§ Order for Second Reading read.
§ 11.5 a.m.
§ Mr. Higgs
I beg to move, "That the Bill be now read a Second time."
As I have been a Member of this House for only three or four months I was lucky to draw a place for a Bill. I consider that the time allowed for the selection of Bills is too short. I know that now is not the time to criticise that procedure, but I do so because the Bill is backed by Members of my own party only, due to the circumstance that I had only 20 minutes in which to find backers. If I had had more time I believe I should have had the support of all parties in the House. I should like to acknowledge the help rendered to me by my hon. Friend the Member for Moseley (Sir P. Hannon). Had it not been for his assistance, I should not be in the position I am to present the Bill.
I am not an expert in property law, but I have done my best to make myself conversant with the facts concerned in the Bill, and I, therefore, ask the indulgence of the House while I present the Bill. After my election as Member for West Birmingham I received a letter from one of my electors which started: "Can you make a law?" She went on to explain the difficulties in which she was placed in regard to some property which she had purchased. I little thought that my opportunity would arise so soon to introduce a Bill that might give relief to her and similar people in her position. Housing is equal in importance to Defence. It is of little value having houses or homes unless they are properly defended, and it is of little value to have a Defence force unless you have homes to defend. My housing experience in West Birmingham during the last 12 months has been of considerable interest, and I shall take every opportunity to do anything I can do to improve the conditions of the people there. I represent a Division which is probably more densely populated than any other in the country. The average density of the population of this country is something in the nature of 470 to the square mile. My division contains 45,000 to the square mile, or 95 1422 times the average. This Bill will mean a saving of expense to many classes, and will save a considerable amount of irritation to people who have no power to prevent happening the things that this Bill will endeavour to regulate.
Half-expired leases are increasing in number. Questions have been asked in this House from time to time on the problem of leasehold property repairs. The reason the Bill is necessary is that speculators, individuals or companies, buy up the reversion of long leases of residential property, with the object of forcing the occupiers to purchase the reversion under a threat of forfeiture. They depend on the fact that covenants to repair are not normally strictly enforced from year to year during the currency of the lease. The method of the procedure of the speculators who buy leases which have, perhaps, 40 or 50 years to run, is to serve a schedule of dilapidations, calling upon the tenant to fulfil the covenants to the last coat of paint, and threatening them with proceedings for forfeiture if that is not done. The motive of this procedure is to induce the tenant, under threat of forfeiture, to buy the freehold reversion at a price which will show a profit to the purchaser of the reversion; or, alternatively, to force the tenant to sell his interest at a low figure. In many cases in which this procedure has been adopted the tenant-owners of the long leases are working class people, and very often are unemployed or are old age pensioners. Evidence of the existence of this ramp comes from London, South Wales, Birmingham and many other places from which I have received correspondence.
If this problem is left untouched, I am convinced there will be propaganda against the whole leasehold system. I think hon. Members will agree that we must not interfere with the leasehold system, which has functioned admirably in many districts throughout the country. I have in mind one instance of a freehold estate of some 2,000 acres, the leases of which have been in existence for nearly 100 years, and throughout the whole of the period no lease has been forfeited because of breach of covenant. The advantages are very considerable. There are green fields and ploughed fields within 1½ miles of the city which has a population of 1,000,000, a golf course 1423 and parks. Had it not been for the leasehold system and had there not been one owner of the whole property, that estate would not exist as it is to-day. We have to thank the leasehold system for estates of that kind in considerable numbers throughout the country. The value of the leasehold system to the speculative builder is very considerable and cannot be over-assessed. If the speculative builder had to employ more capital in the purchase of land he would not be able to build the houses as he has done. The speculative builder has been of considerable benefit to the community.
I will now deal with the Bill. In the first place, I should like to acknowledge the assistance rendered me in the drafting of the Bill by my hon. and learned Friend the Attorney-General. As the law stands, the lessor has been judge and jury. The Bill does not prevent a lessor taking the necessary action, but it does prevent him from doing what he has been doing. The lessor can still maintain his property in good condition; indeed, the last thing we wish to do is to prevent the lessor having justice. The Bill does not prevent his having justice, but it does prevent injustice to the lessee. Most lessees would do their own repairs for their own sake in order to maintain the property in a fair and reasonable condition; it is the unreasonable individual with whom the Bill deals. The Bill limits the right of a lessor to enforce a covenant to repair unless he can satisfy the court that the immediate remedying of the breaches is necessary, but that does not prevent a lessor having his repairs done, as has been suggested on several occasions. A lessee under the Bill can serve a counter notice, and Clause 3 provides that the Bill shall not apply to a house that has been purchased with an expressed agreement that it shall be put in order.
It is obvious that Clause I is intended to protect the small man. I have inserted the figure of £50 rateable value. I did not do so without consulting many hon. Members as to the figure, but I am not altogether sure that the figure is high enough. I do not think it would do any harm if it were increased somewhat, and this may be a point which can be looked at during the Committee stage. Then there is the date of serving the notice—within 10 years of the expiration of the 1424 terms of the lease. I cannot see any reason for altering that. I have had an enormous amount of correspondence in connection with the Bill, but on no occasion have I received any complaint from any individual about a lessor being unreasonable when the lease had less than 10 years to run. The word "house" in the Clause may have a broader meaning, as I have come across cases where small houses have been attached to shops. The counter notice is not likely to be served in the majority of cases. The majority of people are reasonable, and, as I have said, the majority of lessees will keep their property in good order for their own sake, and those who will not will put their property in reasonable order when asked to do so. The Bill is to deal with the unreasonable individual. Sub-section (3) of Clause 1 gives complete control to the court in cases of dispute, and Sub-section (4) gives instructions to the court. Under Sub-section (5) the court can impose such terms and conditions on the lessor or on the lessee as it thinks fit. Many people have no cause of complaint about the Schedule, but everybody has cause to complain of the costs, and that is another factor with which the Bill deals. Then there is the question, how is the lessee to know of the existence of this Measure? I suggest that it might be possible to insert in Clause 1 a proviso to the following effect:Every notice served by a freeholder under this section shall contain a notification to the leaseholder of his right to serve a counter notice, and the admission of this information shall nullify the freeholder's notice.It is a question for the learned Attorney-General to decide whether that is an advisable proceeding to take.
The question has been raised whether the Bill should extend to Scotland and Northern Ireland. I am criticising the Bill because these are suggestions which have been made to me since the Bill was drafted, and I think it is well the House should know that they are in my mind. It has been suggested that there should be a provision giving a leaseholder the first option of purchase. That is undesirable. It is bordering on leasehold enfranchisement. The Bill is intended to cover one particular point, and is not intended to revise the Property Acts. Another suggestion is that it ought to be 1425 made illegal for a freeholder to serve a schedule of dilapidations until the property has been in an individual's possession for a number of years. That is not necessary, because under the Bill a schedule of dilapidations cannot be served and executed except by order of the court. Another difficulty brought to my notice is the question of sub-leases, but I cannot see that there is any real difficulty in that direction. The actual function of a sub-lease is that of a direct lease, but unless something is done on these lines there is no doubt that the freehold property system will fall into disrepute.
