§ 12.30 a.m.
§ The Under-Secretary of State for the Home Department (Mr. David Lane)
I beg to move Amendment No. 1, in page 2, leave out lines 1 to 9 and insert:'(2) If the local authority consider that the applicant
- (a) can reasonably be expected to meet obligations assumed by him in pursuance of this section in respect of a loan of the amount of the expenditure to which the application relates, or
- (b) cannot reasonably be expected to meet obligations so assumed by him in respect of a loan of that amount, but can reasonably be expected to meet obligations so assumed by him in respect of a loan of a smaller amount,
408 the local authority may, if they think fit, offer to make to the applicant a loan of the appropriate amount on such terms (including terms as to the provision of security or guarantees) as may be specified in the offer.In this subsection "the appropriate amount", in a case falling within paragraph (a) above, means the amount of the expenditure to which the application relates, and in a case falling within paragraph (b) above means the smaller amount there referred to.(3) Subject to subsection (4) below, a loan under this section shall bear interest either—
- (a) at the rate which, on the date of acceptance of the offer to make the loan, is the rate for the time being determined by the Treasury in accordance with section 5 of the National Loans Act 1968 in respect of local loans made on the security of local rates on that date and for the same period as that loan, or
- (b) if the local authority so determine, at a rate higher by one quarter per cent. than that rate.In this subsection "local loans" and "made on the security of local rates" have the same meanings as in section 6(2) of the National Loans Act 1968.(4) Where, on the date of acceptance of an offer to make a loan under this section, there are two or more rates of interest for the time being determined by the Treasury as mentioned in subsection (3) above, the reference in that subsection to the rate so determined shall be read as a reference to such one of those rates as may be specified in a direction given by the Treasury for the purposes of this section; and the Treasury shall cause any such direction to be published in the London and Edinburgh Gazettes as soon as may be after giving it.'I believe that it may be for the convenience of the House if with this we take the following Amendments: No. 4, in page 2, line 1, leave out subsection (2) and insert:'(2) The provisions of the Schedule to this Act shall apply in relation to an application made under subsection (1) of this section'.Amendment No. 5 new Schedule:
§ 'PROVISIONS AS TO LOANS
§ 1. The local authority may if they think fit offer to enter into a contract with the applicant for a loan of an amount reasonably required to meet the obligations imposed by the notice mentioned in paragraph (b) of subsection (1) of section 1 of this Act.
§ 3. The loan together with all interest due thereon shall until recovered be a charge on the premises to which the notice mentioned in paragraph 1 hereof relates and on all estates and interests therein.409
§ 4. The terms of the loan may provide that where the applicant does not have an estate in fee simple absolute in possession in the said premises that (without prejudice to any antecedent breach of the terms of the loan) the applicant's obligation to repay the loan shall cease when the applicant's interest in the said premises ceases.
§ 5. Subsections (7) to (9) of section 36 of the Fire Precautions Act 1971 shall in addition to the foregoing provisions apply to the provisions of this Schedule notwithstanding that section 36 has not been brought into operation'.
§ I hope that that is agreeable to the hon. Member for Norwood (Mr. John Fraser).
§ Mr. Lane
I am obliged to the hon. Gentleman.
Before I speak directly to the amendments and explain their purpose I should like to make two introductory points. The first is to remind the House that the Government are relying on everybody concerned to make sure that there is a sense of urgency in applying the main Fire Precautions Act. The safety of the public has to be the paramount factor, and I am sure that that will be kept in mind in the months and years ahead. Enforcement is a matter for the fire authorities. We believe from our information that steady progress is being made in enforcing the Act. We want this steady progress to continue and we believe that the Bill will be of considerable help in that direction.
My second comment by way of introduction is directed mainly to my hon. Friends, but also to some hon. Gentlemen opposite. There has been some anxiety that the provisions in the Bill for local authorities to make loans are discretionary and not mandatory. This is something that we have considered very carefully, and I remind my hon. Friends of a number of points which give me confidence in saying, as I did a moment ago, that the Bill will be useful even as a discretionary provision.
We see this as a co-operative matter between fire authorities, businesses which want to get the Bill carried out, local authorities and the Government. There is a good deal of good will on the part of the local authorities, judging from our contacts with them. It is in their interests to ensure that those who own well-set-up, prosperous businesses comply with the 410 Bill, because so much of the general prosperity of the community in the kind of areas about which we are thinking, and particularly the resort areas, depends upon them.
We are providing, as I shall remind the House again in a moment, that the finance for this loan scheme shall come out of the key sector and not out of other local authority moneys. This will give greater certainty to local authorities in making advances and is a change from the arrangement when the Bill was first before the House. I remind the House that we have given this small amount of elbow room of ¼ per cent. above the Public Works Loan Board rate of interest in order to make sure that there is no reason for the local authorities to hang back on that account.
We have made some—and we are making one more this evening—easings of the mechanics for granting loans. Lastly, as soon as we can we shall issue administrative guidance to local authorities on how we propose that the Bill, when it becomes an Act, should be applied. We shall make clear to them the concern of both sides of the House that there should be no delay in implementing the Bill and our wish that loan applications should be dealt with as quickly as possible.
Looking ahead at the whole prospect when the measure is on the Statute Book, I suggest that it adds up to a fair sized package of incentives and encouragement to local authorities to play their full part in carrying out the intentions of the House. I mention those two things as background to these amendments, and I shall now deal with them as quickly as I can.
