§ Order for Second Reading read.
§ 10.10 p.m.
§ The Under-Secretary of State for the Home Department (Mr. David Lane)
I beg to move, That the Bill be now read a Second time.
Our debate is taking place against the shadow of the tragic fire last weekend at Exmouth. I would like to express the sympathy of the Government with the families of those who died and our admiration for the efforts of everyone concerned in fighting the fire and in the rescue work.
This is a small Bill with a strictly limited scope but it is a necessary part of our whole programme for improving fire precautions. The Bill will enable local authorities to make loans at their discretion—I emphasise that—to persons who need to incur expenditure on certain specified premises to satisfy the requirements of the fire authority under the Fire Precautions Act 1971. Section 36 of that Act already provides for a loans scheme but it is limited to certain kinds of dwellings which come within Section 3 of the Act.
This Bill empowers the Secretary of State to extend the loans scheme by order to other kinds of premises which are required to have fire certificates under the Act. The Bill is fulfilling the undertaking given to the House by the Chief Secretary to the Treasury on 10th July last that legislation would be introduced in this Session under which local authorities could act as lenders of last resort for those in a small way of business who, having to incur expenditure on fire precautions, could not find the money from their own resources or could not readily borrow it from other sources such as banks, building societies or similar institutions. We particularly have in mind the proprietors of smaller hotels and boarding houses who, like the owners of larger establishments, were affected by the first designating order made under the 1971 Act.
I would like to remind the House, and those following our proceedings outside, 354 of the background to this Bill. The purpose of the 1971 Act is to strengthen and rationalise the law relating to means of escape and related fire precautions in a wide range of premises, including places of public entertainment and resort, and certain kinds of residential premises, including hotels. The overriding consideration must be the safety of the public, and the Act is designed to ensure so far as we can that in the event of a fire everyone present will be able to escape even before the arrival of the fire brigade.
I am certain that no one doubts the need to ensure that premises where the public may be present in any numbers are provided with these essential fire precautions. We are implementing the Act by stages and dealing first with premises offering the highest risks. On the advice of the Central Fire Brigades Advisory Councils for England and Wales and for Scotland the Act has first been applied to hotels and boarding houses.
This decision was taken against the background of a series of tragic fires in hotels, and the considered view of those with special knowledge of the problems was that it was urgently necessary to bring the standard of fire precautions in many hotels and boarding houses to a minimum acceptable level. An order applying the Act to all but the smallest of these premises was brought into effect on 1st June last, and at the same time we published a non-statutory guide explaining the principles on which the Act would be applied. The immediate practical effect was to require the owners or occupiers of these hotels and boarding houses to apply to the local fire authority for a fire certificate.
Having done so, the proprietor can continue his business until the application is settled. In due course the fire authority has to inspect the individual premises, and if it is satisfied that means of escape and other related precautions are such as may be reasonably required—and that is an important phrase in ensuring the fair application of the Act—the authority must issue a fire certificate. If it is not satisfied it serves notice on the proprietor informing him of what he 355 has to do before the certificate can be issued.
Naturally, any necessary improvements required by the fire authority will cost money. It is a long standing principle that where members of the public are invited into premises in connection with a commercial undertaking it is for that undertaking to meet the cost of any statutory measures designed to ensure the safety and health of the members of the public there. It is the fact of this expenditure which understandably gave rise to so much concern last year, particularly to the owners of smaller hotels and boarding houses.
Even so, there may have been a considerable misunderstanding. To get rid of any remaining misunderstanding, let me make it clear that the fire authority may require only what is reasonable in the circumstances of each case. Safety must be the main consideration, but there is no question of the guide I have mentioned being applied rigidly regardless of individual circumstances. The requirements in the fire certificate have to be designed for the premises concerned, and there are ample rights of appeal to the courts against the fire authority's requirements. 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.