I have had an enormous amount of correspondence with regard to the Bill from all over the country, but the absence of opposition seems to be somewhat remarkable. I cannot altogether believe that opposition is as absent as it appears to be. If it is, there is something wrong, because very seldom can one bring forward a Measure of this description without at least hearing something against it. I have taken the trouble to write to the culprits who have written to tell me that the Bill is unnecessary, and that I could employ my time better in doing something else. I very much doubt whether that is true. There have been in Birmingham two cases of supposed suicide owing to the issuing of a schedule. The ignorance of the people on these matters is somewhat remarkable. The people with whom the Bill deals are those who have made just one purchase—their house. We are apt to judge others by our own standard, and perhaps do not realise the trouble which these schedules are causing to the people who receive them. This freeholders' ramp is nothing short of blackmail. Their house is the only purchase of many people. I have received letters from bricklayers' labourers, old age pensioners, blind people, and one vicar preached a sermon on the Bill last Sunday. I hope the congregation benefited from it. It strikes me from the correspondence I have received that widows and leases go together. As proof of what is happening I will give the House some examples of schedules which have been sent to me for inspection. I extract from one letter the following:I have spent £100 on my house in four years in modifying it. This takes some doing for a working man.1426 Another says:I have spent £200 in six years.Another reads:They demanded £21 from me for breach of covenant for two houses which were passed by the Corporation's health department 12 months ago.These schedules contain anything up to 15 pages. I have also heard of cases where, after a schedule has been issued, a mysterious man has come round a few days later and wanted to purchase the freehold. I have not taken these schedules for granted, but have been to see a number of properties, and in no case did I find those properties in the dilapidated condition in which the schedules suggested that they were. One house which I inspected yesterday morning was in perfect condition. The husband is more or less a mental case and his wife is down with cancer; and these people are being worried by individuals who are trying to make money out of them. I have in my possession a schedule of dilapidations comprising ten pages foolscap, and seven guineas have been paid for expenses already incurred. The man concerned had a schedule of dilapidations drawn up by an independent surveyor and the work was carried out; since that time there have been three more visits of the surveyor in order to force the person to give up his lease. I will quote to the House a London case:I was served with a schedule of dilapidations, costs of same five guineas. Seven pages, 63 items, with a further page of general items. I was then pressed to purchase the ground rent or sell my leasehold interest, but declined, and carried out the necessary repairs at a cost of £42. I received a letter from the freeholder's solicitor with a threat to issue a writ for damages and forfeiture of the same. I replied that I had complied with the schedule and had the builder's accounts to prove it.Another letter reads:I found myself paying £6 15s. a year for a £3 10s. ground rent.Another states:The schedule contains 200 items. I have had a letter through my solicitor demanding 19 guineas for costs. They have offered to take £5 a month.I have in my hand one of the schedules to which I have referred. On examining, it, I find that no rateable value is given. I find that the house contains one large room upstairs, one large room downstairs and a scullery; and on looking through the schedule of dilapidations, I 1427 find that the scullery has a galvanised iron roof. The first clause demands four guineas for issuing this literature. Among the items of repairs are:Replace missing sash cords to windows; replace portion of dado rail.The concluding paragraph is worthy of notice:Carry out all works, whether specifically mentioned in this schedule or not, necessary to leave the premises in a state to comply with the covenants of the lease and to fulfil statutory obligations to keep the premises fit for human habitation.They were not able to tell the lessee what to do in 15 pages, so they included that clause! Another letter reads:I bid £1,000. The two houses were withdrawn. After the sale I offered £1,050, which was accepted. When paying the deposit, I was asked whether I would buy the ground rent, £0 2s. 11d., 43 years to run, for £450. I offered £150. I ultimately had to buy it for £375.I will mention to the House some of the items from another schedule. The slates have to be of good quality and match the existing slates. In the lease it is stated that there must be two coats of paint, but the schedule states that there must be three coats. These are houses with two rooms upstairs and one room downstairs; the schedule is a very nicely bound document and I think it is worth as much as the houses. The locks have to be oiled and missing keys have to be supplied. They have to overhaul all the boilers and cisterns. They have to flush the drains thoroughly, and so forth. In another schedule, which amounts to 10 pages and refers to a property of three rooms upstairs, one room downstairs and a scullery, among the items are:Overhaul all stoves, adjust weights to two windows, fit new fasteners where necessary, lime and whiten the ceilings.I have in my possession dozens of these schedules, and if any hon. Member wishes, I shall be delighted to show him some. There is, however, one further case which I will bring to the attention of the House. It is referred to in the "Times" this morning, and is the Trealaw Estate in South Wales. The Trealaw Estate has been sold to a London firm, and a "Special Jubilee Offer" is made to sell the freeholds to the householders. There is nothing hidden about this case, as communications have been sent to all the lessees. The conditions of sale are as follow: 14281. (a) Thirty years' purchase where the ground rent is more than £1 per annum per house, and the lease has more than 40 years to run;—From that the House will see the type of property that is being dealt with—(b) where the ground rent is less than £1 per annum per house and the lease has less than 40 years to run, each case must be treated on its merits.2. If the above offer is not accepted by 12th May, 1937 (which, it will be noted, was Coronation Day), the company's surveyor will proceed to examine the properties in order to make a list of dilapidations, after which the survey fees will be payable in addition to the purchase price.3. After receiving notice, unless the premises are put into perfect repair, notices will be served on the house-owner for the forfeiture of the lease.These are one or two of the replies:The house is mortgaged. I receive the widows' pension and to supplement my income I take in lodgers.My house is mortgaged. I am unemployed and already in arrears with my ground rent which I am paying off at the rate of 6s. a month.My sole income is 22s. a week blind pension and my house is heavily mortgaged.The last document with which I shall trouble the House is an advertisement which appeared in a certain paper. I do not know the name of the paper, but I know the name of the firm. It is headed:Four per cent. capital appreciation. Freehold ground rents are regarded as the very safest investment.In the letterpress appear these words:In their prospectus they point out that in the event of any default by the leaseholders in meeting their obligations, the freeholders are entitled to forfeit the lease and obtain possession of the demised property.That is another aspect of this ramp. I have one or two cases in which the leaseholder has required the lessee to repoint coal cellars, and one case was given to me by an hon. Member of a leaseholder who issued a schedule of dilapidations on a 999 years' lease when only 50 years of it had expired. In Birmingham the ground rent of a number of houses was put up for sale and a certain person who was interested bid £400. It was sold for £405, and he had to pay £900 in order to get possession. I think I have given the House several good reasons for the introduction of this Bill, and some concrete proofs of the position which now exists in this respect. I hope that the Bill will be given a Second Reading.
§ 11.38 a.m.
§ Sir Patrick Hannon
I beg to second the Motion.
The House will agree that we have had from my hon. Friend the Member for West Birmingham (Mr. Higgs) a series of very distinct, clear and convincing illustrations of the necessity which exists for the introduction and passage into law of a Measure of this kind. I congratulate my hon. Friend on the amount of hard work which he has put into the preparation of this Bill, as was evident from his speech. The Bill seeks to amend the Law of Property Act, 1925. That Measure was prepared after an immense amount of labour on the part of the late Lord Birkenhead and others, including a gentleman who is now one of His Majesty's judges, and was a very comprehensive Measure. The-relevant section to which this Bill will apply is Section 146, which is as follows:A right of re-entry or forfeiture under any proviso or stipulation in a lease for a breach of any covenant or condition in the lease shall not be enforceable, by action or otherwise, unless and until the lessor serves on the lessee a notice—and the lessee fails within a reasonable time thereafter to remedy the breach, if it is capable of remedy, and to make reasonable compensation in money, to the satisfaction of the lessor, for the breach."
- (a) specifying the particular breach complained of; and
- (b) if the breach is capable of remedy, requiring the lessee to remedy the breach; and
- (c) in any case, requiring the lessee to make compensation in money for the breach;
That is the provision to which the Bill relates. I am sure the examples given by my hon. Friend of the tyranny exercised on small leaseholders by rapacious landlords must have made a great impression on the House. I cannot conceive any more vile combination in human society than the rapacious landlord and the unscrupulous solicitor. We have had this morning in the statement of facts submitted by my hon. Friend an illustration of the villainy and scoundrelism of that combination against poor people. I have had in Birmingham and other parts of the country, sad experience of this assault upon the welfare of poor people. I do not think there could be anything more disturbing to an ordinary family than the feeling that there was some conspiracy afloat to determine the property of that 1430 family in the home. The safety and security of the family and the home is one of the first considerations among respectable people, and if a syndicate is formed, in this city or elsewhere, with the object of bringing pressure to bear on a family to compel the sacrifice of the home and future security of that family, it is something so disturbing and distressing that one cannot adequately describe it in ordinary language.
Two cases in London have been brought to my notice by a very eminent solicitor, a distinguished member of that great profession, who certainly would have nothing to do with cases of the kind to which attention has been drawn. This is the first example. A speculator having acquired by purchase the remainder of a lease granted by the late Sir Spencer Maryon Wilson of premises in Finchley Road, which lease contains a Clause restricting the use of the premises to that of a private dwellinghouse, has, notwithstanding the fact that the character of the neighbourhood has completely changed since the date when the lease was granted—there probably not being a single dwellinghouse in the immediate neighbourhood where paying guests are not taken in—refused to grant a licence to assign, leaving it open to the lessee to approach him as to the terms upon which he may be influenced to sanction the transfer. That is the kind of pressure which is being brought to bear upon small, helpless leaseholders by speculators in real estate.