There were doubts at the earlier stages—I have in mind my hon. Friend the Member for Folkestone and Hythe (Mr. Costain)—whether the loans scheme would be of significant benefit to hotel and boarding-house keepers in a small way of business who held premises under a short lease or a lease due to expire in a few years' time. In the original wording of the Bill, under the terms of Section 36(2) of the 1971 Act, which would apply to the new loan scheme, any loan made by a local authority would have to be secured by a mortgage of the applicant's interest in the premises. Obviously, the value of the lessee's remaining interest in a lease shortly to expire would be quite 411 small and accordingly this might restrict the amount of any loan he might hope to obtain.
In an effort to deal with this point, the hon. Member for Norwood (Mr. John Fraser) moved an amendment in Committee which was similar to the amendment he has now tabled a Report.
§ Mr. Lane
The main effect would be to secure a loan to a short-term leaseholder by means of a compulsory charge on premises to involve the freeholder's interest as well as that of the leaseholder.
The hon. Gentleman in withdrawing the amendment in Committee asked us to consider whether, as an alternative, the provisions of Section 28 (3) of the 1971 Act might be written into this Bill to enable the leaseholder to apply to the court for an order giving directions about the sharing of the cost between the leaseholder, the freeholder and anybody else with an interest in the relevant building. I have looked carefully at this suggestion, but I am advised that it would be outside the scope of the Bill. Even if this were not so, I would hesitate to introduce into a commercial situation a remedy which had been devised solely for housing.
There are wider issues involved in a proposal of this kind which go outside the content of the Bill and which would need fuller examination. Why should a concession of this kind be limited to small businesses? Why should not larger businesses have the same right of recourse to the courts?
At the same time I have been anxious to see whether we could find some other way of helping this kind of leaseholder, and when last week I had consultations with the local authority associations a proposal came up which is embodied in the amendment which I now commend to the House.
We began with the idea that it might help the leaseholder if the local authority were to be given discretion to accept some other security instead of or as well as the leaseholder's interest in that premises—which is the only security permitted at present under Section 36 of the 1971 Act. Short of compelling the freeholder to be joined in the transaction, 412 our idea was that the local authority, the freeholder and the leaseholder might be able to come to some agreement about security for the loan which the local authority might be empowered to recognise, or perhaps in some cases the leaseholder could offer some other form of security altogether which would be acceptable to the local authority.
The local authority associations—and we appreciate the help they have given to us—accepted this idea in principle, but pointed out that any amendment of Section 36 designed to achieve this idea would cause confusion with the scheme at present contained in that section which was closely modelled on Section 57 of the Housing Act 1964. Therefore, the local authority associations proposed—and I was glad to agree to this—that, instead, we should write into the new Bill a self-contained scheme, first to give wider discretion to local authorities in the matter of security, and, secondly, to simplify for the purposes of this Bill the loan scheme set out in Section 36. That is what the amendment is designed to achieve.
It may seem in wordage to be a long amendment. Its main features will be clear when they are compared with Section 36 of the principal Act. The new subsection (2) in form and in substance is very like Section 36(2), except that the local authority may accept any security or guarantees and not merely the applicant's interest in the premises.
Secondly, provision is made for the local authority to specify its own terms in respect of the loan. That means that subsections (3) and (7) to (9) of the original Section 36 are now unnecessary. The new subsections (3) and (4) reproduce the necessary provisions about rate of interest, which, with the amendment accepted in Committee, will be the Public Works Loan Board rate plus, at the discretion of local authorities, ¼ per cent. That is the lowest rate at which local authorities could cover their costs. The idea of a lower rate, or no interest at all in some circumstances, which I know some of my hon. Friends have in mind, is out of the question within the limits within which we have had to cast the Bill. The new scheme has the great merits of simplicity and flexibility. It also has the advantage of making the Bill largely self-contained in a way that it was not before.
413 It is clear that the local authority associations' proposals for an amendment along these lines is further proof of their co-operation in the loan scheme that the Bill introduces. I am grateful to them for their help.
I was also glad to have the opportunity last week to meet representatives of the associations, as I undertook in Committee to do, so that I could explain clearly to them that the Government were extremely anxious that the scheme should be effective.
§ Mr. Julian Ridsdale (Harwich)
Has my hon. Friend met any of the guesthouse proprietors who have been affected?
§ Mr. Lane
I have met some in one or two individual areas particularly concerned. I think here of Brighton and Blackpool. I have not met central organisations. I am not minimising that there may still be difficulties in practice. But we have gone a long way in the Bill, within its narrow limits, to try to meet those difficulties.
Although it is late, I have taken some time because I hope that the reminders I have given of the various encouragements to local authorities to work the scheme and the small but valuable changes we have been able to make will meet a number of anxieties that the small businesses have felt. We have been most anxious that they should.
Apart from the additional quarter per cent. interest rate to be charged at the discretion of the local authorities, the representatives of the local authority associations that I met last week particularly welcomed the news that the new loan scheme will be financed from the key sector and not out of the general pool of locally determined resources. This is another step forward, an extra guarantee that money will be forthcoming at this rather lower-than-commercial rate of interest that we are providing. The representatives added that while they could not speak for any individual local authority they considered that the scheme as we are now modifying it should be generally acceptable.
On that basis, and with this reminder of the totality of the provisions of the Bill, I commend the amendment to the House.
