§ Mr. Arthur Skeffington (Hayes and Harlington)
I beg to move, in page 55, line 24, to leave out from "rates," to the end of line 25.
The Third Schedule outlines the grounds upon which the landlord may obtain possession of tenancies to which Part I of the Measure applies: that is apart from the re-development provisions dealt with elsewhere. The Schedule describes one of the grounds referred to in Clause 12 as:that the tenant has failed to comply with any term of the tenancy as to payment of rent or rates or as to insuring or keeping insured any premises.In passing, I may say that I have never known a possession order granted for non-payment of rates. However, that Amendment deals with the matter of insurance. This seems to us a very unsatisfactory ground and, possibly, even a new one. There was some discussion in Committee of whether or not the proposal in the Third Schedule is on all fours with the grounds in the Rent Acts. That was the line taken by the Joint Under-Secretary. I am not at all certain, about that: if one looks at the First Schedule of the 1933 Rent Act, that statement does not seem correct, because paragraph (a) of that Schedule says:or any other obligation of the tenancy (whether under the contract and tenancy or under the principal Acts), so far as the obligation is consistent with the provisions of the principal Acts which has been broken or not performed.I have never known a case under the Rent Acts where possession has been given on the ground of non-payment of fire insurance. I presume that fire insurance is mainly concerned. The term "insurance" is not mentioned in the Schedule, and I doubt if it is a ground under the Rent Act. In any event, that 2509 would be a very small breach committed by the tenant in the past and I see no reason why, at this stage, he should be punished for some failure in the past. The house would still be there: so the breach is not serious but the landlord would get possession because of it.
I cannot see why, under this Bill, the landlord should be given as an additional ground for possession a comparatively minor breach for which no good reason has been advanced. His first remedy would be to proceed against the tenant in the courts for the recovery of the money, which would be very much more satisfactory from the point of view of everyone unless the landlord is just seeking for some technical breach in order to get possession.
Even now we would ask that the matter of non-payment of insurance should not be made a ground for possession. It seems to us to be an extension which is not in practice a ground used in connection with the Rent Acts. In Standing Committee D the Joint Under-Secretary said:If the tenant had, incidentally, omitted to pay the last insurance premium and there had been no damage to the house the court would almost certainly hold that, despite his omission, it would not be reasonable to grant possession in those circumstances."—[OFFICIAL REPORT, Standing Committee D, 29th April, 1954; c. 660.]If this is so why include this ground for possession at all? This breach is a small one, committed in the past, and no damage in fact will have flowed from it. It therefore seems wholly unreasonable and unfair that in these circumstances the landlord should have this further and new ground for obtaining possession. I hope that even now the Government will consider doing without this extension.
§ Mr. Barnett Janner (Leicester, North-West)
I beg to second the Amendment.
I think there is a principle involved here. What the Government are doing is to say that if the Rent Acts as they stand at present do not cover points of this description they are to take good care to see that they shall cover the points. Hitherto, the Government have been trying to base the whole of their argument on the fact that they are dealing with these houses when leases finish. That is bad enough, goodness knows, and we shall have a little more to say about it later if opportunity arises. But here 2510 they go further than the Rent Acts and try to insert a condition which will open to landlords an opportunity of taking cases to the court and direct the attention of the court to a specific point. What is being done here is quite beyond what the Government profess that they want to do.
If there is any doubt about this point I ask the Minister to give the benefit to the tenant by leaving things as they are rather than emphasising a point which may not, and in our opinion does not, come within the purview of the Rent Acts. Even though it does, there is no necessity for the Government, at this stage, to say that the point should be taken into account. It places the court in the position of having to regard it as a material point. I appreciate that the Bill says that the court still has a discretion under certain circumstances, but the point is that the judge must direct his attention to this question of insurance if it is in the Act.
§ Sir H. Lucas-Tooth
I am advised that the Rent Acts provision is a good deal wider than the paragraph in the Third Schedule. That is undoubtedly the case, because it refers to any obligation of the tenancy. I think the House will agree that those words are as wide as is possible.
§ Mr. Skeffington
The Schedule also says, "consistent with the principal Acts." That is where the doubt arises.
§ Sir H. Lucas-Tooth
I am advised that the words would include insurance.
It may be that not many cases have come up, for the reason that hitherto it has been understood that in the case of Rent Acts property the obligation to insure was not very frequently on the tenant. It is the principle of Part I of the Bill that the tenant should not be deprived of protection because of a breach of such obligation. It is for this reason that paragraph 1 (b) of the Third Schedule is confined to failure to pay rent or rates or to insure, and I think it right to include insurance as a ground for possession.
When a landlord is seeking possession on one of the grounds in the Third Schedule he has not only to establish that 2511 ground, but also he must satisfy the court that it is reasonable that he should have possession. I think it important to point out that fact. That is under Clause 13 (4) of the Bill. If the tenant accidentally omitted to pay the last insurance premium and the house suffered no damage, I think the court would almost certainly hold, despite the omission, that it was not reasonable to grant possession. If, however, the tenant had neglected to insure over a long period I think it right that the landlord should be granted possession. For those reasons, I hope that the hon. Member will not press the Amendment.
§ Mr. Skeffington
I do not wish to waste time by dividing the House, but I must place on record my opinion that the reply of the Joint Under-Secretary is profoundly unsatisfactory. This is a very small breach. It would have been a different matter if it had serious consequences, but this is a small neglect on the part of the tenant in the past, and because of it, the landlord is given another ground for possession. We consider that to be extremely unfair.
§ Amendment negatived.
§ Order for Third Reading read.—[Queen's Consent on behalf of the Crown, the Duchy of Lancaster and the Duchy of Cornwall, signified.]
§ 1.35 p.m.
§ Sir D. Maxwell Fyfe
I beg to move, "That the Bill be now read the Third time."
After the Report stage of a Bill like this, it is something of a relief to return to the consideration of the Bill as a whole. Whatever may be the state of our minds, it is refreshing to look again at the general principles after so much detail. I am sure that I am speaking for the whole House when I say that no one will regret the time we have spent on the examination of the details of this complicated Bill. I consider that our discussions have been of great value. As evidence of this, I would point to the large number of Government Amendments put down for Report. There are 76, and nearly all of them are as a result of points raised in Committee upstairs by right hon. and hon. Gentlemen opposite.
2512 I am particularly grateful to the right hon. and learned Member for Neepsend (Sir F. Soskice) and to other hon. Members for the friendly spirit in which our discussions have been conducted. I should also like to thank those people outside this House who have written to me about the Bill. Their suggestions have all been considered, and many have been adopted. It is encouraging from the point of view of legislation as a whole that there are so many people willing to devote their time and professional knowledge to disinterested criticism of a Bill which Parliament is considering.
Although it has been urged that the Government have come down on the side of the landlords, if one regards the Bill as a whole, it is clear that that is a false impression. I wish to consider that for a short time. I take first the case of a tenant occupying a small house under a ground lease. Apart from the temporary legislation passed three years ago, he has, at present, no security of tenure when the ground lease comes to an end. Apart from such protection as he gets under the general law, he is liable in full under the schedules of dilapidations which we have heard described in such bitter terms.
This Bill makes him much better off. It enables him to stay on as a statutory tenant unless the landlord can establish certain limited grounds for possession. It gives him substantial help in the matter of dilapidations. It will be for the landlord to find the money for repairs and the tenant merely has to repay this, it may be, if necessary, by instalments spread over a period.
Secondly, the amount which the landlord can recover from the tenant is arbitrable by the county court. Thirdly, as I urged yesterday, the landlord cannot recover more than is necessary for putting the house into a state of good repair. That is the absolute upper limit, whatever the terms of the lease, and that takes into account changes in the property.
We have had a good deal of discussion about how the rent should be fixed where the tenant stays on after the end of the ground lease. One must take into consideration that the landlord is being obliged to allow the tenant to remain in most cases, whatever he may have had in view when he bought the property and 2513 whatever price he may have paid. The landlord is also obliged to let the tenant off his repairing liabilities to the substantial extent I have indicated.
In these circumstances, although I have carefully considered all that has been so strongly and eloquently urged throughout the proceedings of the Bill, I feel that the landlord is entitled to a fair up-to-date rent for his house. If one starts, as hon. Gentlemen opposite have said they do, on the basis that it is the tenant's house, then I can appreciate how they reach a different conclusion; but in trying to discover the basis and to bring this legislation into effect, I had to have regard to the legal realities which exist at the present time.
There is one point I wish to make—I do not want to deal with it at greater length, because we discussed it as we went along, but I think it is useful from the point of view of realising how our legislative process works—that the machinery of this part of the Bill has been considerably recast since it was considered upstairs. I think that hon. and right hon. Members opposite made a perfectly fair point when they said that, as the Bill stood originally, rather too much depended on the tenants replying to the landlord's notice within a specified time, and that that might result in people losing their rights simply through a technicality.
The changes which we have made on Report are designed to prevent this from happening. Again, I think that we made an important change—and added an important sanction against the landlord obtaining possession at the end of the ground lease by misrepresentation—by the Clause which I introduced yesterday. I mention this point because it shows that, although there may be considerable difference of opinion on major points, it does not prevent this House and its Committees from getting down to improvements on other points, and the Government of the day, whatever their political flavour, examining these and accepting them where they think an improvement can be made.