The second case is this—and I would ask the House to note the particularly subtle kind of indirect pressure exercised by speculators in relation to some of these poor leaseholders. It is the case of a residential flat which the tenant has occupied for 2½ years, the lease containing a provision entitling him to pay the sum of £5 in discharge of the repairing covenant in his lease, conditional on such payment being made within a month from the termination of the tenancy. By mischance, the tenant neglected to pay the £5 and is now faced with a demand for approximately £45. When appealed to by the tenant the landlord refused to reduce his claim under £40 without so much as suggesting that the premises had not been kept in as good condition as they were in when the lease was granted, fair wear and tear excepted.
1431 Cases of that kind deserve the condemnation of every decent citizen in this country, and I hope very much that this Bill will go very far towards putting the matter in a more hopeful and moderate condition. I wish to quote a paragraph from an article which appeared in the "Times" this morning in relation to this ramp, as my hon. Friend quite properly called it, in South Wales. This paragraph from the "Times" deals with the Trealaw estate in South Wales and is, I think, helpful in giving us an idea of what is taking place. The paragraph states:A return furnished by the Trealaw Leaseholders' Association, which was formed after the receipt of these offers, shows that out of 280 communications received by that body from house-owners 46 were from old-age and other pensioners, 47 from widows and spinsters, and 65 from unemployed men. Of the remaining 122 some were miners in irregular employment and earning low wages, and others were small shopkeepers whose businesses are none too prosperous.That being the case of a whole community of small leaseholders in that part of South Wales, it appears to be quite imperative that this House should take measures to protect these people. In these days an undefinable commodity called a financial syndicate has been making itself manifest in various directions. The financial syndicate generally operates against the interests of the very poorest people of the land. Wherever you see one of these strange organisations making itself apparent, you will find that its object is to crush those who are helpless to defend themselves. This House has always been, from generation to generation, the guardian of the interests of all classes of citizens, but more particularly the guardian of the safety and welfare of the poorest people in the land. I think it is atrocious that these financial syndicates, speculating in these things, should have the power, under the Law of Property Act, 1925, to crush and grind these unfortunate people, and I hope very much that we shall have unanimous support given in this House to a Measure which seeks to relieve that very oppressive condition of affairs.
My hon. Friend has given examples from Birmingham, South Wales, and the distressed areas of how the law stands in these matters. At the same time I am bound to observe that the great majority of property owners are 1432 respectable people, who do not treat their tenants or leaseholders in the way that this Bill seeks to remedy. However, in this House we must take cognisance of cases that arise where the bad property owner uses his position wrongly under the cover of legal authority, and I hope very much that if this Bill goes to a Committee, even if Amendments may be made, the substance of the Measure will remain, so that this House, through this Measure, will protect the interests of the mass of the people of this country, and particularly the very poorest people, the small shopkeepers, the artisans, the unemployed, the poor women in receipt of widows' pensions and, in Birmingham, cases within my own knowledge of disabled men receiving a pension under a warrant. These are cases which are a disgrace to our social system, and I am sure the House will not allow them to continue but will take effective measures to prevent them. I am sure my hon. Friend deserves well of the House and of the country for having introduced this Bill, and I hope he will have cordial support from every quarter in the House in carrying it into law.
§ 11.51 a.m.
§ Mr. Mainwaring
I think the House should extend to the hon. Member for West Birmingham (Mr. Higgs) its thanks for having used the opportunity which came his way to bring before the House a Bill aimed at dealing with a rapid and developing social evil in this country. By the terms of the Bill itself, it does not aim at dealing with the ordinary relations of landowner and tenant, but seeks to deal merely with sudden intrusions into these ordinary relations of life, and I think it would be well if Members on all sides would bear that in mind. Here is no attempt to deal with ordinary relations at all, but to deal with what amounts now to a widespread—to borrow a term from America, because we have not one ourselves—racket in this country, a racket which is indulged in by unscrupulous people. Some of them may be landowners, some of them are solicitors, some of them are estate agents; there are all manner of people who see in this possibility an opportunity to gather wealth unto themselves.
Reference has already been made by the mover and seconder of the Second Reading to a certain estate in my 1433 Division, and they will pardon me if I give the correct pronunciation of that estate. It really is a hyphenated name, and possibly the House will be interested also to learn how the situation developed in that area, because it is my opinion that the mining industry throws up a special class of cases in which this Bill seeks to interfere. What we have there in Trealaw, in the Rhondda—and a similar situation could be cited in a number of other Welsh constituencies and, I have no doubt, in similar mining constituencies in the North of England—is a landowning family who, for generations, have been perfectly satisfied to draw their ordinary rentals during the years while the minerals have been exploited in the area. This landowning family were quite content to draw their royalties from the coal underneath the earth and their surface rents on the surface until a certain situation arose.
There is this danger, that the landowning gentleman, when he sees the coming of the time when his coal resources are exhausted on the one hand and, on the other, certain marked developments on the surface as a result of the undermining operations, will in certain cases use that opportunity to capitalise the future and recede into the background. That is precisely what happened in Trealaw. Sir Rhys Williams, the owner of that estate, sells it at a moment which is extremely profitable to himself, because the longer he hangs on to that estate, the more troublesome will it become. I have here a number of photographs illustrating the conditions on the mountainside at Trealaw. Any hon. Member may look at them and see the condition that ultimately must develop in that area, and I want the House to realise what is going on there. We might divide the tenement properties in this area into two classes. The houses constructed prior to 1890 were all safeguarded in regard to the effect of subsidence and undermining operations. The houses constructed since 1890 have been eliminated from that safeguard. Here is a situation where the landowner sells the whole of his surface rents to a finance company in London, who take over the surface rents as a whole. They in turn enter upon this property, not with the intention of remaining the landowners. That is the last thing in the world this finance company 1434 intends to be. They merely enter in order to capitalise in the shortest possible space of time.
The highest figure which has been mentioned for the purchase of this Trealaw estate is 17 years' purchase. They offered to sell to the tenement owners for anything from 30 to 50 years' purchase. The majority of these owners, who number about 1,700, are old age pensioners, widowers, and unemployed miners. To ask these people for £30, £40, or £50 is to ask the impossible; you might as well ask them for £3,000. It is beyond their power to raise any such sum. When this finance company offer the freehold of the properties to these tenement owners, they do so in a manner which is worse than the experience mentioned by the hon. Member who introduced the Bill. They say, "If your lease has a clause which safeguards you against the effect of undermining operations, that must now be excluded, so that if you now purchase the freehold as we seek to compel you to, it must be minus any consideration of the effect of undermining." There is thus a drastic limitation in the rights of these people who have leased the land. This company is active all over the country, and in the complaints I have heard from all over South Wales, from the West of England, from London, from the Midlands, and from the north of England one company figures very prominently.
This Real Estate and Finance Company of London appears in the picture through a firm of surveyors, Norman F. St. Pier & Company, but they are the same people. Two surveying firms form an estate company to carry on these activities, but they are the same people all the time with simply a change of title. They are acting largely through advances made to them by Barclays Bank. It is about time that Barclays Bank or any other financial institution of that standing understood that they are providing resources for the biggest racket and scandal that this country has ever seen. The sooner the heads of Barclays Bank understand what is going on the better. It is impossible to allow this situation to proceed any further. I have in this House personal friends who are members of the legal profession; I have outside, too, a number of close friends who are honourable members of a very 1435 honourable profession. The astounding thing to me in my experience in connection with this ramp is that solicitors will send letters to clients couched in words which are intimidatory.
When the finance company enter on the scene, the first thing they do is not to go along to the hundreds of owners of tenement houses, but to adopt a much simpler course. They go to the Pontypridd area and call the Law Society together. A dozen solicitors can be much more effectively approached than 1,700 owners of property. They get together a dozen solicitors who have acted for these property owners in the past. They tell the solicitors, "We have bought this estate and it is our intention to sell the freeholds of the properties as quickly as we can. Therefore, if you want to be in the swim and take part in the legal procedure which will follow, you will be doing yourselves a good turn and you will facilitate the final transaction that we are after." These solicitors will then—and without exception they all did it—send letters to their clients warning them of the procedure that is available for the estate company, and quietly introducing words to the effect that "unless you take this course now a worse course may follow, and if you take my advice you will buy now and not risk the greater difficulties that may follow." In fact, the letters are intimidatory. I am not saying that the solicitors are not giving the right advice. They are pointing out the danger that is there, but in the circumstances in which it is done it is even more intimidatory coming from the tenants own legal advisers than it would be if it came from the estate company itself.