§ 12.45 a.m.
§ Mr. John Fraser
We welcome the amendment in that it goes a little way towards what was wanted by the Committee. If they wish, local authorities may make loans available to guest house proprietors at the Public Works Loan Board rate. Apart from that, I imagine that the hon. Member for Bristol, North-East (Mr. Adley) wishes that he had the courage of his own connections, by which I mean his connections in the hotel and boarding-house trade, in that he pressed upon the Committee the need for mandatory loans by local authorities. The hon. Gentleman extracted a good many half-promises from the Under-Secretary, but at the end of the day he does not appear to have got very far.
§ Mr. Robert Adley (Bristol, North-East)
I asked my hon. Friend the Under-Secretary in Committee for assurances of meetings with the Department of Trade and Industry, the Treasury and the Home Office. Having received my hon. Friend's undertaking to that effect, my hon. Friend the Member for Hove (Mr. Maddan) and I withdrew our amendment. The undertaking has been met thoroughly and with the best of good will. They have been to the entire satisfaction of representatives of the industry.
§ Mr. Fraser
That may be so, but the amendment which the hon. Member for Bristol, North-East pressed in Committee has not got very much further.
I agree with the Under-Secretary that it is urgent to make progress with the implementation of the 1971 Act. I have said as much time and time again. Far too many premises in the country are at risk. However, I do not think that the Bill will help very much. In the main, it is a matter of whether proprietors are prepared to do the work, and the main impediment is not a shortage of money.
I welcome the provision in the amendment that guarantees can come from the freeholder where there is a conflict of interest between the lessee boarding house proprietor and the freeholder. But I know of no case in my experience where the freeholder has been willing to give undertakings to meet the lessee's expenditure. We are not living in a real world 415 if we imagine that this will happen. I hope that it does, but I doubt it.
In Committee, I withdrew my amendment on the understanding that the Under-Secretary would look at the possibility of applying the provisions of Section 28 of the Fire Precautions Act 1971 to boarding houses as well as dwelling houses. I do not want to say very much about my amendment except that the new clause, which is out of order, rather better embodies what I wanted than the amendment which is in order.
A boarding house or hotel proprietor may have a lease with only five or six years to run. He may face very heavy expenditure. We all know that in a real world the benefit of the expenditure will accrue to the landlord. It may be that when the lease comes to an end the landlord will serve notice under the Landlord and Tenant Act 1954 and grant to the former lessee a new lease at a rack rent. Nothing in law prevents the freeholder not only charging an economic rent for the premises when the lease ends but also charging a rent reflecting in part the expenditure met by the lessee boarding house proprietor. In those circumstances, it is wholly unjust that the lessee proprietor should be required to meet all the expenditure.
The point can be met adequately by applying the provisions of Section 28 of the 1971 Act to hotels and boarding houses, and that is the essence of my amendment. I am sorry that an amendment which says that directly instead of obliquely is not in order. But I am sure that it is not beyond the wit of the Government to find a way round the difficulty.
It is regrettable that it has not been possible to provide that where the freeholder has the benefit of expenditure he should be made accountable by a county court, on application by the lessee, for a proportion of the expenditure.
§ Sir Fitzroy Maclean (Bute and North Ayrshire)
I was not on the Committee which considered this Bill but I have studied the Bill, as it has been amended, and the proposed amendments. I have listened to the Under-Secretary with a feeling of continuing disappointment. I welcome the Bill because it shows that the Government realise that there is a 416 problem. Unfortunately in practice the Bill does precious little to resolve that problem. A loan on the terms provided for does nothing to help—nothing that could not have been done by borrowing from a bank. What the Government must realise is that depending on the interpretation and application of the Fire Precautions Act, and we can judge that only as time goes on, it could spell doom for a lot of the smaller and older hotels and boarding-houses.
I represent a constituency which is literally full of such establishments. I run one, too, and I declare my interest. This means that I am very much alive to the problems involved. Naturally no hotelier worthy of the name, large or small, wants to run a hotel that is a fire trap. They all recognise the need for sensible fire precautions.
Equally, the average small hotelier, especially in the rural areas of Scotland, the area with which I am concerned, is not made of money. He will probably have a short season of six months or so, during which he takes little money. For him suddenly to be confronted with the necessity of finding perhaps several thousand pounds for structural alterations—and it is not possible to get a great deal done for that money nowadays—which in many cases will actually detract from, or will certainly not add to the assets of his hotel, means nothing short of disaster.
As the functionary who inspected my hotel three years ago said with a merry laugh when he went away, "This will put a lot of small hotels out of business altogether." I cannot believe that this is the Government's objective. The small hotels play an important part in the tourist industry which makes a vital contribution to the economy. The Government should help the small hotel. A loan at 10 per cent. will be of little use. What is needed is either a system of outright grants, or failing that, a provision allowing the cost of whatever structural alterations are called for to be charged against tax in the year during which they are made. Such measures are evidently outside the scope of this Bill but I hope my hon. Friend will use his influence with the Chancellor of the Exchequer to induce him to put the appropriate clause or clauses into the next Finance Bill.
§ Mr. Ridsdale
I support what my hon. Friend the Member for Bute and North Ayrshire (Sir F. Maclean) has said. In my part of the world the holiday season is short and this Bill will do nothing to help hotel-keepers make a profit. It is said that we must not look gift horses in the mouth. Despite the hard work done in Committee by my hon. Friend the Member for Bristol, North-East (Mr. Adley) and others, I still join with my hon. Friend the Member for Flint, West (Sir A. Meyer) in saying that it is a broken-winded old nag of a Bill.