I should like to remind the House—we have not discussed it, because there has been general agreement on it—that we have again helped the sub-tenant by our reversal of the "Knightsbridge case" and by removing the jeopardy in which 2514 he stood from the intermediate tenant finding that his ground lease had come to an end.
In regard to business premises, I think it fair to say that there was less controversy on Part II of the Bill, and that that represents a great advance for the tenant, because I do not think anyone who has not had experience of taking cases through the courts realises how difficult it was to carry out successfully the procedure of the 1927 Act. The tenant had to show that the presence of his business on the premises had increased their value to the landlord. That establishment of inherent goodwill is never easy to prove, and in many types of businesses it is impossible to prove. Under the Bill, there is no preliminary test.
The second point is that the Bill applies to many types of tenants who were entirely excluded from the 1927 Act, and, in particular, to professional tenants, although I am not suggesting that any of the professional gentlemen who are seen in such numbers will require to go to the Bill in order to continue in the premises in which they now work in so distinguished a manner. But, generally speaking, that is a good advance, and I think that everyone agrees with that. I think it was important, and again it was due to a combined operation, if I may put it that way, that we made the Amendments on Recommittal to deal with the tenancy of a shop with a flat above.
I suppose that, summarising, our discussions on Part II have concentrated on the circumstances in which the landlord can obtain possession at the end of a business tenancy, and the compensation which he has to pay. But I wish to make just one point. Had we made it too difficult or too expensive to get possession of premises which had been let, there would have been a danger of stagnation and of the prevention of the improvement of healthy and prosperous businesses, and the creation of new businesses. I think everyone would agree, on reflection, that in this field the landlord-and-tenant relationship is of great benefit to the business community. The businessman who takes his premises on lease has his capital left free for use in other ways. I know that it is always very difficult to hold a balance, but I tried to keep that in mind, as well as the primary 2515 intention of improving the situation of the tenant.
I wish to mention a point that was raised in Committee and which, although we have not had a great deal of discussion on it, I know is very much in the minds of hon. Members who are either at present members of a local authority or who have had local authority experience. I want to tell the House today that I considered very carefully the situation of local authorities, and I want to point out that they have special powers.
Although we are all agreed that local authorities must have special powers in order to obtain possession of premises needed for their special functions, I felt that if a local authority was to be exempted from the requirements which the Bill places on landlords generally, the decision ought to be taken by a Minister who is responsible to this House.
I met the hon. Gentleman who put the points, and other representatives, before the Bill came to the House. I have discussed the point and tried to weigh it. But I think that it is an important matter, and I came down on that side. However, I want to say that I have, as promised, consulted my colleagues who are the Ministers mainly concerned, and they see no difficulty in issuing the required certificates in the time allowed. That was one of the points which, as the hon. Gentleman will remember, was rather worrying the local authority representatives.
The other point raised with regard to local authorities was that, in the interests of the public purse, they should not have to pay compensation where they let property pending demolition. Again, I have considered it, but I cannot believe that it would be justifiable to deprive the local authority tenant of compensation in circumstances where he would receive it were his landlord a private person.
I do not propose to go into Part III and Part IV of the Bill except to remind the House on one point which we have not discussed, because again we are agreed, that it is rather surprising that so little has been said about Clause 50 which does much to strengthen the tenant's protection against unreasonable enforcement of repairing covenants under the Leasehold Property (Repairs) Act, 1938. I am glad that has been done.
2516 In the course of debate, and in view of the strong feelings of interest which they hold, hon. Members opposite may have felt that my attitude at times in respect of the Bill has been negative. I would, however, say that I came to this subject—I approached it soon after I became Minister—without any preconception in favour of landlord or tenant. My aim was to do justice to both, and I honestly think that we have substantially succeeded in doing that.
A number of people will not think that we have gone far enough, but no one can seriously deny that the Bill as a whole confers great benefits on the tenant. As I have indicated in the far too many speeches which I have of necessity had to make upon the Bill, to go further in that direction would mean injustice to the landlord. Holding a proper balance between landlord and tenant is not only a matter of justice between individuals but also something which is vital in the public interest.
As soon as one translates one's ideas into action, it is inevitable that a great deal of the resulting action is subjected, quite properly, to criticism. I would only say—I hope that no one will think that I am fulsome in doing so—that in view of the large scope of the Bill and the different opinions which must be held, I do not think any Minister could have been more fortunate than I have been in respect of the constructive nature of the criticism and the way in which it has been expressed.
§ 1.53 p.m.
§ Sir F. Soskice
I suppose that one always approaches the Third Reading of an important Bill with a sense of fond regret. One gets to live with the Bill, and in a sense it is rather a wrench when the House parts with it. [Interruption.] I am not sure that everybody agrees with me about that. There are mixed considerations which give rise to different feelings according to the aspect at which one looks.
The Home Secretary said that we had had full and, he kindly added, constructive debates during the Committee stage. I cordially agree with him. I am sure that I shall have the assent and approval of my right hon. and hon. Friends in saying that the success of debates in Standing Committees depends very largely upon the personality of the 2517 Minister in charge and his assistants. When I reiterate what the Home Secretary has said about the success—and I hope I may add, the thoroughness—of our debates, the inference which I intend to be understood will, I hope, be obvious.
Substantial clashes of opinion occurred. I am sure that all my right hon. and hon. Friends would agree that the viewpoints which we advanced received careful consideration from the three Ministers who conducted our debates. In some respects those Ministers have been able to meet us. We are disappointed that in other respects they felt, after consideration of our arguments—our arguments undoubtedly received consideration—that they could not go further than they have done.
In spite of all the defects which the Bill has, the Opposition nevertheless welcome it as a substantial advance in the direction of proper adjustment of landlord-tenant relationships. In that regard, for a Conservative Minister, the Home Secretary has done very well. He has been working under considerable disadvantages. He has had the hot breath of united landlordism blowing hard on the back of his neck. He has, on the other hand, been supported and stimulated by persistent, and I think, very valuable goading by right hon. and hon. Friends of mine who contributed in an endeavour to guide the Home Secretary along the path of justice and right.
The result is the Bill which we now welcome. The Opposition would like to see it reach the Statute Book even in its present form if it is not susceptible to improvement in another place. It marks a substantial change in the relationships between landlord and tenant. Years ago such a Bill emanating from a Conservative Government would have been a matter of great surprise. It is an achievement on the part of the Labour Party that it has succeeded to that extent in educating the Conservative Party.
As the Home Secretary has said, the Bill now gives the tenant something which he has never had before. However, if one proceeds to look the gift horse in the mouth, one finds that the advantages which are conferred upon the tenant are not, by a long way, as rosy as he may have thought at first sight. The tenant under these long leases at a 2518 ground rent is now assured—I emphasise the word "assured"—that he will not be turned out of his house at the end of his tenancy if he does not want to go.
If the tenant is assured of that, he ought also to be informed that that is subject to very stringent conditions. It is subject to his paying a rent which he may find within his means but it will be very much more than he ever thought he would have to pay. He is at a disadvantage in that respect as compared with the ordinary rent-restricted tenant; he has to pay the market rent. The Solicitor-General readily accepted that that was the situation, and he sought to justify it as a measure of justice. The Opposition have said, and we shall go on saying whenever the matter arises for consideration, that we think that that is unjust.
Still, a tenant who is very much attached to his own home may find it within his possibilities to pay that market rent. It will probably—almost certainly—be a very considerable drain on his resources. Indeed, that is one of the reasons for the existence of the Rent Restrictions Acts which have been on our Statute Books for many decades. However, the Home Secretary has departed from them in that respect. He has not found it possible to give the tenant that measure of protection which tenants ordinarily expect to have under the Rent Restrictions Acts with regard to the amount of rent which they can be called upon to pay.
If the householder looks further, he will run up against the very unfortunate situation in regard to accrued repairs. I do not want to reiterate the arguments which have been put forward on this subject. I will merely say that the tenant will be allowed to stay on but upon terms which mean that in a great many cases he will be very nearly bankrupt. Staying on is better than not staying on at any cost, and the tenant can stay on if he can put his hand in his pocket to the extent to which the Home Secretary is asking him to do, and that is something.
Part II of the Bill has evoked much less criticism from this side of the House than Part I. We think that Part II makes a substantial advance in relation to business premises—more substantial than the lesser advance made in relation to private premises by Part I of the Bill. Our main 2519 criticism of the Government on Part II is that we think that, quite apart from the niggardly compensation, the landlord is given far too many opportunities in the provisions of Clause 30 to burke the tenant's attempts to extend his tenancy. That, we think, is a great defect in Part II, and we have repeatedly voiced our hopes that the Home Secretary might, at long last, think further about it. We begin to lose hope as we see the Bill vanishing from this House, because we know that if we have not been able to persuade the Home Secretary to change his mind by now, perhaps the chance of the right hon. and learned Gentleman subsequently doing so becomes somewhat less.
There is not much more than I want to say in bidding god-speed to this Bill on its passage to the Statute Book through the medium of another place, but I know that, on Third Reading, I must not speak about anything that is not in the Bill as it now stands. However, I think it would be in accordance with the rules of order and that I shall not be reproved by the Chair if I look at the Bill, turn over its pages and then point out what I cannot find in its provisions. I think that is perfectly legitimate, and, if I may be permitted that intellectual process, and take the Bill in my hands, look at Part I, Part II and then at succeeding Parts, I think it will be within the rules of order and within the scope of a Third Reading speech to shed a bitter tear at finding myself unable to find in the Bill any provision in regard to leasehold enfranchisement.