In this way a good deal of panic is being spread among the people unnecessarily. This is the situation in Trealaw, Treforest, Pontypridd, Cardiff, Newport, Barry, Llanhilleth, Cwmfelmfach, Risca and many other places. Every valley and every town in South Wales is affected to some degree, and I am informed that a similar situation is widespread through the north of England. This House dare not permit this kind of thing to continue. Whatever hon. Members on the other side may think of the ordinary relationship that has existed for generations between landowners and their tenants is not the issue here. There may be Members on 1436 both sides with strong feelings about the question of land ownership. I have them myself, and if I had my way I would nationalise the land at once. But that is not the point here, and I hope that no one will allow feelings of that kind to enter into this discussion. We are aiming to deal with an evil which, I feel certain, will be condemned without hesitation by both sides of the House. It is necessary to condemn it if you want the system of leasehold tenure to continue. It cannot continue if this procedure is carried on.
I shall never forget the harrowed feelings of these hundreds of widows, old age pensioners and unemployed miners in my division. I have had all kinds of harrowing experiences in my life. In his life a miner meets all sorts of circumstances, but I have never seen a more painful gathering than that of hundreds of these people threatened with the loss of their tenements. Years of sacrifice and painful thrift have enabled a husband and wife to secure a roof over their heads. The man from whom they leased the land on which to build the house has gone into the background. At the moment which suits him best he goes into the background and hands these people over to the wolves of finance from London, and because they cannot find £30 immediately they are threatened with a bill of dilapidations which could easily run to £50 or £100—without any strain on the power of the imagination, anybody can make up a bill of dilapidations—and find themselves threatened with the loss of their tenements. I saw hundreds of those people, and it was the most heartbreaking sight.
The hon. Member who moved the Second Reading spoke with extreme moderation, without any exaggeration, giving, as he himself said, rather an under-statement of the position. I do not believe anybody can adequately describe the full extent of the ramifications of this new racket, and I have very great pleasure in speaking directly on behalf of these hundreds of people on that Trealaw estate. They are waiting this morning with great anxiety to hear whether this Bill receives its Second Reading, to learn whether there is any hope of some measure of protection being given to them. At the moment they are in the hands of the technique of the law, and the technique of the law is on the side of the wolves. They hope that the Bill will receive a Second Reading, and that for the future 1437 they will have the protection of a local court which will have full knowledge of local circumstances and will prevent the sort of thing I have described being carried out. It is with very great pleasure that I commend the Bill to the House.
§ 12.8 p.m.
I am far from opposing this Bill, and I congratulate my hon. Friend the Member for West Birmingham (Mr. Higgs) not only on the lucidity but also on the moderation with which he presented his case, and my heart was cheered when he and the hon. Member for East Rhondda (Mr. Mainwaring) used some of the language which, I think, is in the hearts of all of us regarding the practices which have been described. But I wish to put a couple of other points to the House, and to issue a word of warning lest in curing what is admittedly a running sore we start with another sore which, although it would not be nearly as bad, would, I think, be a very real one. The hon. Member who introduced the Bill spoke as if there were only two parties to these transactions—and the Bill itself supports that view—namely, the ground landlord, who is the lessor, and the lessee, who occupies the house. In plenty of cases there are three parties to the transaction, and I should have thought those cases would be at least as common as the type of case which has been referred to. In the cases I have in mind there is the ground landlord, the original lessor, then the original lessee, who probably built the houses, and thirdly the sublessee, who is now the occupier, and we ought to be careful that while dealing firmly with a lessor who is trying to batten on the weakness and the poverty of the occupiers we do not lose sight of the importance of the occupiers' own interest.
It will make things clearer to the House if I give a concrete case, an example of which I have actual personal knowledge. Not very long before the War I became a trustee of a settled estate. It had comprised building land in a town on the remoter fringe of London, and in the 1880's the then principal had developed that land, parcelling it out into what were going to be streets and letting those streets to leaseholders on 99-ycar leases, on condition of course, that they built houses and kept them in repair. Obviously the original lessees could not live in all the houses they built, and they let them out 1438 to sub-lessees, who occupied them. Some few years after the War I called for a report on the condition of that trust estate, and I was perfectly horrified to find the condition into which many of those houses had been allowed to fall. I know that there had been difficulties in getting repairs done during the War, but many of those houses were in a state which made me, as a trustee, and my principal ashamed to have anything to do with them.
We had a survey made and eventually served notices to execute repairs, which were necessary not so much for the maintenance of our reversionary interest, which was 50 years off, but in the interests of the sub-lessees who were occupying the houses, some of which had roofs faulty, the walls falling in, and many other defects. There was a certain amount of trouble and difficulty, but in most cases we did get the repairs done which were necessary to put those houses into a fit state for people to live in. In one street of 14 houses the original lessees would do nothing. The position was that for many years they had taken every shilling they could get out of the occupiers of the houses but had done nothing at all to the houses. We served notices on them, and after wrangling and delay we eventually took steps to approach the High Court. I do not think the action went into the High Court, because they settled beforehand. They forfeited the leases rather than do anything to the houses. My principal spent no less than £1,200, under contract, in putting those 14 houses back into reasonable structural repair, and also spent £12 or £14 per house, on a rough estimate, on decorations, etc., inside. I think it will be clear that in taking that action the trustees had not got in their minds their ultimate reversionary interest, which was 50 years off, but the miserable state of the people who occupied those houses.
I know that under this Bill it will still be possible for ground landlords to serve notices upon lessees to do such work as is necessary, but in any case such as I have stated undoubtedly counter notices will be served, and there will be the expense and the delay involved in going to the High Court to get an order. If you have to prove these things there will undoubtedly be expense, and if the ground landlords do not carry on with it, then 1439 the interest of the occupiers will suffer. What we do in the case of this estate is to have half the houses on it surveyed every two years, so that every house is looked at once in four years. Often, of course, there is nothing to be done, and no notice is served, but if there is a deficient roof, or a leak down the chimney, or pointing needed above windows which otherwise would let in water, a formal notice is served and the work is done. As a result of the action which we have taken since 1924 three streets of houses which were in a really bad state are now I am assured—I was talking on the telephone to the trustees' agents only yesterday—are in a really good conditions for the people living in them. So our action has been wholly beneficial to the occupiers. But in future, if the trustees want to get work done, they will have to serve notices and they will have to prove, in the words of the Clause, thatthe immediate remedying of the breach in question is requisite for preventing substantial diminution in the value of his reversion, or that the value thereof has been substantially diminished by the breach, or proves special circumstances which, in the opinion of the court, render it just and equitable that leave should be given.I am not one who would say that the work which we as trustees ask the lessees to do is to prevent substantial diminution of the value of the reversion. If the Clause remains as it is, I think we shall almost certainly have to cease serving the notices, or serve them at very much longer intervals, as much as 10 years apart, and undoubtedly in the meantime the houses will deteriorate and the occupiers will suffer. We have endeavoured to keep these houses, through these notices, in the sort of repair in which they would be kept by good landlords, but it will not be worth the while of the trustees to serve notices if they are going to get counter-notices, and are not to be able to go on, nor do I think they would be justified in going to the expense, because when a survey is made and notices are served, the trustees are put to considerable expense.
My hon. Friend said that people would be reasonable and do the work. But, after all, if the lessee asks for the protection of this Bill, he will be acting reasonably. In the bad case I have quoted we should have gone to the High Court, and undoubtedly we should have had an order made for the work to be done or 1440 the leases to be forfeited. But in the meantime the lessee would have gone on collecting the full rent from the sub-lessee and he would have been well in pocket over the transaction, even if costs had been given against him at the end, and the trustees would have been out of pocket. In the Committee stage words could be inserted in Sub-section (4) of Clause 1 so as to make the interests of the occupier of real concern and a reason why the order for repairs should be granted. I suggest to the hon. Member who moved the Second Reading that it would be satisfactory if the words were to be:Unless the lessor proves that the immediate remedy of the breach in question is requisite for the welfare of the occupier or the preventing of substantial diminution…Such words would probably have the goodwill of the House. It seems to me that it would be absurd to leave the welfare of the occupier to come in the last division of "special circumstances" that the Court has to consider. That would be irony.
My second point is this, and I would ask my hon. and learned Friend the Attorney-General if he would bear it in mind. I believe that cases have been decided in which remainder-men have successfully sued trustees for not seeing that the conditions of leases were carried out. It seems to me that the trustees of leasehold property will be in rather a delicate position if this Bill goes through as it is. But if such words as I have indicated are inserted it will make it easier for moderate and reasonable repairs to be done and the trustees will have no further difficulty.
