, anyhow, and, later, Lord Long, who was then Mr. Walter Long, and member of the party opposite to that of the right hon. Gentleman the Member for Carnarvon Boroughs, also gave the Measure his blessing. It was, perhaps, not quite as strong a Bill as we should have liked, but, at any rate, we thought we were really going to get something done. In 1920, the Government of the day set up a Select. Committee to inquire into the whole question, but, unfortunately, as with many other recommendations of Select Committees and Royal Commissions, after we had received the recommendations of that Committee nothing was done. That is usually the fate of the recommendations of these Commissions.

The position at the moment is that the tenant of premises is dependent entirely on the good will of the owner of the property, when his lease expires, as to whether he will be allowed to continue his tenancy or not. The value of the business to the tenant depends entirely on whether he has a reasonable chance of renewing his lease at the end of the term; in fact, the goodwill of his business may absolutely depend upon that. What is the position to-day? In most cases the tenants, particularly of smaller properties like shop properties, are absolutely dependent on the mercy of the landlords, and I have thousands of cases that I could quote, though, of course, there is not time to do so this afternoon, to prove that at the moment great pressure is being brought to bear, particularly on the smaller tenants, to compel them either to pay extortionate rents or to leave the premises.

I know it will be argued that hard cases make bad law; we have heard that many times before, and it is rather singular that the majority of the hon. Members who have intimated to me that they are going to oppose this Bill belong to the legal profession. I would like, however, to quote at least one hard case, just to show that there really is something behind the agitation in favour of this Bill. This is a later that I have received from a man in Liverpool. He writes: In 1916 I took a small lock-up shop that originally cost of £98 to build. It is only a shanty, with a leaky tin roof, and had been let at rents round about £30 per annum. I got a lease for 10 years at £60 per annum, and afterwards the landlord wrote and said that be would require £120 per annum for the shanty and that I would have to be responsible for the repairing of the roof. That is a very hard case, and we have many others on equal terms. It is time something was done to bring about a reform in this matter.

The case for the Bill was very admirably put by the secretary to the Town Tenants League in a memorandum. This is what the League claim: Our claim, put briefly, is not for an arbitrary restriction of rental, but for such legislative reform as will enable a trader to negotiate with his landlord without his hands being tied, and in such a position that the landlord must realise that if he does not conic to terms upon a reasonable basis the terms of renewal or of compensation, in the event of dispossession, will be determined by an impartial tribunal as between the parties. We want to make it clear at the very outset that we recognise the position of landlords. There are very many business men to-day who have invested a great deal of capital in business property. There are other business men who are executors and trustees, and an obligation rests upon them in both instances to endeavour to obtain for their properties the highest possible rental. At the same time we also have to remember that in a very large number of cases the increased rental value that attaches to a business property accrues in consequence of the development of the business and the creation and enhancement of the goodwill. In spite of that, a landlord, near the expiration of a lease, comes along to the tenant and says, "You have been paying me £250 a year, but in future I am going to ask you for £500 because you yourself have created the value in that property." We are not ignoring the fact that in many cases the increased value of the tenancy is due in a measure to causes outside the scope either of the landlord or of the tenant, and we have tried to draft the Bill on fair terms as between the landlord and the tenant.

I would refer hon. Members to Clause 13, which lays it down quite clearly that the deciding factor as to what is a fair rental, or whether the tenant has the right to a renewal of his lease, is vested in a tribunal. The instructions to the tribunal are that in deciding as to corn pensation, or whether there is a case made out for renewal, they have to take into consideration the length and character of the tenancy or occupation:

  1. "(i) the length and character of the tenancy or occupation;
  2. (ii) the then rental value of the premises in the open market;
  3. (iii) whether the landlord wishes to terminate the tenancy in order to enter personally into possession;
  4. (iv) the fact of notice to quit having been given in pursuance of any bona fide scheme of reconstruction or development, whether public or private;
  5. (v) the date on which the tenant has received his notice to quit;
  6. (vi) any claim by the tenant that the goodwill of his business has added to the letting value of the premises;
  7. (vii) the existence or otherwise of alternative accommodation equally suitable in all respects."
What we are asking for is only reasonable and fair to the landlord and to the tenant. I have been told by hon. Members belonging to the same political party that if I do that I am preaching a Socialistic doctrine. I deny that emphatically. There is no Socialism about me or any of my actions, and I want to say a word or two to some of the hon. Members who tell me my party stands for the defence of the rights of property. I do not for a moment subscribe to the opinion that that is so. The Conservative party never has stood for the unrestricted rights of property, but at present certain owners of property have unrestricted rights to charge whatever they can screw out of the tenant, and I think for the good name of the party I am proud to belong to a Second Reading ought to be given to the Bill.

Colonel APPLIN

I rise to second the Motion.

There may be some small anomalies in the drafting of the Bill which we cannot all agree to, but they will, of course, be dealt with in Committee, and will undoubtedly be eliminated. I would draw attention to Clause 12, which deals with the formation of the tribunal. Obviously that tribunal will not be a satisfactory one, but it would be quite easy to obtain a tribunal which would in every way be adequate to do justice alike to landlords and tenants. I know of numbers of cases which are unjust. For instance, a small shopkeeper has taken a little shop in a small town or village, and has fitted it up with a window. Then, gradually, as the business has been built up by his own enterprise and by his own initiative he has, perhaps, taken out the small panes and put in plate glass. He has enlarged the back, put in a larger counter, made a big Christmas display, and attracted a large number of customers to the shop. That business has been built up by his own energy and enterprise. Then the landlord comes along and says, "The rent you are paying is not enough. I must put up your rent." It is not fair that the man can be turned out of the shop, probably with no capital, because he has invested all his capital in the business, that the landlord should be allowed to take advantage of the capital that has been invested in the business, turn out the man and put in someone else. It is for these reasons that we are asking the House to give this Bill a Second Reading.


Although I am prepared to agree that there are, in certain circumstances, hardships imposed upon a number of tenants, I cannot see my way to support this Bill. I do not think this House would be justified in interfering with existing contracts. In 1886, 1887, 1888 and 1889 Select Committees of this House were set up to inquire into town holdings, and in each case these Committees reported that, in their considered opinion, there should be no interference with existing contracts. When the question of leasehold tenure came before the House in 1907, Sir Henry Campbell-Bannerman, who was then Prime Minister, said that there was no idea of interfering with existing contracts. Two months or so later, Lord Oxford, who was then Chancellor of the Exchequer, said that existing contracts would be rigidly respected as sacred, and that legislation must proceed with that for its starting point and underlying substance.

I hesitate to believe that this House will be of any different opinion from that expressed most definitely by the Select Committees to which I have referred, and from that which was expressed by the then Prime Minister and the then Chancellor of the Exchequer, namely, that existing contracts, made by individuals of full age—


rose in his place, and claimed to more, "That the Question be now put," but Mr. Speaker withheld his assent, and declined then to put that Question.


—should not be interfered with. However much I sympathise with leaseholders in certain directions, I cannot accept—


Am I in order, Mr. Speaker, in moving "That the Question be now put"?


—the view that we should pass legislation of this kind for the cancellation of existing contracts.

It being Four of the Clock, the Debate stood adjourned.

Debate to be resumed upon Monday next.

The renzaining Orders were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.

Adjourned at One Minute after Four o'Clock until Monday next (22nd February).