I know that I cannot discuss that here, and can only refer to its absence, but, very bitterly, I do refer to its absence. It is not in this Bill, and I feel terribly tempted to say that it certainly ought to be. We shall certainly have our opportunity in the future of doing what we think social justice requires to be done, and we shall await that opportunity which, no doubt, will come in a very short time from this moment.
I should like to compliment the Home Secretary on what he has done, and to thank him and his assistants with all sincerity for the courtesy and care with which they have met the points of view we have put forward. The Home Secretary has stood between us and the landlords. He knows that landlordism is an 2520 extremely powerful force, and it takes a very courageous Minister to resist it as the Home Secretary has done. We congratulate him on his success. We have done our best to help him on points which may have been difficult, and this Bill emerges improved at the end of the day. We shall be glad to see it placed on the Statute Book and brought into operation, even though it still possesses the defects to which we have repeatedly called attention.
§ 2.3 p.m.
§ Mr. Fletcher-Cooke
The right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice) referred to "the hot breath of landlordism" beating on the neck of my right hon. and learned Friend the Home Secretary from back benchers on this side—
§ Sir F. Soskice
I hope the hon. Gentleman will not think me discourteous if I have to go out, but I have to go, may I add, not for the purpose of having lunch.
§ Mr. Fletcher-Cooke
Of course, I quite understand that the right hon. and learned Gentleman must go, but I will, however, proceed to say what I began to say. At the moment when that observation was made, I was the only back bencher on this side of the House, and I wish to say, that, as far as "the hot breath of landlordism" is concerned, I can assure the right hon. and learned Gentleman that I am not a landlord, that I have never been a landlord—
§ Mr. Fletcher-Cooke
I am much obliged; I am sorry that I did not observe my hon. Friend.
It has been no part of this party's tactics to cause the "hot breath of landlordism" to blow upon the neck of my right hon. and learned Friend, and that is a completely unjust accusation. I am not a landlord, I never have been, and I never shall be.
Our task has been as the Home Secretary's has been, to see that justice is preserved particularly in Part I of the Bill, because Part I raises very different considerations to Part II. After all, when we are concerned with somebody who has been living in a house for a long time, quite different considerations arise to those affecting business premises which 2521 are now brought within the purview of what I might call a "tenancy freeze." Part II is, indeed, a revolution. My right hon. and learned Friend referred to it as "a great advance," but it is really much more than that.
The 1927 Act really provided no sort of security of tenure for business people except on a very limited basis. They had to prove all sorts of different things before they could get any security at all. Why was that? Was it not for this reason—that, as far as business premises are concerned, considerations of public efficiency spring very closely to one's mind? As far as houses are concerned, that does not apply, but, where industry and trade in this country are concerned, they apply very strongly.
I would strike a slightly discordant note on Part II, because I believe it is very important that the best man, and not necessarily the man in possession, should have the opportunity of developing a business or developing trade. That does not apply so much to shops, and particularly mixed premises with the home above the shop. Therefore, the considerations of Part I apply to Part II to a limited extent. But as far as these enormous industrial premises now for the first time brought into the tenancy "freeze" are concerned, it is time somebody's voice was raised to echo what my right hon. and learned Friend the Minister of State said in the Minority Report:Attractive though a permanent freeze may be to sitting tenants and to those with vested interests, I believe it is in the interests of the country as a whole that there should be considerable flexibility in the system of tenure of business premisesWe have seen the danger in what has happened in the agricultural community if we "freeze" a productive business too far. We see that the sitting tenant, provided that he preserves a standard of farming just above the minimum necessary to prevent eviction, can, as it were, trundle along year after year, while there are thousands of aspiring tenants, young and vigorous men, who might be able to farm that land much better, and I am very worried lest we may not be reproducing the same situation on the whole of the business, commercial and industrial premises in this country.
It will be a terrible thing if both parties in this House today are concerned with entrenched interests, whether they be 2522 landlords or tenants—and both have got their pressure groups—and should forget the perhaps even more important class, the class of aspiring tenants, the people who would like to be tenants, but who have no pressure group, have no identity and no association, and, therefore, no voice in this House.
To me it would be a terrible derogation of our duty if, in our attempts to preserve justice as between the landlord and the tenant, we should forget that there is a third party to whom justice must also be done—the "would-be" tenant, the aspiring tenant, about whom, as far as I can remember, nobody taking part in these debates has said a word at all.
A recent publication by some colleagues of mine, called "Change is our Ally," said this—and I agree with them:The essential condition of future security in this country is industrial flexibility, as opposed to the maintenance of the status quo.'Later, they say:The speed and readiness with which less efficient methods and less valuable forms of production are abandoned in favour of those which are superseding them have become all important.In other words, it is their view—and it is certainly mine—that we must be prepared to ease the way for rapid changes in the direction and degree and quality of industrial production in this country.
Of course, one of the difficulties of doing so is created if we "freeze" the present tenants in their present premises and I fear that that is what Part II of the Bill may do, since it is drawn so widely. This does not apply to the retail distributive trade, because obviously it is not as important there to have the opportunity of rapidly changing the methods of production and distribution, but this Bill covers productive industry, too, and in that connection it seems to me to go contrary to the direction in which we should go, which is the direction of flexibility and change and not the direction of ossification.
I believe that before long Part II of the Bill will have to be amended so as to exclude from its provisions what I may call the big firms and the big concerns. I do not think they are entitled to the same degree of security of tenure. After all, they are often just as strong financially—and sometimes even stronger—than the landlords, and there is no 2523 particular reason why they should be given this protection.
§ Mr. W. Wells
Surely the hon. Gentleman appreciates that if there is continuous pressure from landlords to increase the rents of business premises—and that is a matter of common experience in London today—it will put up the price of goods to the consumer. If the hon. Member is arguing the cause of efficiency, which in business matters means ultimately the cause of cheapness, surely he should take that factor into account.
§ Mr. Fletcher-Cooke
I do take it into account, and I also take into account the fact that on the whole, because of the pressure of demand, the person who can afford to take the premises is more likely to work harder, to streamline his productive line and thus to produce his end-produce more cheaply than the man who knows that he can sit back without making that effort at efficiency. Our experience is that the man who knows he can sit back because he does not have to fight has not the same incentive towards lowering his costs or the price of his end-product.
§ Mr. Fletcher-Cooke
I do not wish, on Third Reading, to become engaged in a long economic argument about the way the market works. I adduce in support of my argument the last sentence of the Minority Report of the Leasehold Committee, upon which the Bill is founded. I do not think that that point of view has yet been put forward and I think it should be put forward.
I believe very strongly that when the landlord and tenant are on equal terms, as they are at the big business level, they should be allowed the freedom of the market. It has always been recognised that that is not the case with mixed premises and shops, with which most of our discussion has been concerned. In those cases all parties agree that protection of some sort should be given, and this is probably the best way of giving it.
I wonder whether it is enough to take the view—although it is right in itself—which has been taken by the Home Secretary that in this matter of commercial and industrial premises it is enough to 2524 sit like a judge or a referee and hold the balance between landlord and tenant. Is it not the function of anybody concerned with the industrial future of this country to do something a little more active and to be concerned with something more than justice between two people?
Ought we not to be concerned also with the efficient use of those premises? Surely we should take into account not merely these two parties, the plaintiff and the defendant, as it might be, but also a whole host of people who have not appeared before the court at all, who have not been represented in any way, whose identity we do not know and who, indeed, may not yet have been born—that is to say, the vigorous, young, new-minded, fresh-outlooked, aspiring tenant who cannot find premises now and to whom this Bill offers very little hope of finding them in the future.
§ 2.16 p.m.
§ Mr. D. J. Williams (Neath)
I do not propose to follow the hon. Member for Darwen (Mr. Fletcher-Cooke) into all the technicalities of Part II of the Bill. I say that for two reasons: first of all, because I do not pretend to understand all the intricacies and complexities of Part II as it applies to business premises, and secondly, I want to be brief because the time for Third Reading is limited and I know that a number of other hon. Members wish to speak.
We are now coming to the final stages of the discussion on this Bill; and I want to say that the progress of the Bill through the House has been followed with deep anxiety in Wales and especially in the industrial areas of South Wales. The Bill has caused concern and disappointment in many other parts of the country, but I mention South Wales, not only because it is the area which I know best but because in South Wales the problems created by the leasehold system are present in a particularly acute and concentrated form. This is due, not to any special national characteristic of the Welsh people, but to the course of our industrial and social history over the last 150 years.
I am bound to say that some of the provisions of the Bill have shocked a very large number of people in South Wales. Indeed, I know of no Measure introduced by this Government over the last two or 2525 three years which has caused more resentment and more disappointment in the Principality. It is true that the people of Wales did not expect a great many benefits from this Tory Government. That is why they voted so overwhelmingly against them at the last Election. But as a result of this Bill the vote against the Tory Party in Wales at the next Election will be even more decisive and overwhelming.