It does nothing to allay the fears of guest house proprietors. Does the Minister understand the kind of charges they are facing as a result of the Fire Precautions Act 1971—which I want to see implemented as much as he does? The authorities are just beginning their assessments under the Act in Clacton on Sea and they are beginning in Agate Road because it begins with an "A". The houses are simple guest houses with hardly more than two storeys and they certainly could not be classified as being of moderate height. A person could quite easily jump out of the top storey and probably not break any limbs. Yet one house faces a charge of £3,000 and another a charge of £1,000. Another has had such a high charge put upon it because of fire precautions that it has decided to close down.
Yet on Second Reading the Under-Secretary said:The fire service is well aware of the need to take all circumstances into account including financial circumstances, and I want to dispel any notion, if such remains, that its approach will be rigid and inflexible."—[OFFICIAL REPORT, 23rd January 1973; Vol. 849, c. 355.]When I met these guest house keepers over the weekend and asked them how the assessments were made, they were nervous that they had been handled in a rigid fashion. These are family businesses catering for the lower wage earners. They are dependent upon a short season. Not only has the 1971 Act put them into debt but they have to face the interest rates proposed by the Home Secretary in the Amendment. With interest rates from the Public Works Loan Board at around 10 per cent. it could mean in the long term an outlay of £3,000 to meet the requirements of the Act and interest rates of a similar amount. Is it a wonder that 418 the guest house proprietors are in despair?
I have a letter from one of them which reads,Anyway, I suppose there is always the mental home. That is something I shall certainly be eligible for, along with many other hoteliers who are in a small way of business, of course. Perhaps it is a blessing to have been chosen first in Clacton to get the fire precautions work done. There will be such a queue for the mental home soon.Yet the Under-Secretary saidA point which I stress particularly for many of my hon. Friends is that as we are dealing with a predominantly holiday industry the fire authorities want to phase their programme so that any work will fall to be done out of the season, where this is possible without undue risk to the public. For many of the proprietors of the smaller premises the chances are that it will be some time before they are faced with any expense."—[OFFICIAL REPORT, 23rd January 1973; Vol. 849, c. 356.]Already one of these guest house proprietors is having to close down because of the charges. I am sure that is not what my hon. Friend intended. Is the amendment the most we can expect from the Home Secretary? Inevitably on occasions like this when local authorities are made to do central government work there is the proviso that the local authority can charge at a rate ¼ per cent. higher for the trouble of doing the work so that a charge does not fall upon the ratepayers. But is it not absurd that it ever should? Here central government, through the Fire Precautions Act, are putting obligations on to local government which could continue for some time rather than simplify the procedure and accept responsibility through the Treasury, seeing that no charge falls upon the ratepayers. Yet what has been noticeable on Second Reading, in Committee and now is the complete absence of any Treasury Minister, although this appears to be a Treasury measure.
In defence of what he was doing, the Under-Secretary in Committee used the argument that if the rate were put at ¼ per cent. above the Public Works Loan Board rate the ratepayer was saved extra expense. I only wish that some of his Government colleagues would feel like that when putting the huge educational burden on the ratepayers. My hon. Friend must know that this is a paltry sum compared with the charges the ratepayers already have to meet. It 419 is small because in Essex these proprietors, in addition to having to face interest of anything between £100 and £300 a year, face rate increases of 25 per cent. in the present year, and that does not even allow for revaluation.
I hope that my hon. Friend will undertake to look again at the Bill in another place. An Amendment signifying how I feel has not been called, but the Government should do far more than they are doing. The previous Government gave help to the hotel industry. In Committee the present Administration gave such help to the big hotels but have not been prepared to extend it to the small hotels. They have not done nearly enough to help these small guest houses and hotels which are facing charges in addition to those caused by the Fire Precautions Act.
I ask my hon. Friend to do something more than has so far been done, as otherwise in constituencies that have a short season some of our small guest houses and hotels, because of all these charges and the high rates, face being forced out of business, which I am sure neither my hon. Friend nor the Government want.
§ Dame Irene Ward (Tynemouth)
I did not have the pleasure of being a member of the Standing Committee. If I had, I should have started at an early stage saying what I thought about such a provision as this. As it is, I understand that my hon. Friend made some complicated arrangement, which no one seems to know will prove satisfactory, to meet an amendment on short leases moved by my hon. Friend the Member for Folkestone and Hythe (Mr. Costain), but never said a word about the situation of people owning guest houses and small hotels. The fact that such people have acquired those businesses by using their savings seems to have passed the Minister completely by, and the whole position is most unsatisfactory.
I remember that when we had that magnificent deputation to the Treasury the Minister was obviously shocked, because I do not think he had intended to do anything at all. He is a charming man, but on this occasion he displayed no charm. He was shocked by so many 420 people being in the deputation. We made our position plain, but to no effect.
I should like to know which local authorities the Minister saw. I have great admiration for some local authorities and none at all for others. I want to know the names of the local authorities which the Minister saw—but not a bit of it. He talked about "local authorities", which might be local authorities which know nothing about small hotels and boarding-houses. Some large authorities have no notion of the problems of people who live on small incomes from boardinghouses which they have started with their own savings.