In view of the concern we arranged for special guidance to be issued from the Home Office to all fire authorities encouraging them to hold conferences locally and to explain and discuss the way in which the Act would be applied. Whenever possible, I have talked to chief fire officers with the same object in view. Recently I took two opportunities to visit boarding houses and hotels in Blackpool and Brighton to see how the requirements are being met in the various types of premises. As a result of all this I am satisfied that there is a much clearer understanding of the position. The good response which we have had from proprietors of hotels and boarding houses owes a lot to the efforts which the fire authorities have made in explaining the arrangements. It will take time to complete all the inspections and certifications, 356 but the fire authorities are concentrating on the highest risk premises.
A 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.
We have to keep in view the primary need to ensure the safety of the public, and I am, therefore, anxious that the present programme should be completed as soon as possible. We do not have precise figures to give us an arithmetical idea of progress, but all the indications we have show that the fire authorities have made an encouraging start.
However, given this reasonable approach, we still realise that some owners of smaller premises may not have had time to plan for the extra expenditure which they may be faced, and that is why we decided that we must make some provision for the special cases. The Bill enables local authorities to make loans towards the cost of fire precautions in certain specified premises; that is, premises described in any order made under the Bill. The primary intention of the scheme is to help those owners of the smaller hotels and boarding houses who cannot meet the cost of the necessary fire precautions from their own resources or cannot easily get loans from the customary sources, but the scheme can later be extended, if we think it justified, to other types of premises. Before it is extended to any other premises, voluntary organisations engaged in social work or whatever it might be, there would again have to be first a designating order under the main Act and we should then have to consider on its merits an extension of the loan scheme to these new premises.
Turning to the Bill in more detail, Clause 1 contains the main provisions relating to the loans scheme. Subsection (1) limits the application to persons who need to incur expenditure on premises for which a fire certificate has been applied for or is already held under the provisions of Section 1 of the main Act, and these premises have to be described 357 in an order made under the Bill. In other words, the premises must first have been subject to a designation order under the main Act and a fire certificate must already have been obtained or applied for.
At present, only hotels and boarding houses have been designated under the 1971 Act, and the loan applied for must be to meet the cost of the requirements of the fire authority as detailed in the notice which has to be served on the occupier under Section 5 of the 1971 Act; that is to say, the work that must be done before a fire certificate can be issued. The new loans scheme will also apply in cases where the fire authority requires work to be done on premises that are already covered by a fire certificate to bring them into conformity with any regulations made by the Secretary of State under Section 12 of the main Act.
Subsection (2) empowers the local authority to make loans at its discretion in accordance with the provisions of subsections (2) to (9) of Section 36 of the 1971 Act, with the exception that the local authority must charge a rate of interest ¼ per cent. above the Public Works Loan Board rate provided for under Section 36.
To clear up that rather complicated point, Section 36 of the Act is not yet in force, because it relates to loans covered by Section 3 of the Act which also is not yet in force. We have so drafted subsection (2) of the Bill as to make it possible for the provisions of subsections (2) to (9) of Section 36 to apply to loans under this Bill even though Section 36 is not yet in force. It is much simpler than I have made it sound.
There are precedents for the special provision in this part of the Bill for a local authority to charge a rate of interest ¼per cent. above the PWLB rate. The precedents are the Small Dwellings Acts of 1899 to 1923 and the Local Authorities (Land) Act of 1963. This provision was included after consultation with the local authority associations, whose view was that the scheme would involve local authorities not only in additional work but also in dealing with commercial undertakings rather than housing to which they have been more accustomed. This would mean establishing different 358 criteria for judging the merits of applications for loans under the Bill.
Subsection (3) empowers the Secretary of State, for the purposes of an order under the Bill, to describe premises by reference to rateable value, the purpose for which they are used, the number of persons accommodated, their size, or whatever it may be. That is not an exhaustive list. It is intended to provide as flexible a basis as possible—and that is how we have designed the whole Bill—for tailoring the loans scheme to particular needs. We intend that the scheme should be limited to persons in a small way of business and to those who are responsible for small non-profit-making enterprises. That has been our intention from the start, and it is the intention in the Bill.
