HC Deb 16 February 1949 vol 461 cc1281-7

(1) Any person applying for a licence to build any premises for letting for use as a dwelling-house may apply to the licensing authority at the same time as his application for licence to build or at any time prior to the first letting of such premises for an Order determining the standard rent of such premises when so let and upon receipt of such application and after hearing any representations made by or on behalf of such applicant the licensing authority shall determine the reasonable rent on the same principles as govern the tribunal under section one of this Act, and such rent when determined shall be the standard rent of such premises and no application shall be made thereafter to the tribunal in respect thereof.

(2) Where any person has executed or caused to be executed work upon the improvement or conversion of any premises to which the principal Acts apply and to which section one of this Act would apply upon the letting thereof, the person who has executed such work or caused the same to be executed, or any person entitled to let and desirous of letting such premises may apply to the tribunal for an Order determining the standard rent in advance of such letting, and in such event the tribunal shall make an Order determining the reasonable rent, in accordance with the principles set out in section one of this Act, and such rent when so determined shall be the standard rent of the such premises.—[Mr. Hogg.]

Brought up, and read the First time.

10.15 p.m.

Mr. Hogg

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

The Minister's kindness in accepting a criticism I made during Second Reading emboldens me to ask whether he cannot see his way to accept this new Clause, to which at any rate some of us on this side of the Committee attach a good deal of importance. In the first place, I hope the Committee will accept my apologies for any inelegancies in drafting the Clause in its two parts. A person who has not the aid of the expert team of draftsmen that the Government can necessarily command, in seeking to draft Amendments, must do so with a grave sense of the obligations of the subject and of his own inadequacy. I shall seek first to explain to the Committee the object which this Clause is designed to achieve, and secondly, discuss the suitability of the machinery with which it is sought to achieve it.

In the Second Reading Debate the Minister gave me courage to hope that he was not in any way seeking to discourage those who legitimately wanted to engage their money on building premises to let, or indeed in converting premises for the use of those who wish to take them on a lease. He further encouraged me to believe that he was not opposed to their receiving a reasonable return on their money. Indeed, he led the House to think—and I believe that he sincerely means it—that his aim in this Bill was to attack unreasonable arrangements designed to exploit a shortage, and not to discourage those who engaged in legitimate enterprise.

I suggested on Second Reading that a great deal of uncertainty would be saved if it were open to those who sought to build houses to let, or to convert premises for letting, if they knew in advance what they would be allowed to charge. If they in fact risk their money, spend their money on expensive capital operations, and then fall victim to an attempt by someone going to the tribunal, and perhaps persuading the tribunal to allow a less sum than affords a reasonable return on the money, that would be a discouragement of legitimate enterprise. My object has been to see to it that those who seek to embark their money on legitimate projects of this kind should know in advance what a proper return on the money is thought to be, and once that is found and determined by the appropriate authority it could not be further questioned.

I think we are all concerned as to what should be the appropriate authority if that principle is accepted. My own view is that in the case of new premises the appropriate authority should be the licensing authority, and I will tell the Committee why. A builder who seeks a licence to build ordinarily has to provide plans and specifications of the house he proposes to build to let, which ordinarily includes a statement of the rent he proposes to charge. If he does not provide those particulars, he does not get his licence. If he does provide those particulars, and if the licensing authority comes to the conclusion that the rent which he is proposing to charge is a reasonable one, prima facie it ought not to be possible to question that further, and he ought not to make a second application to the tribunal. In other words, the builder ought to get a licence to charge the sum which the authority giving him the licence to build allows him to charge in obtaining the licence to build.

The second Subsection deals with conversion.

I think it would have been legitimate, and it might even be considered better, to have applied the same considerations to that Subsection. I have not, in fact, done so, but I have instead allowed the person seeking to convert to go to the tribunal. My view is that there is something to be said for that difference because in the case of conversions there is not the same guarantee that the premises when converted will actually be let as in the case of new buildings. But I will say "Thank you" to the Minister if he will accept my objective, which is to give certainty in advance of what a reasonable rent will be, although I am not wedded to the particular machinery I have chosen in these two Subsections.

I do not wish to prolong my speech. In fact, in my present state of health I do not think I could physically do so. I ask the Minister to give favourable consideration both to the objective behind this new Clause and the machinery with which we seek to carry it out.

Mr. Bevan

I hope it will be possible to shorten the discussion on this new Clause. I admit at once that this is a point of substance. In fact, hon. Members will recall that I mentioned this matter on Second Reading. This, however, is not the appropriate Bill for this purpose. Under Section 7 of the Building Materials and Housing Act, 1945, as the hon. Member for Oxford (Mr. Hogg) has already said, the local authority agrees a maximum rent for a new house which they licence. That point is already covered by that Act.

Where, however, it is an adaptation or a conversion, that is not the case, and as I understand it the desire of the hon. Member for Oxford is to try to secure that adaptations and conversions should be facilitated by giving those who wish to make them an idea of the profitability of their undertakings by fixing the rent. It is a desirable objective, but this is not the place where it can appropriately be secured, because this Bill does not deal with the provision of accommodation but rather with the fixation of rents. Very shortly, however, there is to be brought before the House, in fulfilment of the statement made in the Gracious Speech, a Measure dealing with reconditioning, and this point will be assimilated in that Bill when it is brought forward. I give the undertaking now that it will be regarded then.