§ Sir P. Hannon
Would the hon. and gallant Member state precisely how trustee property is affected by the Bill as it stands? It is a very important matter.
Trustees would be in a delicate position as to when exactly they should serve their notices. They would waste the money of the trust if they served notices prematurely, and if they delayed the notices too long they would stand to be shot at by the remainder—men, who would say, "You ought to have done it before."
The hon. Member for West Birmingham said that the lessor was judge and jury, 1441 but I would like to put in a word for the good firms of estate agents and surveyors who advise trustees. In my experience notices are not sent out for repairs to be done unless the firm have not only carefully surveyed the place but have taken into consideration all sorts of factors, such as the length of the lease the situation of the houses and the class of tenant. These firms of repute should not suffer under any imputation that they are party to the very improper practices which we have heard described. I am sure that such an imputation was never in the mind of anyone. These firms of good repute act in the interest both of the occupier and of the original landlord; they really act as arbitrators between them.
§ 12.23 p.m.
§ Mr. Leslie
I wish to support the Bill and to take the opportunity of bringing before the House two cases that have come to my notice. There can be no denying the fact that the leasehold system is notorious for exaction. There were a couple of friends of mine who at considerable sacrifice had renovated a house and over a number of years had established a very good class of boarding house. Before the lease expired the landlord sent in a surveyor, who reported what repairs he considered to be necessary. To the surprise of my friends when they got the Bill they found they would have to pay approximately £500 for a new roof and other repairs. That house had been kept in good condition during the whole period that they had been in occupation. To crown all, they were told that if they wanted to continue in occupation the rent would be doubled. Here was an old couple, in the evening of their lives, who had built up a good business and did not want to sacrifice it. They were faced with a demand to pay nearly £500 and double rent.
The other case was that of a music teacher. She had purchased her house, and, unfortunately, she was stricken with blindness and lost her pupils. The ground landlord, knowing the position of this woman, who had had to leave the house and to let it, immediately put in claims for repairs to such an extent that the woman found herself unable to meet the cost. The ground landlord then threatened to take possession. The woman came to me in tears, and I put 1442 her case before a solicitor. Fortunately, he found a flaw in the lease, and was able to protect her and ultimately to get the house sold. Those are two cases that have come within my personal knowledge, and they form a reason why I welcome this very modest Measure. There is undoubtedly a definite ramp being practised in the purchase of ground rents by unscrupulous individuals, and it is high time that householders were protected from such rapacious sharks. I hope that this Measure will have the unanimous support of the House.
§ 12.27 p.m.
§ Mr. Hutchinson
The object of the Bill, as was stated by the hon. Member for East Rhondda (Mr. Mainwaring), is to deal with a very special set of circumstances, but it is right that I should remind the House that the Bill does not seek to introduce a new principle. The law has always recognised that some restriction must be placed upon the lessor's right of re-entry. That was recognised long before the Act of 1925, to which the hon. Member for Moseley (Sir P. Hannon) referred. It is desirable that we should bear in mind, also, that we are not seeking by the Bill to do anything to interfere with the rights of those who are carrying on the legitimate business of landlords. The hon. Member who introduced the Bill said in the most convincing terms that a very undesirable class of speculators is to-day operating in real property. Those who, in their daily avocations, have to deal with real property from time to time, know that such gentlemen are a most undesirable element in the community, and that the law as framed at present is in many respects inadequate to restrain their proceedings. One of the reasons why these gentleman have been given their opportunity is that the trend of legislation has for years been to discourage the legitimate business of being a landlord. I hope that the hon. Member for East Rhondda will not think that I am challenging what he said about the circumstances which exist in his own constituency. I have no knowledge of them, and I want to deal with the matter from a rather more general standpoint. The trend of modern legislation has made the business of being a landlord very much less attractive than it was in days gone by.
1443 It would be a mistake to suppose that all landlords are in a very substantial position; it is not so. Many of them are of quite modest means, but have found that real property is a satisfactory form of investment for their savings. They have conducted their business as landlords fairly and quite properly towards their tenants. One of the unfortunate consequences of modern legislation seems to have been that that class of landlord has been driven out to a very large extent, and thus an opportunity has been provided for the undesirable speculator to come into the property world. It is the activities of these speculators that make Measures such as this very necessary. For that reason it is right to point out that the Bill will strengthen the hands of the bona fide landlord. Whenever undesirable elements are operating in any class of business, the more one restricts their operations, the more one strengthens the hands of those who carry on the business in a legitimate way.
This Bill is at present restricted to properties of a rateable value of £50 a year or less, but I am not sure that it will prove a complete safeguard, at any rate in the Metropolitan area, against the evils which have been described, if that figure remains unaltered when the Bill has been through Committee. I therefore suggest to the hon. Member for West Birmingham (Mr. Higgs) the introduction of provisions somewhat similar to those in the Rent Restrictions Acts, by which differentiation is made between rateable values inside and outside the Metropolitan area, a higher figure being chosen in the former case. I should like to see the Bill confer its advantages on districts such as that which I represent, where the rateable values are comparable with those of the County of London. I hope that the Bill can thus be made to afford security to occupiers of property in the whole area of Greater London.
The other matter to which I should like to call the attention of the House, and to which reference was made by my hon. friend the Member for West Birmingham, is the scope of the class of property to which it is proposed that the Bill should apply. As the Bill stands, it applies to a lease of a house, but I think my hon. friend will recognise that the expression "house" is an ambiguous one, which would inevitably give rise to 1444 confusion and misconstruction if it remained as it stands at present in the Bill. I should like to see the Bill extended to business premises, and in speaking of business premises I have particularly in mind shop premises. This is a matter which I think my hon. friend must have considered when he was framing his Bill, and it may be that he had very good reasons for limiting the Bill in the way that he has. I would, however, suggest to him that, before the Bill goes to a Committee, he should consider whether its provisions ought not to be extended to the smaller classes of shop premises, in connection with which there exists precisely the same evil which this Bill is intended to check.
Whenever Measures of this sort have been introduced into the House of Commons, I have always made it my practice to study them with a veiw to ascertaining what their effect is likely to be on the smaller class of retail traders. To-day great changes are going on in the conditions under which retail trade is carried on. It often seems to me that the circumstances of the present time are comparable with those which have existed in other spheres of trade or industry during earlier periods of our history. Throughout the Middle Ages, for example, the small cultivator was gradually being pressed off the land and deprived of the status of independence which he had previously enjoyed. Again, during the eighteenth and the early part of the nineteenth century the same process went on in the case of the journeymen tradesmen and individual artisans. Gradually, owing to the changes in conditions, that class of independent persons was edged out of its position of independence and reduced to a different status, which was not a position of independence. To-day, when I see what is going on in my own constituency, indeed, in all suburban districts around London, and no doubt in other great cities as well, it seems to me that precisely the same process is going on in the case of the retail trader which took place in the Middle Ages and in the eighteenth and nineteenth centuries in the case of the other classes of persons to whom I have referred.
For my part, I should regret to see the retail trader driven out of his position of independence, his premises absorbed by the multiple shop, his children 1445 deprived of the opportunity of living as independent traders, and forced to take situations in the service of those who have driven their parents out of trade. I feel that it is wholly undesirable that such a sate of things should go on. The evil to which my hon. Friend directs attention affects precisely that class of traders, because there is undoubtedly a great speculative redevelopment value in many of the smaller shop premises in districts around London. The speculator knows that, if he can once get possession of the premises, there is a multiple shop and, indeed, the co-operative society waiting round the corner to come in and reconstruct the premises on quite different lines and carry on trade under quite different conditions from those of the small trader. I should like to see the advantages which the Bill quite rightly confers on the lessees of houses—I assume that by houses dwelling houses are meant—extended to the smaller trader as well.
§ Major Milner
May I remind the hon. Member that the Landlord and Tenant Act, 1927, has already done a great deal to protect the tenant in such cases?
§ Mr. Hutchinson
I am obliged to the hon. and gallant Member. I had not overlooked that Act, which, I agree, has done a great deal to safeguard the small trader, but I do not think the House has gone too far in that direction. The point I want to make is that, if we have the opportunity, I, for one, should be very glad to see the House give any assistance that it can to the small trader in the conduct of his legitimate independent business. If the House sees fit to give a Second Reading to this Bill, and it is passed through all its stages, it will, in my opinion, be a most useful addition, from the point of view of small lessees, to our leasehold law.
§ 12.42 p.m.