§ Mr. A. P. Costain (Folkestone and Hythe)
Small boarding houses are often on leaseholds. Could my hon. Friend say what will be the situation in regard to loans to leaseholders operating on a short lease?
§ Mr. Robert Adley (Bristol, North-East)
My hon. Friend has referred to non-profit-making premises. Presumably he is referring not to premises which may no longer make a profit as a result of the fire precautions legislation but premises which do not intend to make a profit.
§ Mr. Lane
I am referring to premises which are not covered by the Bill but which may be covered as the provisions are extended at a later stage. We are trying to define the premises not only in physical terms but also in terms of the applicant's personal circumstances. We took the view that it was better to leave it to local authorities to decide on the eligibility of a particular applicant for a loan, subject to the administrative guidance which we shall be circulating from the Home Office. In practice, the local authority will have to be satisfied that the premises for which an applicant seeks a loan comes within the terms of the order, and the order will deal with such matters as the size of premises and the 359 purpose for which they are used. A local authority also must satisfy itself about the credit-worthiness of an applicant.
Among the administrative points which I envisage our guidance to local authorities will include is advice to the effect that applications should be considered only from somebody in a small way of business—not, for example, from the manager of a small establishment which may be part of a far larger one. I underline the fact that any order made under the subsection will be subject to a negative resolution in either House and may subsequently be varied or revoked.
I should like to say a word about subsection (5) of Clause 1. This provision is included in the Bill in case at some future date a small charitable organisation which may be brought within the provisions of the 1971 Act should merit help. The subsection provides that Section 29 of the Charities Act 1960 shall not apply and will enable a charity to mortgage its property for the purposes of a loan under the scheme without having to seek express consent of the Charity Commissioners. The commissioners requested that some such provision should be included in the Bill.
I have already explained that we have been able to consult the local authority associations and the Greater London Council in preparing the Bill. The Association of Municipal Corporations has expressed some reservations and is concerned about the additional burden which the Bill could place on local authorities. It is impossible to estimate accurately the extent to which the new loans scheme is likely to be used, but, given that it will be some time before fire authorities will be able to complete the present programme, and also given the fact that premises must be dealt with on an individual basis, I should be surprised if the local authorities, which will he consulted in advance by the fire authorities, found themselves immediately overwhelmed with applications for loans. I should also imagine that where hotels and hoarding houses are a major activity in a particular area the local authority concerned might see advantages in any scheme, however limited, designed to help those concerned. Nevertheless, if there should be any unforeseen difficulties experienced by local authorities, I can 360 assure them that we shall do our best to help. After all, it is on them that we depend for the success of the scheme. We want to co-operate with them to the full, and we shall be grateful for their help.
This is a modest Bill, but it is important if we are to ensure steady progress in carrying out the Fire Precautions Act. Therefore, I commend it to the House, and, if it makes good progress, I expect that the first order relating to small hotels and boarding houses will be laid before the House and brought into force during the coming summer.
§ 10.30 p.m.
§ Mr. John Fraser (Norwood)
I begin by associating the Opposition with the sympathy expressed by the Under-Secretary for the relatives and victims of the tragic fire at the Imperial Hotel, Exmouth, and the hon. Gentleman's further tribute to the gallant action of the fire brigade there.
I was glad that the hon. Gentleman said that the fire brigades would always have to be reasonable about their requirements, and I hope that no hotel or boarding house proprietor will he frightened at the cost of implementing the Fire Precautions Act and that people will not be deterred from applying for fire certificates for their premises because of any unwarrantable fear about the cost.