At the beginning of the present Parliament the Government announced, in the Queen's Speech, that it was their intention to introduce legislation to effect leasehold reform in England and Wales and in Scotland. That announcement aroused considerable hopes in Wales and it did so because of the use of the expression "leasehold reform." For over two generations, "leasehold reform" in Wales has meant one thing and one thing only; it has meant leasehold enfranchisement, it has meant the right of the lessee to buy the freehold of the land on reasonable terms. Leasehold reform in that sense has been part of the political vocabulary of Wales for a long time.
§ Mr. Deputy-Speaker (Sir Rhys Hopkin Morris)
The hon. Member can deplore the absence of it from the Bill, but I do not think that he can develop the argument in favour of it.
§ Mr. Williams
I accept your Ruling, Mr. Deputy-Speaker. I was not developing the argument for leasehold reform. I was taking the Government's announcement and trying to show how far short of that promise the Government proposals are.
The Government's use of the expression "leasehold reform" means something entirely different from what that expression means in Wales. Indeed, we now know that it means quite the opposite. The use of the term by the Government was an indication to the people of Wales at the time that they meant to introduce some measure of justice for the tenant, but the hopes raised in Wales by the Government's announcement were shattered first by the White Paper of January, 1953 and finally and irrevocably by the present Bill.
In Wales we have always regarded the leasehold system as iniquitous and unjust; and the demand for the reform of the leasehold system has been a live 2526 political issue in Wales over the last 70 years or more. This Bill does not reform the leasehold system. It leaves it intact, and it leaves untouched all the objectionable features associated with the leasehold system.
At one stage in the proceedings on this Bill the Home Secretary who is also Minister for Welsh Affairs, said that it was his object to maintain the balance between landlord and tenant. He repeated that expression this morning. That, I think we all agree, is a very worthy and laudable object. If that really was the right hon. and learned Gentleman's intention—and I accept his word for it that it was—then I am bound to say that he has failed dismally and lamentably. He has failed in this Bill to maintain the balance between landlord and tenant. In the outcome the balance has come down heavily in favour of the landlord and against the tenant.
Let us see how the landlord fares under the leasehold system and under this Bill. First of all, during the currency of the lease he has already received in ground rent four or five times the original value of the land. Secondly, he gets the land back, and the land is now of a much greater value than it was when it was originally leased. Thirdly, he gets the house in good repair. The landlord did not build the house and he did not keep it in repair. Fourthly, he gets the rent from the tenant, and one factor in the assessment of the amount of rent which the tenant has to pay is the cost of the repairs which the tenant has already paid.
Let us see how the tenant fares. First, he has to give back the land to the landlord even though he has already paid in ground rent far more than the original value of the land. Secondly, he has to give up the house in which he lives. In other words, he loses his status as an owner-occupier and becomes a tenant; he loses the ownership of his home and becomes a tenant in his own house. This change means not simply a loss of status for the tenant, even though that is serious enough. It also means for the tenant a considerably increased financial burden. As a lessee he would pay in South Wales a ground rent of somewhere between £1 and £2 per year. Now as a tenant he may have to pay £40 or £50 a year in rent for the house which he 2527 and his family have always regarded as their own.
The landlord certainly comes out very well under this Bill. Whatever the technical difficulties in the way of doing justice to the tenant—and we have heard that there were many—there seem to be no difficulties at all about helping the landlord. In his case all the technical difficulties are easily overcome. To use a colloquialism which we have in South Wales, the landlord, under this Bill, gets both the penny and the bun.
This Bill is not a measure of leasehold reform. It is certainly not leasehold reform as we understand the term in South Wales. It does not reform the leasehold system—it preserves it and perpetuates it. It confirms and consolidates all the advantages which the landlords enjoy under the leasehold system.
Finally, may I say this. The next time that the Home Secretary speaks in Wales, I hope he will take for his text that ancient and hollow Tory slogan about a property-owning democracy.
§ 2.26 p.m.
§ Sir Edward Boyle (Birmingham, Handsworth)
I would not have intervened but for what the hon. Member for Neath (Mr. D. J. Williams) has just said. He seemed to me to be suggesting that this Bill is not consistent with what the Conservative Party had said in its election propaganda about leasehold reform. I quite understand any hon. Member opposite, particularly if he happens to represent a Welsh constituency, feeling that this Bill does not go far enough, but it is not fair to say that this Bill is inconsistent with what we said when we were in opposition.
I would ask hon. Members, before they make that accusation, to see what my right hon. Friend who is now the Chancellor of the Exchequer said in this House in the debate on the Address on 1st November, 1950, which was the first occasion when this subject was discussed. I think that I am in order in doing so, Mr. Deputy-Speaker, because what my right hon. Friend said on that occasion is absolutely on all fours with the present Bill. He said:We believe that there is need to do three things. First, there is the necessity to extend the protection of the Rent Restrictions Acts to ground lessees in occupation of their premises 2528 within the rateable value limits of those Acts upon the expiry of the leases. Secondly, we think that greater security should be given to tenants of business premises; and, thirdly, we think that amendment and consolidation of the law in regard to landlord and tenant is necessary, particularly in regard to repairs and improvement."—[OFFICIAL REPORT, 1st November, 1950; Vol. 480, c. 178-9.]It seems to me that the Bill which we are now reading for the Third time exactly carries out that statement of policy which my right hon. Friend declared in this House nearly four years ago.
§ Mr. Janner
Does the hon. Gentleman realise that the bringing of these premises under the control of the Rent Acts would be interpreted in Wales and other similar places as meaning that the ground rents as they stood would be protected? That is what he was saying.
§ Sir E. Boyle
That was not how our policy was expounded, when we were in Opposition, by my right hon. and learned Friend who is now the Solicitor-General. When the Leasehold (Temporary Provisions) Bill was going through this House in the Session 1950–51, we made clear in detail, in a series of rather elaborate and complicated Amendments which must have been very difficult to move what we intended to do about the rent, when we were returned to power, and were in a position to bring forward a large-scale landlord and tenant Bill. Whatever right hon. and hon. Members opposite may feel about the merits of this Bill, it really is not fair to accuse us of any breach of faith in this matter.
I cannot agree with the hon. Member for Neath when he says—as many Members have said—that the leasehold system is a bad system in itself. I am glad that in this Bill we are keeping the leasehold system in existence, because it has enabled countless people to own a house of their own without having to sink money in a freehold. We are absolutely consistent in supporting both the idea of a property-owning democracy and the system of ground leases.
In my view, Part II of the Bill goes rather wide and I should like to reinforce what my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) said about it. I am a little sorry that we have made the ambit of Part II quite so wide as it is. But with this reservation I believe this to be a Bill which 2529 holds the balance fairly as between landlord and tenant. It has been defended in the House and in Committee upstairs with great skill, courtesy and patience by my right hon. and learned Friends the Home Secretary and the Solicitor-General. I believe that as time goes on people will come to see that we have reached what is, on the whole, a thoroughly equitable solution of a really difficult and tricky problem, which must have needed great skill in drafting to solve.
§ 2.32 p.m.
§ Mr. Weitzman
The Home Secretary has said that the Bill represents a considerable advance, both in the provisions of Part I and in the provisions of Part II. On the face of it, there has been an advance, but to see whether there has been real progress and something done to improve the position of tenants, surely the right thing is to examine the provisions and see how far they go.
Everybody on both sides recognised that in regard to the owner of a ground lease whose lease came to an end, something would have to be done. We recognise that with regard to business tenants the provisions of the Landlord and Tenant Act, 1927, were not sufficient and something had to be done with regard to them. It is a little important to see what has been done in both cases, what benefits or advantages have been granted or given to ground owners or to business tenants, and I should like to look first at the provisions of Part I, quite briefly, to see what advantage is given to a ground lessee whose lease comes to an end.
It is said that that person is given security of tenure in the protection afforded by the provisions of the Rent Restrictions Acts. Certainly, if the matter was left there, that would be an undoubted advantage. But the position is not left there. The ground lessee is not left in the position of a person who has the protection of the provisions of the Rent Acts, because tenants under the Rent Acts who may have been there for years are paying standard rents—in the case of old controlled tenants, their standard rate of August, 1914, and in the case of tenants of new controlled property, the rent of September, 1939.
But here, whilst it is said that the ground lessee is given security by rent 2530 control, what is being done is to put upon him such a burden in the payment of rent as to do away with any real benefit that he gets from security of tenure. Perhaps hon. Members remember the illustration which I endeavoured to give in an intervention during the Report stage. It has been said again and again that the cases dealt with in Part I have a great deal of application in South Wales. Instances of hardship to ground lessees are not limited in any sense to South Wales. There are many cases in many parts of the country, apart from Wales, of people who will suffer, and suffer bitterly, when their ground leases come to an end.
What will happen to them under the Bill? A ground lessee with a rental of £10 a year will now have to pay a rent, but what kind of rent? It is an open market rent, often based very largely upon scarcity value. In the example I gave—say, in the Finsbury Park area, which is part of my constituency and where there are many leases of this sort—a man who spent his life savings in acquiring the house and who has been paying a ground rent of £10 and occupying the house as his own for many years, will now have to pay a rent, I visualise, of about £4 a week—15 or 20 times the amount of ground rent that they were paying before.
From a practical point of view, let hon. Members see what that means to the tenant. A person who has been living in a house and paying ground rent of £10 a year now faces the prospect of a rental of £4 a week. Even if we make the figure a little less and say £3 a week, what a burden it is to place upon the tenant. When one adds that with dilapidations and the arrangements under the provisions of the Bill with regard to initial repairs and that an instalment order will be made by the county court judge allowing the tenant to pay by instalments for initial repairs, and when there are repairs which may well cost hundreds of pounds in addition to the £4 a week which the tenant will pay, we must recognise what an enormous burden that represents.