I understood that there was to be a special meeting with the same Treasury Minister to argue the matter out before a decision was reached tonight. I was horrified to hear that the meeting was to take place after we had dealt with the Bill.
§ Mr. Lane
It might save time if I were to clear up this matter now. The purpose of the wider meeting which we are hoping to have soon, which will include a Treasury Minister, is to discuss the wider problems of hotels and boardinghouses, not merely those arising from this narrow Bill. We are going ahead with the Bill tonight on the clear understanding that the wider meeting will take place for the various purposes my hon. Friends have in mind as soon afterwards as can be arranged.
§ Dame Irene Ward
That sounds very nice, but I have not been told about that and I like to know where I am. My Whip told me that there would be a meeting, and it was difficult to fit in. Obviously, it was never meant to be fitted in.
I am interested in fire precautions and the effect of the Bill on boarding-houses and small hotels in my constituency. I feel that I have been done, and I do not like being done. I have not been told about the wider issues, and I have had no representations on them from small boarding-house keepers in my constituency.
I listen to debates on big issues with interest and sympathy. The Government seem to be more interested in bigger issues. They are important, but so are the small issues, which always go to the 421 bottom of the pile in Cabinet and ministerial meetings. Small things matter very much. It is Conservative philosophy to want to help people who try to stand on their own feet. Certainly a lot of these small hotel and boarding-house keepers stand on their own feet. But one cannot raise money at the drop of a hat, and all these people have to meet increases in rates and all sorts of things.
The Government are rightly trying to help, but when we ask for something for a specific group we do not get the sort of sympathy which is necessary. Are we to have a meeting before another place gets the Bill? I want to have another go at the Treasury. I am devoted to the Treasury really but it is so busy that it does not think about small people. We are in a deplorable situation, as I know because I have above the average proportion of retired people in Whitley Bay, the part of my constituency where there are so many small hotel and boardinghouse keepers.
Why cannot my hon. Friend see the people who represent the small hotel and boarding-house keepers? I do not like being represented by enormous bodies, because they lose touch. Can we have a meeting with a Treasury Minister at which the small people can really state their case? That is all I have to say at this hour, but I think that my hon. Friend could have come along with something more than just talk about leaseholders. I hope that my people will be there for life. It is not just a question of short leases.
I feel thoroughly dissatisfied. I have a suspicious nature and I imagine that, with the Bill being put on so late at night, the Minister thought that not much attention would be paid to it. But the people we are representing here ought to be protected by a Conservative Government.
If I do not get something better than this, I shall tell the whole Government when they are here of my dissatisfaction with one interpretation of Conservative philosophy. I hope that my hon. Friend will put that into his head and realise that the battle is not lost, because we shall fight on and on and on. I do not suppose I shall be here for another 10 years, and it usually takes 10 years to win a battle in this House, but it would be a good thing now if my hon. Friend were to show 422 more sympathy and not just talk about a small section of the industry by which he thinks he has done very well. He may have done, but he has not done well for the majority of the people in whom we are interested in this context.
§ 1.15 a.m.
§ Mr. Norman Miscampbell (Blackpool, North)
One welcomes the change which has now been made to allow security to be raised for loans, not only for leaseholders but for freeholders. It is a step forward.
Criticism has been made of my hon. Friend the Under-Secretary of State and others that they have not taken an interest. I know from my personal experience that they have taken a deep and enduring interest in the matter. My hon. Friend the Under-Secretary has taken the trouble to talk to hoteliers with great care about the problems they are facing.
We have also to recognise that the Bill has to provide for loans. The campaign which many of my hon. Friends wish to conduct tonight is one which we should be conducting when the Budget comes and not on this Bill. If we argue tonight for grants, we must remember that the original Act provided for loans and that the Bill takes that one stage further and arranges for those loans to be made.
Having said that, it is worth remembering the difficulties in which a number of our boarding-house keepers find themselves. I do not take quite such a pessimistic view as some of my hon. Friends. Those who have to find thousands of pounds for refurbishing or making their big hotels safe from fire can probably find the money, but I have a much clearer picture of those in difficulty in finding a few hundred pounds, those with 14 or 15 bedrooms. It is worth remembering the kind of figures on which those people are working.
§ Sir F. Maclean
Does my hon. Friend realise how little one gets done now for £1,000 in building? That is what we have to remember.
§ Mr. Miscampbell
I not only realise it. I have been to dozens of Blackpool hotels in the last six months looking at what can be done at every door and window, and looking at estimates. I appreciate it very clearly. Of course I 423 sympathise with those who have to find thousands, but the overwhelming problem we have in a place like Blackpool is of much smaller sums which many have to find and their difficulty in finding them.
Ten years ago the average Blackpool hotel or small boarding-house was providing bed and breakfast at the unbelievably low figure of 18s. per night. Today—I translate into new money—they provide the same kind of holiday for working-class people at £1.25 or £1.50. For full board, they are doing it for £2. It is a considerable burden to try to find between £300 and £500 for fire precautions from that kind of figure.
It is easy to say in the House of Commons that we should have these new fire precautions, and we know that we should. We know what a horrifying situation there would be if anybody was caught in a fire in a hotel in Blackpool or in any other resort. It is our proud record in Blackpool that nobody has died in such a fire in living memory. That may be luck but it is the case.
