§ 3.51 p.m.
§ Mr. George Thomas (Cardiff, West)
I beg to move,That this House, noting with grave concern the hardships caused in Wales by the operation of the current leasehold system, calls upon Her Majesty's Government to introduce forthwith legislation enabling leaseholders who are owner-occupiers to purchase the freeholds of their homes at a fair and reasonable cost.Telegrams and messages which have come in from the Principality today indicate the very deep interest and concern which our people have in the subject of leasehold.
The problem of leasehold reform is not new to this House. As far back as 1885 a supplementary report of Her Majesty's Commissioners for inquiring into the housing of the working classes stated that legislation favourable to the acquisition on equitable terms of the freehold interest on the part of leaseholders would conduce greatly to the improvement of the dwellings of the people of this country.
Needless to say, opposition to this proposal was led by the Lord Salisbury of the day. He thought that the suggestion was at once objectionable and revolutionary, and that was the end of that for the time being. Select Committees of this House were directed to consider the leasehold system in 1889 and again in 1920. In the intervening years, over 20 Private Members' Bills have been introduced into this House seeking to ameliorate in some way the hardships of the operation of the leasehold system.
It was left for the Labour Government, in the 1940s, to set up a special committee of inquiry into the working of the leasehold system. Four hon. Members who are Members of the House now played a prominent part in that committee, which was known subsequently as the Jenkins Committee, being named after its second chairman. The present Chancellor of the Exchequer, who submitted a minority report of his own, was a member of the Committee. My hon. and learned Friend the Member for Leicester, North-East (Sir L. UngoedThomas), my hon. Friend the Member for Oldham, West (Mr. Hale) and the hon. and learned Member for Cardigan (Mr. Bowen) also served on the Commit- 402 tee. The majority Report, which was signed by the hon. and learned Member for Cardigan, rejected leasehold enfranchisement as a policy, partly for lack of evidence of any gross abuse of the system. The minority Report, which was signed by my hon. and learned Friend, came out strongly in favour of leasehold enfranchisement.
The first result of that report was that a holding Measure was introduced by the Labour Government of 1950. It was called the Leasehold (Temporary Provisions) Bill. Unhappily, it fell to the party opposite, due to its success in the 1951 General Election, to introduce permanent legislation based on the Jenkins Report. This it did in the Landlord and Tenant Act, 1954. We opposed that Measure on its Second Reading because it failed to provide leasehold enfranchisement for owner-occupiers. Desipte the fact that every hon. Member opposite, including the hon. Member for Barry (Mr. Gower), went into the Division Lobby in support of the Second Reading of the Bill, we were unanimously against it.
In the debate on 30th April, 1953, the present Lord Chancellor, who was then the Home Secretary, was the spokesman for the Government, and he said:We are not in favour of enfranchisement…and our conclusion is that even a moderate scheme of leasehold enfranchisement runs into such difficulties that it is simply not worth while.Later, in giving one of the main aims of the Landlord and Tenant Bill, he said:I feel that today the main need is for the right of occupation to be protected rather than for a new right of ownership to be conceded."—[OFFICIAL REPORT, 30th April, 1953; Vol. 514, cc. 2351 and 2356.]The first substantial point that I wish to make is that, since the Jenkins Committee reported, and since the 1954 Act was introduced, circumstances have changed so radically that the conclusions of the Jenkins Committee no longer have any relevance to our situation. Three new important factors have conspired to change the whole aspect of our leasehold problem. First, the change in town and country planning legislation, with the unparalleled leap-frogging in the value of land, has radically changed the problem of leasehold. Secondly, the inflationary influence of the Rent Act, 1957, on the value of property cannot be exaggerated, especially with regard to the leasehold 403 problem. Thirdly, the ground landlord's exploitation of the Landlord and Tenant Act, 1954, has exposed leaseholders to practices little short of legalised blackmail.
The 1954 Act, in favour of which the hon. Member for Barry waxed so eloquent, seems to be completely lopsided. It is a ground landlord's charter, for it makes him judge and jury in his own cause. When leaseholders seek either to renew their lease, or to buy the freehold of their home, they are held to ransome. Leaseholders are completely defenceless before the ground landlord. First, it is the landlord who decides whether there will be any negotiations about either renewing the lease or buying the freehold. In many cases he arrogantly ignores communications from tenants about the renewal of the lease or the purchase of the freehold.
Secondly, it is the ground landlord who decides whether there shall be any renewal of the lease if there are negotiations or whether he will insist on the sale of the freehold, or vice versa.
Thirdly, the ground landlord lays down the terms and the tenant has to take them or leave them. The law is weighted completely in favour of the ground landlord. He lays down a time limit, usually 30 days, in which leaseholders have either to accept his terms or to lose their property.
Because of the profitability of the leasehold system, finance corporations have bought out a great many ground landlords. Today, South Wales is in the grasp of a few of these powerful speculative bodies. I welcome a director of at least one on the benches opposite. These finance corporations have South Wales in an octopus grip, and they are exploiting to the maximum their near monopoly powers. The City of Cardiff, the capital of Wales, is a shocking example of a city in pawn to absentee landlords whom we see only when we come to this House, when we see them sitting on the benches opposite.
I want to give the House some examples of how the leasehold system, which the Attorney-General defended so vigorously last week, when he said there was no need for a change in the law, is working in Wales. A constituent of mine in Riverside, Cardiff, who had 404 twenty-three years to run on his lease and whose ground rent was £3 10s. a year, applied to the Western Ground Rents Finance Corporation for his freehold in March, 1959. He was told by that finance corporation that he could not be allowed to buy his freehold but that in their grace the finance people would permit him to renew his lease for eighty years, taking into account the twenty-three years still to run, so that it was an addition of fifty-seven years. If the lease was renewed, however, he would have to pay a premium of £180 and the ground rent would go from £3 10s. to £12 10s. He refused the offer. That was in March, 1959.
In September, 1960—possibly his circumstances had altered—he came back to the same corporation and was told that he could have his lease renewed, but that the ground rent would go from £3 10s. not to £12 10s., but to £20, and that the premium would be, not £180, but £500. [HON. MEMBERS: "Shame."] Does the Attorney-General defend blackmailing efforts of that sort?
In the constituency of the hon. Member for Barry, who sits on the benches opposite, the freehold cost of a house in 1958 was £400, which the owner-occupier declined to pay. In 1960, however, two years later, the cost had jumped from £400 to £750. It had nearly doubled in two years. Is that what the Attorney-General thinks is a system that does not need changing?
I can quote another case of an owner-occupier with thirty-two years remaining to his lease. Western Ground Rents said that it could be extended to eighty years on payment of a premium of £345, the ground rent jumping from £9 10s. to £35 forthwith, although the lease still had thirty-two years to run. That is the equivalent to demanding from my constituent a premium of £1,161 for an extension of the lease for forty-eight years, with all solicitors' and surveyors' fees to be paid by the tenant.
The lifeblood is being drained out of Wales by the financiers, who are protected by the Government side of the House. These excessive premiums and extravagant freehold charges make legislation urgently necessary, not in the long term, but in the near future. The leasehold system works in an inflationary way because, very often, people have to renew the lease on their houses before 405 they can get a mortgage. Properties in Cardiff and right along the South Wales coastal belt and in the valleys become virtually unsaleable in the latter part of a lease and they become neglected.
I have an instance from the constituency of my hon. Friend the Member for Carmarthen (Lady Megan Lloyd George). It concerns a retired police officer, aged 80, who was receiving £5 a week. I know that age and income do not matter to finance corporations, but these things matter to this House, as we represent the people. This man was paying a ground rent of £2 12s. a year. He has been offered an immediate renewal of his lease for fifteen years, including the six years unexpired, at £30 a year instead of the £2 12s. He has refused.
I have one more illustration, from the City of Cardiff, of the operations of Western Ground Rents. Mr. Harold Turner, who lived at 51, Cathedral Road, Cardiff, was so infuriated by the demand of Western Ground Rents that he went to the Western Mail, to whom I pay tribute for the consistent and outstanding way in which it has campaigned for leasehold enfranchisement. I want today to pay my tribute in the House to the Western Mail for its attitude to this question.
Mr. Turner has twenty-three years to run on his lease. He pays a ground rent in Cathedral Road of £10 a year. Western Ground Rents said that he could have the freehold of his house for £2,315 and legal fees. That is equivalent to £18,520 an acre. The Attorney-General blandly told me last week, just as he is smiling now, that no change in the law was necessary.
What headlines there are when workers ask for an increase in pay, but these speculators, who do nothing to increase our national wealth, get increases beyond calculation. Our whole community, from the tip of Pembrokeshire right across to Monmouthshire, as the Minister for Welsh Affairs ought well to know, quite regardless of party loyalties, is in a state of fury about the machinations of these ground landlords and finance corporations and the callous behaviour of our absentee landlords.
Things have now reached such a pitch that some of the better ground landlords are appealing to finance corporations 406 like Western Ground Rents to behave. The Lord Lieutenant of the County of Glamorgan is highly respected. He is claimed as a friend by hon. Members on this side as much as by hon. Members opposite. Nobody would accuse him of being a Socialist. Indeed, to the contrary, he is a ground landlord himself.
In the Western Mail of 16th March, 1961, however, he was reported in the following terms:Property owners should not be too greedy concerning the sale of freeholds, Colonel C. G. Traherne, the Lord Lieutenant of Glamorgan and President of the South Wales and Monmouthshire Association of Building Societies, said at the Association's annual luncheon in Cardiff yesterday. There are occasions when the price our client has been asked to pay has been exorbitant and then we may not have been able to make the full advance.I beg the Government Front Bench to realise that these are not the exaggerated claims of people with a grudge against landlords. These are the calculated statements of people with knowledge of the way in which finance corporations are exploiting the power given to them under the 1954 Act.
Although the Lord Lieutenant of Glamorgan appealed to the better nature of the finance corporations, he could have saved his breath. It is as useful to appeal to their better nature as it would be to pray for fine weather in a blizzard on a mountain top. These finance corporations are quite soulless. They are without feeling. They measure every application in terms of £ s. d. and disregard all human considerations. They are concerned with profits, not with people. They reject appeals, they scorn petitions and they rob the widow and the pensioner alike. The law allows them to do it.
Nothing but an alteration of the law will prevent this exploitation being continued. Exhortations from the Dispatch Box and exhortations by hon. Members and right hon. Members in the country will not stop these finance corporations having their pound of flesh. These people have done nothing to increase our wealth in Wales. They come there only for their dividends. They have never built a house, they have never provided a drain, they have never built a road or helped with our street lighting, and they have never helped in any way to increase the value of the land. But they are 407 cashing in on the labours of our community and stealing the reward of our labours.
I realise that it is easy to condemn these money-crazed financiers as social parasites. I realise that it is quite easy to do that, but the real culprits are on the Treasury Bench. The real culprits are those who use this House to protect finance corporations of this sort. The real culprits are those who put the power in their hands. That is why we are putting forward this Motion, a Motion which notes the grave disquiet and hardship which the present leasehold system is creating.
I say to the Attorney-General that there is not a Welsh Tory in South Wales who feels it safe not to join us on this issue. They all of them express the same anxiety, and express the same contempt for the machinations of these finance corporations, as I have expressed here this afternoon. It is undoubtedly a fact that the Welsh people are more united on this than on any other question.
Moreover, we feel that no further inquiry is needed. That is why I took my name from the Motion put down by the hon. Member for Cardiff, North (Mr. Box). Indeed, some of my hon. Friends have done the same. We feel we have all the information necessary. I have already given instances this afternoon which surely call for remedy.
I would quote a most remarkable and outstanding article in the Western Mail of Tuesday, 4th July, referring to the Answers which the Attorney-General gave me in the House last week. It says:The danger is"—and this is the answer to the hon. Gentleman's Motion—that further delay will exacerbate the situation. But it is perfectly clear from the remarks last week of the Attorney-General, Sir Reginald Manningham-Buller, that the Government either has not given this matter proper consideration or that it has callously disregarded the plight of many thousands of leaseholders, not only in South Wales but in other pockets throughout Britain. Sir Reginald seems to think that it is enough to reassure a man, whose father or himself has bought a house by dint of years of saving and self-denial, that he has no need to worry because the 1954 Act gives him security of tenure. What kind of justice is this, that 408 an archaic system, a legacy from the days of the robber barons, makes a man a tenant in his own home, having to pay a full economic rent with nothing to show for his thrift and no redress?That is the policy which the Attorney-General defended last week.
I think that the House ought to be aware that within the next twenty years thousands of leases in South Wales will fall in; 12,000 will fall in in the City of Cardiff. Although the information which the hon. Member for Bury St. Edmunds (Mr. Aitken) gave us proved inaccurate, that nobody has been refused permission to buy his freehold, and although the hon. Member has had to admit that he was wrong in that, none the less I accept his statement that leases will fall in within the next twenty years. In the valleys of South Wales leases will fall in on a wholesale basis, and, therefore, every passing year, without legislation, pushes up the Prices, puts money into the pockets of finance corporations and makes the leaseholders' position and that of those who are seeking security in their own homes more intolerable.
The compensation on which enfranchisement is to be given we have left open. All we say in the Motion is that owner-occupiers should be able to purchase their freeholdsat a fair and reasonable cost.We do that because we realise that definitions belong to legislation rather than to Motions, and it is obviously the responsibility of those who introduce the Bill to deal with that question. The questions of amenity covenants and severance compensation and minor issues, as I regard them, would be dealt with by legislation, but the general principle ought to be accepted.
I realise that there are probably great differences between those on that side of the House and those on this on what is fair compensation. On 3rd March last, again in the Western Mail, the hon. Member for Cardiff, North is reported as having been addressing the Cardiff North Conservative Women's annual meeting. A cosy meeting, no doubt. Many of my neighbours will have been there, and delightful people they are—for Tories. The hon. Gentleman told that meeting:I do not doubt the sincerity of the Socialists in wanting to solve this problem, but their idea of a fair deal to both parties may differ considerably from our own.409 The hon. Gentleman never spoke a truer word, because there is a wide gulf between us as to what the compensation ought to be to people of this sort.
The present Lord Chancellor, in the debate in 1953, posed two pertinent questions. He said:Is the compensation payable by the tenant to be related to the market worth of what the tenant is acquiring or is it to be something else? Is the right of enfranchisement to be limited to the leasehold occupier or to extend to the leasehold investor who sublets at a rack rent?"—[OFFICIAL, REPORT, 30th April, 1953; Vol. 514, c. 2351.]We are quite clear in our Motion. We limit the leasehold enfranchisement to the owner-occupier, to the little family struggling to own its own home. We believe that every family has that inalienable right to own its own home—despite the views of the party opposite.
There are signs that the Government are conscious of the mounting pressure of public opinion; and it is only public opinion which shifts them. That is why we have initiated a great petition which is now in circulation, and for which three hon. Members opposite have declared their support, and which condemns the holding to ransom of the people of South Wales by these finance corporations.
I have in my possession a copy of a letter which was circulated by Mr. A. F. Dolman, a solicitor, of Bridge Street, Newport, Monmouth, to solicitors in South Wales, in which he says:The Lord Chancellor has asked for particulars of (1) any cases of actual hardship (2) of any hardships which are thought to result from the present system, and which may perhaps not have been brought to the attention of the Leasehold Committee and (3) to any new factors since 1950 which may have altered the situation in the meantime.I have tried to base my remarks this afternoon as an answer to these three questions. I believe that I have provided instances of actual hardship. I believe I have provided instances of hardship which could not possibly have been brought to the Leasehold Committee because they are the results of the new factors of the town and country planning legislation, the Rent Act, 1957, and the Landlord and Tenant Act, 1954, and these are new factors which, since 1950, have altered the situation completely.