When the Fire Precautions Bill was presented in 1970, my hon. Friend the Member for Leeds, South (Mr. Merlyn Rees) promised it a speedy passage and assistance from the Opposition. I can make the same promise in respect of this Bill, which provides for resources to finance fire precautions by enabling local authorities to lend money to owners at the rates of interest which the hon. Gentleman mentioned. The loans will be available to all classes of dwellings which may be affected by the Fire Precautions Act when it is applied to different classes. There is the subsection about charities. That apart, that is about all that the Bill says.
I hope that we shall be told what rateable bands the Bill will be applied to in the early stages, the type of building to which it will be applied initially—whether, for example, it will be a small boarding house—and whether items of equipment like smoke and fire detectors 361 will qualify for loan facilities. Many commentators, especially in the technical Press, have pointed out that the Home Office guide to precautions does not mention smoke or fire detection equipment at all, and many commentators feel that this is the most useful fire precautions equipment to have in a boarding house or hotel and, therefore, that it should qualify for a loan under the Bill.
The reasons why the Bill has been produced are well known. On 1st June 1972 the Fire Precautions Act was applied to every hotel, guest house and boarding house which slept more than six persons, including staff, and it caused near panic among thousands of small establishment owners, who feared the cost which would be imposed on them. At the same time, deficiences in fire precautions became increasingly apparent. We have also the problem of what might be called the "creeping" hotel; that is, the establishment without planning permission for use as a hotel. We have problems of businesses which have never been rated as hotels. No doubt we have the problem of the small hotel proprietor who has never declared his income for tax, and there is apprehension felt by that kind of proprietor about making application for a fire certificate.
At the same time, we have had too many tragic and cruel reminders of the need for adequate fire precautions. Only a few days before the Act was applied to hotels there was the tragic fire at the Ambassador Hotel in Bayswater. More recently there has been the deadly outbreak in the Imperial Hotel, Exmouth. That hotel was well equipped with detector equipment. There are two lessons that one can learn from that. The first is that no amount of equipment can ever supplant the need for care and vigilance in guarding against fire. The second is that the tragedy would have been much worse if equipment to detect and prevent fire had not already been installed in the hotel. In addition, there have been tragic fires in factories and mental hospitals, all of which have brought the matter to the public eye. In the light of these events there has been concern about the cost of implementing the Act, and the Government have acted.
362 There is some apprehension among hotel proprietors about the cost not only of this Act but of value added tax, rates, and the increased prices of food. I think there should be a co-ordinated view about the future of the hotel industry, but that is not a matter for debate tonight.
I turn now to what the Bill does not state and that which the Explanatory Memorandum omits but which is germane to the purposes of the Bill.
How widely and quickly is the 1971 Act to be implemented and what are the resources for doing so? I believe that there is cause for a good deal of anxiety about fire risks and the Government's strategy for dealing with them.
I will mention some of the anxieties. First, we all know that the fire hazard remains very great. The latest figures for 1972 show that there were over 650 deaths, 3,900 people injured, 227 firemen seriously injured, two firemen dead and over £130 million of fire damage. Therefore, fire remains the great destroyer.
Secondly, on what one might call the non-implementation of the Fire Precautions Act, one estimate that I have seen is that about 250,000 hotels, boarding houses, and so on, are already affected by the Act. Therefore, one is bound to ask what strategy the Government have for dealing with all these premises.
In December 1972 more than half of these premises—about 125,000 establishments—had not even bothered to apply for fire certificates. In June 1972 16,000 establishments in the counties of Devon and Cornwall had not made applications. I checked the figures for the London area today, and found that 50 per cent. of eligible premises, about 2,000, have not made application. Some of these places will be absolute death traps, particularly those in the seedier London areas. London Fire Brigade spokesmen have already said that they are seriously concerned.
Thirdly, the time element. Most commentators on the Fire Precautions Act say that it will be between five and 10 years before applications under the Act can be dealt with. The Fire Precautions Act 1971 was first contemplated and planned in 1964, so there will be a great time lag before it is implemented.