§ Mr. E. J. Williams
There seems to be unanimity in the House in support of this Measure, but I would particularly ask the Mover to bear in mind the words of the hon. Member for Ilford (Mr. Hutchinson) when the Bill goes into Committee. In my constituency, and particularly in the town where I reside, great developments are going on at the moment. The Government propose to spend some hundreds of thousands of pounds on a new arsenal and other works. 1446 Already the speculator is at work, and there can be no doubt that many small proprietors of business premises will be very seriously affected. I hear about this nearly every week-end, and I should be very glad if the Mover of the Bill would be prepared to extend the Measure to include small business proprietors and people of that kind. I realise that, as my hon. and gallant Friend the Member for South-East Leeds (Major Milner) has pointed out, some protection is available already, but I do not think that the small retail trader can obtain very much protection, and I support the suggestion of the hon. Member for Ilford that the Bill should be so extended that it will include, not merely the occupiers of houses as such, but the occupiers of small business premises as well.
§ 12.44 p.m.
§ Mr. H. G. Williams
The House will have been very much interested by the remarks of the last two speakers. The promoter has indicated that he personally would be in favour of an extension of the Bill to shop property, and he tells me that he will be glad if suitable Amendment to that effect can be agreed upon when the Bill reaches its Committee stage. The hon. Member for Ilford (Mr. Hutchinson) rightly drew attention to the very important balancing social factor in our life which the small shopkeepers have always constituted, and it is deplorable that they should be literally stamped out in many districts by the activities of great multiple institutions, whether private companies or co-operative societies. In that respect both of these are evils, though I do not say that there is not a proper place for them in our great community. A great measure of unanimity has been shown this morning, but I would like to throw one small stone of controversy on the smooth surface of the waters.
To some extent, the evil we are discussing is a by-product of the existing death duties. You cannot, from time to time, force the breaking up of great, well-managed estates without inducing large numbers of people to buy up the ground rents—people who have not the same sense of obligation held by their predecessors in title. An enormous amount of our work in Parliament consists in trying to prevent abuses of the system by those who stick to the letter, and not the spirit, of the laws of the game. If people 1447 would only behave decently, a great deal of our legislation would be unnecessary. Here, we are finding an abuse of the spirit of the laws of the game. We should be grateful to my hon. Friend the Member for West Birmingham (Mr. Higgs) for making use of his fortune in the ballot to introduce this most valuable Measure. He asked me to be one of the backers, and, only three days after he asked me, I received particulars of a very bad case from my own constituency.
I think, however, that we must not forget the implications of the speech of my hon. and gallant Friend the Member for the New Forest (Major Mills). Not every leaseholder is an angel, not every ground landlord is a devil, and not every tenant is a plaster saint. There are difficulties all along, and we should be careful that, in checking abuses, we do not put an unfair power into the hands of the leaseholder. Perhaps many hon. Members are familiar with the story of the rent collector, who called one morning, pointed out that arrears had mounted up to £5, and indicated that if they were not paid steps would have to be taken to get the tenant out. The tenant said that he would do better next Monday. Next Monday the collector called again, and was offered 5s. 6d. He said that it was rather a poor contribution towards the £5. and the tenant replied that he would not have had that if he had not sold the bedroom door. That may be apocryphal, but it represents the state of mind, I think, of some tenants. The leasehold system, although it has disadvantages, has also many advantages, one of which is that it enables the tenant to avoid having to find a capital sum. Anybody who examines London will be forced to admit that some of the best town planning in the country is the result of wise administration by owners of property, all of which is leasehold. Do not let us abuse the system merely because the system has been abused in practice.
I mentioned a case in my constituency. It relates to three houses, all controlled under the Rent Restrictions Act and the rent at the moment of each, inclusive of rates and all repairs, is 14s. 8d. a week, so it will be understood that they are not enormous properties. The ground rents some little time ago were bought by one of these speculators, and in due course notice was served. As far as I can make 1448 out the houses have been well looked after. About 1926, the drains were reconstructed in accordance with the requirements of the sanitary authority; new gutters were fitted about 1929; and in 1931, £200 was spent on damp-proof coursing and reconditioning; while in 1934 the whole of the houses were properly painted outside. Every year, the usual repairs were done, and whitewashing and repainting were done where necessary. This is a case where, as far as one can tell, the leaseholder has looked after the property. The notice which was served last August relates to a lease granted on 19th June, 1857. It contains an intimation that the person who is now the lessor of the premises, within the meaning of the Law of Property Act, 1925, requires certain repairs to be carried out, and certain breaches of covenant which are said to have been committed to be remedied, and compensation paid for such breaches. The notice says:If the said breaches shall be remedied and the repairs completed as aforesaid within three months from the date hereof I will accept as such compensation the sum of £6 6s. (six guineas) for expenses already incurred by me together with the amount of any further expenses to be incurred by me in respect of the breaches aforesaid.Unless within three months from the date hereof you remedy the said breaches to my satisfaction and make reasonable compensation in money I shall commence proceedings to recover possession of the said premises.That schedule was shown to a competent builder, and a rough estimate was given that the cost would be £200 per house. This is a form of blackmail—literal blackmail—it seems to me, in respect of premises which, as I have already said, are let at an inclusive rental of 14s. 8d. a week. Making the usual deductions, I do not suppose that the net rental would be more than 9s. 6d. It would be an intolerable burden, and the only thing, of course, would be for the people to say, "You had better take the property over."
§ Mr. Williams
I got the facts from the lady concerned three or four months ago, and it was only last night that I received particulars again, and I regret that I am not able to give all details now.
I hope that this Bill will be passed into law. At the same time, I hope that it will be examined with the greatest care, 1449 in order to see that unfair pressure is not put on the ground landlord. A Bill may slip through which may involve great injustice. I am not able to give the scrutiny it requires, because I do not understand sufficient of the law of property, but I am sure none of us wishes to see injustice created, and, as one of the backers of the Bill, I say that we should take great care in examining it to see that injustice is not done to others.
§ 12.54 p.m.
§ Sir Charles Edwards
I suppose I ought to ask, the indulgence of the House, because I speak so seldom here; but I am very interested in this Bill and have done something to bring it into existence. I have had letters from people in my constituency about a particular company. It seemed to be such a serious matter that I put down a Question to the Attorney-General. I do not remember the exact Question, but I believe I asked him whether his attention was being called to the matter. The effect of putting down that Question induced a number of hon. Members to see me, and I found out that this company was operating in several other parts of the country as well as in South Wales. I wrote a letter to the Attorney-General asking him to meet us, a mixed deputation went to see him, and he met us very sympathetically. I rather thought that from his sympathetic treatment of the deputation he might have had a hand in suggesting this Measure. At that time I received a number of letters, as one always does on such occasions, and I also received several schedules containing repairs which these people had sent out. I left them with the Attorney-General, and I suppose that they were so interesting that he never returned them. The result is that I cannot show the House the demands that these people were making. It would have surprised anybody who had not seen any of these schedules. One of the schedules was from a woman in London and contained about 20 sheets of foolscap relating to repairs which they wanted to be done to the house.
My experience of people who own their own houses is that they look after them very well, and that, if small things want doing, they do them from time to time. Why is this company in London interested in leaseholds in South Wales or anywhere else? They see in them the means of 1450 making money, and that is their only object. They send a surveyor, and they charge these people who own houses from £3 to £5 He draws up a long list of repairs, and the people are given the option of either buying back the leases at an enhanced price or else doing the repairs, which is an impossibility to working people in most cases. I am very glad that the hon. Member has introduced this Bill in order to put an end to this sort of thing. If it does not go far enough—and there are properties above the rateable value mentioned—I hope that sooner or later we shall have an amending Measure. People who own their premises ought to be protected from sharks in the City of London or anywhere else. It is a very serious matter; they simply worry people to death by the demands which they make upon them. I hope that the Bill will be given a Second Reading—I think it will—and that when it gets into Committee hon. Members will not try to amend it out of existence, as is done sometimes. If Amendments are required, let us have them, but if the Bill does not go far enough, do not let us spoil it but deal with the matter again—one thing at a time. It is a very important Bill, and I strongly support it.
§ 12.59 p.m.