I therefore believe that we have a right to ask the Government to think again. In the debate in 1953, my hon. Friend the 410 Member for Leicester, North-East stated that the root of the issue was whether we agree that it is the right of the tenant to decide whether he wishes to buy the freehold or extend the lease, or whether we believe it is the right of the landlord to decide whether the tenant shall buy, whether he shall renew, or whether he will take the property. We have no doubt in saying that it is time the tenant was emancipated from his present subservience to the landlord.
We believe that there is no more honoured word, no more sweet sounding word, in the language than "home". We are fighting for the homes of our people, and I hope that the Attorney-General will realise that today we speak for people who are deeply moved and deeply angered by the way in which exploitation is being conducted. Whether people own leaseholds or not, they hate to see injustice. The present system is immoral, is unjust, and is a denial of democracy, because it weighs the law down on one side.
The Welsh National Anthem begins with the words:Mae hen wlad fy nhadau"."The land of my fathers is dear unto me." We ask the Government to accept the Motion so that the land of Wales can belong to the Welsh people and not to finance corporations, as at present.
§ 4.21 p.m.
§ The Attorney-General (Sir Reginald Manningham-Buller)
The hon. Member for Cardiff, West (Mr. G. Thomas) has moved the Motion standing in the name of his right hon. and hon. Friends and himself with the eloquence and charm that we have come to expect from him. Of course, the hon. Gentleman mixed with that charm some harsh comments about me and about my hon. Friends, but we also expect that from him. His eloquence and charm will not, I hope, lead the House to accept without question all the allegations and charges that he has thought right to prefer.
The hon. Gentleman has for a long time been an opponent of the leasehold system, in so far as that relates to ground leases. I have heard him make many speeches on the subject, and, if he will not take it amiss, may I say that I think that his speech today was the best that I have heard him make. It was, I have 411 no doubt, largely due to the activities of the hon. Gentleman that the Socialist Government appointed the Committee, to which he referred, presided over first by Lord Uthwatt and then by Lord Jenkins, to report upon these matters.
That Committee sat for a very long time and conducted a very full inquiry. As the hon. Gentleman has said, the majority of that Committee, after prolonged investigation, did not recommend that an occupying tenant of residential or other premises should be given the right to purchase compulsorily the freehold or any other prior interests in the premises. Nor did they consider any other form of leasehold enfranchisement desirable in addition to that existing under the Law of Property Act, 1925, Section 153, and the Places of Worship (Enfranchisement) Act, 1920.
The Committee went on to recommend that occupying ground lessees should be given security of tenure. Then, as the hon. Gentleman has said, in 1954 we introduced the Bill which, after prolonged debate and discussion, reached the Statute Book as the Landlord and Tenant Act. It is true—this is really the complaint of the hon. Gentleman—that it contained no proposals for leasehold enfranchisement. But it did, among other things, provide for security of tenure for occupying lessees of residential property.
The hon. Gentleman and I took part in, I think, nearly all of those debates and, to me, what the hon. Gentleman has said today had a very familiar ring. Perhaps at this point I ought to say what I have said in all the debates on this subject in which I have taken part. I must disclose to the House, in accordance with the usual custom, such interest as I have in this matter. I say straight away that I have no interest in any property at all in South Wales, so that all the harsh things said by the hon. Gentleman about property owners and finance corporations and landlords in South Wales do not apply to me. I am a trustee of a trust which owns a considerable amount of property and which does let that property on ground leases. But, so far as I am aware, none of the ground leases is a ground lease of residential property. I have said that more than once in these debates until I 412 am tired of saying it. But I think it only right to say it once again.
It is true that eleven years have elapsed since the Jenkins Committee reported, but I differ from the hon. Gentleman when he says that the position of tenants holding ground leases to residential property is today worse than it was then. In my submission, and as I shall seek to show, their position is much better than it was when the Jenkins Committee reported, in consequence of the legislation placed on the Statute Book by a Conservative Government. We provided that security of tenure despite the termination of the ground lease—security which the party opposite failed to provide when in power.
Today, and on other occasions, the hon. Gentleman has bitterly attacked the ground lease system. While I am not speaking on behalf of Western Ground Rents, or any finance corporation, or any landlord, I should like to say a word generally about that system. I do not think that an attack on the system in general is justified. When the owner of land puts up a building and lets it, he demands and obtains from the lessee a much higher rent than he does when he lets the land and the lessee undertakes to erect the building. In the latter case, instead of paying the increased rent for renting the building, the tenant puts his money into putting up the building. In many instances, that has advantages both for the ground lessee and the ground lessor.
It is a commonplace that towards the end of a long ground lease the tenant is paying a far lower rent for the occupation of that property than the property would command in the open market. I am sure that the hon. Member for Cardiff, West would not deny that many, if not all, of the ground lessees in South Wales are paying far less than they would be paying in rent for council houses or for similar property on the market today.
§ The Attorney-General
The property is not theirs. The bargain made was that they would rent the land and put a building on it. What the hon. Gentleman keeps saying—and what, of course, is wrong—is that they are in homes 413 which they own. They are the homes in which they live, but they do not own them.
§ The Attorney-General
That was part of the bargain originally made. That is what happens under ground leases, whether it is residential property or any other kind of property. I know that the hon. Gentleman is seeking to alter the system. I am seeking to give reasons why the system has its advantages.
Ground leases have been granted, not only 150 years ago but all the time, and to my mind the system has some advantages. The other day, in a supplementary question to me, the hon. Gentleman spoke of ground lessees having bought their homes. But that is not the case. If they have bought their homes, they would not have to pay rent.
§ Mr. Raymond Gower (Barry)
May I interrupt my right hon. and learned Friend? He said that if people had bought their homes they would not be paying any rent. Surely that is wrong. They can buy a freehold and still be charged rent. I think that my right hon. and learned Friend is inaccurate.
§ The Attorney-General
If they have bought the freehold they do not pay rent any longer—[HON. MEMBERS: "They do."] They may create a rant charge, but the property is not held by landlord and tenant even then.
The hon. Gentleman has said that having to pay a full economic rent shocks these people. I am quoting his words and I hope that I am not misquoting him. But the tenant of premises falling within the protection of the 1954 Act is not—as the hon. Gentleman has suggested more than once—at the mercy of the landlord. The landlord cannot hold the tenant to ransom. He is not judge and jury in his own cause. Under the 1954 Act, if the tenant's lease expires, he can hold on and he and the landlord can agree a new rent.
But if they fail to agree as to the rent, the county court will fix the rent at what, in the opinion of the court, is 414 a reasonable figure for the dwelling-house. That is the statutory provision created by the 1954 Act, which does provide for security of tenure.
§ The Attorney-General
It is no use quarrelling about that. What he bought was an interest in the lease.
§ Mr. Leo Abse (Pontypool) rose—
§ The Attorney-General
I should like to continue my speech. There is plenty of time.
The position has changed in the last eleven years in this respect. Eleven years ago, such tenants had no protection at all. They could be strictly held to the terms of their contracted bargains and forced to leave their houses at the end of the leases. Now, as I have said, thanks to the 1954 Act, they have security of tenure, and it is given to them at a fair price, fixed if need be by the county court.
§ The Attorney-General
The hon. Gentleman says, "How long?" They can continue, and the landlords can only get possession if there is a plan for redevelopment.
§ Mr. Callaghan
Do they not become statutory tenants under the Rent Restriction Acts, and, if that is so, does it not mean that amendment of the Rent Restriction Acts could and would remove the protection from them?
§ The Attorney-General
An amendment of the statute law might remove certain protection given to them by the 1954 Act. The law can always be altered one way or the other. I am talking about the present position, compared with what it was before our 1954 Act, and it is merely a historical review of the situation. What I am asserting, and I do not think that anyone will seriously deny it, is that the 1954 Act did change the position of the tenants for the better.
§ Mr. John Morris (Aberavon)
Surely the security of tenure created by the 1954 415 Act was fictitious, in that, first, if the landlord wishes to develop the property, he can remove the tenant, and, secondly, he has the ordinary remedy under the Rent Act and can get possession?
§ The Attorney-General
I do not regard that as fictitious. I think that the protection he has had since the 1954 Act gives real security of tenure—and this is an important factor—because he can go on remaining upon the premises after his lease has terminated.
The hon. Gentleman has said that having to pay the full economic rent shocks them, but let us bear in mind that they are in a better position than those who go to South Wales and seek to negotiate a lease of a house. They can stay on where they are, and, if need be, go to the county court to get a reasonable rent fixed. It is easy to use unjustified and extravagant language on this subject. I must confess that I do not consider that the security of tenure given on these terms can rightly be criticised.
I do not think, either, that one should exaggerate the size of the problem in South Wales. For the last eleven years or more the hon. Gentleman has constantly attacked Western Ground Rents, a company which owns, I am told, about 10,700 residential properties in South Wales let on ground leases. I am told, too, that during the years 1958–59–60, only two leases held by this company expired. Neither property was occupied by the leaseholder.
In one case, the company took over the statutory tenant; in the other, it sold the freehold to the occupier. I am also informed that between now and 1970, 73 of the company's ground leases will expire in Cardiff and 56 outside Cardiff, a total of 129, and, of those, 50 are occupied by the lessee. These are the facts, of which I have been informed, about that position.
The Motion moved by the hon. Gentleman calls upon the Governmentto introduce forthwith legislation enabling leaseholders who are owner-occupiers to purchase the freeholds of their homes at a fair and reasonable cost.That is to say, to introduce legislation to enable leaseholders who are occupying the properties to engage in compulsory purchase of other individual's property. I must say that it would require very 416 strong grounds indeed to convince me that such a step would be right.
Then, what is meant by "fair and reasonable cost"? The hon. Gentleman has left that open today, but he has had leave to introduce a Bill, which has been published and which shows his views on the subject. I rather gather that what he means by "fair and reasonable cost" is so many years' purchase of the ground rent. I would ask him to consider quite seriously whether that would be fair and reasonable. I myself would not have thought it right to ignore the value of what would be bought; that is to say, the value of the reversion.
The Motion limits the giving of this right of compulsory purchase to owner-occupiers. Of course, there is a very natural sympathy with owner-occupiers, whether they hold under a ground lease or any other lease, when that lease is coming towards its end, but if this right was given to the owner-occupier to purchase at a price related to the ground rent, the purchaser could sub-let the next day at the full market rent. Is there really any hardship which would justify putting him in the position where he could do this? I am sure, having heard the hon. Gentleman and all he has to say—and I did not interrupt him—that I do not think that he has established that there is.
If the owner-occupier were to be given the opportunity to do this, why should the ground lessee who has sub-let his property for many years not be able to do the same thing? I do not understand why the argument applies to one and should not apply to the other. Suppose we gave this right for which the hon. Gentleman asks to the ground lessee and he enfranchised his property. He could sell it the next day at the fair market price, reflecting the value of the reversion, which, presumably, he is unwilling to pay. I find it a little surprising to hear the Opposition urging changes in the law which would permit of this profiteering.
I would remind the House that the minority Report of the Leasehold Committee, signed by the hon. and learned Member for Leicester North-East (Sir L. Ungoed-Thomas) and the hon. Member for Oldham, West (Mr. Hale), proposed that the price payable on the compulsory enfranchisement of the leasehold 417 should be the fair market value of the reversion, with the sitting tenant protected by the Rent Restriction Acts, so there is a division of view, quite obviously, in the party opposite. That is what is meant by a fair price for acquisition, and that division of view has been present throughout all our debates. [HON. MEMBERS: "Oh, no."] Indeed, it has, among the party opposite, and the hon. Gentleman has sought to conceal that division by saying airily that we can leave that problem to be solved by legislation. The view expressed by those who signed the minority Report differs from the view of the hon. Gentleman.
I gather that the hon. Gentleman's view is that it should be so many years' purchase of the ground rent, and that, in my submission to the House, is a basis which is, by its very nature, bound to be unfair and to do injustice. If we want to do justice on this, we must look not only at the position of the leaseholder but also at that of the landlord. They are not all great landlords, and not all finance corporations.
It must be very rare indeed for the present lessors and lessees of these properties to be the persons who were parties to the original ground leases which are now approaching their end. We know that the freeholds have changed hands. Many of the leases must have changed hands, too. Others, again, have been sub-let by the ground lessees. In fact, I understand that more than two—thirds of the leasehold property in South Wales is occupied not by the ground lessee, but by a tenant paying an ordinary rack rent.
When the freeholds and the leases changed hands—this is a point that I would ask the House to bear in mind—the prices paid must have reflected the value of the property being bought and sold. The price paid by the freeholder would reflect the value of the reversion—not merely the capitalised value of the ground rent which the hon. Gentleman, with all his talk of fair and reasonable cost, would give him as compensation for expropriating his interest in the property.
When the lease changed hands, the lessee must have paid a price that took into consideration both the fact that he was buying a wasting asset and the fact 418 that he would, at the end of his lease, be liable under the repairing covenants. No one can seriously believe that when he bought his lease a fair and reasonable price for the freehold would have been what he paid for the lease and the capitalised value of the ground rent.
What the hon. Member proposes is a right of compulsory purchase to be given to a private individual of a confiscatory nature which would give the leaseholder an uncovenanted benefit and not compensate the freeholder for what he was parting with. I cannot think that this would be right. I know that this subject arouses great feeling and emotions. The hon. Gentleman certainly has left me in no doubt of that. I was delighted to hear him say today that he is no longer pressing for an inquiry, because only last week he was demanding one with all the emphasis at his command.
§ The Attorney-General
I hope that the hon. Gentleman will in due course change his mind a little more on this subject than he has on this point.
While I say that I know that this subject arouses great feeling and emotion, I cannot think that that is a good basis for legislation. It was so long ago as 1953, in our debate on the White Paper, that a very hard thing was said about some hon. Members of the Labour Party. The hon. Member for Widnes (Mr. MacColl) said:Some of my hon. Friends appear to have an emotional fixation about the discarded Liberal Party policy of enfranchisement."—[OFFICIAL REPORT. 30th April. 1953; 514, c. 2453–4.]The hon. Member for Cardiff, West, in the course of his speech and on other occasions, has sought to represent that landlords have been demanding extortionate prices for the sale of the freehold. By that, if I understand him rightly, he means prices in excess of the capital value of the ground rent. But I should be most surprised if he can produce—I should be glad if he would send it to me—evidence of prices being asked in excess of the fair value of the reversion. If he can produce that evidence, I should be glad to see it.
The hon. Gentleman has spoken today and on other occasions with great 419 passion of the landlord being judge and jury in his own cause, by which he seemed, as I understood him, to mean that the landlord was free to refuse any offer which he considered unreasonable. In that sense, of course, the lessee is himself judge and jury in his own cause because he is equally free to refuse an unreasonable offer.
§ The Attorney-General
No. Certainly, he is free to do so, for the Landlord and Tenant Act has put him in a strong bargaining position if his landlord wishes to sell. If the landlord makes no offer, he merely holds over at the end of the lease. He is in a strong bargaining position—this is what the hon. Gentleman ignores—because he has this security of tenure given him by the 1954 Act and cannot be got out of the house unless it is wanted for redevelopment.