363 Finally, there is concern about the Government's assessment. During the proceedings in Committee on the 1971 Bill the then Minister of State said:the numbers of owners…who are unable to finance simple fire precautions from their own resources will be very few."—[OFFICIAL REPORT, Standing Committee A; 15th December, 1970, c. 161.]If that were so we would not have this Bill tonight.
I conclude with some suggestions and questions. First, what estimate can we now be given of the number of establishments which have not applied for fire certificates? The information ought to be available. I speak with some knowledge, because my father was a station officer for many years. Most station officers know their ground, as they call it, extremely well. They know where the hotels and boarding houses are and can probably make a fairly accurate assessment of how many establishments have not bothered to apply for certificates.
Secondly, how quickly will.411 applications be dealt with? In my opinion, six to 10 years seems more appropriate for an application in the old High Court of Chancery under the reign of Lord Eldon than for a matter involving life and death. I understand that there have been only seven certificates in draft in the Greater London Council area. That is obviously far too slow a pace to deal with the applications.
Thirdly, I welcome the guidance which has been given that fire officers should deal with premises which have the greatest risk. Will that guidance be extended to premises which have not yet made applications for certificates? Again, many station officers will know those premises which are at risk and have not made application. I hope that they will be advised to take the initiative, even though the proprietor has not made an application.
Fourthly, will consideration be given to the suggestion put to me that owners might submit plans for fire precautions for their premises without having to wait for an inspection by the fire brigade or the architect's department? When a new building is to be constructed or where a building is to be converted the surveyor or architect will draw up plans for fire precautions and those plans will be approved by the local authority. This takes 364 a lot of work off the local authority. It enables the owner to take the initiative. Somebody selling a hotel or boarding house may then be able to assure a prospective purchaser that plans have been put in and approved and the premises are up to standard.
Finally, what changes are proposed in the use of the fire brigade manpower so that it is used more productively and so that fire precaution is a major part of the fireman's task? I have visited fire stations for many years and I have seen firemen spending far too much of their time cleaning brass, windows, fire engines, hoses and floors and doing many other household tasks whilst on duty in the station. We must use firemen more productively on fire prevention duties—for example, the inspection of premises.
I understand that discussions are under way at present to use the fire service manpower more productively. Can the Under-Secretary of State tell us how far the discussions have gone, and whether we shall be able to use a lot more manpower, especially now that firemen are equipped with bleepers and other means of communication, on the inspection of premises?
If we are to make any useful judgment on the scope and effect of the Bill and the scope and effect of the 1971 Act, that question must be answered to the satisfaction of the house and the public who remain at risk.
§ 10.42 p.m.
§ Mr. Martin Maddan (Hove)
I welcome the Bill, and I agree with what the hon. Member for Norwood (Mr. John Fraser) has said about the need for the public to receive the protection which is implied in the 1971 Act, which the Bill helps to implement. The hon. Gentleman pointed out that the 1971 Act was first mooted in 1964 and did not reach the Statute Book until 1971. As six of the intervening years were years when the hon. Gentleman's party was in office, I thought he might have given us a little explanation of the difficulties or the reasons for the delay, but he has kept them veiled.
§ Mr. John Fraser
I did not want to waste the time of the House. The reasons are set out at great length in the Second Reading debate on the 1971 Act.
§ Mr. Maddan
I have not re-read that tonight. However, the fact remains that six years passed. If it was an urgent matter I am certain that it could have been dealt with during that time.
I received by chance a letter from one of my constituents on Friday last. I shall read a few sentences from it because it underlines the wisdom of my hon. Friend in bringing forward this measure. It is a letter not from a hotelier or boarding house keeper but from a member of the general public. It says:Would it be possible for you to look into the position regarding fires in hotels…Later it says:…s commonsense would surely suggest that serious consideration be given to compulsory provision of fire escapes. It is small inefficient establishments that are presumably unable to bear the cost of such facilities that the fire risk is greatest.I question what the writer says about inefficiency, but what is said about "small" is true. The letter concludes:I realise that it may be that the present machinery is adequate, but it does appear that some pressure in the appropriate quarters would greatly reduce the risk even if some expenditure is necessary.That constituent will be delighted that the Bill, in contrast to what happened when the hon. Gentleman's party was in office, has been brought forward in four days in response to his plea. But seriously, we know that my hon. Friend has devoted a lot of attention to this difficult matter over recent months.
