HC Deb 24 October 1967 vol 751 cc1604-9

Lords Amendment No. 23: In page 25, line 25, leave out from "of" to "shall" in line 27, and insert each period of ten years after the original term date the letting value at the expiration of that period".

Mrs. White

I beg to move, That this House doth disagree with the Lords in the said Amendment.

It might be for the convenience of the House if I gave reasons why it should also disagree with the Lords Amendments, in page 25, line 30, leave out "either" and insert "each"; in line 33, leave out "by" and insert "equally by the landlord and"; and in line 35, leave out "of the twenty-five," and insert "year of any period of ten".

Mr. Deputy Speaker

If the House agrees, so be it.

Mrs. White

The purpose of this Amendment and the others, which are consequential upon it, is to ensure that if a tenant should apply for and obtain an extended lease, the amount of ground rent payable, which is to be a modern ground rent in the first instance, not the old ground rent of the former leases, should naturally be determined at the initial period of the new lease.

It was felt that the 50 year extension which was available under this provision was perhaps rather long in terms of modern devaluation of the currency and that it was fair to the landlord to suggest that half way through the period there should be an opportunity for a revision of the rent. The Amendment suggests that the 25 year period proposed is too long and that instead of one revision after the initial one there should be revision every ten years.

When we originally discussed this matter, an even shorter period of seven years was suggested. This seemed entirely out of keeping with the spirit of the proposals in the Bill. I do not think that ten years is any great improvement. We still think that it is quite unreasonable for a revaluation of the rent. I would remind the House that if one looks a little further down in Clause 15 one will see that what we ale discussing under these Amendments is rent pure and simple.

Where other charges are concerned, in subsection (3), either for services, or for repairs, maintenance or insurance, there are separate arrangements, whereby these charges can be dealt with more quickly. It is only the ground rent that is the subject of these Amendments. It is true that there is a slight palliative in suggesting these extra valuations. Amendment No. 25 proposes that instead of making the tenant responsible for the entire cost of the valuation, and one would be increasing the number of valuations from two to five, one should arrange for this cost to be shared with the landlord.

This is a slight disadvantage to the tenant, who would have to pay two and a half instead of two valuations. One would not say that it was a matter of great principle, that one would necessarily regard that as being conclusive, but it is nevertheless a slight disadvantage to the tenant. The main argument against this proposition, however, is that if one is to have so many valuations, one will not merely increase the expense but also the work. We are frequently told that we are short of good valuers, and it is really, to our mind, against public policy, that one should suggest that one would need so many valuations in the course of a 50 year tenancy.

All that we are discussing is the ground rent. I repeat that there are other arrangements for all other charges which may go up. We do not think that a landlord would display very much business acumen if he could not reasonably work out 25 years ground rent. He has the chance to revise. At the beginning the new extension would be set at the current market rate and we cannot see adequate arguments for adding to the tenant's uncertainty and causing extra work in valuation for no good reason. We hope that the House will not persist with these Amendments but will disagree with their Lordships.

Mr. Allason

The right hon. Lady suggests that, when a landlord fixes a rent for the first 25 years, he should take into account the fact that it is against public policy to have frequent rent reviews and should therefore fix it high enough to avoid them. Is she saying that the rent for that period shall not be the current market rent but something midway between the current market rent at the beginning and that at the end of the period? This is what it means if she invites landlords to quote the proper rent.

Surely a landlord who started quoting a rent considerably in excess of the current value of the land would run into trouble—

Mrs. White

Perhaps I did not express myself clearly. The current market rent, if for 25 years, takes that whole situation into account, surely.

Mr. Allason

But that is what it does not do. The right hon. Lady was more robust at our last discussion when she replied to me: … we do not think that to revise a ground rent every seven years makes sense. Property owners should be able to foresee conditions for 25 years ahead; we are not suggesting that they should crystal gaze for as long as 50 years."—[OFFICIAL REPORT, 20th June, 1967; Vol. 748, c. 1582.] But property owners cannot foresee conditions 25 years ahead at the moment; they know that there will be inflation and therefore they do not generally grant leases longer than seven years and usually have a rent review at the end of that period.

To suggest that they can foresee conditions and then quote current market rent is ridiculous, because that rent does not reflect inflation over the next 25 years, and Heaven knows what that will be. It can reflect only the bargain which a landlord strikes: he takes current market

rent and has to give the tenant a reasonable period—seven years—at the end of which, he realises, the value of money will have dropped.