Despite the eloquence and the emotion with which the hon. Gentleman moved the Motion, the case for legislation on the lines proposed in it and in the Bill which he has introduced is not, in my submission, made out. Examination of the facts, so far as they are available to us, does not establish that it would be either right or fair to introduce confiscatory legislation, legislation giving a right of compulsory purchase to individuals at prices less than the value of what they purchase. For these reasons, I ask the House to reject the Motion.
§ Mr. Sydney Silverman (Nelson and Colne)
Before the right hon. and learned Gentleman sits down, will he tell the House whether he has any criticisms whatever of the present system of leasehold tenure of land, and, if so, what they are?
§ The Attorney-General
I shall not give way to the temptation to reply at full length to the hon. Gentleman. I did not realise that he was so much of a fisherman, but this time the fish will not rise to the fly which he has cast.
§ 4.46 p.m.
§ Mr. Ifor Davies (Gower)
Following the very powerful and effective opening speech of my hon. Friend the Member for Cardiff, West (Mr. G. Thomas)—I congratulate him heartily upon his 420 speech—I had expected the Minister for Welsh Affairs to rise and close the debate by accepting the Motion. But it appears, following the speech of the Attorney-General, that we have to continue to try to persuade the Government.
I should like to assure the right hon. and learned Gentleman of one thing immediately. There is no division on this Motion on this side of the House. Indeed, there are hon. Members on the Government side who are in sympathy with it. Moreover, two of the most important newspapers in Wales are also in sympathy with it.
Listening to the right hon. and learned Gentleman, I was reminded of a question asked in the House more than fifty years ago by the then Member of Parliament for Carnarvon Boroughs (Mr. David Lloyd George). His question was:Who made 10,000 people owners of the soil and the rest of us trespassers in the land of our birth?That question is very relevant in this debate, because the 10,000 owners have been reduced by take-over bids and modern financial movements, as we have already heard from my hon. Friend. But masses of the people are still regarded as trespassers in the land of their birth.
It is not only we on this side of the House who feel keenly about the matter. The Western Mail this morning refers to the matter as something near to the heart of Wales. The hon. Member for Barry (Mr. Gower), on 1st April, 1960, when he introduced his own Bill, said:…this is one of the major subjects of controversy….I remind the hon. Gentleman of a further statement that he made. He said that it cantruly be claimed that the rank and file, whether they be Conservative, Socialist, Liberal, Nationalist, or anything else, are largely united"—that is the word, "united"in their dislike of the prevailing system of leasehold tenure as it affects dwelling houses in the Principality.The hon. Gentleman also said:The problem exists to an extent"—this is the answer to what we have been told by the Attorney-General, who said that it is not worse—which is scarcely to be appreciated by non-Welsh Members.…"—[OFFICIAL REPORT, 1st April, 1960; Vol. 620. c. 1764–5.]421 We have had proof of that again this afternoon.
The hon. Member for Cardiff, North (Mr. Box) also supported his hon. Friend. He said that the leasehold system was regarded by his constituents as a curse on Wales. That is strong language. He said that deep concern—similar words to those which we use in our Motion—was felt that more effective action had not been taken to solve the problem. Not only are hon. Members on both sides concerned, but the Press of Wales is also concerned. I shall refer to the problem outside Cardiff, for I also speak for West Wales.
I pay tribute to the editor of the South Wales Evening Post for an editorial published last Thursday in anticipation of this debate. The editorial said that the plea that we are making in this Motion,…for a change in an outmoded and iniquitous system"—Those are not our words. The South Wales Evening Post is a very good friend to Members opposite—bequeathed to Welshmen by an earlier generation…is a just one, and Welsh Conservatives should support it.The problem is of fundamental importance, and I urge the Attorney-General to realise that the Government should acknowledge that grave concern is felt not only on this side of the House, but also throughout the Principality.
Since I became a Member of this House I have been made acutely aware, both by volumes of correspondence—which I will not quote because many of my hon. Friends wish to speak—and also by personal meetings with the people I have the honour to represent, that they resent more than any other social injustice the way in which the leasehold system operates in Wales. It is also appropriate that we should be having this debate at a time when the effects of the present system are being felt more keenly than ever before.
Here, I want to cross swords with the Attorney-General about one comment which he made. He referred to the Jenkins Report. This was published in 1950, and it anticipated the present situation. The Report, referring to long leases, said:…there appears to be little justification for the belief that a specially large number is due to expire in the next year or two…422 But the next paragraph says:in about ten years' time, however, the effect of the mid-nineteenth century development should begin to be felt and over a period of 20 to 25 years there may be a noticeably higher rate of expiry.The ten years is now up. That is why, as expected by the Jenkins Committee, the leasehold problem is now becoming increasingly serious.
I disagree with the Attorney-General when he says that the position is not worse than it was ten years ago. It is very much worse. Today, more than ever before, with these leases increasingly expiring, it is realised by many people, for the first time, that the ground landlord is, as my hon. Friend the Member for Cardiff, West said, both judge and jury in his own cause. It is the landlord himself who decides whether he will negotiate at all with the leaseholders about either renewal of the leases or the sale of freehold rights. He demands to know what terms they are offering, and at no stage is there any sign of a freely-negotiated contract. I am sure that many hon. Members could produce evidence to that effect.
In my constituency of Gower, more than half the house properties are leasehold, involving, in many cases, entire villages in industrial areas. Names like Gwaun-cae-Gurwen, Cwmgorse, and Penclawdd come to mind. Last Sunday, a deputation came to see me. It consisted of six men who live in the same street, and it was led by an ex-miner who is over 70 years old—the best possible type of man. I say to my hon. Friend the Member for Rhondda, West (Mr. Iorwerth Thomas) that this man is also a pillar of Nonconformity in Wales.
This man has lived in the same house for forty years and, by continuous improvements, has practically rebuilt it. It is not merely his house, it is his cherished home. Today, however, due to the existing leasehold system, he faces the threat of losing it after forty years. So, when defenders of the leasehold system talk about the sanctity of contract, we are entitled to ask, "What about the sanctity of homes?" There can be no sanctity about any contract if it is unjust. It has become the practice of the Government, as we heard again today, to defend their refusal to introduce leasehold reform by referring to the complexity of the problem and to the legal difficulties 423 For instance, the present Lord Chancellor, when he was Home Secretary, said, during the Committee stage of the Landlord and Tenant Bill, in his capacity as Minister for Welsh Affairs:I spent many months trying to see whether I could find a scheme of leasehold enfranchisement which would work. I tried, and I failed. What has been shown is that when a genuine and well-intentioned effort is made to meet the difficulties which I have propounded, the only result is to create further difficulties."—[OFFICIAL REPORT, Standing Committee D, 4th March, 1954; c. 18.]The emphasis is always on difficulties, but the truth is that this is not a question of difficulties, but of objections. It is the Gentleman's objection to the principle of leasehold enfranchisement which is proving to be the main stumbling block to reform. But we on this side of the House have no difficulty, nor have many other people, because we have accepted the principle. The crucial decision that has to be made here today is not one, as my hon. Friend the Member for Cardiff, West rightly said, of detail here and there—that is not the issue—but whether we are to give a tenant, in the case of an owner-occupier, priority over the landlord's interests.
In the Landlord and Tenant Act, 1954, to which the Attorney-General referred at great length, I acknowledge that the Government have moved a little towards breaking the sanctity of the law of contract in this matter. Indeed, during the Second Reading debate on that Act, the hon. and learned Member for Buckinghamshire, South (Mr. Ronald Bell) protested at what he called…the violence which the Bill does to the law of Con tract."—[OFFICIAL REPORT, 27th January, 1954; Vol. 522. c. 1837.]Thus, the Government have already broken into the law of contract, and, despite its many weaknesses, that Act recognised—though in a severely qualified way—that tenants have some rights.
I appeal, therefore, to the Minister for Welsh Affairs, in particular, to go a step further when he winds up the debate and to accept this Motion, recognising that a Welshman's home, too, is also his castle. I hope that, after this debate, we shall find that the Welsh day this year has become memorable because the right hon. Gentleman has 424 agreed with us that no longer are we to be regarded as trespassers in the land of our birth.
§ 5.0 p.m.
§ Mr. John Foster (Northwich)
I start by disclosing my interest as a director of Western Ground Rents, which I have done before. I should like to bring the problem into perspective. Throughout all these debates the hon. Member for Cardiff, West (Mr. G. Thomas) has exaggerated the problem and has erroneously stated the number of leases that will fall in. As my right hon. and learned Friend the Attorney-General said, only two leases belonging to Western Ground Rents have fallen due in 1958, 1959 and 1960, and in the next ten years only 73 leases will fall in. Nonetheless, as I say, throughout the debates the hon. Gentleman has made wild and exaggerated claims that the whole of Cardiff is to be filched from the old owners—
§ Mr. Foster
The hon. Gentleman says that he never said anything of the sort, but I have extracted what he has said in the past. In the debate on the Address on 7th March, 1950, the hon. Gentleman said:Within the next 10 years, half of the city of Cardiff will be taken from the business people and householders by these finance corporations, unless leasehold reform is introduced."—[OFFICIAL REPORT, 7th March. 1950: Vol. 472, c. 261.]That is quite inaccurate as regards Western Ground Rents. As I say, only two of its leases have fallen in up to 1961—
§ Mr. Foster
I am, at the moment, confining my attention purely to the wild, exaggerated statements made by the hon. Member for Cardiff, West. He made a similar statement to the House on 2nd November, 1950. He then said:…between now and Christmas a large number of homes in Cardiff will be lost to a financial corporation if the Government do not protect the people."—[OFFICIAL REPORT, 2nd November, 1950; Vol. 480, c. 426.]That is quite inaccurate. It is nothing like that.
425 Again, on 7th March, 1950, speaking in this House, the hon. Gentleman said:In the Grangetown Ward, no fewer than 4,000 houses will be taken away from those who purchased them by these finance corporations, unless some action is taken during the lifetime of this Parliament…"—[OFFICIAL REPORT, 7th March, 1950; Vol. 472, c. 261.]The fact is that there are only 3,139 houses in the whole of Grangetown. Of those, 951 are owned by Western Ground Rents. None fall in before 1974, and only 62 between 1974 and 1989. Why did the hon. Gentleman think that 4,000 houses would be taken away unless something was done in the lifetime of that Parliament?
On 15th March, 1948, the hon. Gentleman asked:Is my right hon. and learned Friend aware that notices are being given on a large scale in Cardiff to people whose leases fall due within the next five years and that tenants are being asked to pay a purchase price of 175 years' purchase or lose their homes…".—[OFFICIAL REPORT, 15th March, 1948; Vol. 448, c. 1693.]The fact is that no notices were given by Western Ground Rents, who owned a substantial part of Cardiff. As to the purchase price of 175 years' purchase of the ground rent, the ground rent was only £1 a year, making £175, but the house was worth between £2,000 and £3,000—and we offered it to the tenant for £175—
§ Mr. Foster
It is important that the House should know how far the hon. Gentleman has exaggerated the case in the past. I can quite understand him squirming now and his hon. and right hon. Friends trying—
§ Mr. Foster
In my experience, people do not make wild and exaggerated statements.
In Tribune of 6th December, 1946, the hon. Gentleman wrote:In South Wales thousands of leases are falling due each year, and this is the ground speculator's opportunity.Quite untrue.
Speak mg in the House on 14th November, 1946, the hon. Gentleman alleged that under the present law people were 426 being blackmailed and robbed, and that the Marquess of Bute had sold the ground rents of 20,000 houses. He had sold the ground rents of 11,000 houses.
On 14th November, 1946, the hon. Gentleman said:Within the next 10 years the majority of the leases in Cardiff will be falling due."—[OFFICIAL REPORT, 14th November, 1946; Vol. 430, c. 265.]As I have said, in the next ten years 73 leases will fall due in Western Ground Rents share of Cardiff.
Today, the hon. Gentleman repeats his inaccuracies. He says that 10,000 houses in Cardiff—
§ Mr. Foster
It was either 10,000 or 12,000. If the hon. Gentleman said 12,000 houses, that makes it worse—
§ Mr. Thomas
I might point out that I have these figures from the hon. Member for Bury St. Edmunds (Mr. Aitken).
§ Mr. W. T. Aitken (Bury St. Edmunds)
The hon. Member says that, but I do not remember giving them to him. Would he tell me when and where I gave them to him, because I have no recollection at all of giving him any such figures?
§ Mr. Thomas
It may be that the hon. Gentleman's memory is failing, because when he last spoke in this House he mentioned the number of houses and I did him the courtesy of quoting the same figure. Further, the hon. Gentleman said that Western Ground Rents never refused to sell anyone the freehold, but he has had to eat his words and so has the right hon. and learned Gentleman.
§ Mr. Foster
We are at cross-purposes. I heard the hon. Gentleman say that in the next twenty years the leases of 10,000 or 12,000 houses would fall in. That is quite untrue, and hon. Members can see that that cannot be right, because the number of houses in Cardiff in 1871 was only 5,000. In 1881 there were only 12,000 houses—
§ Mr. Foster
In 1891 there were 20,000 houses. It is, therefore, quite impossible for the leases of 12,000 houses 427 to fall in in the next twenty years—[HON. MEMBERS: "No."] It is impossible, because, judging by the experience of Western Ground Rents, in that period we have 731 leases falling due—
§ Mr. Callaghan
It is quite right that they will not fall in, but the reason will be that a great many ground landlords are selling, and the intense resentment felt against the hon. and learned Gentleman's company is caused by the fact that if the company does want to sell it asks such extortionate prices.
§ Mr. Foster
The hon. Gentleman is getting away from the point. There are not that number of leases falling in in the next twenty years. It is a misstatement by the hon. Member for Cardiff, West—
§ Mr. Foster
No, it is not quibbling. If the matter is presented as a great problem, with the leases of thousands of houses falling in by Christmas or in the lifetime of a Parliament, the House gets a very different idea of the problem.
Let us see what sort of people the hon. Member for Cardiff, West supports. In 1948 he wrote to Western Ground Rents:I have been approached by Mr. I. Gaba…whose lease of the above properties expired last March.The properties mentioned are Nos. 14, 15 and 16 Patrick Street:I understand the property is very old and that you have asked Mr. Gaba for the sum of £575 to renew the leases. He finds it impossible to pay this figure and in view of the fact that he wishes to buy the houses to help his daughter who is in poor circumstances, I should be glad if you would give sympathetic consideration to his request…How did it turn out? It turned out, as is shown by the answer of Western Ground Rents, that the hon. Member was wrong. The figure of £575 was for six houses, not three. It was for the freehold and not for the renewal of the lease. Mr. Isaac Gaba purchased the lease of six houses in March, 1940, for £200. After purchasing them, he must have received at least the Schedule "A" valuation, which would amount to an income of £1,152 for his outlay of £200.
During the time that Mr. Gaba owned these houses, the hon. Gentleman was 428 making representations for someone not in occupation. Western Ground Rents said:…the occupiers state no repairs have been done, the War Damage has not been attended to and the normal day to day maintenance has been done by them"—
§ Mr. Frederic Harris (Croydon, North-West)
On a point of order, Mr. Deputy-Speaker. Is it quite correct for an hon. and learned Member to quote correspondence between an hon. Member and a company, even if the hon. and learned Friend is connected with the company, in this extraordinary way?
§ Mr. Abse
Further to that point of order. Is it not deplorable that a Member of Parliament writing in his private capacity to a company should then find his name being bandied about in this way by another hon. Member? Surely, this is reprehensible—but something we expect from the directors of Western Ground Rents. To make it even worse, I have great reason to believe that the person of whom the hon. and learned Gentleman is speaking is now dead. I think that it is deplorable.