Consider the change in the position of the ground lessee. His ground lease has come to an end. Instead of paying £10 a year, he has this enormous burden. Does this not make a farce of the security given to the tenant under the Rent Acts? 2531 It is quite true that the tenant is allowed to remain in occupation, but only if he shoulders this enormous burden in the way of rent and in the way of instalments in payment of the cost of initial repairs. Looked at from a practical point of view, this is an illusory security. Therefore, in its provisions the Bill is gravely defective in that way.
Part II of the Bill relates to business premises. The Government have done one very good thing. The provisions of the 1927 Act were very limited in scope. They did not apply to professions or to anything else except a business; they did not apply to factories and matters of that kind, and a very welcome extension is made by Clause 23 to the Bill. But although the Government say that they are conferring an advantage as against the provisions of the 1927 Act, by the provisions of the Bill a considerable number of people will lose in the result.
It is true that adherent goodwill was difficult to define and that it was difficult for a tenant to establish under the provisions of the 1927 Act his right to a new lease or to compensation if an order for a new lease was not made, but there were many cases where such tenants did get a new lease or, where they could not get their lease, got compensation. Their compensation was measured in hundreds and sometimes in thousands of pounds.
All that has gone, and in its place there is this much wider benefit in that it is being conferred on a greater number of people. The actual terms of compensation in the Bill are grotesque in the extreme; the amount of rateable value or twice the rateable value is so absurd when one looks at it in money value it really is no compensation at all. That, I suggest, is a grave blot on the provisions of the Bill.
The other thing which I desire to criticise and which, I hope, will be looked at again, even at this late stage, is the provision under Clause 30 which sets out the grounds upon which the landlord may claim possession and deny the tenant the right to remain in his business premises. I should have thought these grounds are far too extensive and that they should be limited so as to give considerably greater opportunity to the tenant to retain his holding.
2532 There is one other small point I should like to make and I hope in doing so that I shall not be transgressing the rules of order. It will be observed that the court dealing with these matters is defined under Clause 61 of the Bill. It is quite obvious that a great deal of the litigation that will ensue will be litigation in the county court. It surely is important when such an amount of litigation of such a vital nature to so many people is inevitable that the provisions of the Legal Aid and Advice Act should be extended so that legal aid is given to matters of this kind—a right denied to them now because it is in the county court.
§ 2.41 p.m.
§ Mr. George Thomas (Cardiff, West)
The course of the debate this afternoon has been much more even than the course of the deliberations during the earlier stages of the Bill. I have been very glad to share in the discussions on the merits of the respective Clauses in the last two days. It was unfortunate for me that I could not be on the Committee dealing with this Bill and I failed to speak on Second Reading.
I therefore welcome the opportunity of declaring today the attitude which I think we ought to adopt towards this Measure. It is, in my opinion, not a minor Bill, but a major one. It is a Bill involving millions of pounds of the money and the rights of little people as well as the rights of big people and big combines. It also involves justice to the people.
I would have thought that the Government would have been well advised to have given us a little longer to look at the Bill on Third Reading. I speak more in sorrow than in anger at this stage. My right hon. and learned Friend the Member for Neepsend (Sir F. Soskice), who has put up such a valiant fight throughout against so many of the proposals in the Bill, has already said that by the Third Reading of a Measure we have all mellowed a little. But I have not mellowed sufficiently to welcome the Bill.
It is, to me, an anachronistic Measure which shows the Conservative Party reverting to type. It is against the tide of opinion in the 20th century for it reveals a cold-blooded decision to take 2533 the landlords' side on leasehold, though not in the second part of the Bill which everybody acknowledges to be a tremendous step forward. I am talking about Part I of the Bill, which concerns the little man who owns his own house.
It has already been indicated that in South Wales this problem takes precedence over all others. With the single exception of mass unemployment, I know of nothing which captures attention in Wales more than the words "leasehold system." That is because in Cardiff today it is impossible to get a house freehold. I suppose I ought to have declared my interest. I own a leasehold bungalow which I am paying for, but long after I reach pensionable age I shall have to give it up and it will go back to the ground landlord unless I can find the necessary money to keep it and to meet the cost of the rent and repairs as laid down by this Bill.
In Cardiff, there are two big companies, Western Ground Rents and Mountjoy, Ltd., who own almost the whole of our city. It is a common remark that we ought not to sing "Land of my Fathers," but to sing, "Land of Western Ground Rents" because that company reaps the reward of all the efforts of the Welsh people in that great city. I think it is unjust to make the conditions of tenure as severe as they are being made here when a lease runs out. In thousands of cases the rent will be as much per week as it has been per year. I am doing my best not to exaggerate, but, certainly, in thousands of cases where people paid £3 or £4 a year ground rent they will have to pay that much by way of rent, and the instalments for the repairs will mean that working people will, in many cases, find that they have lost the home which either they or their fathers bought.
This is not only a landlords' charter, which is bad enough, but it is a lawyers' charter. I can understand the interest which has been taken in it by hon. and learned Members in all parts of the House because to the legal profession this must be a juicy morsel which will be welcomed by the members of their profession. It is a pity that this Bill will not only take money from the pockets of the people to give to the landlords, but will put money into the pockets of 2534 the lawyers, and at the end of the day, if we do not belong either to the class of the landlords or to the profession of the lawyers we shall be in a very poor position indeed.
I only want to say one word about Part II of the Bill. The conditions which tenants have to observe in order to stay in business premises are fairly extensive. A family business in my constituency has been owned by the same people for 30 years. An English concern has bought the lease from one of the big combines that I mentioned. It is one of those stores which has shops in different parts of the country, and it has already indicated to this family concern which has been 30 years in my constituency that it will want this place for itself.
Under the Bill, my constituents will have to get out. What compensation does this Bill give to them? It gives them twice the rateable value of their shop as total compensation for taking away their living and their goodwill which cannot be transferred, and for making them go and find accommodation elsewhere. It is no easy problem to find accommodation in Cardiff, but to find it in those circumstances is a hardship against which they have every right to be protected. These people have been thrown to the wolves by the Government.
I am reminded—and I am coming to my conclusion because I know so many of my hon. Friends want to speak—that in 1906 when the Liberal Party swept Wales with the cry, "God gave the land to the people," it appealed to something very deep in all of us. A lot has happened since God gave the land to the people. People in between have been interfering, and we have the right to say now that as we are the proud custodians here of the liberties and rights of the British people we will protect them from exploitation and from injustice.
This Bill does nothing of the kind. Fortunately, it is not the last word. The Labour Party is committed to leasehold enfranchisement, which does not take away property but gives people the right to buy their freehold at a fair price. When that day comes, we shall indeed be able to say that this House has once again taken another step on the road to full democracy.
§ 2.50 p.m.
§ Mr. Janner
I want to take this opportunity of asking the Government once again to think over what they are doing in this Bill. It is a bad Bill, particularly in respect of the provisions regarding leaseholds. When the right hon. and learned Gentleman the Home Secretary next visits Wales, where the heart of the problem is to be found, he will find nothing has been exaggerated by hon. Members from that area who have spoken. I know the position down there myself. He will find that the Bill is doing a grave injustice to lessees there as elsewhere.
I want to point out one or two things that have perhaps escaped the notice of the Home Secretary. It is not a question of perpetuating leaseholds. The Bill is destroying anything in the nature of security of tenure provided by a lease and leaving the dregs, the covenants and the obligations with little rights to the tenant. Why do I say that? Because, instead of giving a long security of tenure, the Bill merely gives a so-called security of tenure under the Rent Acts. It makes the tenant carry out certain repairs which are not obligations even within the Rent Act provisions, and it enables the landlord to turn out the tenant, whereas, if there had been a continuation of the lease, that would not have been possible.
I will give one or two illustrations. If a landlord says that he requires a house for his own use, if a question of greater hardship arises on any grounds at all, he can say to the tenant, "I ought to have possession of your house, which your family have held for so many years, and I want a court to grant me possession to which I am entitled under this Bill." In those circumstances, the court would have to give possession provided it was satisfied that greater hardship would be entailed by refusal. This means that a person is no longer secure because, whereas formerly he held a tenancy of a substantial nature, he can now be turned out.
There is a second injustice which the Government refuse to amend. Supposing a person in leasehold premises, the lease of which had just come to an end, dies a day or two after the expiration of the lease—I am taking an extreme example to see what will be the position when this Bill becomes an Act—his children 2536 can be turned out as soon as the tenant's widow dies. It is grossly unfair. When the Conservative Party said that it was going to give security of tenure to lessees, nobody could have dreamt that the family could be turned out within a few hours in circumstances of that nature.
Now I come to one of the biggest difficulties of all in respect of tenancies which are under the Rent Acts at present. Thousands and thousands of houses will be thrown within the provisions of the Rent Acts by this new Measure, and, as a result, county courts will be cluttered up with cases, because under the Rent Acts the county court is the place to which such cases must be taken. Yet the tenant, no matter what his grievance, will not be able to face up to that procedure if he has not the wherewithal to enter into proceedings or to get legal advice. The Government have made no provision for legal aid to help the many more thousands of tenants who should now come to the county courts to fight their cases.