I continue to argue that seven years is the proper time. Their Lordships have compromised between seven and 25 and settled on ten years, which at least is divisible into 50, a merit which my proposal did not have, as I admitted. The Government want to revert from ten to their wicked 25 years. These will not be freely negotiated deals, as the landlord will be compelled to grant a 25-year lease. Under the Government's proposals he will have to do it at the current market rent, which is just further evidence of the Government's zeal for expropriation.

Question put, That this House doth disagree with the Lords in the said Amendment:—

The House divided: Ayes 175, Noes 92.

Division No. 495.] AYES [9.15 p.m.
Allaun, Frank (Salford, E.) Edwards, William (Merioneth) Leadbitter, Ted
Alldritt, Walter Ellis, John Loughlin, Charles
Allen, Scholefield Ennals, David McBride, Neil
Anderson, Donald Ensor, David MacDermot, Niall
Archer, Peter Evans, Gwynfor (C'marthen) Macdonald, A. H.
Atkins, Ronald (Preston, N.) Evans, Ioan L. (Birm'h'm, Yardley) McGuire, Michael
Atkinson, Norman (Tottenham) Finch, Harold Mackenzie, Alasdair (Ross & Crom'ty)
Bacon, Rt. Hn. Alice Fletcher, Ted (Darlington) Mackintosh, John P.
Bagier, Gordon A. T. Foot, Michael (Ebbw Vale) McMillan, Tom (Glasgow, C.)
Barnett, Joel Ford, Ben Mahon, Peter (Preston, S.)
Bessell, Peter Freeson, Reginald Mallalieu, J. P. W. (Huddersfield, E.)
Bidwell, Sydney Galpern, Sir Myer Manuel, Archie
Binns, John Gardner, Tony Mapp, Charles
Blackburn, F. Garrett, W. E. Marquand, David
Boardman, H. Gourlay, Harry Mellish, Robert
Booth, Albert Greenwood, Rt. Hn. Anthony Mendelson, J. J.
Boston, Terence Gregory, Arnold Miller, Dr. M. S.
Braddock, Mrs. E. M. Grey, Charles (Durham) Milne, Edward (Blyth)
Brooks, Edwin Griffiths, David (Rother Valley) Mitchell, R. C. (S'th'pton, Test)
Brown, Bob (N'c'tle-upon-Tyne, W.) Griffiths, Rt. Hn. James (Llanelly) Morgan, Elystan (Cardiganshire)
Buchan, Norman Griffiths, Will (Exchange) Morris, Alfred (Wythenshawe)
Buchanan, Richard (G'gow, Sp'bum) Grimond, Rt. Hn. J. Neal, Harold
Cant, R. B. Hale, Leslie (Oldham, W.) Norwood, Christopher
Chapman, Donald Hamilton, James (Bothwell) O'Malley, Brian
Coe, Denis Handing, William Orme, Stanley
Coleman, Donald Harrison, Walter (Wakefield) Oswald, Thomas
Conlan, Bernard Haseldine, Norman Owen, Will (Morpeth)
Corbet, Mrs. Freda Heffer, Eric S. Padley, Walter
Craddock, George (Bradford, S.) Hilton, W. S. Page, Derek (King's Lynn)
Crawshaw, Richard Hooley, Frank Pannell, Rt. Hn. Charles
Cullen, Mrs. Alice Hooson, Emlyn Park, Trevor
Dalyell Tam Horner, John Parkyn, Brian (Bedford)
Davidson, Arthur (Accrington) Howarth, Harry (Wellingborough) Pavitt, Laurence
Davies, Dr. Ernest (Stretford) Howarth, Robert (Bolton, E.) Pearson, Arthur (Pontypridd)
Davies, G. Elfed (Rhondda, E.) Howie, W. Pentland, Norman
Davies, Ednyfed Hudson (Conway) Huckfield, Leslie Perry, George H. (Nottingham, S.)
Davies, Harold (Leek) Hughes, Emrys (Ayrshire, S.) Price, Thomas (Westhoughton)
Davies, Ifor (Gower) Hughes, Hector (Aberdeen, N.) Price, William (Rugby)
Davies, S. O. (Merthyr) Hughes, Roy (Newport) Probert, Arthur
Dempsey, James Hunter, Adam Rhodes, Geoffrey
Dewar, Donald Jackson, Peter M. (High Peak) Robinson, W. O. J. (Walth'stow, E.)