§ Mr. G. Thomas
Further to that point of order, Mr. Deputy-Speaker. Since I am involved, perhaps I may be allowed to say that I cannot remember the incident to which the hon. and learned Gentleman refers because, in the intervening years, I have dealt with thousands of constituents' cases. I therefore cannot check the accuracy or otherwise of what the hon. and learned Gentleman produces from the files of Western Ground Rents. But, since it would have been possible for the hon. and learned Gentleman—who, I realise, is a director of Western Ground Rents in Cardiff—to have produced many other appealing letters I have written for owner-occupiers, why does he only single out this one from twelve years ago? Is it not a breach of our privileges in this House that we should use our position as Members of the House, representing our constituents, to advance our own financial interests? Is not that a breach of privilege?
§ Mr. Deputy-Speaker (Sir Gordon Touche)
The responsibility of an hon. Member for his statements rests entirely on him. It is not out of order. As for any interest the hon. and learned Member has, he has declared it to the House.
§ Mr. Callaghan
Further to that point of order, Mr. Deputy-Speaker. If I may say so, you have a great responsibility to safeguard the traditions of the House as well as the order of the House. May I ask you, Sir, whether it is in accordance with the traditions of the House that in the circumstances quoted by my hon. Friends the Members for Pontypool (Mr. Abse) and Cardiff, West (Mr. G. Thomas), an hon. Member should so use his position to produce private correspondence, which, as far as I know, he has no warrant to do, in order to bolster up his case on behalf of his company?
§ Mr. Deputy-Speaker
I do not think that the Chair can comment on the conduct of hon. Members in that way.
§ Mr. Michael Foot (Ebbw Vale)
Further to that point of order, Mr. Deputy-Speaker. Hon. Members very often declare their interest—they may give information which comes from a particular industry or profession—but it is a very different matter for the hon. and learned Member to devote his entire speech to delivering the kind of argument that he might put quite properly in a court of law where he was openly and directly paid for it. To do so in the House of Commons, when he seems to be acting under the same kind of principle, is utterly disgraceful. Again, might I remind you, Sir, that this matter was not originally raised from this side? Many hon. Members on this side were extremely reticent about raising it, because they were aghast about what was happening. It was originally raised, quite properly, by an hon. Member opposite. We are witnessing a disgusting exhibition, and I must say that I have never before heard anything like it in the House of Commons.
§ Mr. Deputy-Speaker
That is not a point that rests with me. If the hon. Member has a substantial complaint against the hon. and learned Member he should put down a Motion on the Order Paper.
§ Mr. Morris
Is it in order, Mr. Deputy-Speaker, for the hon. and learned Member to confine his remarks to what is happening in Cardiff, ignoring the remainder of Wales and all the other considerations?
§ Mr. Foster
Obviously, the hon. Member for Cardiff, West did not like it because it showed the kind of people he was appealing for. It is quite obvious that Western Ground Rents has been attacked throughout these debates, throughout the years, and the hon. Member did not spare Western Ground Rents. Obviously, it is quite in order that Western Ground Rents should defend itself.
§ Mr. Morris
Is it in order, Mr. Deputy-Speaker, for the hon. and learned Member specifically to come to this House and confine the whole of his speech to defending one company, without declaring exactly the extent of his interest in that company?
§ Mr. Foster
As I was saying, Western Ground Rents is held up as robbing the widow and as refusing to answer tenants who want to buy their leasehold interests, and it is obviously only just that Western Ground Rents should have a spokesman.
§ Mr. Callaghan
On a point of order, Mr. Deputy-Speaker. As the hon. and learned Member is so clearly misunderstanding his function as a Member of Parliament, will you allow me to move a Motion that he be no longer heard?
§ Mr. Foster
I can understand that when one points out the inaccuracies and mis-statements levelled at Western Ground Rents, hon. Members opposite should get in a heat and try to raise a lot of points of order. If I may pass now to the policy we have adopted in Western Ground Rents—
§ Mr. Awbery
May I ask the hon. Member one question? I am rather disturbed as to whether he can answer it.
§ Mr. Foster
The objection of the hon. Member for Cardiff, West is that when leases fall in the people are robbed of their homes. He said in his speech today that Western Ground Rents gives the tenants 30 days in which to accept the terms or lose their property. That is another inaccuracy. Until the leases fall in, they cannot lose their property. If somebody writes in and asks the ground landlord what he would have to pay for the purchase of a freehold or have to pay for a new lease, it is only natural to state the terms in which that offer to the landlord can be accepted or not. It is a complete misrepresentation of the situation, if there are 20 years or 25 years of a lease to run, and if the landlord says he wants £x for the freehold and would like an answer in 30 days, for the hon. Member for Cardiff, West to say that the tenant is going to lose his home in 30 days. It is typical of the hon. Member for Cardiff, West to get a series of mis-statements into this debate and a series of emotional statements which have no foundation in fact. I have given some instances.
If the ground landlord offers to sell the freehold for the price of the reversion calculated according to the tables, then it seems to me that he is offered a fair and reasonabe price. [An HON. MEMBER: "Who makes the tables?"] The tables are made on mathematical calculations. If the party opposite is also going to overthrow mathematics in this proposed legislation, it will have to go a very long way. What hon. Members opposite would wish is for the tenant to have his house as a freehold under the market value so that he can then go and sell it.
§ Mr. Roderic Bowen (Cardigan)
How does the hon. and learned Member justify a rise from £180 to £500 in premiums in one year if it is a mathematical calculation?
§ Mr. Foster
I cannot give way. I must answer the hon. and learned Member for Cardigan (Mr. Bowen).—or if the market price has gone up for that house in those two years, the market price is the reversion price, discounted by 5 per cent. In the majority of cases, when a tenant asks for the sale of the reversion, he is himself wanting to sell the house. [HON. MEMBERS: "Nonsense."] That can be proved.
§ Mr. Foster
I can understand the heat of hon. Members opposite. I can understand their excitement when confronted with the facts. The facts are that in the great majority of cases tenants in Cardiff—
§ Mr. Foster
As I was saying, the facts are that when tenants in Cardiff ask for the freehold to be sold to them it is because they propose to resell the house. The reason is that if the freehold is married with the reversionary interest one gets a bigger price. It is no good the hon. Member for Cardiff, South-East (Mr. Callaghan) saying that is not true. It is true.
§ Mr. Foster
The hon. Gentleman says that he knows a good deal more about it than I do. I have shown by my quotation from the speech of the hon. Member for Cardiff, West that he was not aware of the facts. [HON. MEMBERS: "Sit down."] Hon. Members opposite always shout "Shame", "Disgusting" or "Sit down" when they are confronted with the facts.
§ Mr. G. Thomas rose—
§ Mr. Foster
If the hon. Gentleman catches the eye of the Chair he will be allowed to reply to my speech.
I want to bring the facts to the attention of hon. Members. [An HON. MEMBER: "What are the directors' fees?"] As if it matters what are the directors' fees. Hon. Members will find that they are very modest indeed. The hon. Member for Cardiff, West mutters that I have made a fool of myself. I understand his resentment. The policy of Western Ground Rents has been attacked in debate after debate by the hon. Member for Cardiff, West. The policy of the company is to sell the freehold to every tenant who wants to buy it except in very exceptional cases. The exceptional cases are those where, for reasons of good estate management, the freehold should not be sold. That, again, is true.
§ Mr. Callaghan
Every reputable solicitor in Cardiff denies what the hon. and learned Gentleman is saying.
§ Sir Kenneth Pickthorn (Carlton)
On a point of order. I came into the Chamber because I wished to hear the debate. The point of order which I wish to put to you, Mr. Deputy-Speaker, is whether it is not intolerable that hon. Members who, rightly or wrongly, dislike an argument should make it quite impossible for the argument to be fairly put or far it to be heard.
§ Mr. Thomas
The hon. Gentleman must not say "Be quiet" to me. Is it not exceptional, Mr. Deputy-Speaker, that we have to sit here for years, as I have done for sixteen years, before hearing a director's report on behalf of his company?
§ Mr. Foster
In conclusion—[HON. MEMBERS: "Hear, hear."] I gather that at this stage I have the approval of hon. Members opposite. The reason my speech has lasted so long is because of 434 the interruptions of hon. Members opposite.
I support my right hon. and learned Friend the Attorney-General in asking the House to reject this Motion, because the debate is founded on facts which have been mis-stated and which have been laid in an atmosphere of vindictive emotionalism.
§ 5.26 p.m.
§ Mr. Llywelyn Williams (Abertillery)
I do not want to refer to the speech to which we have just listened from the hon. and learned Member for Northwich (Mr. Foster). I think that it was in shocking taste, and I strongly disapprove of the whole idea of an Englishman interfering in Welsh affairs. [HON. MEMBERS: "Hear, hear."] I am certain that no Englishman would have dared to interfere in a debate on Scottish affairs as the hon. and learned Member has done in this debate, particularly when he has such a very obvious personal financial interest in the subject of the debate.
In almost eleven years' experience of the House, I have never found it more difficult to contain myself than I did at one stage of the speech of the Attorney-General. Physically, I suppose, we were about 12 or 15 feet apart, but when the right hon. and learned Gentleman was speaking we wore thousands of miles apart. He seemed 'to be speaking from another world from that in which I live. He seemed to be speaking from outer space. He did not seem to see things with the same purpose in mind as I see them.
For the right hon. and learned Gentleman to suggest that when a person has either bought a house or built a house and has occupied it for the best part of fifty or sixty years, during which time he has looked after it carefully, that that house is not that person's home is just making language completely meaningless.
The whole trouble of this question of leasehold reform is, basically, that it has relevance for a comparatively small part of the British Isles. It means nothing at all in Scotland. Scotland has no leasehold system. The residents of the larger part of England would not know what we were talking about, because in most parts of the country leases are for 999 years. Thus, to all intents and purposes, 435 the properties concerned are complete freeholds.
I am certain that if this leasehold system, which I unhesitatingly call an iniquitous and unjust system, obtained in every part of the United Kingdom, no Government, Tory or Labour, would have withstood to this day the pressure that would have been brought to bear upon them. It is a reflection—and the reflection is as much on hon. Members on this side of the House as on hon. Members opposite—on our sectionalism, on our segmented political outlook on life, that there is in all those areas and among representatives of those areas not concerned with the leasehold system an almost complete indifference to what I would call a basic and fundamental issue.
I could never understand in 1953 and 1954 when Lord Morrison, as he is now, was conducting our opposition to the commercial television Bill then before the House why it was insisted in our party that we should obey three-line Whips on an issue which all my instincts told me then meant nothing to the ordinary people of the country. As events have proved, the ordinary people of the country are not interested whether a television programme is A.B.C., B.B.C., I.T.V., X.Y.Z. or anything else. As long as they can look at television, that is all they want. We as a party have now withdrawn our opposition to commercial television. But, contemporaneously with the passage of that Bill through the House of Commons, the Landlord and Tenant Bill was going through, and at every stage of that Measure, which dealt with basic human issues, we had to make do with a two-line Whip. That proves my point that the segmentary outlook on great burning political issues is to be deprecated and deplored.
This is essentially a Welsh problem, although it has some impact in certain areas in England. If we speak to a person from the United States of America, and explain to him what happens under our leasehold system, he does not know what we are talking about. There is no other country in the world where this leasehold system obtains. It is about time that we threw off this last relic of feudalism—this last flagrant injustice. We have thrown off many flagrant injustices in the course of the last fifty or sixty years; 436 surely it is time that this last outstandingly flagrant injustice should be thrown overboard.
It is an acute problem not only in the capital city of Cardiff but in the industrial valleys of Wales, because our industrial system was built up from about 1850 onwards, and we have literally thousands of houses in Wales which were built under the leasehold system and whose leases are now beginning to lapse. Mr. David Rhys Grenfell, who was Father of this House for many years, wrote a fine pamphlet on leasehold enfranchisement, in which he stated that there were 350,000 houses in Wales under the leasehold system. My hon. Friend the Member for Hayes and Harlington (Mr. Skeffington) has also written a fine Fabian pamphlet, in which he says that the total number of such houses for the whole of England and Wales is 700,000. From those figures it can be appreciated that the problem is much more acute in Wales than in other parts of the country.
The problem was brought home to me in a very clear and unforgettable way when I had the great privilege of living during one of the most formative periods of my life in the birthplace of my hon. Friend the Member for Caernarvon (Mr. G. Roberts), in a village called Bethesda. That village, with its environs, was owned by one person—Lord Penrhyn. I have never met a finer type of men than the quarrymen of Bethesda. They are cultured and independent, and a natural product of Welsh nonconformity—a word which has been used with some opprobrium in this House, quite wrongly, because it is something to be proud of. They are the natural products of nonconformity, with its particular emphasis on the individual and individual responsibility.
I believe that in our industrial areas there is a higher percentage of owner-occupied houses than there is in English industrial areas. In many of our industrial areas the figure is as high as 50 per cent.
§ Mr. LI. Williams
I am told that in some areas it is as high as 70 per cent. The Minister for Welsh Affairs should see this problem as a personal 437 challenge in relation to his responsibility for Welsh problems. This is a real Welsh problem. Great injustice is being done because of the way in which this system is working out.
I do not wish to exaggerate the picture. Some people are prone to do that, and nothing is achieved by it. I agree at once that this system works in more than one way. First, there are the reasonable landlords, and the directors of landed estates, with what I would describe as a progressive social conscience. I testify willingly to the way in which the Llanover Estate, in Monmouthshire, has dealt with owner-occupiers. I bought the freehold of my home two or three years ago for what I regarded then, and still regard, as a very reasonable price. That is the common experience of those who live on that estate. My right hon. Friend the Member for Llanelly (Mr. J. Griffiths) is not here, but I am sure that he would agree that the Stepney Estate in Llanelly, my home town, is another with a fine and honourable record. Nobody would wish to do anything but pay tribute to the approach of these two estates to the leasehold system.
Next we come to the type of estate or company which is obviously represented by some hon. Members opposite, where a point-blank refusal is given to people wishing to purchase their own freeholds. There has never been a time when I was not a Socialist, but the seven years that I spent in Bethesda intensified my Socialism, because the basis of Socialism is a burning, abhorrent hatred of injustice. That is one thing that I have not lost. God knows—and I want to make a personal confession now—that eleven years in Parliament have robbed me of things which I am not proud of losing, some of my idealism, but I have not lost my sense of injustice, and when I remember, as my hon. Friend the Member for Caernarvon can remember even better than I can, how quarrymen who had actually built their own houses and had owned them for 99 years were told, at the end of that period, that everything had to be restored to Lord Penrhyn, in Penrhyn Castle, I realise that that was one of the most heart-breaking social pictures that it has ever been my lot to see.
There are some arguable propositions, but this is surely a priori; this is axiom- 438 atic. It just cannot be right that a person who has built a house should be held not to own it.
I cannot understand how the Attorney-General could speak so coldly of the cherished possession of a family, or a succession of families. That is why, in no pseudo-dramatic way, I say that a terrific gulf exists between us. Many people are much nearer to my way of thinking than the Attorney-General suggests, but there is surely a great gulf between us if he can tell me that such property should revert to a ground landlord who has never spent a penny-piece on it. If the right hon. and learned Gentleman is correct I am either crazy or simple and completely hopeless in my ability to understand the situation, but all the lawyers in Christendom will never persuade me that such a situation is defensible.