These matters are all bound up with each other. We cannot honestly say that we are giving a lessee a chance if we place him in the position where not only are we hurting him financially, because a very much higher rental will fall upon his shoulders but, in addition, if there is dispute between himself and his landlord, he is left without the help that is given to litigants in High Court cases. That is a serious point, and I ask the right hon. and learned Gentleman to consider putting a provision into this Bill, even at this late hour, which will enable the tenant to have free legal advice in respect of these complicated matters.
Those who have emphasised the fact that the leaseholder has been looking for some kind of relief for many years have said nothing short of the truth. I remember in my early days, even before I entered political life when I was living in South Wales, that the burning problem at that time was ensuring the security of lessees who had paid over and over again for the right to build and live upon a piece of land which was previously useless. I have in my possession a book published on the subject when the Liberal Party dealt with it 30 years ago. In spite of the fact that proper agitation had been going on before and continuously ever since then, when it comes to dealing with 2537 the situation we now have in this Bill a ridiculous crumb which cannot sustain the lessee for any period at all.
It is a pure travesty to say that this is a leasehold reform Bill. The Government should be ashamed of themselves for trying to deceive people into believing that the Government have done anything at all consistent with the necessity of the occasion. I beg them to make their position quite clear outside this House, and to tell the people of the country that although the leases have existed for all these years it is the Government's belief that the landlord is fully entitled to take everything that has been created by the lessee and that the lessee now is to be fully at the mercy of anyone who wants to purchase fag-ends of leases and turn the lessees out in order to use those places themselves. I who have agitated for many years for leasehold reform could never have believed that anything of this kind would be described as reform, and I am sure that the Bill will not meet the situation. Furthermore, it will have to be altered in a very short time, and the sooner the better.
§ 3.1 p.m.
§ Mr. Granville West (Pontypool)
I think that it is agreed on both sides of the House that the Government have brought forward the Bill because they recognised that there was a problem affecting the owner-occupier of leasehold properties and also a problem affecting business tenants. If I were to say that I welcome this Bill and the methods which the Government have adopted in dealing with these two problems, I should be exaggerating my position. I have a very great difficulty in agreeing to a Third Reading, a difficulty which I do not find very easy to resolve.
In the first place, I recognise that there is an improvement in the position of the business tenant. In some respects he has a greater security than he had before. My hon. Friend the Member for Leicester, North-West (Mr. Janner) has already dealt with the terms of compensation. They have been described as niggardly, absurdly low and unnecessarily mean. I am deeply concerned with the problem of the leasehold owner-occupier of a dwelling house. As my hon. Friends have indicated on many occasions, that is a problem which affects South Wales in particular, as well as other parts of the country.
2538 One ought to consider the grounds on which the Government have proceeded with the formulation of the proposals in the Bill. It has been made quite clear to the House on more than one occasion that the Government had recourse to the Leasehold Committee's Report and that it was upon the basis of the Majority Report of that Committee that they formulated their policy. They, therefore, bring forward a proposal that the owner-occupier of the leasehold dwelling house should have security of tenure at the end of his lease under the Rent Acts.
That was never the problem. The problem with which the House should be dealing is not the question of giving the leasehold owner-occupier that limited security of tenure on the expiration of his lease. The House should consider the question of the ownership of the house itself. The Leasehold Committee, dealing with the leasehold system generally, said:At this distance of time it is obviously impossible to adjudicate upon charges of unfair conduct on the part of the original landlords in the granting of leases 80 or 90 years ago. But the difficulties with which occupying ground lessees of working-class dwellings, whether in South Wales or elsewhere, may well be faced at the expiration of their terms have caused us concern;That is the position which I gather the Government have accepted.
The Leasehold Committee go further and say that they haveheard of practically no cases in which occupying ground lessees have in fact been compelled to quit their holdings on the expiration of their leases. A more common complaint is to the effect that the landlord in such a case offers a new tenancy at an excessive rent, or offers to sell the freehold to the tenant at an excessive price.The Committee add:Some of these complaints are doubtless well-founded, …What do the Government do? In face of the facts as found by the Leasehold Committee, they come forward and give protection under the Rent Restrictions Acts, which the Leasehold Committee say is not the problem. What do they do in regard to the complaint of the Leasehold Committee, which they say is well founded, that landlords have been demanding exorbitant prices for freeholds and exorbitant rents? The Government are supporting the landlords to do this very thing.
2539 One of the grave doubts that I have about this Bill is that building lessees will be in a worse position under it than before. It is true that ground landlords were able to exercise their powers to compel the owner-occupier to pay an exorbitant rent or to pay an exorbitant price for the freehold of his house, but under this Bill we are giving legal authority for landlords generally to demand high prices for the freehold or exorbitant rent in respect of dwelling houses. I am definitely opposed to that part of the Bill.
I agree that on balance there is some advantage to the business tenant, but there is a great disadvantage to the owner-occupier of the leasehold dwelling house. I believe that with the legal authority they will have under this Bill in future ground landlords will be insisting upon higher prices for the conversion of leasehold properties into freeholds or will be demanding increased rents beyond the capacity of the tenants to pay. It is upon that point that I view this Bill with great dissatisfaction.
The only hope I have is that expressed by my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) that very soon we shall have a Labour Government returned to power to whom the leasehold tenant can look with hope of getting ownership of his property restored to him. We trust that day is not too long distant. My hon. Friend said that this Bill would be a good thing for the landlords and also it would be a "juicy morsel" for the lawyers. I regard it not as a juicy morsel but rather like the curate's egg. My hon. Friend did not mention the fact that Members of the legal profession who sit on this side of the House have not been looking at the Bill as a juicy morsel but have been fighting most strenuously in opposition to it.
§ Mr. G. Thomas
I am grateful to my hon. Friend for giving way because, on second thoughts, I should not like anyone to think that I believe lawyers on either side of the House would look on this for what they could get out of it, but I know that my hon. and learned Friends have fought harder against it. Is that all right?
§ 3.5 p.m.
§ Mr. W. T. Williams (Hammersmith, South)
Like several of my hon. Friends, and like the Home Secretary, I have lived with this Bill a very considerable time. It may be that my own view about it has been softened and has become gentler as the Bill has gone through its various stages; except that today, after the Report stage, I feel that I hold a record, in that more of my Amendments were cut out than those of any other living person.
I am glad to have the opportunity to pay a tribute to the Ministers for the courtesy and restraint which they exhibited, often under great provocation, during the Committee stage upstairs. It was matched only by the courtesy and restraint of my right hon. and hon. Friends. It is true that by this time almost all that can be said about this Bill has been said, and the Ministers in charge of it must be very tired of hearing again and again the kind of arguments and protests against which they have stood for hour after hour in the past weeks. But perhaps they will bear with me if I put as shortly as possible my particular complaints against this Measure.
I do not think that anyone on this side of the House believes that the Government could have been persuaded to do the job properly and to have given leasehold enfranchisement, without which we on this side could not be satisfied. Nor can the Government complain unduly if, not having given us the whole horse, we complain bitterly about the smell of the part carcase with which we have been provided. Bearing in mind the difficulties facing the Government they may feel that they have done their best, but in respect of both parts of this Bill it appears to many of us on this side of the House that they have been unnecessarily stingy.
Part II of the Bill is undoubtedly the better. I think that is because the Government understand the point of view of the business man better than that of the little man who lives in his own small leasehold house. But each part of the 2541 Bill has its faults, and they arise in our eyes because the House, as was the Committee upstairs, is divided by a gulf of principle. The Government have said, and I accept their assurance, that they have tried to weigh the balance fairly between landlord and tenant. But of course they are cursed by their political philosophy and by the history of their party. Unconsciously they have revealed that by the provisions in this Bill. They have been biased on the side of the landlord.
It appears to hon. Members on this side of the House that the benefits provided for the tenant are largely illusory. Even such benefits as have been afforded are so hedged about by restrictions, inhibitions and requirements as to limit greatly such protection as is afforded in such a way that to use the words of a popular song, for the last two years or so of his tenancy, the tenant is altogether, "bothered, bewitched and bewildered."
It appears to us that in this Bill the Government have been more than fair to the landlord whom, they declare, they have wanted only to treat with justice. It is not my intention to repeat in detail now the criticisms that have been made so often before, except to say that not only in South Wales—though I speak as a South Walian, I am now the representative of a London constituency—but also in my own constituency, many tenants feel very heavily the burden of the leasehold provisions, and have expressed to me their disappointment and concern about the Bill.
The total effect of the Bill is to provide the landlord with a gift of property in which for many years he has had no interest except the financial interest of collecting the rent, to which he has made no contribution, and the natural improvement in whose value he has done nothing to create. Land upon which his property has stood owes its value to the property upon it, a property which is in good repair thanks to the tenant and not to the landlord.
The landlord receives all these benefits at the price of providing to the tenant a benefit and an advantage that is not even as good—and I think this point ought to be made as forcibly as it can—as the provisions that protect the tenants of rent-restricted properties. The 2542 tenant of a rent-restricted property is very much better off than the tenant who holds over after the leasehold has fallen in.
