HC Deb 01 April 1960 vol 620 cc1764-72

Order for Second Reading read.

3.36 p.m.

Mr. Raymond Gower (Barry)

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

Even an hour or so ago, I hoped that I should have a longer time in which to develop my arguments in support of the Bill, but at this time, as I am sure the House will appreciate, I shall have to abbreviate what I have to say.

I need hardly explain that the subject of leasehold tenure and attempts to modify it have a formidable long Parliamentary history. This history extends, as I think the hon. Member for Cardiff, West (Mr. G. Thomas) said on an earlier occasion when the subject cropped up, as far back as the Leaseholders (Facilities of Purchase of Fee Simple) Bill, 1884, and, perhaps, even further than that. Since that Bill almost eighty years ago, about 20 Bills have been brought before the House at different times, and all of them have prescribed in different ways methods of dealing with what their sponsors deemed to be a real problem.

The very number of Bills on the subject down the years indicates in some degree the existence of a problem at any rate in certain parts of the United Kingdom. My Bill differs in at least two important respects from most of its predecessors. In the first place, it is designed to be limited in its operation to Wales and for this, as for almost every other legislative purpose today, Wales is deemed to include the county of Monmouth.

I do not deny that there are parts of England where there is leasehold tenure and where the high incidence of it doubtless constitutes a problem, but I respectfully submit that there are towns and villages in Wales where the problem exists to an extent which is scarcely to be appreciated by non-Welsh Members of Parliament. In how many English borough or county constituencies, for example, can it be said that this is one of the major subjects of controversy? How many Parliamentary candidates outside Wales go to election meetings feeling sure that the inevitable question of leasehold tenure will be raised by somebody in the audience at some time or other? Where, outside several Welsh constituencies, can it truly be claimed that the rank and file, whether they be Conservative, Socialist, Liberal, Nationalist, or anything else, are largely united in their dislike of the prevailing system of leasehold tenure as it affects dwelling-houses in the Principality?

All sorts of estimates have been made of the amount and proportion of this kind of tenure in Wales. Some of these estimates undoubtedly have been exaggerated. I do not intend to exaggerate today. Therefore, I shall not make any excessive claims. But I am certainly not exaggerating when I say that industrial Wales, in particular, is predominantly leasehold in its residential areas. For example, Cardiff, Barry and the Rhondda have substantially more leasehold than freehold property. In varying degrees, Newport, Pontypridd, Swansea and Neath have the same pattern. I respectfully submit that the peculiarly high incidence of leasehold tenure of dwelling-houses in large areas of Wales where the majority of the population of Wales lives, constitutes a special problem requiring special treatment.

What are the consequences of this state of affairs in Wales? The difference between Wales and the remainder of the United Kingdom is shown by the fact that the people in the Principality regard the acquisition of a leasehold house as the acquisition of the ownership of that house. It is the only form of ownership that many Welsh people have been able to contemplate. Freehold houses often are not obtainable. We therefore make a distinction between a tenancy and a lease which would not be easily understood elsewhere.

I confess that the Landlord and Tenant Act, 1954, passed by the Government of my right hon. Friend the Member for Woodford (Sir W. Churchill), improved the position of leaseholders of residential property whose long leases were expiring. It prevented their being evicted—

Mr. Arthur Skeffington (Hayes and Harlington)

In certain circumstances.

Mr. Gower

I am not trying to raise party political points. I am trying to be objective.

It also eased their liability for dilapidations and under repairing covenants. But it did not—I repeat "not"—meet the leasehold problem as it largely affects considerable areas in the Principality. The problem in Wales does not arise chiefly from leases which are about to expire. It arises in a troublesome manner from the numerous leases whose unexpired terms are thirty, thirty-five years or less.

From my own knowledge of Barry and Cardiff and indeed, other places in Wales, I can assert without much fear of contradiction that whole areas and streets in many part of the Principality are virtually unsaleable except at ridiculously low prices. Prospective purchasers cannot obtain mortgages in the case of leases of houses with perhaps twenty, twenty-five or thirty years to run. The freeholds cannot be acquired. I know this personally, because, as a solicitor, I have tried on behalf of clients and, as a Member of Parliament, on behalf of constituents to arrange the acquisition of freeholds. One result is that these houses are virtually frozen as unsaleable assets in the hands of their present owners.