That is the basis of our case. That is why we have brought it forward in this debate. Our people are genuinely suffering, and are full of anxiety and fear, because of a system which is wicked and which stands condemned on all counts.
We have this point-blank refusal to allow people to purchase the freehold of the property which they have come to regard as home. There is also the question of the exorbitant prices, and, as my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) said in his most moving and gripping speech, the question of people taking advantage of all the developments which have taken place in the last five years.
I shall not weary the House with more than one example. I shall not mention the commercial enterprise involved in this case, because I have appealed to it to have second thoughts and I do not want to prejudice the fresh negotiations. This widow, who is an old-age pensioner, has a small house but no ground apart from that on which the house stands. The lease has eleven years to run. The annual ground rent is 4s. a year, so I leave it to the imagination of hon. Members to decide how extensive that piece of land is.
This company, which last year made a profit of millions of pounds, one of the largest industrial enterprises in the country—paradoxically with a fine record in human relations in other aspects 439 but probably in this instance actuated by someone sitting in an office in London who has never seen Abertillery and who thinks only in terms of the value of property in London, has asked this poor widow to pay £175 plus solicitor's fees for the freehold of the property. This is a shocking example. Even though Ahab coveted the vineyard, he was at least prepared to pay for it. On my calculations £175 represents 875 times the ground rent. If any hon. Member can justify that, I will be horrorstruck with amazement.
I ask the Minister to conduct a new investigation. We had the Royal Commission, and we, as a party, are indebted to my hon. Friend the Member for Leicester, North-West (Sir L. UngoedThomas) and my hon. Friend the Member for Oldham, West (Mr. Hale) for what they did and for the recommendations they made in the minority Report, but I ask the Minister, because he is the Minister for Welsh Affairs, and a member of the Cabinet, to say that the time has come to call a halt to a system which has caused untold mental, physical, and spiritual suffering to decent people; people who have been brought up on the virtues of thrift and independence and who have purchased their own homes. I regard it as the Minister's bounden duty to do something practical to help them.
§ 5.44 p.m.
§ Mr. Raymond Gower (Barry)
Even though the hon. Member for Cardiff West (Mr. G. Thomas) in moving the Motion threw a few political quips across the floor of the House I find myself very much in sympathy with what he said.
Just over thirty years ago a Bill dealing with leasehold enfranchisement was introduced in this House by the late Daniel Hopkin, the then hon. Member for Carmarthen. It is not surprising that a succession of similar Bills have been introduced by Welsh Members since then. Indeed, as many hon. Gentlemen opposite have said, throughout the years there has been a succession of leasehold Bills. From 1900 to 1914 there was one every year. In 1923 there were three such Bills, and Bills of a similar kind appeared in 1927, 1928 and 1929. The history of Parliament during the last seventy-five years is bestrewn 440 with the relics of abortive leasehold Bills.
The earlier Bills reflected a general United Kingdom interest in this subject, but, I think it is fair to say that since the late Daniel Hopkin introduced his Bill in 1931, a passionate interest in this subject has remained constant and unabated only in Wales.
In my constituency, in that of the hon. Member for Cardiff, West, and in the constituency of my hon. Friend the Member for Cardiff, North (Mr. Box), and indeed in every other constituency between Pembrokeshire and Monmouthshire, every General Election candidate, irrespective of party, is likely to be asked about his attitude to this subject. It is sometimes amusing to see a "carpet-bagger" candidate quickly learning something about this subject, if he has not already done so.
The first question which the Government should ask—the first question which my right hon. Friend the Minister for Welsh Affairs must surely ask—is why, if my right hon. and learned Friend the Attorney-General is right that there is no special Welsh leasehold problem, interest in, and concern about, this topic has remained constant throughout the industrial and thickly populated parts of South Wales. I suggest that there are few, if any, other parts of Great Britain where audiences of Labour, Conservative, or other supporters invariably applaud any speaker who confesses to be in favour of some modification of the present leasehold system, and give short shrift to a candidate who indulges in specialised legalistic arguments on this issue.
If, after having considered why this interest remains so great, my right hon. Friend is still doubtful, he should remember that in the last twelve months the Wales and Monmouthshire area of the Conservative and Unionist Associations has passed a resolution calling for legislation to give leaseholders of dwelling-houses the right to apply to a court or tribunal for an extension of leases, or for the right to purchase the freehold on terms to be assessed. This was a unanimous resolution passed by those who by definition are the leaders of the Conservative Party in the Principality of Wales. Would any other area in Britain have passed such a resolution?
441 Welsh people are largely united on this issue. What the Conservatives of Wales asked for in that resolution is not altogether dissimilar from the more general terms implied in the Motion we are considering today, because, as the hon. Member for Cardiff, West pointed out, he has shifted his ground slightly and has come some way to meet those who think that a straightforward enfranchisement or some system of so many years purchase is open to severe criticism.
Those facts should convince Ministers that the issue in Wales is no ordinary one. It has been suggested that this issue has been kept alive artificially by intense propaganda. The reverse is the case. It is true that there is a South Wales Leaseholders and Owner-Occupiers' Association under the ardent direction of Mr. Watson Cliffe, but this organisation has very limited resources, and indeed has functioned to any extent only in recent years.
The issue of leasehold tenure in Wales has been, and is, kept alive by the day-to-day problems of ordinary leaseholders who are unable to obtain mortagages on leases of less than thirty-five years; those who are faced with excessive demands for an enhanced rent with or without a premium; and those who are not permitted by the owner or the property to purchase the freehold at any price. The issue is also kept alive by experienced estate agents who find themselves helpless to assist these people.
I do not wish to destroy leasehold tenure. From my experience as a solicitor and as a constituency Member, I am convinced that in many cases leasehold tenure serves a useful and valuable purpose.
Hon. Members who represent South Wales constituencies see their constituents acquiring leasehold houses. In some cases they prefer to acquire the leasehold rather than spend a capital sum of £250 or £300 on the freehold of a new house. Even so, I do not accept the argument sometimes advanced that even a measure of leasehold reform designed to give the leaseholders the opportunity to acquire the leasehold or to renew it on fair terms is likely to deter freeholders from granting leases in future. If a freeholder is happy to alienate from himself and his family the ownership of a plot of land for as long 442 as ninety-nine years he is not likely to be deterred by the knowledge that this may later be extended on fair and reasonable terms.
There is little doubt that our problem in many parts of Wales has arisen not from the nature of leasehold tenure but from its peculiar incidence in many parts of the Principality. I could take my right hon. Friends to streets in Barry, Cardiff and Newport where most of the houses are leasehold. There is a solid array of leasehold houses, on a 99-year term originally, much of which has expired, broken only by an occasional house the owner of which has been fortunate enough to acquire the freehold or to have the lease extended. This has had at least two results. In the first place, it is difficult to sustain the argument that all these people became leaseholders of their own free choice. How could a person who wished to own a house do other than buy one of the available houses which in most cases were leasehold? Therefore, any suggestion that these people freely entered into the contract should be modified by consideration of the fact that in most cases they had no choice.
If an estate agent in South Wales has a freehold property for sale he deems it to be such an outstanding event that he is tempted to embrazon the fact in letters of gold. Where in the United Kingdom outside South Wales would hon. Members expect to see an advertisement such as I saw recently in South Wales which declared in very large type, "Freehold dwelling house for sale: Vacant possession"? The advertisement proceeded to set out details of the accommodation.
§ Mr. Gower
In South Wales even a 999 years' lease is something to be spoken of with awe. In one part of my constituency houses are held on a 999-year lease rather than the usual ninety-nine years and the people of that locality are regarded with something like envy by their neighbours. Another result of all this is that large numbers of dwelling-houses in parts of Wales have now leases of less than thirty-five years unexpired. This fact has a number of consequences. Mortgages can seldom be obtained on 443 terms of thirty-five years or less. Whole streets of such houses are at present almost unsellable because the prospective purchasers cannot obtain short-term mortgages.
I can speak with some knowledge of this matter. Both professionally and as a Member of Parliament I have tried to negotiate the acquisition of freeholds or longer leases on behalf of my clients and constituents. But the result of the situation in South Wales is that first-class legislation passed by this Government and their predecessors to enable local authorities to advance 100 per cent. to people who wish to buy is abortive in the case of many of these houses. Legislation passed to enable building societies to advance money on houses built before 1919 is also largely abortive in respect of whole streets in the towns of South Wales.
My right hon. Friend the Minister for Welsh Affairs may say that the remedy for these people is to buy the freehold or to negotiate a now lease. In some cases they try and they succeed, but in others they fail. I have in mind the cases of those who shortly after the war, when there was a great shortage of accommodation, had to acquire homes and they bought leasehold houses which then had fifty years unexpired. Mortgages were obtainable for that period, but by now the unexpired term is so short that it is impossible to sell these houses.
In some cases freeholders have behaved extremely well. I would refer in particular to the Plymouth Estates Ltd., and Barry Dock Syndicate Ltd., both of which have sold freeholds on eminently fair terms. There is a street in Barry where some leaseholders bought from the Barry Dock Syndicate on reasonable terms, but other houses in the same street are owned by an individual who is not nearly so fair. Some people paid the syndicate about £100 but the other individual wants nearly £700 for similar small terrace houses in Barry Dock.
The same individual apparently is making similar demands in Newport. I have a letter from a correspondent in Newport which reads:Dear Mr. Gower, I am the leaseholder of 3–4 James Street, Newport for 99 years from 25th March, 1893, at an annual ground rent of £3–31 years to run. I asked if he would sell me the reversion and he wants £500 which works out at 167 times…444 Other leaseholders face even worse problems. In some parts of Barry the freeholders are a provident insurance company which sometimes sells a block of properties but rarely a single house. The reason the company gives for that is that it would be inconvenient for management to sell singly. I can understand that, but it is small consolation for the poor individual who has a lease of less than thirty-five years and wants a sufficient term to enable him to raise a mortgage. Another freeholder in South Wales is the Glamorgan County Council. Its reply to requests for the sale of freeholds is a polite refusal. I can understand that the council is dealing with public funds, but that again is small consolation to the leaseholder when he finds that he cannot hope to purchase the lease at any price.
I am glad that the Government, through the Lord Chancellor's Office and the Law Society, have taken the step of addressing a letter to solicitors asking for details of some of the difficulties which have already been described in this debate. As far as it goes, this will be helpful and it is a praiseworthy step, but solicitors are busy professional men and few of them will have kept records of the abortive cases which they have had in recent years. More knowledge about this subject could be obtained from a short conversation with estate agents in Barry, Cardiff and Newport. Many of them have described to me the difficulties and hardships they have encountered among leaseholders and the problems which arise from short leases.
I believe that I have said enough to explain why I was sadly disappointed not only by the speech but also by the unaccommodating attitude of my right hon. and learned Friend the Attorney-General. I had hoped for something more. Indeed, I had been led to expect by what I read in the Western Mail that at any rate there would be some little light, some little hope. I am strengthened in that view by the form of the Opposition Motion, which does not ask for a sort of blank enfranchisement, but for legislation to enable Welsh leaseholders who are owner-occupiers to purchase their freeholdsat a fair and reasonable cost.Is not it strange that people of all parties in Wales should be so concerned about this question? Is not this the sort of 445 problem to which the Government should be concerned to find a solution? In recent years there have been many Bills of this kind. I have tried myself to devise in Bills I have tendered some sort of machinery to assess a fair and reasonable price. It would make nonsense of all I have said on every platform, and of all I have said since I entered politics, if I voted with the Government tonight. I regret this deeply because I do not lightly vote against my own side, but on this issue I am sadly disappointed.
I believe that this is a real issue in the industrial parts of South Wales. What we want is not something unreasonable but something to meet the specialised needs of the localities in which we live and which we represent. I should be failing in my duty to my constituents and those who sent me to this House—to the Conservatives in Wales who nearly all take the same view that I have been expressing—if I did not take this course. For that reason, reluctantly and sadly, I shall have to vote against the Government.
§ 6.3 p.m.
§ Mr. Roderic Bowen (Cardigan)
I should like, first, to make a comment upon some of the observations of the hon. Member for Abertillery (Mr. Ll. Williams) and the hon. Member for Barry (Mr. Gower). The hon. Member for Abertillery condemned the longterm leasehold system root and branch, whereas the hon. Member for Barry saw considerable virtue in it.
On a number of occasions since I have been here, whether there has been a Conservative or a Labour Government, the House has passed Bills which perpetuated the long-term leasehold system. For example, in the development corporations of the new towns the value of the long-term leasehold system has been recognised in legislation passed by parties represented on both sides of the House. It is also true that local authorities, whatever their political complexion, have shown themselves willing—indeed anxious—to perpetuate the long-term leasehold system.
Although we have heard of instances today, and while instances no doubt exist, in which that system has led to problems of great personal difficulty which have to be faced, I do not think it right to make sweeping statements in 446 entire condemnation of the whole system. We have heard during the course of the debate a great deal about the bad landlord and we have heard compliments paid to some good landlords. The hon. Member for Cardiff, West (Mr. G. Thomas) used very strong words indeed in relation to landlords, but the strong words he used were mild compared with words which have been used by the Minister for Welsh Affairs in relation to landlords. I shall quote his description of landlords in a speech he made in this House last year. This is what the Minister said with regard to landlords:I think that there are some swindlers in the market, and if information is given to me I am ready to have an examination made of those people who may be sailing too close to the wind.He ended by saying:I should like to deal with them."—[OFFICIAL REPORT, 26th July, 1960; Vol. 627, c. 1599.]The Minister was not referring to the same group of landlords as the hon. Member for Cardiff, West had in mind. The Minister was referring to that group of landlords who were taking a mean advantage of their position under the Rent Act of 1957 and, in particular, those who were taking advantage of their position arising out of Section 11 (1) and Section 11 (2) of that Act. The Minister made it perfectly clear that, despite the fact that landlords in that category were exercising their legal rights and rights given to them under the Rent Act, if they were in fact making exorbitant and grasping demands on their tenants he certainly would be prepared to intervene.
The quotation I have made from the speech of the Minister in this House was one which he thought fit to quote in a Ministry circular, Circular 45/60, issued in relation to this matter on 13th August, 1960. The Minister has claimed that his statement in that regard and the issuing of that circular has had a most salutary effect on the behaviour of the type of landlord to whom he was referring. It is quite clear that the Minister has indicated that he is prepared to intervene to prevent exorbitant, extravagant and grasping demands being made by landlords in the exercise of their rights under existing legislation. The particular powers he had in mind in that regard were powers given under 447 the Housing Act, 1957, in relation to the acquisition by compulsory purchase by local authorities of property of landlords behaving in that fashion.
It is true that the tenants in that category were faced not only with exorbitant financial demands but, if they could not meet those demands, with the prospect of being dispossessed. The persons we have in mind, the persons referred to in South Wales, by reason of the Act of 1954 are, in the main, protected in their security of tenure, on terms. If the demands made by the ground landlord either for an extension of the lease or for the purchase of the freehold are exorbitant, the hardship placed upon these people is certainly comparable with the hardship placed upon people to whose rescue the Minister was prepared to come when he issued the circular to which I have referred.