Clearly a change in fire precautions law must be made, but the ordinary small person with, as the hon. Member for Norwood (Mr. John Fraser) pointed out, a lease with three or four years to go is faced with a problem in finding £300 or £400 to make a change which Parliament rightly feels should be made. I make no bones about it: I wanted a grant, a grant limited to a quite small figure. I thought that if a grant of £200 or £300 was made in every case, this would cope with the smallest boardinghouses which have to face the most difficult problem and that the larger hotels could no doubt finance themselves.
However, the fact that I want a grant and advocate a grant cannot be pursued in the House tonight, because the Bill is not the occasion for doing that. I should like to urge my hon. Friends to save their ammunition for the occasions on which we can do that, at Budget time or in urging matters upon Treasury Ministers and on other occasions. They are the occasions when we can get a grant. We cannot get a grant out of the Bill.
I have mentioned the difficulties of the smallest boarding-houses. I recognise 424 that the Government have paid considerable attention to them. I welcome the fact that we now have a loan scheme as a final long-stop to help. I thankfully accept what we have got today. Nevertheless, on the appropriate occasion I should like to fight to make sure that we get the grant which we should have.
§ Mr. Adley
I would say to my hon. Friend the Member for Blackpool, North (Mr. Miscampbell) that it is just because a large number of us went to the Treasury nearly a year ago and fought the battle we are now fighting, to try to provide help for the small hotel keepers, that we are here tonight. It is perhaps not coincidental that almost a year has passed, and the measure that the Treasury promised has turned out to be something of a damp squib. But this time we are fortified in our renewed attacks on the Treasury by the knowledge that our fears were justified. It would not perhaps be inappropriate to warn the Treasury—in the absence, yet again, of a Treasury Minister—that this time we shall want real assurances, before action through the passage of the Finance Bill, that action will be taken to help small hotel keepers.
My hon. Friend the Under-Secretary has been put in an intolerable position. With all the sincerity I can muster, I should like to say that he has been superb in every way in trying to help those of us who have gone to him in the last few months. He has done everything he possibly could. What has become increasingly clear is that the Bill which was provided is simply not the vehicle we thought it would be and were led to expect when we had the meeting at the Treasury nearly a year ago, to which my hon. Friend the Member for Tynemouth (Dame Irene Ward) referred.
This time we must make sure that the Treasury does not palm off on to the Home Office the work it should be doing and should have done in the first place. Perhaps it was our weakness in the first place that has put my hon. Friend in the extremely difficult position of having to face a barrage of criticism from his backbenchers and the invidious position of being unable to do what I feel he knows is necessary, because of the impotence of our legislative processes.
Once again I declare an interest in the hotel industry. What saddens me is that 425 my interest, which is with a large hotel group, shows me that unfortunately, not for the first time since I have been a Member of the House, and under both the previous Government and the present Government, we seem to be able to take action which can make life easy if not attractive for the big organisations, be it the British Steel Corporation, the British Aircraft Corporation or Hilton Hotels, yet we seem totally unable to find any means of helping those who really need assistance.
With no disrespect to Hilton Hotels, it is a little silly that that organisation is to receive £600,000 of public money to build a hotel in Shepherds Bush when we cannot find £200 for a small hotel keeper in Blackpool, Clacton or Bude who wants to continue in business in the way to which he has been accustomed over the years by providing a service for people on low incomes. Surely this cannot be right. Surely no Government in their right minds could have that intention. It must be up to those of us who are trying to help the small hotel keepers to ensure that we succeed in doing so.
My hon. Friend the Minister has produced a further amendment tonight. He is bending over backwards to help. The fact that the loans under the Bill are to come out of a key sector is a further indication of his sincere attempt to help the small hotel keeper. But there is a limit to which he and the Bill can go. My hon. Friend says that it is out of the question, within the limits of the Bill, to do a number of things that his hon. Friends want him to do. He referred to narrow limits, and that is the whole point. It is the narrow limits of the Bill which have shown us that the amendments we have sought to press, however hard we had pressed them, would not have achieved the objective which we all sought.
It is slightly ironic that we should have started this debate late at night, after the Report stage and Third Reading of the Coal Industry Bill. Some quick mathematics in the Library has shown me that, in the 2½ years since June 1970, the House has spent 56 hours discussing coal mining and 3½ hours discussing tourism, nearly all of which has been time gained by back benchers on Adjournment debates or through dis- 426 cussion of this Bill, which itself resulted from pressure by back-benchers.
I am in some difficulty. I do not want to speak for too long, because other hon. Members who have sat here for many hours wish to speak, and we all want to get home, but there are one or two points that I must make.
The British Hotels, Restaurants and Caterers Association has expressed, through its chief executive, the view that the Government are not totally aware of the problems of the industry. There is a reference to this in a speech he made at the hotel and catering industry conference in Scotland a couple of weeks ago.
The Development of Tourism Act, which the last Government passed, is closely related to what we are discussing. I hope that my hon. Friend—again, I feel sorry for him, because it is not the responsibility of his Department—will impress on the Department of Trade and Industry how important it is that registration and classification be brought in as part of that Act so that he, in the Home Office, may know the extent of the effect that Acts like the Fire Precautions Act will have on the small hotel keeper. Even he has no idea of the size of the problem because no one knows how many small hotels there are in this country, and we will not know until the Government summon up the courage to implement Part III of the Development of Tourism Act.