Another consequence is that Government legislation—I want my hon. Friend the Parliamentary Secretary to take note of this point, so that he can convey it to the Minister—passed in recent years to stimulate the granting of 100 per cent. mortgages by local authorities is abortive in these cases. Government legislation to encourage building societies to advance money on houses erected prior to 1919 is equally abortive because the leases of such houses in most cases have about thirty years or less to run. In other words, the house purchase and housing legislation brought forward during the 1955–59 Parliament by my right hon. Friend the Minister of Housing and Local Government has only a very limited operation in parts of Wales for the reasons I have given, which surely were not considered fully by those who passed that Measure, the operation of which is excellent in other parts of the country but does not operate as it was intended in Wales.

Another considerable difference between the Bill and nearly all its predecessors will be found in the Clauses prescribing the machinery. Nearly all earlier leasehold Bills have been based on the idea of enfranchisement—the automatic acquisition of the freehold or other superior interest at a prescribed number of years, for example, twenty-five years, purchase, the price being ascertained merely by multiplying the annual ground rent by this number of years.

Such a rough-and-ready formula had obvious defects. It might be fair and reasonable in some cases, but in others it might be quite unfair. For example, a leaseholder with only twenty years unexpired may have acquired the lease of a house very cheaply indeed simply because it was a very short-term lease. It would then be manifestly unjust if such a leaseholder could acquire the freehold at a price at all comparable with the price to be paid by a person for a much longer term.

The present Bill confers upon the courts—the county court in cases of rateable values of under £100, or the High Court in other cases—the fixing of a reasonable price. The Bill also—and here we find another difference from most of its predecessors—enables a leaseholder who has not sufficient money to contemplate the purchase of the freehold to apply to the court for a new lease. Clauses 5 and 6 describe the considerations which the court may have in mind in assessing the purchase price or the conditions of such a new lease.

I recognise that these formulae which I have put into this Bill may not be perfect. It is probable that they can be improved on discussion and consideration by the House, but I submit that they certainly represent a conscientious attempt to frame a solution which will be fair and reasonable to all concerned. This, indeed, is the motive of the Bill which I now bring before the House. I feel sure that most people who live in the Principality will recognise that I have not exaggerated this problem. I hope that they will feel that I have sought to present, in a shorter time than I expected to have, what I conceive to be a real attempt to arrive at a reasonable solution for these very real problems.

3.47 p.m.

Mr. George Thomas (Cardiff, West)

I congratulate the hon. Member for Barry (Mr. Gower), who is my next-door neighbour in geographical terms, on having introduced his Measure today. The word "leasehold" is a magic word, or rather the words "leasehold enfranchisement" are magic words, in Wales, for we have suffered enormously from the unjust system, which I believe is capitalism at its worst, in which the landlord or finance corporation is enabled to hold to ransom little people who have been struggling hard to buy their own homes.

Half of Cardiff is in the hands of great finance corporations, like Western Ground Rents, the Penllyne Estate, and another great finance corporation the name of which evades me at the moment. I want to bring to the attention of the House the fact that at my interviews with my constituents nothing crops up more regularly than this problem of leasehold enfranchisement.

I have a case at present of a constituent who pays a ground rent of £3 15s. a year. Because his lease is running out, the ground landlord says he can have the freehold for £850, which is sheer robbery, of course. As his lease has less than ten years to run, my constituent will get no help from this Bill because, unfortunately, the Bill offers no help at all to people whose leases have ten years or less to run. I am grateful for what is here in this Bill, but I wish that the hon. Gentleman had felt able to go further.

Mr. Gower

The hon. Member had a similar formula in his own Bill some years ago—in fact I have taken it from his Bill—to keep our speculators buying short-term leases.

Mr. Thomas

So be it. We will not argue now, because with a little good sense we will get the Bill through and have a Committee stage whereby we shall be able to improve the Measure and deal with these difficulties. The party opposite will have to repeal the 1954 Act for this Measure to be effective.

The 1954 Act is working savagely in the City of Cardiff. In my constituency, there are people whose leases have run out and who can stay in their homes only by paying an economic rent for the home which they or their fathers bought years ago. The Rent Act means that an economic rent in Cardiff could be £3 10s., £3 15s. or £4 a week for a house in a modest residential part of the city. The 1954 Act is an act of cruelty for my constituents and they would unite in asking for any Measure that would grant leasehold enfranchisement to our people.

We like to sing, The land of my fathers is dear unto me". It is natural that we have a special concern in people's homes and the land on which homes are built being free from the interference of finance corporations. Because we hold this deep feeling, we resent more than any other social problem I know the way in which the leasehold system works in South Wales.