§ Mr. Doland
I wish to speak on this Bill for a few minutes from the point of view of a shopkeeper. I have been interested in the distributive trades for something like 40 years, and I was very pleased indeed when I saw the Bill for the first time a few days ago. I must compliment my hon. Friend the Member for West Birmingham (Mr. Higgs) upon bringing the Measure forward. I think he mentioned that he was ably assisted in its draftsmanship by the Attorney-General. I am inclined to think that the hon. Gentleman has given the leaseholders of this country just a grain of assistance, but not a full meal. I feel that the promoters should have gone a little further in this Measure. We are satisfied, anyhow, with what we have got, and I am convinced, after what I have heard this morning, that the Measure will be placed upon the Statute Book. The Mover of the Bill suggested that the lessor to-day is judge and jury. There is no question about that; we all agree. But speaking as a man interested in shop property and as a leaseholder of many shops, and for those of my 1451 brother traders who are also interested in a Measure of this description, it is to be regretted that there is little mention in the Bill of shop property, except—and I am very pleased even to obtain this grain of comfort—that it was suggested by my hon. Friend the Member for West Birmingham that it may apply to shops attached to houses. That will be something. It is unquestionably limited to property with a rateable value at the moment of £50 per annum. I must take exception to this limitation, and I suggest that perhaps in Committee it may be made somewhat higher. If we were in 1914 such a rateable value, perhaps, would have been justifiable, but we are in 1938. I remember the time when shop property was taken at a rental of £80 per annum, and to-day, in my short span, it is rated at something like £400. If this Bill can be extended to cover a rateable value somewhat higher than £50 it will do more good than it will in its present form.
I want to give one example of the many instances which have been given here this morning from the benches on both sides, of the House. It refers to the landlords of the Woods and Forests. I have been given to understand that of all landlords, the Woods and Forests, as represented by the Crown and the Ecclesiastical Commissioners, are the worst landlords in creation. Whether that is so or not, I would not like to say. Nevertheless, I intend to give this example. Shop property was taken, and after a time, with the development of the neighbourhood, the shopkeeper thought of putting in a new shop front in order to bring it up to date. The shop front was 30 years old. Licences had to be obtained and fees to solicitors, surveyors and agents amounting to very nearly £100, had to be paid. When the licence was produced, it solemnly stated that that shop front, 30 years old, would have to be reinstated in 20 years' time at the end of the lease. Such a provision as that in a lease meant nothing less than blackmail at the end of the time, as one could not possibly put back a shop front that was 30 years old when it was taken out, and which was burnt as soon as it was taken out.
I am sorry that we are not going far enough in the legislation on this matter so as to give us a measure of leasehold 1452 enfranchisement. That would be a boon to shopkeepers for which we have been asking for a generation, and I sincerely hope and trust—I know that it cannot be done in a Bill of this character—that my hon. Friend the Member for West Birmingham, if he has the same luck in the ballot again, will bring in a Measure for leasehold enfranchisement.
§ Sir P. Hannon
With respect to the hon. Member's reference to the Ecclesiastical Commissioners as landlords, has he seen the very comprehensive defence of the Commissioners by Sir George Middleton, a former Member of this House?
§ Mr. Doland
I am very pleased to know that perhaps I am wrong in suggesting that the Ecclesiastical Commissioners are bad landlords. I should like to refer to another case which has come to my notice within the last few days. A house had been lately bought by a speculator, the end of the lease was approaching and the list of dilapidations was due to be expected by the tenant. Instead of a list of dilapidations, although a surveyor went over the premises, a letter was sent by a firm of solicitors suggesting that a payment of £500 would be accepted in lieu of whatever might be expended on dilapidations. The tenant suggested that the list should be forthcoming, and it was sent after a few weeks. The list was presented to a reputable firm of builders, and it was ascertained that the requirements contained in the schedule of dilapidations could be performed for a payment of £350. A letter was thereupon sent to the solicitors asking whether they would accept £350 as the cost of the estimated repairs, or whether they would prefer that the repairs should be put in hand. A letter came back to say that they did not expect the work could be done for such a sum, but it would be best for the tenant and the solicitor to get together and to see what they could arrange. In many instances within my time it has always been the case of asking for money rather than the repairs being put in hand. I should like to stress the extraordinary amounts in costs that are charged by solicitors and surveyors and agents. It would appear that there is something of a ramp in this respect. These remarks also apply to the cost of licences to carry out certain alterations or repairs to property.
1453 I am glad that mention has been made, and I should like to emphasise it, of the crushing out of existence of the small retail traders. Some 35 years ago I started business on very hardly-earned capital. After having been a trade unionist I scraped together £100 and started as a small shopkeeper. Since then I have been able to achieve a certain amount of success, and I represent the neighbourhood where I started in business. It seems to me a terrible thing that neither my sons nor my grandsons will, in consequence of the position today, be able to do what I have done, because of the crushing out of existence of the small traders by the large multiple stores and the co-operative movement. The right hon. Member for Hillsborough (Mr. Alexander)—I am sorry that he is not here to-day—has suggested, either in a broadcast or in an interview, that the co-operative movement will ultimately supersede shopkeepers as a whole. I think it has been suggested that he should be that shopkeeper—
§ Mr. Deputy-Speaker (Sir Dennis Herbert)
I am afraid that that sort of remark is likely to draw a reply.
§ Mr. Doland
I will not proceed further on those lines, but will content myself by expressing the hope that this Bill will help to relieve the position due to the crushing out of the small shopkeepers. When small property in London and the suburbs or throughout the country is required by the landlord, the tenant is given the option to put the building in a certain state of repair, sometimes at an exorbitant cost to the tenant, or he must clear out, as the shop will be required for purposes of a multiple character. The hon. Member for South Croydon (Mr. H. G. Williams) has suggested that there might be unfair advantages in favour of the leaseholder, but I am not afraid of that. I am certain that not only the freeholders but their surveyors, solicitors and the agents will sufficiently safeguard the position to ensure that there are no unfair advantages to the leaseholder.
I trust that the Bill will go to Committee, and that it will be so amended as to bring within its purview a larger number of smaller shopkeepers. There are 750,000 of us, all endeavouring to get a living and to serve the public, and I think we ought to be considered. I 1454 think the limitation of £50 does not go far enough to give us that relief for which we have been asking for a number of years. I have great pleasure in supporting the Measure.
§ 1.13 p.m.
Mr. Edmund Harvey
The House owes a debt of gratitude to the hon. Member for West Birmingham (Mr. Higgs) for having introduced this Bill, and for the lucidity and moderation with which he put the case for it. I feel sure that it is the desire of the House that the Bill should go forward, in a form to protect still further the people who are suffering under the existing state of the law. It has been intimated that Amendments will be considered in Committee to extend the scope of the Bill as regards the rateable value and the classes of property, so as to include shops and very small business premises.
A special point was made by the hon. and gallant Member for the New Forest (Major Mills), which, I hope, will be considered in Committee. It is, surely, the object of the Bill primarily to protect the occupier of these small premises. Where the original landlord serves a notice upon a lessee who is not the occupier, and who possibly is exploiting the occupier, it is not the object of the promoters of the Bill, and it would not be the object of this House, to protect that lessee from the notice served upon him by the original landlord in the interests of the actual occupier who is being rack-rented by the lessee. Therefore, I hope the promoters of the Bill will be able to accept the Amendment that was suggested by the hon. and gallant Member to insert in Clause 1 (4) at the beginning, as a reason for the action of the owner, the well-being of the occupier, and that that should be the first ground for serving the notice. That would not interfere in any way with the purpose of the Bill.
We have already had evidence of the necessity for the Bill. I have heard myself from some of those engaged in adult educational work near the Trealaw Estate of the extreme urgency of the problem there. On this particular estate the whole community is looking forward to this Debate and to the passing of the Bill into law. The life of the whole community is affected. If only for their sake, I think the hon. 1455 Member will have done a great act of justice if he succeeds in getting the Bill passed into law. In view of the conspicuous examples which exist in many parts of the country, I feel sure that there is nothing but good-will for the object of this beneficent measure.
§ 1.18 p.m.