With the passage of time, my hon. Friend the Member for Harwich (Mr. Ridsdale) says, he has just got to the letter A in Clacton. By the time he gets to the Ls, Ms and Ns, a large number of small hotels will have been forced out of business. It will be a slow and painful death for many of them. We have to do something; we cannot just sit by. I stress, in an aside to my hon. Friend to the Member for Blackpool, North, that this affects not only resorts but towns and cities all over the country. If we do not do something quickly, we will have to sit by impotently while many hotels go out of business.
So that I shall not be accused of talking idly without facts, I should like to refer to the Scotsman of Monday 22nd January. A 23-bedroom hotel at North 427 Berwick, East Lothian—the 80-year old Imperial Hotel—was forced to close because of the cost of complying with the new fire safety regulations. The Scotsman said:It is the first known 'victim' of the new laws…Mr. Frank Mickel, the manager, said that the cost of bringing the hotel up to the fire regulations standards would have been about £20,000. It would have taken them ten years to recoup this money, he said, so they decided to convert the hotel into flats.My hon. Friend was asked whether he had had consultations with the industry. Very fairly he pointed out that he had been to Blackpool and to Brighton but had not been in touch with any of the industry's associations. Has my hon. Friend received any representations from the British Federation of Hotel and Guest House Associations which is based in Blackpool? I should like to refer to a letter which I received within the last few days from Mrs. Kathleen Harris, the general secretary of that organisation, who writes:We are an organisation representing some 2,500 small hotels and guest houses, and naturally the Fire Precautions Act and its implications are causing us much concern on behalf of our members. I am fully aware that the Government has promised that discretionary loans will be made available through local authorities to hotels and guest houses to assist them in bringing their establishments up to the requirements of the Act, but this concession, I believe, will only be as a 'last resort'.At our recent Annual Conference a resolution calling on the Government to make available grants in order to help alleviate financial hardship to hoteliers and guest house owners who are faced with high costs through compliance with the Act was carried unanimously by the delegates, but I am afraid that the Home Office categorically refused to consider our appeal on the grounds that they saw no reason to treat hotels and guest houses any differently to shops, works and factories etc.After the Development of Tourism Act 1969 neither the Treasury nor the Home Office should be allowed any longer to get away with telling us that there is no difference between a hotel, a shop or a factory.
Mr. Clive Derby, the Chief Executive of the British Hotels, Restaurants and Caterers Association, has made urgent representations to the Chancellor of the Exchequer about the Fire Precautions Act. He pleadsthat the total cost of expenditure on fire precautions should be allowed against the 428 profits of the accounting year in which it is incurred.I do not think that is an unreasonable request.
I should like to draw to the attention of my hon. Friend a fact borne out to me today in a letter I received from my hon. Friend the Under-Secretary of State for Trade and Industry that, under the Government's counter-inflation regulations, hotels will not be able to increase their prices and that the Fire Precautions Act appears to be a factor which they will have to swallow. Not only can they not afford to have the work done—and they probably cannot afford to borrow the money—but they cannot now put up their prices to cover the costs. This is grossly unfair. Perhaps my hon. Friend will seek an opportunity to intercede with the Department of Trade and Industry on this point.
I again apologise to my hon. Friend the Under-Secretary for appearing to aim at him the darts and arrows which by rights we should be aiming at his right hon. and hon. Friends in the Treasury and the DTI. We appear to be back at square one. We have had a year in which we have learned a great deal. Possibly, like the Duke of York, we have been up the hill, we have reached the top and we had a Treasury meeting last year at which we thought we had gained a great success. We reached the bottom of the hill when we saw the Bill. I finish as I started by giving my hon. Friend a warning, which I hope he will pass on to his right hon. and hon. Friends, that we are about to start climbing the hill again.
§ Mr. Lane
I shall return to Amendment No. 4 in the names of the hon. Member for Norwood (Mr. John Fraser) and some of his hon. Friends after I have tried to deal with one or two other points.
I have never suggested—and I do not now suggest—that the Bill will act as a kind of magic wand to solve some of the difficulties that have been mentioned tonight, but I think that on the part of some hon. Members there is an excessive air of gloom and doom about the prospect facing the small hotel and boardinghouse keeper. I do not think it is right that that message should go out from the House. I am not minimising the difficulties. I have heard some of them. I 429 have heard, via a number of hon. Members speaking on behalf of their constituents, that there may be difficulties, but I deprecate so much talk about many people being forced out of business or that the Government are trying to force them out. That is not the case. The Bill will be of significant help to some of the smaller people in meeting the necessary costs of fire precautions in the interests of the public.
I hope equally that the message will not go out that anyone here would in any way connive at the continuance in business of hotels, of any size, which are manifestly a grave fire risk. I take the House back to the original purpose of the 1971 Act, and I stand by that.
My hon. Friend the Member for Bute and North Ayrshire (Sir F. Maclean)—and I appreciate the experience from which he was speaking—said that the Bill does nothing more than borrowing from a bank will do. The Bill is intended to provide last-resort facilities for those who would have difficulty in getting money from a bank, because we envisage a rate of interest appreciably lower than the rate charged by banks, and that will be of some help.
My hon. Friend said that small men are not made of money and that they may suddenly be faced with an expenditure of several thousand pounds. I hope that that will not be a normal experience for the small man. I agree that it depends on what size we have in mind—and different figures have been quoted—but I say to him and to my hon. Friend the Member for Harwich (Mr. Ridsdale) that if a small hotelier thinks that he is faced with an unreasonable list of alterations he can have resort to the Act which provides that the fire authority can require only what is reasonable, and that includes taking account of financial considerations. If anyone believes that the fire authority is being unreasonable he has a right of appeal to the courts about it.