I hope that the Government will be as forthcoming on this—although I doubt it—as they were on the Offices Bill, that they will tell us that the Conservative Party has now seen the light, that it believes in leasehold enfranchisement and that it will give to owner occupiers the right to buy the freehold of their own homes. So that other hon. Members may have an opportunity to speak and so that we may have the Second Reading, I go no further at this stage. I tell the House, however, that the people of Cardiff, and, I believe, the people of Wales, are fed up with waiting for leasehold enfranchisement and the right of security in the homes which they have bought.

3.52 p.m.

Mr. Donald Box (Cardiff, North)

The leasehold system is regarded by many of my constituents as the curse of Wales. They welcome the Bill as a courageous attempt to unravel a legal position as complicated as any that exists today. If anybody doubts that these complications exist, I invite his attention to the Government's policy statement on leaseholds issued in January, 1953, in Cmd. Paper 8713. It will be seen as a result that so many anomalies exist that successive Governments, both Conservative and Socialist, have hesitated to tackle such a thorny problem.

It is to the distinction of some landlords and tenants that a steady number of freeholds are willingly negotiated between the interested parties each year, for, contrary to public opinion, not all landlords are of the Scrooge variety. In some cases, trustee landlords are not only offering the freeholds to the sitting tenants on a fair and equitable basis, but they have also offered to loan the money to make the purchase on reasonable terms as well. Sometimes, when large estates have to be sold to raise death duties, the executors insist, quite properly, that the leaseholders shall have first refusal of the freehold. One outstanding example of this was the Tredegar Estate, where a few years ago some thousands of freeholds in Cardiff and Newport were sold to the leaseholders at their probate value.

Unfortunately, there are good and bad landlords just as there are good and bad tenants. Some landlords take unfair advantage of their undoubted legal right by demanding large sums from their tenants for the freehold, or a high premium for a new lease, while on the other hand some tenants completely ignore present market values, and their complaints often camouflage a secret desire that legislation will be introduced which will make a gift to them of a valuable freehold. Both these categories of tenants and landlords do a grave disservice to those of us like my hon. Friends who are endeavouring to solve this complex problem, and the sooner they decide to behave sensibly the better for all concerned.

First, landlords, when offering a freehold or a new lease, should be willing to disclose the basis on which such figures are calculated. They should also be willing to provide supporting evidence where required. I recently assisted a member of my staff to buy her freehold, and when, at my suggestion, she wrote to the ground landlord for some indication of how the figure mentioned was arrived at, her letters were completely ignored. Such behaviour is both highhanded and ill advised. It creates unnecessary suspicion and indicates deceit where often none exists.

Though from time to time there have been half-hearted attempts to make party political capital out of the situation, the supporting evidence for this is invariably very flimsy indeed. It is to the credit of the party opposite that it instigated the Jenkins Committee to investigate this problem. It is to its discredit that it has never attempted to tackle this problem or say how it would tackle this problem if it were returned to power.

Mr. Skeffington

That is not true.

Mr. Box

To some of my hon. Friends opposite any stick is good enough to beat a so-called wicked landlord over the head. They would do well to consider that in so doing they may well be chastising such respected bodies as the Church in Wales, the Co-operative movement, the National Union of Mineworkers, and Socialist-controlled councils in many parts of the country. One does not have to look far afield to find Socialist-controlled councils some of which perpetrate some of the worst features of landlordism—in the guise of the public interest.

Secondly, those tenants who wish to see a change in legislation in regard to leaseholds should get together to frame proposals which are realistic, practical, and bear some relation to the facts of the situation. Like myself, many of my hon. Friends on this side of the House recently met a delegation from a leaseholders' society only to find that their aims and objects were so disproportionately biased in their own favour that they could not possibly hope to succeed.

Mr. G. Thomas

The hon. Member will talk the Bill out.

Mr. Box

If they would only realise it, they are doing great damage to their cause. They claim to be in favour of freedom, fair play and democracy, and in the next breath they seek powers to tear up solemn legal agreements, to which, whether they like it or not, they are a party. They would be much better advised to support the more reasonable proposals contained in this Bill in an endeavour to encourage public sympathy for their efforts, for an essential feature of this Bill is the fact that it recognises that any measure of leasehold enfranchisement which does take place must be at a price which is fair to both parties.

Though it might well be said that this is a big bite for a little Bill, I hope that today's speeches will at least leave my right hon. Friend in no doubt whatsoever as to the deep concern we in Wales feel that more effective action has not been taken to solve this problem.

Mr. Charles Doughty (Surrey, East)

I cannot agree that the Bill should be given a Second Reading. I am sure that we have heard about the initiatives of some people in Wales—

It being Four o'clock, the debate stood adjourned.

Debate to be resumed upon Friday, 29th April.