Can it be said that in relation to the ground landlord of the South Wales area, with wham we are mostly concerned today, as it has been said of landlords in the context to which I have referred, thatthere are swindlers in the market"?We have heard statements in one direction and statements in another direction. I do not think an issue of that kind can be properly determined by exchanges in this House. I should like the Minister to indicate quite clearly and categorically that if he has evidence, or if he is satisfied, that ground landlords are abusing their present powers and are making exorbitant demands in negotiations for the extension of a lease or the purchase of a freehold, he would be prepared to use powers similar to those he proposed to use in relation to the landlords in London.
The powers he had in mind in relation to landlords in London were those under the Housing Act, 1957. I concede readily that the powers under Sections 91 to 96 of that Act are probably not appropriate for use in this connection, but if they are not, then nothing would be easier than for the Minister to acquire powers for the purpose. I should like the Minister to say categorically to these ground landlords in South Wales that if they do not behave in a reasonable and fair manner towards their ground lessees he will invoke powers similar to those which 448 he has threatened to invoke in relation to landlords in London.
What the Minister had in mind—he will correct me if I am wrong—was that the powers under the Housing Act, 1957, should be exercised by the local authority and that when applications for compulsory purchase were submitted to him for approval in those circumstances, he would consider them sympathetically. Let the Minister indicate that he is prepared to take precisely the same attitude and to exercise precisely the same powers in relation to ground landlords who behave unfairly and unreasonably towards their tenants. If the local authorities in Wales felt that an injustice was being done in this direction they would not hesitate to act. If they did not act, at least the tenant would have one additional body about which to complain.
We have had evidence in the last two speeches of a large number of ground landlords who have behaved properly, but we have heard allegations that a number are not behaving properly. Just as the issue of Circular 45/60 had a salutary effect, so a categorical statement by the Minister on the lines which I have indicated might do a great deal to help in this direction. If it did not have a salutary effect, I should support the introduction of measures to enable the Minister to carry out the powers which I have indicated.
§ 6.12 p.m.
§ Mr. Hugh Rees (Swansea, West)
I am glad to have the opportunity to join in the debate because I do not want it to be felt that the City of Cardiff is the only part of Wales which has this problem. I represent part of the County Borough of Swansea, and I have found that many of my constituents occupy their homes on leasehold tenure. They would be most upset if they thought that I had not managed to take part in the debate, as so often happens in the House.
I want to take part in the debate, too, because I shall deal with the problem from a rather wider experience as a practising chartered auctioneer in South Wales, for I come across both sides of the argument, acting on behalf of landlords and on behalf of tenants. First, I must confess that I have a personal interest in it, being a part beneficiary of some leasehold reversions on long terms, but it is interesting to note that the people 449 holding those leaseholds are not very anxious to purchase the freeholds, although they have been offered to them.
There is no doubt that this is a Welsh problem, as we have quite clearly heard today. I was disappointed to hear my right hon. and learned Friend the Attorney-General, in his reply, deal with it as a legal matter. I have read the Jenkins Committee's Report. Ten years ago there was a lot to commend all that it said and all the points which were raised. But the fundamental difference between Wales, or rather South Wales, and the rest of the country is that the purchaser has no option but to take a leasehold interest. Cardiff was originally developed by three families, the Plymouths, the Butes and the Tredegars. Swansea was developed by several others.
A point which some people forget, but which the hon. and learned Member for Cardigan (Mr. Bowen) pointed out, is that the system is developing further at the moment because the new towns have been developed on the same basis. The County Borough of Swansea is one of the biggest freeholders in the area. This system is spreading. Recently we heard that the Labour Party's policy solution of the problem of the high price of land was to extend the leasehold system.
If we are to tackle this problem, therefore, we should tackle it not only at the fag-end of the lease but also at the other end, the start of the lease. At the beginning of my remarks, which must be brief because other hon. Members wish to speak, I should like to deal with the beginning of the lease, because one of the objections which is put forward to leasehold reform is the sanctity of contract. If we dealt with the problem of the contract at the beginning, there would be no question of sanctity of contract. I should like to see a certain measure of reform whereby when a building and ground lease of less than 999 years is being entered into for the construction of a property on a plot of land, the ground landlord must build into the contract a right to purchase the freehold at some stage in the early part of the lease.
The ground landlord who is entering into that lease at that stage has a right of reversion in 100 years' time, and in view of the changes in planning and planning control, nobody will convince 450 me that his interest in redevelopment, which is the argument so often put forward for keeping a freehold estate in existence, is very serious. He is interested in his security and in his investment. He has achieved his planning aim. His positive planning aim at that stage has been achieved, because he has brought about development of the land. If the agitators of 100 years ago had thought about doing this, we should probably not be debating this problem today. This condition has been put into leases voluntarily. Many of my professional colleagues are advising their clients in South Wales to do it, and I know of four or five estates in my constituency being developed on this basis.
The trouble arises when we come to the fag-end of the lease. I have had clients in my office—and I am sure that other hon. Members have had this experience—to whom I have explained that they were buying a wasting asset with perhaps seventy years to go, and they have said, "It will see my life out, so why should I worry?" They do not begin to worry until the lease is down to forty, thirty or twenty years. That is when the trouble arises.
Another trouble which arises, and which has been running throughout the debate, is that of the misnomer "ground lease", because a layman cannot get it into his head—and I can understand this—that the building and the ground cannot be severed and that he is paying a rent for the building which is standing on the ground. He has paid a premium at the beginning of the lease for building that building. Nevertheless, it reverts to the landlord. If we could overcome that problem we might be able to see the position in better perspective.
When the lease has only thirty years or twenty-five years to go, or some such term, it becomes an unmortgageable asset. My right hon. and learned Friend rightly pointed to the benefit which will accrue from the 1954 Act of security of tenure, bat that is useless to the man who has to move away to other work, perhaps because there is no employment in the district or because he has promotion and has to sell his house and leave. If there are thirty years to go on the lease, it is a valuable asset, but his potential purchaser cannot obtain a 451 mortgage and cannot pay the full capital value. This is a man who needs a certain amount of help. I know that it will be said that he does not want to buy this interest until he is selling the house, and that may well be so, but if we genuinely wish to help people to move into jobs we must do something in the public interest to help them at that point with their houses.
Much has been said in one form or another about the oppressive and wicked prices which has been asked. Although I am very much in support of the Motion, I think that if some of the words which have beep spoken are read people will imagine that if this legislation is introduced they will get their freeholds for nothing. They will not. I should like to quote from the mathematical tables which have been referred to earlier. I should like to take a fair and straightforward basis, using a 5 per cent. table, and indicate the change in the capital value of the reversionary interest as the years disappear.
Let us assume that the house has a capital value of £2,000. If the freehold is bought with 25 years unexpired, the probable value would be about £590. I am not giving this as a professional valuation; it is an indication of a mathematical figure. If, however, one waits until only 18 years are left—in other words, seven years have passed—the figure is up to £839. At that stage, the asset is wasting rapidly.
Constituents have told me that they will not buy the ground rent because the price is iniquitous. As a valuer—putting on my other hat, not charging them a fee for it—I have worked out the figures, which have been very fair. When I explain to my constituents, they reply that their ancestors before them had paid the ground rent through the years and it has been paid for over and over again. That is the way they look at it. [HON. MEMBERS: "It is true."] It is not true. [Interruption.] Very well. If somebody puts £100 in the Post Office Savings Bank and leaves it there for 50 years, at the end of that time he has £125 in interest from the Post Office, but he still wants his £100 back. What one has paid in ground rent is an interest on the capital investment. What people must realise and must get clearly into their heads and not forget is that if they 452 get leasehold reform, of which I am in favour—I am very much behind it—they need not imagine that it will be at give-away prices.
§ Sir Lynn Ungoed Thomas (Leicester, North-East)
The point that the hon. Member makes about it being interest on capital is perfectly valid; but the interest is on the ground. The house has been built by the tenant or his predecessor in title. The crux of the problem is whether the landlord should have the benefit of the house which the tenant has built or whether the tenant should have the benefit of it. That is a problem which the hon. and learned Member for Cardigan (Mr. Bowen), in a speech which appeared to be extremely brave, did not face.
§ Mr. Rees
I take the point that the hon. and learned Gentleman makes, but politics are the achievement of the practical. Over the years, trusts funds, pension funds and all sorts of funds have been invested in long-term leaseholds with a freehold reversion. If, overnight, hon. Members opposite want to destroy that fundamental principle, on which people have bought and invested trust funds, they will not achieve their aim. We must accept the situation that that has been the basis of tenure all along.
I am sorry that I did not hear a more hopeful and encouraging reply from my right hon. and learned Friend the Attorney-General. I am in an embarrassing position tonight, to put it mildly. I cannot vote against the Motion. I shall have to abstain from voting unless I find more encouragement coming from the Government.
§ Several Hon. Members rose—
§ Mr. Box
On a point of order. Is there any possibility, Mr. Speaker, of extending the time of this debate? It is obvious that other Members, including myself, wish to speak. We have had an intervention from one English hon. Member for 35 minutes. I am faced with the situation that both of my Socialist colleagues from the Cardiff constituencies will have spoken in the debate, but, apparently, I shall not be able to do so.
§ Mr. Speaker
As the hon. Member knows, that is not within my control. It is not by the provision of any order 453 of the House that the debate stops at any fixed hour before 10 o'clock.
§ Mr. James Griffiths (Llanelly)
May I help, Mr. Speaker? This is a Welsh day, at the disposal of the Opposition. We have arranged that there should be two debates. We want reasonable time for the following debate, but the subject of this first debate is a big and vital one. Speaking for myself and, I think, many hon. Members who would like to take part in the second debate, we would not keep rigidly to the time limit of 7 o'clock for the first debate to finish, but we would hope that reasonable time may be given to the second debate.
§ 6.24 p.m.
§ Mr. John Morris (Aberavon)
It will take only a few minutes to say what I intended to say. Today, we have heard some fantastic arguments from the Attorney-General, which I will leave to my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) to answer. The right hon. Gentleman tried to justify the 1954 Act. The weaknesses of that Act are self-evident. The lessee has been given the right to remain, but only as a statutory tenant. His right is therefore severely qualified. If the landlord wishes to develop the property, as the Attorney-General conceded, the lessee has no security of tenure. Again, if the landlord wishes to obtain possession of the property on grounds provided by the Rent Act, he can get possession and, therefore, the security of tenure is fictitious.
Secondly, although the premises will never be his, the new tenant will still be responsible for the whole cost of dilapidations. Therefore, in addition to paying the increased rent that he will have to pay, he will also have to pay the value of the dilapidations on the property.
Thirdly, the rent which he has to pay is the market rent. Therefore, there is very little in the 1954 Act. It has given some security of tenure to the tenant, but close examination shows that it is a fictitious security of tenure.
In my constituency, the Church in Wales is the holder of ground reversions. In the past few months, the Church has taken advantage of a clause 454 in its leases to the great detriment of my constituents. I am sorry to have to say this about the Church in Wales, but in this respect it has behaved badly. There is a clause in the leases enabling the lessor to specify the company with whom the lessee must insure the property. This clause has been in abeyance for years, but in the last few months the Church in Wales has insisted upon using it. One of the reasons may well be that somebody is able to get commission in respect of the insurances.
This matter has caused great annoyance in my constituency. The people are annoyed, especially when they realise that the new insurances must be effected with an ecclesiastical insurance company. At this late juncture, I ask the Church in Wales to have regard to the feelings of my constituents. I am sorry to have to mention the name of the Church in Wales, but the Church, too, should behave as a reasonable landlord, and although a clause such as I have described is contained in the leases, there is no need to insist upon its application when it has not been insisted upon in the past for a great many years.
Innumerable cases have been quoted this afternoon, and I have had masses of cases myself. I have obtained some facts and figures regarding the Aberystwyth Corporation, which holds a number of ground reversions. I am told that the value of the leasehold ground in the borough is almost £½ million. The total income which the borough receives is £6,543 a year, or a return on the capital of 1.3 per cent. After deducting the cost of administration of .7 per cent., there remains a return to the borough of .6 per cent. I ask the Minister of Housing and Local Government and Minister for Welsh Affairs, when considering local government finances, to consider seriously whether it would not be better for this local authority—and other local authorities which hold reversions of this nature—to sell the £½ million worth which it now possesses instead of borrowing money at 6 per cent. interest for other purposes for which it needs money.
The finance corporations who own reversions are, in many instances, people who till not, who sow not, but who make sure that they reap every time when the leases fall in.
§ 6.30 p.m.
§ Mr. Donald Box (Cardiff, North)
It is perfectly obvious that the time for this debate is inadequate and that the Motion is in effect a Motion of censure of the Government. As Motions of censure go, it is about the mildest form of censure which I have ever read. The only conclusion which I can draw from that is that the Front Bench opposite has not got its heart and soul in the matter, or has such a guilt complex at its own lack of activity that it is not wholly behind the Motion. I have examined the records of the Socialist Party and, although I obviously have to curtail much of what I have to say in this respect, I must say that even in its latest policy document, which was issued only a week or so ago, the Labour Party made practically no reference to this matter other than to say:We must also reform leasehold law to enable leaseholders with long leases to buy their own homes.There is no question about when, where, or on what terms.
It is true that, in a thinly disguised plan for land nationalisation, the Labour Party intends to acquire all freehold building land in the country, but it makes no reference to this leasehold problem. It is no wonder that one searches in vain for a solution to the problem. It is no wonder that The Times recently described this policy statement as a deceptively simple solution to an exceedingly complex problem.
On the other hand, I cannot claim that my own Front Bench has been conspicuous by its action over the last eleven years. Admittedly the Landlord and Tenant Act, 1954, gave some security of tenure to leaseholders to become statutory tenants, at the current market rents, on the expiration of their leases. I know that some people consider that that has largely taken the sting out of the leasehold system; but, although it appears to offer a crumb of comfort to leaseholders, it is really merely one more way of putting off the day when we tackle this thorny problem.
Because this is an issue which is at present confined to South Wales, some parts of London and a few towns in the north of England, we Members who represent constituencies in South Wales have great difficulty about convincing our colleagues not faced with the prob- 456 lem of the growing danger created by the present great expansion of the leasehold system. Their attitude, perhaps understandably, is rather like that of a person signing a 99-year lease who, on being told that at the end he will have to hand over his property so that the value accrues to the landlord, says, "That will not bother me". The end of these leases will not bother any hon. Members now present, but I make the confident forecast that it will become a very perplexing problem for future generations, unless we do something to tackle the situation now.
I am strongly opposed to the leasehold system in its present form, although I realise that there are certain fundamental objections to stopping it now. The chief is the dire shortage of land. In its present form, it is a deceptively cheap and convenient way of selling houses on the "never-never"—never paid for, never owned—yet guaranteed to create friction between landlords and the leaseholder in the end.
The whole system requires a thorough review and a determined effort to adjust the position by new legislation. Neither the Government nor the Opposition have much on which to congratulate themselves in this respect. There is far too much evidence of prevarication, putting off the evil day, and leaving matters for someone else to clear up in the future. I hope that even at this late stage my right hon. Friend will initiate an up-to-date review of the whole leasehold system. If he did so, he would not only give great service to Wales, but would earn for himself the eternal gratitude of the Welsh people.
§ 6.35 p.m.
§ Mr. James Callaghan (Cardiff, South-East)
I will scrap the speech I intended to make, as we have to vote at ten o'clock.—[Interruption.]—I mean seven o'clock. I wish that it were at ten o'clock and I am sure that my hon. Friend the Member for Pontypool (Mr. Abse) and other Members do, because they would then have been able to speak.