Colonel Dower

I should like to say how much we welcome the friendly way in which the right hon. Gentleman has met this new Clause. He realises that it is a point of substance and that if conversions are to be encouraged, as we want to see them encouraged, then this is one of the first and best ways of giving encouragement. I have not been entirely idle in this particular activity, and I should like to suggest to the right hon. Gentleman that when this new Measure comes under his examination he should bear in mind that there are two most urgent things to be considered before anyone gets down to the very hard work of converting a large house into four flats.

First, admittedly, is the question of the standard rent, because the person concerned will want to know beforehand what the expenses and returns are likely to be. Secondly, there is the point that assessments are altered as soon as the project is completed, and I hope that the Minister, when he examines this important subject, will remember that before anyone gets down to business and spends several thousands of pounds in alterations, a great deal of hard work has to be done—all the licences have to be dealt with, the plans, the builders and all sorts of other paraphernalia. The person concerned wants to know how the assessment will be altered.

That is very important. The person is not questioning what it should be, but he wants to know—and at present no one knows—what will come under the Rent Restrictions Acts and what will not. One day something comes under the Acts and the next day it comes out, according to how the assessments are altered. It does lead to a tremendous amount of confusion. I think the right hon. Gentleman will agree with me that this confusion prevents people from getting on with the work. I ask the right hon. Gentleman, when he brings forward his proposal, to meet these two considerations which discourage enterprise and conversion. People want to know what the assessment is going to be and what would be a fair standard rent to charge.

Sir Ian Fraser (Lonsdale)

The Minister's conciliatory speech seemed to me to be satisfactory so far as the second part of this new Clause is concerned, for he indicated that he would consider the point of substance that has been made about conversions or adaptations. It was not clear to me, however, whether the statement was satisfactory in regard to the first part. He admitted that where application was made for a licence to build a new dwelling the price, including the rent, was before the licensing authority at the time when the licence was given. He half implied that that meant that the builder might take that to be the rent without further question, but he did not say so. Could he make it clear whether such a rent, having been approved, might subsequently be challenged in the courts proposed to be set up under this Measure?

Mr. Bevan

I think it is quite clear—and has, indeed, been made clear on a previous occasion—that those properties cannot be challenged. The maximum rents would have been fixed by the local authority when the licence was given. What we are dealing with here, as hon. Members will recollect, is new houses built to let. There are not very many of them, for obvious reasons. Most of them are built for private ownership. Where the builder wishes to build a house for letting, the conditions of rental are attached to the licence. That is covered by existing Statutes. That is not a standard rent for the purposes of the principal Acts, and therefore cannot be taken to the tribunal. In dealing with reconditioning and conversions, which are outside this Bill, because the Bill is not for the provision of accommodation, I have undertaken to consider the point in succeeding legislation.

Lieut.-Colonel Elliot

In view of the interesting observation made by the Minister that he was about to bring forward legislation, and that he would have regard to the principle of this new Clause, I think it may be possible for my hon. Friend to withdraw the Motion. I think it is true that, as a rule, one does not withdraw a new Clause on promise of consideration in subsequent legislation, but only on promise of consideration in the Measure itself. However, the Minister indicates that he expects his new Bill to come forward at an early date.

I wonder whether it would be possible for him to give any indication when he expects to be able to produce that new legislation. Will it be before Easter, or after Easter? I am sure it would be of assistance to those who, as my hon. and gallant Friend the Member for Penrith and Cockermouth (Colonel Dower) said, are anxious to get on with the job if they could look forward to some period during the present building season when it would be possible to obtain such a ruling as my hon. Friends have desired. Could the right hon. Gentleman give an indication that during the coming building weather such a ruling will be given? I am sure that if we were given such an indication, my hon. Friend would be willing to withdraw the Motion.

Mr. Bevan

I am not master of the timetable of the House, as the right hon. and gallant Gentleman knows, and such a question in the ordinary way would be put to the Leader of the House or the Prime Minister, as the case may be. It is not for me to determine the time when Bills will be introduced; but I imagine it will be introduced before long. As to whether it will be a suitable means of getting building done this year will depend upon the facilities given for it to be put into law. Once Bills are introduced, of course, Ministers are only too anxious to get them on to the Statute Book, and I should welcome the cooperation of the Opposition in getting this Bill into law as soon as possible. I can assure the right hon. and gallant Gentleman that it ought not to be many weeks before the Bill is in the Vote Office. I should have thought a few weeks at the outside.

10.30 p.m.

Lieut.-Colonel Elliot

I think the Minister will agree that the introduction and circulation of a Bill is much more in the hands of the Minister than the time at which it will either be submitted or passed through the House. The Minister has extensive powers with regard to the circulation of a Bill. I think that, with his suggestion of a few weeks, it would be possible for people interested to know where they stand. We are no more willing than the Minister to buy a pig in a poke. I understand that the pig in a suitable poke will be submitted at an early time, and as soon as the poke is slit and the pig taken out, we will be glad to give the Minister our opinion of its suitability for baking. We are assured by the Minister that it will be brought to market within a few weeks. I think my hon. Friends will find that not unsatisfactory.

Mr. Hogg

I do not know what my right hon. and gallant Friend meant about pigs in pokes. If the Minister shows the same consideration to the Opposition as he has done on this new Clause, I can assure him that he will not find difficulty to any of his legislation. I beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.