Dickens, James Jeger, Mrs. Lena (H'b'n & St.P'cras, S.) Rogers, George (Kensington, N.)
Dobson, Ray Johnson, Carol (Lewieham, S.) Rowlands, E. (Cardiff, N.)
Doig, Peter Jones, Dan (Burnley) Ryan, John
Dunnett, Jack Jones, J. Idwal (Wrexham) Shaw, Arnold (Ilford, S.)
Dunwoody, Mrs. Gwyneth (Exeter) Jones, T. Alec (Rhondda, West) Sheldon, Robert
Edwards, Rt. Hn. Ness (Caerphilly) Kerr, Russell (Feitham) Short, Mrs. Renée (W'hampton, N. E.)
Silkin, Rt. Hn. John (Deptford) Wainwright, Edwin (Dearne Valley) Williams, Alan (Swansea, W.)
Silkin, Hn. S. C. (Dulwich) Wainwright, Richard (Colne Valley) Williams, Clifford (Abertillery)
Silverman, Julius (Aston) Walden, Brian (All Saints) Wilson, William (Coventry, S.)
Skeffington, Arthur Walker, Harold (Doncaster) Winnick, David
Slater, Joseph Wallace, George Winstanley, Dr. M. P.
Small, William Watkins, Tudor (Brecon & Radnor) Winterbottom, R. E.
Spriggs, Leslie Weitzman, David Woodburn, Rt. Hn. A.
Summerskill, Hn. Dr. Shirley Wellbeloved, James Yates, Victor
Swain, Thomas Whitaker, Ben
Tinn, James White, Mrs. Eirene TELLERS FOR THE AYES:
Tomney, Frank Whitlock, William Mr. Alan Fitch and
Urwin, T. W. Wilkins, W. A. Mr. Joseph Harper.
Varley, Eric G. Willey, Rt. Hn. Frederick
Allason, James (Hemel Hempstead) Hawkins, Paul Pearson, Sir Frank (Clitheroe)
Astor, John Hay, John Percival, Ian
Awdry, Daniel Heald, Rt. Hn. Sir Lionel Pink, R. Bonner
Bennett, Dr. Reginald (Gos. & Fhm) Heseltine, Michael Pounder, Rafton
Body, Richard Hiley, Joseph Price, David (Eastleigh)
Brinton, Sir Tatton Hogg, Rt. Hn. Qulntin Prior, J. M. L.
Brown, Sir Edward (Bath) Holland, Philip Pym, Francis
Bullus, Sir Eric Hordern, Peter Quennell, Miss J. M.
Clegg, Walter Hornby, Richard Renton, Rt. Hn. Sir David
Cooke, Robert Hunt, John Rippon, Rt. Hn. Geoffrey
Cooper-Key, Sir Neill Iremonger, T. L. Rodgers, Sir John (Sevenoaks)
Costain, A. P. Irvine, Bryant Godman (Rye) Rossi, Hugh (Hornsey)
Craddock, Sir Beresford (Spelthorne) Jopling, Michael Royle, Anthony
Dalkeith, Earl of Lancaster, Col. C. G. Russell, Sir Ronald
Dance, James Lane, David Shaw, Michael (Sc'b'gh & Whitby;
Digby, Simon Wingfield Loveys, W. H. Silvester, Fred (Walthamstow, W.)
Elliot, Capt. Walter (Carshalton) McMaster, Stanley Smith, John
Elliott, R. W. (N'c'tle-upon-Tyne, N.) Maddan, Martin Stodart, Anthony
Errington, Sir Eric Maginnis, John E. Summers, Sir Spencer
Farr, John Maude, Angus Taylor, Frank (Moss Side)
Fletcher-Cooke, Charles Maxwell-Hyslop, R. J. Thatcher, Mrs. Margaret
Foster, Sir John Mills, Stratton (Belfast, N.) van Straubenzee, W. R,
Gibson-Watt, David Miscampbell, Norman Walker-Smith, Rt. Hn. Sir Derek
Grant, Anthony Mitchell, David (Basingstoke) Ward, Dame Irene
Grant-Ferris, R. Montgomery, Fergus Weatherill, Bernard
Gresham Cooke, R. More, Jasper Webster, David
Grieve, Percy Morgan, Geraint (Denbigh) Wills, Sir Gerald (Bridgwater)
Gurden, Harold Murton, Oscar Worsley, Marcus
Hall-Davis, A. G. F. Nabarro, Sir Gerald Younger, Hn. George
Harris, Frederic (Croydon, N. W.) Osborn, John (Hallam)
Harris, Reader (Heston) Page, Graham (Crosby) TELLERS FOR THE NOES:
Harrison, Col. Sir Harwood (Eye) Page, John (Harrow, W.) Mr. Timothy Kitson and
Mr. Hector Monro.

Subsequent Lords Amendments disagreed to.