§ Sir Reginald Clarry
I wish to reinforce the desire which has been expressed that the Measure should get as speedily as possible to the Statute Book. As far as I am concerned this is no new question, because 14 years ago I approached the then Attorney-General, but I am afraid I did not get any sympathetic reply, because nothing was done at that time. I want to thank the hon. Member for West Birmingham (Mr. Higgs) for bringing forward the Measure and the Attorney-General for the sympathetic attitude he takes towards it. Let me read a resolution, passed by the town council of Newport as far back as June, which, I think, puts the whole case:That this council strongly deprecates the action of certain owners of properties in serving notices upon their lessees to carry out repairs to such properties which are not reasonably necessary, and instructs the town clerk to ask the Member of Parliament for the division to call the attention of Parliament to the matter.That puts the case in a nutshell. The House has already had a large number of cases of hardship which have arisen—one has to be moderate in his language in Parliament—through these exploiters of the poorer class of persons who have put their life savings into property, and who find that these exploiters are prepared to throw them into the street for a comparatively small gain. I do not know much about the law, but I gather that blackmail is one of the worst crimes known to the legislature. I think the crime of these political vultures ranks on the same basis as blackmail—I am not sure it is not worse—and if I suggested any criticism of the Bill, I should say that the one thing it lacks is that it is not retrospective, and that we cannot prosecute these blackmail exploiters. There is nothing too harsh for me to say about people who exploit the public in this particular way, and within the law, and the sooner we remedy the situation the better. The present situation brings the law into 1456 disrepute. Anything I can do to further the Measure and to stop this terrible situation I am only too happy to do.
§ 1.21 p.m.
§ Mr. David Grenfell
I am sure hon. Members will be delighted to hear the robust sentiments of the hon. Member for Newport (Sir R. Clarry), but words stronger even than those he has used are justified in supporting the Bill. I wish to offer my thanks to the hon. Member for West Birmingham (Mr. Higgs) for introducing a Bill to remedy the glaring evils which have been revealed this morning. This kind of exploitation and abuse of the law has spread from one part of the country to another. I know of one particularly hard case in South Wales, and it was then said that there was no legal remedy or redress. Now the House is preparing a redress for a condition of things which is causing great hardship and great injustice in all parts of the country. I share the desire of some hon. Members that it should have been made an offence in the Bill. It would have been a stern warning and a discouragement to these people, a warning that they would carry on their business in the future under peril.
This is a conspiracy against the poor classes of the people, and the least informed in regard to their rights. They are lessee occupiers who have built their houses on land let to them for building purposes, and hon. Members know the tremendous labour and struggle involved in building a house by a workman in a factory, or mine or on a railway. It is a lifelong job. It takes years and years of thrift and effort and courage. He carries a mortgage on his shoulders while he is earning enough to meet his obligations, and then after 30 or 40 years of toil, enterprise and thrift, when he arrives at an age to receive the old age pension, when he is without any capacity for further work, he is subject to the worst form of intimidation.
Let me say something about the narrow limits of the Bill. I think it is wise to confine the Bill within narrow limits. There are other conditions of our leasehold system which must receive further attention. I believe in leasehold enfranchisement. It is part of our social life. I think there is a good case for leasehold enfranchisement, the return to the leaseholder of the work he has done on the property. But we are dealing 1457 to-day with a specific evil which is growing and spreading, and which requires to be denounced and stopped. I am glad members of all parties in the House have supported the Bill. There has not been one dissentient voice, and I am waiting to hear the final blessing announced by the Attorney-General. What a happy family we shall be if we all join hands in doing this piece of social and legislative redress for hardships and injustices which have been borne too long by the people of this country.
It was never suspected that the law was as weak as it is in this respect, and it is high time that we prevented this body of people from taking advantage of the law as it stands in order to inflict abuses on people. I hope that the unanimity with which the House has received this Bill and the unanimity with which has been promised for the Committee proceedings will convey itself to those people who have been carrying on this practice and that they will desist from further intimidation and terrorism of innocent people in all parts of the country. I hope that the Attorney-General will give as much support as we expect from him and the Law Officers, who are fully conversant with these matters. I am glad that the House has supported the hon. Member who moved the Second Reading so well, and I hope that the final stages of the Bill will be equally happy and unanimous.
§ 1.27 p.m.
§ The Attorney-General (Sir Donald Somervell)
On behalf of the Government, I commend this Bill to the House. As the hon. Member for East Rhondda (Mr. Mainwaring) said, this discussion has wisely proceeded without raising those greater issues of the nationalisation of land or leasehold enfranchisement, and we have directed our attention to the narrow points raised by the Bill. As has been recognised in some of the speeches that have been made, it is remarkable that those who no doubt feel the strongest, as we do on this side, that the leasehold system is a good one, have been as loud in their condemnation of this abuse of it as have those who do not regard the leasehold system as a whole in quite the same way as we do.
I think it is right to bear in mind that the circumstances which have given rise to the need for this Bill are not abuses 1458 by ordinary landlords, but are due to a special class of activity by people whose last desire is to become landlords in the ordinary or permanent sense. They purchase these reversions at a low price and then use the extortionate threats which they find they can legally do under the contract, to obtain a profit for themselves. Since I was first asked a question in the House on this matter—I think the first question was put to me by the hon. Member for Bedwellty (Sir C. Edwards)—I have had much evidence from hon. Members of all parties and from correspondents as to how widespread this evil is, and how gross are some of the cases in which threats or pressure of this kind have been exerted. The normal cases have been described sufficiently by more than one hon. Member. The hon. Member for East Rhondda referred to a special variation of the ordinary course arising out of a right to withdraw support—and while he was speaking I was inclined to think it was still last night and not this morning—and many examples could be given of aggravated cases of that kind.
It is interesting to trace the history of this matter. I believe that in olden days in the normal 99 years' lease, the only covenant was one to deliver up in repair, but very many years ago it was naturally found that it was in the interests of both sides, landlords and lessees, that there should be a power in the landlord to prevent, during the course of the lease, the property being so neglected as to become valueless at the end, and incidentally possibly become unfit for human habitation during that period. Therefore, very many years ago a general covenant to repair was inserted; but, of course, the normal interest of the reversioner is in his reversion and the ordinary type of landlord does not seek to use that general covenant to repair in the way in which it is used by these speculative syndicates which buy up leases for the purpose of trying to make a profit by these means. One can pay some tribute to their ingenuity, but none to their sense of social justice. There is, of course, no intent on any side of the House to interfere with the normal activity of the ordinary, reasonable, good landlord.
My hon. and gallant Friend the Member for the New Forest (Major Mills) referred to two aspects of the case, for which the House is grateful, since they are points which have to be considered. 1459 The first aspect is where there is the original lessor, where the land is let on a ground rent, and where the house is sublet on a tenancy to an occupier. I think that is a matter which has to be considered. My hon. Friend the Member for West Birmingham (Mr. Higgs) might consider it in the light of the rights of occupiers vis-à-vis the lessee, that is to say, their lessor.
§ The Attorney-General
I think they would have a right to have the houses kept in repair. That aspect of the case has to be borne in mind. My hon. and gallant Friend then gave a further case which is obviously one which has to be considered. It is that of trustees of reversions, having this covenant to repair, who do not seek to abuse it, but to use it to make occupiers spend money from time to time in order to keep the houses in decent repair and to prevent them from falling into a neglected condition. He said that it would be impossible for the trustees to be satisfied that the repairs were necessary to prevent damage to their reversion. That, clearly, is a point which has to be considered. It was suggested that that case could be dealt with by the insertion in the Bill of the words, "welfare of the occupier," and however attractive, from some points of view, that proposal may be, I think there would be difficulties about construing words of that kind in the courts. As I say, I am not expressing any view as to whether we can or cannot meet that case, but whenever any system is abused so that the legislature has to step in to prevent certain things or to impose penalties, there may be cases in which necessarily, at the same time, you prevent reasonable action of a kind which, if there had been nothing else, would have avoided any necessity for Parliament's intervention. There are cases where that is an unescapable result of Parliament having to step in to prevent by Statute certain abuses. Naturally, the point which my hon. Friends have raised requires, and will receive, careful consideration.
One or two other smaller points were raised which, no doubt, will also be considered. I think it was my hon. Friend the Mover of the Motion who suggested, for example, that the notice which the 1460 landlord serves might itself be made in the Bill to contain a statement setting out the right to serve a counter-notice. That is a further matter which we might consider. There is also the question of rateable valuation, particularly with regard to London. My hon. Friend who moved the Second Reading said he desired the Bill to apply to shops, and other speakers have expressed the same view. I am not sure whether the word "house" would or would not cover shops. These are all points, however, which can be considered in Committee.
I desire to join with those who have congratulated my hon. Friend the Member for West Birmingham for the service he has done, I think I may say, to the community at large and to this House, in bringing this Measure before us. May I also express the pleasure which has already been expressed by other speakers at the unanimity with which the Bill has been welcomed, and the hope that it will receive a Second Reading?
§ Question, "That the Bill be now read a Second time," put, and agreed to.
§ Bill read a Second time, and committed to a Standing Committee.