§ Sir F. Maclean
Did my hon. Friend hear our hon. Friend the Member for Bristol, North-East (Mr. Adley) quoting the case of an hotel in North Berwick which had 22 bedrooms and for which the cost of adapting for fire precautions would have amounted to £22,000? My own hotel is about the same size as that, 430 and I assure my hon. Friend that an ordinary, run-of-the-mill country hotel of that size cannot find £20,000. If it borrowed the money from a bank, from a local authority or from anyone else it would find itself in the soup in trying to repay it.
§ Mr. Lane
I know of the North Berwick case. If an hotel of that size has to spend that amount of money, one is bound to ask about the state of its fire precautions. Is not that the very kind of place at which the Act is directed?
My hon. Friend the Member for Harwich mentioned the experience of Clacton and he spoke to me about this earlier in the week. If my hon. Friend feels that the fire authority is being over-rigid in its assessment, the matter can be discussed with the authority. The Act provides that anyone can apply to the magistrates' court if he feels he is being asked to do an unreasonable amount of work. I hope that my hon. Friends will make this known.
I do not feel that that case justifies the use by my hon. Friend of the phrase "despair for the small man". Let us try to keep this in proportion. Some will have greater difficulties than others. The Bill will give a significant degree of help.
My hon. Friend the Member for Tynemouth (Dame Irene Ward) complained that I was talking tonight, as I am, purely about a fairly narrow part of the Bill. She said that nothing had been said on behalf of the people who own their own businesses. With respect to my hon. Friend, the whole purpose of the Bill is to help the small people about whom she spoke so eloquently. It is deliberately tailored for the small business, not for the larger ones. It is their problems that we have in mind.
§ Dame Irene Ward
I was worried that, after all the powerful representation which had been made, action was taken only in respect of short leases and so on and that nothing had been done concerning the main argument which we started with the Treasury about a year ago. I remind my hon. Friend that I know exactly what the Bill stands for. I have not yet quite lost my memory, and I am sorry that he thought I had.
§ Mr. Lane
I am coming on to my hon. Friend's point. She will no doubt remember the memorable occasion—I regret that I was unable to be there—when a number of my hon. Friends went to see my hon. Friend the Chief Secretary. They are being a little unfair to my hon. Friend because in this Bill we are doing precisely what my hon. Friend on 10th July last year said we would do. I know it does not go as far as my hon. Friend would like it to go, but we have never made out that in this Bill we were going further than we have done. Therefore, I defend my hon. Friend the Chief Secretary against any implication that he promised something that we have not carried out.
My hon. Friend also asked which local authorities I had talked to. I spoke last week to representatives of all four local authority associations covering local authorities large and small, urban and rural. Therefore, in that sense I covered the whole field.
My hon. Friend also asked whether we could have a wider meeting before the Bill starts in another place. Because of the time factor I cannot guarantee this will happen, but I will tell my hon. Friend the Under-Secretary of State for Trade and Industry exactly what she said about timing. I hope that it will be possible to have this wider meeting, if not before the Bill starts in another place, before it finishes, but I cannot give an absolute undertaking. I do not think this matters because the meeting that we are trying to arrange is to discuss the wider problems of hotels, boarding-houses and the tourist industry and not mainly the Bill at all and it will take place as soon as we can fix it.
I was grateful for what was said by my hon. Friend the Member for Blackpool, North (Mr. Miscampbell). He promised a battle at Budget time and emphasised the difficulties faced by the small man.
Finally, I appreciate the remarks of my hon. Friend the Member for Bristol, North-East (Mr. Adley) but I assured him that this is not a damp squib measure. It is what in July we said we would do. At any rate, my hon. Friend has fired a shot across the Treasury bows and 432 the Treasury will take due note. I will draw the attention of my hon. Friend the Under-Secretary of State for Trade and Industry to what he said about registration. My hon. Friend also asked why there had been no consultation by me with the small man. We had thorough consultations during the drawing up of the 1971 Act and, so far as I know, that sector has not sought meetings with me about this Bill.
On the question of the freeze, I think that what my hon. Friend has been told by my hon. Friend the Under-Secretary of State for Trade and Industry applies to the present situation, and what may apply in a few months' time is still open to further discussion.
I return to the amendment of the hon. Member for Norwood. Having heard his arguments again tonight, I cannot advise the House to accept the amendment, which goes rather further than we should go in the Bill. I still do not accept the hon. Gentleman's analogy with arrangements in housing. Another reason against the amendment is the question whether it is right to put that sort of compulsion on the freeholder. Why should he have to finance himself through a local authority loan and other means? We do not believe that it would be equitable to put that burden on him in precisely the way the hon. Gentleman proposes.
The idea of compelling other people to be associated with the expense of an enterprise of that kind we are considering seems not only wrong in principle but against the general approach of the 1971 Act, which was focussed on the occupier rather than the freeholder. We should not accept the amendment except as part of a much wider revision of the main 1971 Act. I shall be grateful if the hon. Gentleman will be willing to withdraw his amendment in view of those assurances and explanations.
§ Amendment agreed to.
§ Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
§ Bill accordingly read the Third time and passed.