Therefore not to put too fine a point on it, it appears to us that the Government have succeeded in giving the tenants, not the uncovenanted mercy about which Cromwell spoke, but rather the worst of all possible worlds. The tenant's sacrifice is the greater as the landlord's benefit is the greater. For us the real import of the Bill lies not in what is in it, but in the fact that we can take comfort from the knowledge that, if a Conservative Government have attempted even this much reformation, there is hope that when another Government come to power, the first death knell of the leasehold system which this Government have begun to sound will be brought to a full carillon with the happier occurrence of a Labour administration.
§ 3.18 p.m.
§ Mr. Cledwyn Hughes (Anglesey)
The hon. Member for Handsworth (Sir E. Boyle), who, I am sorry to say, is not present, was at great pains to show that there was no inconsistency between this Measure and the policy of his party. I would merely comment that the rent policy which the Government have inserted in this Bill will do nothing to alleviate the cost of living in this country, and one of the cardinal promises of the Conservative Party in the last Election was that it would reduce the cost of living. One thing that the Bill will do, through these increased rents, is to add to the cost of living.
I agree with my hon. Friend the Member for Neath (Mr. D. J. Williams) when he says that this is a Measure for which many thousands of leaseholders have been anxiously and hopefully waiting for a very long time. There have been temporary legislation, a report, a White Paper, and debates in this House. This Bill is the end product, the long-awaited-for Measure upon which the Government will ultimately be judged.
At this stage of the proceedings, it is difficult for hon. Members to be completely objective about the Bill. We have had our noses so close to the grindstone for so long and we have been so busily engaged with the minutiae of paragraphs, subsections and Clauses that it is difficult for us to look at the Bill in its proper perspective. However, one 2543 thing emerges beyond any shadow of doubt: this Measure falls short of the hopes and aspirations of a large section of the community. As has been said by my hon. Friends, what they desire is enfranchisement and the translation into law of the undoubted moral rights of the tenant, but, unfortunately, that is what the Bill fails to accomplish.
I want to be fair in my appraisal and would agree that the Bill has made concessions to tenants which they have not previously enjoyed. It is better than nothing. The granting of security of tenure in Part I and Part II will be a partial relief to tenants, and we welcome it, but we make the reservation that it is so hedged about and so limited that it ceases to become the generous security of tenure which we desire.
Let us get this one basic point clear. The security of tenure—this point has been made before, but it is worth making again—is not given to the tenant as a right and as something related to his status as a leaseholder and an owner-occupier for many years; it is given because it is expedient at the present time that the shelter of the Rent Acts should be thrown over him. The security of tenure about which so much has been said has no real permanency. If and when there is progressive decontrol, as occurred between the two wars, these houses will lose the protection of the Rent Acts, and the security of tenure will go.
The Government have made their attitude to the ground lessee perfectly clear. They did so in paragraph 16 of the White Paper, which was quoted by the Home Secretary during the Committee stage and the Solicitor-General during Second Reading. It said that the Government were very far from conceding that occupying ground lessees possessed such a right as a matter of principle. That is the Government's attitude, but the Opposition believe that the ground lessees have certain inherent moral rights, and our complaint about the Bill is that those rights are not granted recognition.
I propose, briefly, to mention two cardinal defects in the Bill. One is in Part I and one in Part II. The first relates to rents. Surely it is not unreasonable to expect the Government to fix a level of rents which would be related to the level of rents on houses 2544 which come under the Rent Acts. However, in spite of every effort made by my right hon. and hon. Friends, we have completely failed to persuade the Government to move an inch in our direction.
There has been no spirit of compromise at all. I make no complaint about the demeanour of the Home Secretary during our proceedings on the Bill. He has been extremely courteous, but, at the same time, incredibly obstinate. His obstinacy is always cloaked by a characteristic charm, but that does not help us in any way, and we have, unhappily, failed to persuade him to move in our direction.
The attitude of the right hon. and learned Gentleman was summarised by him during the Committee proceedings. The words that he used are most interesting. He said:… I think it would be wrong to deal the landlord a double blow—to deprive him of the right of vacant possession and also limit the rent under the Part I statutory tenancy to an artificially low level — it would be an unconvenanted mercy or benefit to the tenant if he were to get both the protection and the artificially low rent. I do not think that would be fair."—[OFFICIAL REPORT, Standing Committee D, 16th March, 1954; c. 165.]The fact is that the tenant will have to pay an artificially high rent, and that is the argument we have advanced; in other words, what the Home Secretary meant—and he will correct me if I am wrong—is that it is a blow to the landlord for the tenant to be given security of tenure and a blow to the landlord if a ceiling to the rent to be charged under this Bill was fixed.
I must say that the blow to the landlord has been considerably softened by the Government, and this is especially true when we consider that one landlord in Pembroke Dock will have his annual income from 1,730 houses increased from £34,000 per annum to £100,000 per annum. It is, indeed, true to say that the blow to the landlords has been considerably softened and cushioned by the right hon. and learned Gentleman and his hon. Friends. There is no talk of the blow which a tenant deprived of his birthright will suffer.
There is no reluctance, in Clause 37, to fix a ceiling above which compensation payable to a tenant should not 2545 rise, and this is the sort of contradiction which we find in this Bill when we come down to details. There is a refusal to fix a ceiling to the rent, but a great readiness and willingness to fix a ceiling to the compensation payable to the tenant.
The second deficiency to which I wish to refer is in Part II, and deals with this question of compensation. It is still far too easy for the landlord to obtain possession of business premises. The hon. Member for Darwen (Mr. Fletcher-Cooke) criticised Part II on the grounds that it would tend to "freeze" the tenant in business premises, but my criticism of Part II would be quite the opposite. It is that the loopholes to enable the landlord to obtain possession of business premises are still far too wide and too numerous.
Clause 30 is far too widely drawn, and, under it, a small business man may find himself deprived of his home and livelihood, he may not be able to find alternative accommodation, yet at the most he can only recover twice the amount of the rateable value. Of course, big business is well able to look after itself; it is the small business man in the small country shop who will find himself in difficulty.
I say that this Bill makes one thing inevitable. The inevitability is that the next Labour Government, at a very early stage in its career, will be bound to introduce legislation to grant enfranchisement, and I hope that that day will not be too far distant.
§ 3.29 p.m.
§ Lieut.-Colonel Marcus Lipton (Brixton)
I have watched the various stages of this Bill as it has proceeded on its way with growing pessimism and dissatisfaction. The Government had an opportunity of dealing with what has been regarded for a long time as a very serious injustice to the owner-occupiers of leasehold premises. In the constituency of Brixton, which I have the honour to represent, we enjoy the melancholy distinction that Brixton has been for too long a hunting ground for the most crooked landlords in London. It has been a happy hunting ground for them, but a most unhappy hunting ground for the unfortunate occupiers of property.
This Bill will do nothing at all to prevent some of the operations in which these crooked landlords have been 2546 indulging for some time of either buying the ground on which derelict property stands or buying the tail-end of leases and, by a variety of the most dubious expedients, blackmailing the tenants into paying sums to the operators for one reason or another.
I am precluded from going into that aspect in greater detail, for reasons which are known to the Solicitor-General. Criminal proceedings are pending in one case and, to my knowledge, various civil proceedings are pending in the local county courts.
It is most disappointing that the Government have not taken the opportunity to do something about this field of exploitation which will continue to be at the disposal of some of these crooked property speculators. It may be argued that some security of tenure has been granted to the occupiers of leasehold properties on the termination of the leases, but the tenants will merely be thrown into the very deep waters of the Rent Acts, and if and when those Acts have to be dealt with these tenants may find themselves very much worse off than they have ever been before.
Furthermore, the difficulties and legal complexities with which these occupiers will be faced in the not-too-distant future will be increased by virtue of the fact that the legal aid scheme will not be available to them to enable the various points at issue to be effectively dealt with in the county courts.
For all those reasons, I very much deplore this big gap which will still exist in the law and which will enable some of these crooked landlords to continue to pursue their various forms of exploitation for a long time. As has been pointed out by previous speakers, the only answer is to provide the right of compulsory leasehold enfranchisement. Until that fundamental problem is tackled, there will be no such thing as security for the people whose interests we are trying to serve.
§ 3.34 p.m.
§ Mr. Skeffington
I know that my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) wants to speak in a few moments and I will sit down shortly in order to enable him and the Solicitor-General to wind up the debate.
I am grateful to catch your eye, Mr. Speaker, even if only for one or two 2547 minutes, first of all because I did not have an opportunity to thank the Home Secretary in connection with the new Amendment Which he put down in place of paragraph (g) in Clause 30, partly I believe as a result of my representations. Although, naturally, we cannot be completely satisfied with it, we must be grateful that the difference between us is not as great as it was. May I also thank him in connection with some suggestions about the wording of Clause 38, which I gather may be changed in another place?
The Government will not expect us to be enthusiastic on this side of the House, particularly in relation to Part I, but I think that it is worth while saying, even at this late hour, that one does realise that there are improvements with regard to leasehold law in relation to business and commercial premises. They are, on the whole, a very real advance because previously business tenants in fact enjoyed no security of tenure and no rent protection
Even if they attempted to take advantage of the rather lame assistance of the 1927 Act and did succeed in being granted a new tenancy, they could always be defeated by the fact that the landlord merely fixed so high a new rental that the tenant could not meet and so no new lease was effected. That weakness has been to some extent remedied. There is an opportunity for continuing the lease at a rent which at any rate, will be decided by some other arbitrator than the two parties or the security value of any particular district.