Let me get the record straight for the benefit of the hon. Member for Cardiff, North (Mr. Box). Since 1951, the Labour Party has been committed to leasehold enfranchisement in every policy document and in every statement and election manifesto. It has been made clear, and I reaffirm it now, that in the event of the 457 present Government not legislating, a Labour Government, if returned at the next election, will certainly legislate in order to provide leasehold enfranchisement.
The hon. Member complained that "Signpost for the Sixties" did not lay down a detailed plan. I have never yet known a signpost which conveyed a detailed sketch of the whole of the surrounding countryside. It is a declaration of intention and the hon. Member should not seek to escape from the embarrassment of his own Government by trying to foist on us responsibility for the last ten years, which have been entirely in the control of his own party.
I do not wish to spend a lot of time on the speech of the hon. and learned Member for Northwich (Mr. J. Foster), because the House showed its distaste for his speech, a distaste emphasised by the fact that we see the hon. and learned Member here only when this subject is discussed. I do not know what his electors think about him, and perhaps they just do not know. I have looked up his record of appearances in the House and of his speeches. I do not know where he goes, but, according to the record, he has asked one Written Question this year, while last year there were no entries in the Index of HANSARD and the year before he made one constituency speech on the Adjournment. He must not take it amiss if when he arrives, those of my hon. Friends who do not know him wonder who he is and are disgusted with his contribution.
It is true that there are good ground landlords, but I want to make a distinction. I say to the two directors sitting opposite that a great deal of criticism lies against their company and they should know it. I have had much experience—all my hon. Friends share it—of dealing with ground landlords who have offered to sell their freeholds on reasonable terms, but when the hon. Member for Bury St. Edmunds (Mr. Aitken) says that it is his company's policy to sell its freeholds, I can only say that he is given the lie by every reputable solicitor in Cardiff.
§ Mr. Aitken indicated dissent.
§ Mr. Callaghan
It is no use the hon. Member shaking his head, because I am stating the views of solicitors who are 458 handling these matters every day. I have one letter from a well-known solicitor, whose name I do not propose to advertise, who says:I have found most estates are prepared, upon request, to sell the freehold, except Western Ground Rents Limited, who either refuse to sell, or ask for a large sum of money.
§ Mr. Aitken
I call the attention of the hon. Member for Cardiff, South-East (Mr. Callaghan) to the official statement by the chairman of the company, in which he said that for a number of years the company had been perfectly willing to sell a freehold or renew a lease, except in cases where it was obviously in the interests of good estate management that it should not do so.
§ Mr. Callaghan
And the complaint made is that the company fixes ridiculously high prices so that it is not making a genuine offer. That is our experience. Of course the hon. Member says that the figure is based on the valuation tables and the reversionary rights, but who fixes the value of the property from which a discount is made? It is Western Ground Rents Limited. It fixes the capital value of the property. The complaints now being made by my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) and others about the property in Cathedral Road is that it is now going at an extortionate price by comparison with what it was ten years ago. It is that company which is saying what this property is worth and then making a discount from its valuation tables, so that it is able to say that it is working it all out mathematically.
I put this to the hon. Member for Bury St. Edmunds. Of course, the value of property in Cathedral Road has been going up. It is near the centre of a city which is developing fast. But has Western Ground Rents developed it? What has that company put into Cardiff? And, apart from asking what contribution Western Ground Rents has made to Cardiff, have those hon. Members ever been there? The hon. Member for Bury St. Edmunds would not even know his way around Grangetown or Roath. I am talking about absentee landlords of the worst order. They are a group of financiers, hired lawyers and actuaries who know nothing about the city but who control our lifeblood and destinies.
459 This subject causes great emotion. Hon. Gentlemen opposite do not understand the bitterness and hatred that is felt for Western Ground Rents in Cardiff. My hon. Friends have said that this is a much wider problem and, of course, it is and I am sorry that, because of the time factor, more of my hon. Friends have not been able to take part in the debate.
Western Ground Rents Ltd. has done much to damnify the leasehold system, which the hon. Member for Swansea, West (Mr. Rees) defended. It did it because of the financial return it is getting, and for no other reason. In this connection, I will read what the firm's distribution of dividends has been over the last few years—all made out of people's homes. In 1951–52 it paid a dividend of 50 per cent. In 1952–53 it paid a dividend again of 50 per cent. For 1953–54, 1954–55 and 1955–56 there was a dividend of only a beggarly 25 per cent. In 1956–57 it made a capital distribution of two shares for every one share held by its shareholders. The company therefore paid a dividend whose equivalent is 60 per cent. In 1957 it paid a dividend whose equivalent is 75 per cent. and in 1958 it paid a dividend whose equivalent is 75 per cent.
In three years a shareholder could get his capital back more than twice, yet those hon. Members opposite have the impudence to come to this House and claim that they have a right to the capital value of Cardiff, to which they have not contributed a single penny since they first laid down the land.
§ Mr. Aitken rose—
§ Mr. Callaghan
No. The figures I have given are from the Stock Exchange records and if the hon. Gentleman wishes to speak he can make his own speech. In fact, I make this offer to the hon. Gentleman. He can come to Cardiff and have a public meeting and debate the issue there. We will fill the Tory hall five times over with his tenants.
§ Mr. Callaghan
I am not afraid to give way to the hon. Gentleman or to anyone else. I have not been an undiluted admirer of the hon. Member for Barry (Mr. Gower) but this afternoon he has spoken like a real man. I agree with every word of his speech and I congratulate him on it, as I congratulate my hon. Friend the Member for Cardiff, West (Mr. G. Thomas) on his contribution, and my hon. Friend the Member for Abertillery (Mr. Ll. Williams) on his moving speech.
§ Mr. Callaghan
That is not true. I have been in this House far sixteen years and hon. Members can judge whether or not I am afraid to give way.
§ Mr. J. Foster rose—
§ Mr. Box rose—
§ Mr. Callaghan
I will not give way to the hon. Member for Cardiff, North (Mr. Box), because the hon. Gentleman was given time to speak and he used it merely to make an attack on the Labour Party.
This is an issue which has aroused intense emotion. I warn the Government that if they do not accept this Motion—and already some hon. Members opposite intend to vote against the Government—and unless they are prepared to act, this agitation will continue. It is bound to go on until there is a solution to the problem. The Land Development Commission, which the Labour Party proposes should be established, will be one means—and I do not have time to develop this in detail—of ending this monopoly.
When that Commission has acquired land, and the houses are built upon it, it will be possible and a proper matter of policy to sell the freehold of those houses back to those who are occupying that land. That is the only way, in many parts of Wales, that one will be able to get land at a reasonable price. I warn the Minister that resentment in South Wales is growing. It is founded on emotion that cannot be swept aside.
461 I will close my remarks with a little ditty that was heard at the weekend when the Home Secretary made a speech in order to try to overcome what the Prime Minister told us about our never having had it so good. I have taken the liberty of adding to it and, no doubt, my hon. Friends could add to it further. This is what the Home Secretary told us:Nations earn their right to riseThrough service and through sacrifice.I have taken the liberty of adding the following:But Western Ground Rents say, 'This is rot,You build the house, we take the lot;Yours is the right, whilst our profits riseTo serve us and to sacrifice'.
§ 6.47 p.m.
§ The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke)
I appreciate that this debate is confined to half a day and that other hon. Members still wish to speak, but I know that it is the desire of the Opposition to raise another subject following this debate.
This has been an interesting debate and the speeches made by my hon. Friend the Member for Swansea, West (Mr. Rees) and the hon. and learned Member for Cardigan (Mr. Bowen) were two of the most thoughtful contributions that I have heard in a number of debates to which I have listened or in which I have taken part on the subject of leasehold over a number of years past.
It is a subject with which I am not unfamiliar from my constituency point of view. I think the hon. Member for Abertillery (Mr. Ll. Williams) said that leasehold would be a much more famous topic if it were more widely spread. It happens that my constituency of Hampstead is largely subject to ground leases. I have represented that constituency for eleven years, and it is a subject on which hardly any of my constituents write to me. What the cause of that is I can only guess. I think it is partly because the ground landlords are very wise in handling their lessees and have pursued an enlightened policy. I think it is also because remarkably few people in Hampstead are so gullible or stupid as to imagine that they have acquired the freehold interest when they have actually acquired the leasehold.
§ Mrs. Eirene White (Flint, East)
Does not the Minister realise that in Hampstead there is also a considerable number of freeholds? As a freeholder myself in Hampstead I know that in Hampstead one has a choice that one does not have in South Wales.
§ Mr. Brooke
There are all these considerations, but the fact is—and I did not think that there was any dispute about this—that the Landlord and Tenant Act of 1954 seems to be acting without giving any serious or widespread dissatisfaction, other than in South Wales.
Therefore, one of the matters for hon. Members to examine—or for examination by anyone interested in this subject—is what, if any, are the bad features in South Wales which give rise to dissatisfaction. The hon. Member for Abertillery was frank in his speech. He said, in effect, that if one had a leasehold interest one could fairly imagine that it was a freehold interest and complained that one's home was being snatched if one was not able to retain that interest beyond the expiry of the lease. That is perfectly frank, but it makes nonsense of all contracts.
I am aware that over the years a number of people in various places have had that totally mistaken idea. No one in this House holds it, I am sure. All hon. Members realise the difference. The argument here is whether the leasehold system should continue. That point was raised by the hon. Member for Swansea, West who made interesting suggestions about possible changes in the law, as I understood his speech, so as to insist on certain provisions being included in future long leases that are granted.
The question, in fact, is whether there is now to be some form of leasehold enfranchisement or some other kind of interference by compulsion imposed by Parliament on contracts that have been entered into and have been running for a number of years. That is a subject which the Jenkins Committee examined a number of years ago and by a large majority that Committee—which was a very strong one—came to the conclusion that it would not be justifiable to grant powers of compulsory purchase to a private citizen.
As I understand it, what this Motion implies is that the Government should 463 introduce forthwith legislation which will put powers of compulsory purchase into the hands of certain citizens, to wit occupying lessees. The Motion confines it to occupying lessees although, as my right hon. and learned Friend the Attorney-General pointed out, at once one would risk doing injustice if one were to follow this advice as between the occupying lessee and the non-occupying lessee. A situation might be created in which Mr. Jones, living in one house, and who is the occupier, is entitled to exercise compulsory purchase rights against the ground landlord and obtain it at a figure which I suspect the Opposition wants to be rather below the market value; whereas Mr. Williams, who is the lessee of the house next door, because he is not living there, would have no such right. If Mr. Jones can then sell his property, having compulsorily acquired it, at a profit to somebody else, while Mr. Williams cannot do so, obviously there is going to be a renewed feeling of injustice.
All I am putting to the Opposition is that this proposal of theirs, if it were adopted, would not eliminate feelings of injustice as between one person and another.
§ Sir L. Ungoed-Thomas
Does not the Minister realise that the action which his own Government have taken with regard to leaseholds in Scotland makes nonsense of his objection to the Motion which is before the House?
§ Mr. Brooke
I am addressing myself to the terms of the Motion which proposes to give certain powers of compulsory purchase to occupying lessees in Wales. I am pointing out what would be the consequences of that.
The Motion further refers to the hardships caused in Wales by the operation of the current leasehold system. My right hon. and learned Friend the Attorney-General asked to be given specific instances of that. He said that he had been making inquiries but had not come across 464 or gained information of cases where the ground landlords had been appearing to demand for the freehold reversion a figure that was, in fact, higher than its market value.
Equally, I have been seeking to gain information and I have not got from the papers, from inquiries that I have made or from this debate any clear examples of hardship caused. Let me quote one or two that were mentioned. My hon. Friend the Member for Barry (Mr. Gower) spoke of somebody being offered a house in Newport with thirty-one years unexpired for £500. I cannot tell whether it is worth £500 or not, but I know that almost anybody in my constituency would snap up a house with thirty-one years unexpired for £500. Obviously, of course, it depends on the condition of the house.
The hon. Member for Cardiff, West (Mr. G. Thomas) alleged that there was severe hardship in the case of an ex-policeman who had been paying 1s. a week in respect of his house and was now, on the expiry of the lease or towards the end of it, told that in future he would have to pay 11s. 7d. a week. In most parts of England and Wales 11s. 7d. a week does not sound an extortionate rent. The responsibility is on the hon. Member to try to convince the House that 11s. 7d. is a rent that is likely to cause hardship to the person who has been living in the house. If, indeed, it is a ground rent it is not clear why the 1s. a week is not continuing and why this person, if he feels that a hardship is being imposed upon him, is not seeking the protection of the 1954 Act.
The hon. Member for Abertillery spoke of a widow who was occupying a house with eleven years unexpired and who was being asked £185 for the house. Again it was not clear where the hardship is. If the lease is eleven years unexpired she is entitled to live in that house for a further eleven years, and at the end of that period she can claim to continue to live there because the 1954 Act guarantees her security of tenure at a rent which, if it cannot be agreed with the landlord, will be fixed by the court. Where is the hardship there?
§ Mr. LI. Williams
The Minister has misstated the position. The £185 was not for the house; it was for the ground rent.
§ Mr. Brooke
If she had eleven years unexpired she would be able to continue living there for another eleven years, and at the end of the eleven years she could claim the protection of the 1954 Act.
The truth is that for a great many people the whole topic of leasehold tenure is a mystery, and I am bound to say that that is in part due to a number of ground landlords being quite content that it shall remain a mystery. One of the facts that have been brought home to me is that in Wales, as elsewhere, these troubles seem to arise on certain estates and not on others. I can only think that the explanation of that is that certain ground landlords are far more successful, by publicity or public relations or otherwise, in letting everybody know what their policy is. I would certainly commend to all ground landlords in Wales and elsewhere, because this subject is one of common public interest, that they should not make it so difficult as some do at present for people to discover what, in fact, their policy is as regards their willingness either to extend the lease or to dispose of the freehold reversion, and on what terms.
The hon. and learned Member for Cardigan (Mr. Bowen) asked me whether I would consider taking similar action with regard to ground landlords as I took last August in relation to certain landlords in London. But, of course, the cases are not on a par. I was taking action against people who I feared were going to render their tenants homeless, but the occupying lessee cannot be rendered homeless. He is protected by the 1954 Act. The action which I took in that case would not be applicable or of value in the case which we are discussing today.
My hon. Friend the Member for Barry mentioned the difficulty of obtaining a mortgage for less than thirty-five years. That is a subject on which I would be very glad indeed to obtain further information. Clearly there is something unsatisfactory if a man needs to move away and yet cannot dispose of the remainder of his lease because nobody will give the incoming purchaser a mortgage since the lease is for less then thirty-five years. My impression is that 466 in 99 cases out of 100 if an approach is made to the ground landlord the matter can be settled. But if there are cases where a ground landlord is not prepared to help in any way and nobody else is, I shall be glad to hear of them.
There is another type of case which has not been mentioned today and which is of concern to me as Minister of Housing and Local Government. It is that where there are less than fifteen years unexpired it is difficult to apply for and obtain an improvement grant for a house. That, obviously, is of interest to me. I do not know. Again, cases of that kind have not come to my notice, but they may exist. If they do, I should like to hear about them.
The hon. Member for Cardiff, South-East (Mr. Callaghan) made perfectly clear that the Labour Party's policy, if it came to power, would be to throw over the majority Report of the Jenkins Committee in regard to leasehold enfranchisement policy. Hon. and right hon. Members will find the argument in the majority Report more cogent and persuasive than, perhaps, they imagine. Is it true, as some hon. Members have argued, that the situation has altered since the Jenkins Report was presented? Again, if there is information of a specific kind which hon. Members wish to produce or can obtain from their constituencies, the Government are prepared to look at it. But the Government are not prepared to accept this Motion or to promise to set up another committee on such vague evidence as has so far been brought forward.