I am sorry that the Government have not thought it possible to look at paragraph (h) in Clause 30 which enables the landlord to obtain possession of business premises if he wants them for occupation for himself to carry on a business. That seems to place a very considerable handicap on the ordinary tenant as against the multiple firm, or the case as quoted by the Off-Licence Association in which they said, in a memorandum which they sent around, that many of the off-licence premises were in fact owned by brewery companies. Under the proposed legislation any brewery company desiring to obtain possession will be able to plead paragraph (h) and obtain possession of the premises on payment of a nominal sum; that is to say, the very small com- 2548 pensation laid down under the Bill. This seems a defect in the Bill of a character which I would not have thought the Government really wished to create and I hope that this matter will be looked into in another place.
I shall not say anything about Part I, because there is no time to express my indignation, and I have already expressed it. May I say one thing about the contracting-out provisions in Part II? I think that what will happen in relation to Part II premises is that every solicitor advising a landlord will advise him to put in the tenancy agreement a provision to contract out of compensation payment, and the seven-year long-term leases will in many instances be a thing of the past. New terms will be restricted in future to five years. In that case the whole of the meagre compensation proposals will in any event fall to the ground. I hope that even at this late stage these arguments may be reconsidered in another place.
§ 3.39 p.m.
Mr. Glenvil Hall
We all know that the Solicitor-General will want sufficient time to wind up this debate and, therefore, I intend to be as brief as I can be. It is very easy for me so to be because we have had, as I think the whole House will agree, some excellent speeches notable both for their brevity and for the fact that they have been confined to the points at issue.
My right hon. and learned Friend the Member for Neepsend (Sir F. Soskice) began by saying that he was rather sorry to say "Goodbye" to the Bill. For my part, I am delighted to see the back of it. We have had it with us for a good many months. We spent altogether nearly two months on it upstairs. The OFFICIAL REPORT on our proceedings there runs to nearly 700 closely printed double-column pages, and over and over again, as Ministers themselves will be the first to admit, all of us have, unfortunately, fallen into the deadly sin of repetition. Nevertheless, it is well, as we part with the Bill, to look back and consider whether we have covered any real distance as a result of the astonishing labours in which we have collectively engaged.
I remember the Second Reading debate extremely well. There were then very high hopes on this side of the House that 2549 the Bill was a Measure that was worth supporting and that between us, before we parted with it, we should be able to improve it. I must say that we have been able to do very little to make it a better Bill. In addition, the more we came to consider its provisions and to hear the explanations which were given us by the Home Secretary and the Solicitor-General, the more despondent we became, at any rate about Part I.
That is not to say, as my right hon. and learned Friend the Member for Neepsend pointed out in his speech, that there is not much in the Bill of which we approve, and which we shall be delighted to see reach the Statute Book. But when we consider what the Bill might have been, we are extremely disappointed and feel that much of our time has been wasted.
What is much worse, many hundreds of people who have heard about the Bill, who knew that it was to deal with the question of leasehold reform and that its object was to give security of tenure to many residential premises where leases were coming to an end, will be deeply and tragically disappointed when they come to examine the Bill after it becomes an Act.
My right hon. and learned Friend, who is a master in this field, when summing up the effect of this Bill, pointed out that so far as Part I is concerned thousands of people will look upon it as a cruel mockery. Therefore, although I, at any rate, am glad to see the Bill leave this House, and am also glad to see some of the provisions therein reach the Statute Book, I do so with a sense of deep disappointment that this opportunity has not been taken really to make a good Measure of it.
Sometime, as my hon. Friends on this side have pointed out, we shall have to come back to this matter, and when we do, it will be, I am almost positive, under a Labour Government. For I doubt whether the party opposite will want to touch it again for many years. In any case, it is unlikely that they will have the opportunity; but at any rate, whether this is so or not, when we on this side reach the benches opposite, we shall obviously have to try to implement the promises that have been made and to undo the injustices of the present leasehold system which now become more and more apparent.
2550 One matter which was mentioned by one of my hon. Friends should be mentioned again, namely, the question of legal aid. We hope that the Home Secretary will remember that many of the provisions of the Bill give the right either to the landlord or to the tenant to go to the county court. Obviously, unless things go much more smoothly than we at present can envisage, this means that the county courts will be given a great deal of extra work. That is not a thing that we have to worry about when dealing with this Measure, but we must remember that such extra work for the county court means extra costs to individuals. It will certainly mean extra legal costs to many tenants.
We should like to feel that the Government are well aware of this and are aware, also, that this legislation, which the Government themselves have introduced, will mean that this added legal burden will, in all too many cases, be placed on people who will find it difficult to bear. We feel that the legal aid scheme ought to be extended at the earliest possible moment to assist people of this kind. I am sure that when I make a plea to the Home Secretary it will not fall on stony ground. Some of us have sat opposite him both in Committees and in the House for a long time now and have always found him most kind and courteous. But some times we wonder why anybody so intelligent and efficient can find himself unable to accept the arguments put forward with such force and cogency from this side of the House.
We feel that the right hon. and learned Gentleman must realise that what we are saying is right and we can only assume, as I ventured to remark last evening, that he must be the prisoner of Conservative policy. If only he and the right hon. and learned Gentleman the Solicitor-General would break away from their own back benches and the policy laid down by the Tory Conference—that is, if they ever follow what their conferences say—and treat these questions, particularly this one, as they should be treated, I feel sure that they would sleep in their beds with clearer consciences.
We on this side of the House do not intend to divide on the Third Reading, although we are bitterly disappointed that the Government have not seized this opportunity to make a real job of the 2551 Bill. They have not seen their way so to do, and it is quite obvious that when this Measure reaches another place it is unlikely that it will be more radically improved than has been the case in this House. Therefore, as I say, this matter will have to be dealt with again.
We are grateful that the Government have accepted our point of view to the extent that they have, but we feel that the Measure is not what it should be. So although we are glad to see it go and we will not be altogether sorry to see it reach the Statute Book, we feel that the earliest opportunity will have to be taken by another Government to carry on the work so tentatively and timidly here begun so that those who suffer under our present leasehold system will at last receive justice at the hands of Parliament.
§ 3.48 p.m.
§ The Solicitor-General
I join with the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) and not with the right hon. and learned Gentleman the Member for Neepsend (Sir F. Soskice) in the view expressed about the passing of the Bill. I confess that I shall be delighted to see the back of it. During the last few years we have had many debates on the relationship between landlord and tenant. There have been two temporary Acts, a White Paper, the Second Reading of the Bill, the debates upstairs and yesterday's debate. I should not look forward with much feeling of pleasure to having to discuss in the near or immediate future any further proposals about the law of landlord and tenant.
During the passage of the Bill we have experienced all sorts of weather. The Second Reading was somewhat stormy with a wintry atmosphere. When we got to Part II of the Bill the weather seemed to improve, although there were violent showers. Yesterday we reached the Report stage but at times during the summer weather, like all English summers, there were constant and unexpected thunderstorms. Now on this Third Reading there is the atmosphere of a pleasant summer evening, with a faint glow of sunshine from the West. Indeed it was not until we heard the hon. Members for Leicester, North-West (Mr Janner) and Pontypool (Mr. West) that there was any threat of a change of weather.
2552 I think our discussions have been useful throughout and I hope that they have led to appreciation of the different points of view. Of course, this Bill must be disappointing to those who have come down firmly in their own minds in favour of leasehold enfranchisement, because this Bill does not provide that and we have on more than one occasion given reasons why it does not do so. I will not endeavour to repeat them now. I can well understand the disappointment of those enthusiasts but, if they can put that on one side, I feel sure they must agree that this is a good Bill which arrives at a fair balance between the interests of the tenant, on the one hand, and of the landlord, on the other, without regard to the interests of lawyers.
It is wrong and unjust to describe this Bill either as a cruel mockery or as one which comes down completely on the side of the landlord. It certainly does not do so in relation to Part II, which some people think goes too far. I do not take that view. I have always felt that Part II is the most important part of this Bill because it affects all kinds of tenancies of all classes of business premises. I hope that under Part II we have produced a code which will endure for many years; a code which provides an example for the good landlord and for the good tenant. I do not think that there is so much danger in the view that it will freeze tenancies, because the good landlord wants, if he can, to retain the good tenant. Sometimes in our debates we might get the impression that the majority of landlords were bad and that the majority of tenants were not so very good. I hope that Part II will prove to be of great public advantage, and it cannot be said that this part of the Bill is a landlord's benefit.
Nor can it be said in relation to Part I. because even if it does not provide for leasehold enfranchisement, it deprives the landlord of the right that he now has in law to possession of the premises at the end of the ground lease. It deprives him also of his right, which he would then have, to sue for large sums for dilapidations and repairs.
I do not now intend to say any more about the content of the Bill, but I want to pay a tribute to all the officials and to the Parliamentary draftsmen who have helped us. In helping us they have helped hon. and right hon. Gentlemen 2553 opposite both to appreciate the effect of the various proposals that have been put forward, and they have helped us also to produce a Bill which is drafted as well as a difficult Bill of this character can be drafted.
I hope that the Bill will not require to be amended in any great degree, at least for a large number of years, that in its operation it will be shown that the fears which have been expressed about it by hon. and right hon. Members opposite have not been well founded, and that it will prove to be of benefit to the people of this country and of Wales.
§ Bill accordingly read the Third time, and passed.