So far as we can ascertain, there is no specific evidence of hardship that would justify a fresh committee. The Government are very willing, as my right hon. and learned Friend said, to examine any information on these matters which is put into our hands, but, in our view, the Motion is not sufficiently supported by hard facts. I have explained that were it to become Government policy the proposal in the Motion would cause injustice between man and man and would give compulsory powers to private individuals, which is something which this House should be very reluctant to do. On all those grounds, I invite the House to reject the Motion.
§ Question put:—468
§ The House divided: Ayes 179, Noes 245.469
|Division No. 249.]||AYES||[7.2 p.m.|
|Abse, Leo||Henderson, Rt. Hn. Arthur (Rwly Regis)||Pearson, Arthur (Pontypridd)|
|Ainsley, William||Herbison, Miss Margaret||Peart, Frederick|
|Awbery, Stan||Hill, J. (Midlothian)||Pentland, Norman|
|Bacon, Miss Alice||Hilton, A. V.||Plummer, Sir Leslie|
|Baxter, William (Stirlingshire, W.)||Houghton, Douglas||Prentice, R. E.|
|Bence, Cyril||Hoy, James H.||Probert, Arthur|
|Blyton, William||Hughes, Cledwyn (Anglesey)||Pursey, Cmdr, Harry|
|Boardman, H.||Hughes, Emrys (S. Ayrshire)||Randall, Harry|
|Bowden, Herbert W. (Leics, S.W.)||Hynd, H. (Accrington)||Rankin, John|
|Bowles, Frank||Hynd, John (Attercliffe)||Rhodes, H.|
|Box, Donald||Irvine, A. J. (Edge Hill)||Roberts, Albert (Normanton)|
|Boyden, James||Irving, Sydney (Dartford)||Roberts, Goronwy (Caernarvon)|
|Braddock, Mrs. E. M.||Janner, Sir Barnett||Robertson, John (Paisley)|
|Broughton, Dr. A. D. D.||Jay, Rt. Hon. Douglas||Robinson, Kenneth (St. Pancras, N.)|
|Brown, Alan (Tottenham)||Jeger, George||Ross, William|
|Butler, Herbert (Hackney, C.)||Jenkins, Robert (Dulwich)||Royle, Charles (Salford, West)|
|Butler, Mrs. Joyce (Wood Green)||Jenkins, Roy (Stechford)||Shinwell, Rt. Hon. E.|
|Callaghan, James||Johnson, Carol (Lewisham, S.)||Silverman, Julius (Aston)|
|Castle, Mrs. Barbara||Jones, Rt. Hn. A. Creech(Wakefield)||Silverman, Sydney (Nelson)|
|Chapman, Donald||Jones, Dan (Burnley)||Skeffington, Arthur|
|Chetwynd, George||Jones, Jack (Rotherham)||Slater, Mrs. Harriet (Stoke, N.)|
|Collick, Percy||Jones, J. Idwal (Wrexham)||Slater, Joseph (Sedgefield)|
|Corbet, Mrs. Freda||Jones, T. W. (Merioneth)||Small, William|
|Craddock, George (Bradford, S.)||Kelley, Richard||Sorensen, R. W.|
|Crosland, Anthony||Kenyon, Clifford||Soskice, Rt. Hon. Sir Frank|
|Cullen, Mrs. Alice||Key, Rt. Hon. C. W.||Spriggs, Leslie|
|Davies, Rt. Hn. Clement (Montgomery)||King, Dr. Horace||Steele, Thomas|
|Davies, G. Elfed (Rhondda, E.)||Lawson, George||Stewart, Michael (Fulham)|
|Davies, Harold (Leek)||Lee, Frederick (Newton)||Stones, William|
|Davies, S. O. (Merthyr)||Lee, Miss Jennie (Cannock)||Swain, Thomas|
|Deer, George||Lever, Harold (Cheetham)||Swingler, Stephen|
|Diamond, John||Lewis, Arthur (West Ham, N.)||Sylvester, George|
|Dodds, Norman||Lipton, Marcus||Taylor, Bernard (Mansfield)|
|Donnelly, Desmond||Loughlin, Charles||Taylor, John (West Lothian)|
|Dugdale, Rt. Hon. John||Mabon, Dr. J. Dickson||Thomas, George (Cardiff, W.)|
|Ede, Rt. Hon. C.||McCann, John||Thomas, Iorwerth (Rhondda, W.)|
|Edelman, Maurice||MacColl, James||Thompson, Dr. Alan (Dunfermline)|
|Edwards, Rt Hon. Ness (Caerphilly)||McInnes, James||Thornton, Ernest|
|Edwards, Walter (Stepney)||McKay, John (Wallsend)||Ungoed-Thomas, Sir Lynn|
|Evans, Albert||Mackie, John (Enfield, East)||Wainwright, Edwin|
|Finch, Harold||Mallalieu, J.P.W. (Huddersfield, E.)||Warbey, William|
|Fletcher, Eric||Manuel, A. C.||Weitzman, David|
|Foot, Michael (Ebbw Vale)||Marquand, Rt. Hon. H. A.||Wells, Percy (Faversham)|
|Forman, J. C.||Marsh, Richard||Wells, William (Walsall, N.)|
|Fraser, Thomas (Hamilton)||Mason, Roy||White, Mrs. Eirene|
|Galpern, Sir Myer||Mayhew, Christopher||Wigg, George|
|George, Lady Megan Lloyd (Crmrthn)||Mitchison, G. R.||Wilcock, Group Capt. C. A. B.|
|Ginsburg, David||Moody, A. S.||Wilkins, W. A.|
|Gordon Walker, Rt. Hon. P. C.||Morris, John||Willey, Frederick|
|Gourlay, Harry||Mort, D. L.||Williams, D. J. (Neath)|
|Gower, Raymond||Moyle, Arthur||Williams, Ll. (Abertillery)|
|Grey, Charles||Mulley, Frederick||Williams, W. R. (Openshaw)|
|Griffiths, Rt. Hon. James (Llanelly)||Noel-Baker, Francis (Swindon)||Williams, W. T. (Warrington)|
|Griffiths, W. (Exchange)||Noel-Baker, Rt. Hn. Philip (Derby, S.)||Willis, E. G. (Edinburgh, E.)|
|Gunter, Ray||Oliver, G. H.||Woof, Robert|
|Hale, Leslie (Oldham, W.)||Oram, A. E.||Wyatt, Woodrow|
|Halt, Rt. Hn. Glenvil (Colne Valley)||Owen, Will||Yates, Victor (Ladywood)|
|Hamilton, William (West Fife)||Padley, W. E.|
|Hannan, William||Parkin, B. T.||TELLERS FOR THE AYES:|
|Hayman, F. H.||Paton, John||Mr. Redhead and|
|Healey, Denis||Pavitt, Laurence||Mr. Ifor Davies.|
|Agnew, Sir Peter||Bevins, Rt. Hon. Reginald||Bullard, Denys|
|Aitken, W. T.||Bidgood, John C.||Bullus, Wing Commander Eric|
|Allason, James||Biggs-Davison, John||Burden, F. A.|
|Amery, Rt. Hon. Julian||Birch, Rt. Hon. Nigel||Butcher, Sir Herbert|
|Atkins, Humphrey||Bishop, F. P.||Campbell, Sir David (Belfast, S.)|
|Balniel, Lord||Black, Sir Cyril||Campbell, Gordon (Moray & Nairn)|
|Barber, Anthony||Bourne-Arton, A.||Carr, Compton (Barons Court)|
|Barlow, Sir John||Boyd-Carpenter, Rt. Hon. John||Cary, Sir Robert|
|Barter, John||Boyle, Sir Edward||Channon, H. P. G.|
|Batsford, Brian||Braine, Bernard||Chataway, Christopher|
|Baxter, Sir Beverley (Southgate)||Brooke, Rt. Hon. Henry||Clark, William (Nottingham, s.)|
|Beamish, Col. Sir Tufton||Browne, Percy (Torrington)||Clarke, Brig, Terence (Portsmth, W.)|
|Bell, Ronald||Bryan, Paul||Cleaver, Leonard|
|Berkeley, Humphry||Buck, Antony||Cole, Norman|
|Cooper, A. E.||Hulbert, Sir Norman||Pilkington, Sir Richard|
|Cooper-Key, Sir Neill||Hutchison, Michael Clark||Pitman, Sir James|
|Cordle, John||Iremonger, T. L.||Pitt, Miss Edith|
|Corfield, F. V.||Irvine, Bryant Godman (Rye)||Pott, Peroivall|
|Costain, A. P.||Jackson, John||Powell, Rt. Hon. J. Enoch|
|Coulson, J. M.||James, David||Price, David (Eastleigh)|
|Courtney, Cdr. Anthony||Jennings, J. O.||Price, H. A. (Lewisham, W.)|
|Craddock, Sir Beresford||Johnson, Dr. Donald (Carlisle)||Profumo, Rt. Hon. John|
|Critchley, Julian||Johnson, Eric (Blackley)||Proudfoot, Wilfred|
|Curran, Charles||Johnson Smith, Geoffrey||Pym, Francis|
|Dalkeith, Earl of||Jones, Rt. Hn. Aubrey (Hall Green)||Quennell, Miss J. M.|
|Dance, James||Joseph, Sir Keith||Rawlinson, Peter|
|Donaldson, Cmdr, C. E. M.||Kerans, Cdr. J. S.||Ridley, Hon. Nicholas|
|Doughty, Charles||Kerr, Sir Hamilton||Ridsdale, Julian|
|Drayson, G. B.||Kershaw, Anthony||Rippon, Geoffrey|
|Duncan, Sir James||Kirk, Peter||Robinson, Sir Roland (Blackpool, S.)|
|Eden, John||Kitson, Tlmothy||Robson Brown, Sir William|
|Elliot, Capt. Walter (Carshalton)||Langford-Holt, J.||Ropner, Col. Sir Leonard|
|Emmet, Hon. Mrs. Evelyn||Leather, E. H. C.||Royle, Anthony (Richmond, Surrey)|
|Errington, Sir Eric||Leavey, J. A.||Scott-Hopkins, James|
|Farey-Jones, F. W.||Leburn, Gilmour||Sharples, Richard|
|Farr, John||Legge-Bourke, Sir Harry||Shaw, M.|
|Fell, Anthony||Lewis, Kenneth (Rutland)||Shepherd, William|
|Finlay, Graeme||Lilley, F. J. P.||Smith, Dudley (Br'ntf'rd & Chiswick)|
|Fisher, Nigel||Lindsay, Martin||Smithers, Peter|
|Foster, John||Linstead, Sir Hugh||Spearman, Sir Alexander|
|Fraser, Hn. Hugh (Stafford & Stone)||Litchfield, Capt. John|
|Fraser, Ian (Plymouth, Sutton)||Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)||Speir, Rupert|
|Freeth, Denzil||Lloyd, Rt. Hon. Selwyn (Wirral)||Stevens, Geoffrey|
|Gammans, Lady||Longbottom, Charles||Steward, Harold (Stockport, S.)|
|Gardner, Edward||Longden, Gilbert||Stoddart-Scott, Col. Sir Malcolm|
|Glover, Sir Douglas||Loveys, Walter H.||Storey, Sir Samuel|
|Glyn, Dr. Alan (Clapham)||Low, Rt. Hon. Sir Toby||Studholme, Sir Henry|
|Goodhart, Philip||Lucas, Sir Jocelyn||Summers, sir Spencer (Aylesbury)|
|Goodhew, Victor||Lucas-Tooth, Sir Hugh||Sumner, Donald (Orpington)|
|Gough, Frederick||MacArthur, Ian||Tapsell, Peter|
|Grant, Rt. Hon. William||McLaren, Martin||Taylor, Edwin (Botton, E.)|
|Grant-Ferris, Wg Cdr. R.||Maclean, Sir Fitzroy (Bute & N, Ayrs.)||Taylor, W. J. (Bradford, N.)|
|Green, Alan||MacLeod, John (Ross & Cromarty)||Teeling, William|
|Grimston, Sir Robert||Macpherson, Niall (Dumfries)||Thomas, Leslie (Canterbury)|
|Gurden, Harold||Maddan, Martin||Thompson, Kenneth (Walton)|
|Hall, John (Wycombe)||Maitland, Sir John||Thompson, Richard (Croydon, S.)|
|Hare, Rt. Hon. John||Manningham-Buller, Rt. Hn. Sir R.||Thomton-Kemsley, Sir Colin|
|Harris, Frederic (Croydon, N.W.)||Markham, Major Sir Frank||Turner, Colin|
|Harris, Reader (Heston)||Marples, Rt. Hon. Ernest||Turton, Rt. Hon. R. H.|
|Harrison, Brian (Maldon)||Marshall, Douglas||Vane, W. M. F.|
|Harrison, Col. Sir Harwood (Eye)||Marten, Neil||Vaughan-Morgan, Rt. Hon. Sir John|
|Harvey, Sir Arthur Vere (Macclesf'd)||Mathew, Robert (Honiton)||Vickers, Miss Joan|
|Harvey, John (Walthamstow, E.)||Matthews, Cordon (Meriden)||Vosper, Rt. Hon. Dennis|
|Harvie Anderson, Miss||Maxwell-Hyslop, R. J.||Wakefield, Edward (Derbyshire, W.)|
|Hastings, Stephen||Montgomery, Fergus||Wakefield, Sir Wavell (St. M'lebone)|
|Hay, John||More, Jasper (Ludlow)||Walder, David|
|Heald, Rt. Hon. Sir Lionel||Nabarro, Gerald||Walker, Peter|
|Henderson-Stewart, Sir James||Wall, Patrick|
|Hendry, Forbes||Nicholls, Sir Harmar||Watkinson, Rt. Hon. Harold|
|Hicks Beach, Maj. W.||Nicholson, Sir Godfrey||Whitelaw, William|
|Hiley, Joseph||Noble, Michael||Williams, Dudley (Exeter)|
|Hill, Dr. Rt. Hon. Charles (Luton)||Oakshott, Sir Hendrie||Williams, Paul (Sunderland, S.)|
|Hill, Mrs. Eveline (Wythenshawe)||Orr-Ewing, C. Ian||Wills, Sir Gerald (Bridgwater)|
|Hinchingbrooke, Viscount||Osborn, John (Hallam)||Wise, A. R.|
|Hirst, Geoffrey||Osborne, Sir Cyril (Louth)||Wood, Rt. Hon. Richard|
|Hobson, John||Page. Graham (Crosby)||Woodhouse, C. M.|
|Holland, Philip||Pannell, Norman (Kirkdale)||Woodnutt, Mark|
|Hope, Rt. Hon. Lord John||Partridge, E.||Woollam, John|
|Hornby, R. P.||Pearson, Frank (Clitheroe)||Worsley, Marcus|
|Hornsby-Smith, Rt. Hon. Patricia||Peel, John|
|Howard, Hon. G. R. (St. Ives)||Percival, Ian||TELLERS FOR THE NOES:|
|Howard, John (Southampton, Test)||Peyton, John||Mr. Gibson-Watt and|
|Hughes Hallett, Vice-Admiral John||Pickthorn, Sir Kenneth||Mr. J. E. B. Hill.|
|Hughes-Young, Michael||Pike, Miss Mervyn|