I am still concerned about the discretionary element in the local authority's power to make a grant. The 1971 Act makes it clear that the local authority must satisfy itself that the person receiving the grant is credit-worthy. My hon. Friend said that he wanted to see that bodies that were parts of large commercial enterprises and could afford the money did not take advantage of the scheme. Yet he wants to charge ¼ per cent. above the Public Works Loan Board rate. I do not understand how he balances these things. With all the conditions which will go with the local authority loan, that does not seem a very attractive rate.
If I am right, those who apply for a grant should do so in the knowledge that, if they are credit-worthy they will get it. If my hon. Friend does not think that 366 that is a good line of argument, at least we should consider at a later stage writing into the Bill that an applicant, if refused, can appeal to the Secretary of State, who can, if he thinks fit, order the local authority to give the grant. There is a wide fear—I understand the reason for this—that some local authorities may refuse grants and put certain hotels or boarding houses out of business. There should be a reserve protection.
My final point I touched on when I talked about the cost of loans. Will it be permissible, in the present period of freeze, to charge more per room per night for premises that have been made safe than was charged when they were unsafe? If not, and the interest charge nevertheless has to be borne, that will be equivalent to putting many hoteliers or boarding house keepers out of business.
So, although I welcome the Bill and the speed with which, since last summer, when this matter came to a head, my hon. Friend has acted, there are those points which will need further attention. No doubt in Committee we shall return to them.
§ 10.48 p.m.
§ Mr. John Pardoe (Cornwall, North)
I should like to associate myself with the remarks from the two Front Benches about those who suffered bereavement in the fire at Exmouth. This has emphasised, as do all hotel fires, the tremendous and urgent need for these fire precautions.
However, if the hon. Member for Hove (Mr. Maddan) thinks that this Bill will get any fire precautions made, will get any fire escapes built, he is living in cloud-cuckoo-land. It is essential to get the Fire Precautions Act implemented as quickly and as painlessly as possible. This is what the Government are refusing to do, and have refused to do ever since the Act was passed.
When trying to reply to the question "How soon will it all be done?" the Minister says "As soon as possible". I must ask the same question as the hon. Member for Norwood (Mr. John Fraser)—when is "as soon as possible"? Speed is of the essence. At no time have the Government brought forward specific rewards for quick action. There is undoubtedly a great temptation, which all of us representing seaside constituencies 367 realise only too well, to put off the evil day as long as possible.
The history of the Bill is fairly simple. The Fire Precautions Act was passed but, unfortunately, in a kind of economic vacuum. No one really thought about how the costs would be borne. They were presumed to be somehow spirited out of thin air. Then we came to the debate on the Finance Bill on 10th July 1972. The Chief Secretary to the Treasury was then in a quandary. We had a great debate, and he had had many requests from his side of the House for some concession. He got to the end of his speech and realised that he was running out of time and desperately needed something to produce, like a white rabbit out of a hat. We did not get a white rabbit. We got a mouse. When he produced it many of his hon. Friends said what a marvellous measure it was and what a tremendous benefit it would be to the hotel industry. They are not feeling quite so optimistic now.
The Minister seems to have described the Bill this evening with a large number of diminishing comments, such as, "a modest Bill", "a small Bill". He also said that it was unlikely that local authorities would be overwhelmed by requests for loans. He can say that again.
On 10th July 1972 the Chief Secretary to the Treasury said:Nevertheless, I go on to make it clear that I recognise that there is a problem which has to be met. It is a problem mainly affecting small hotels and business houses, and a number of my hon. Friends have emphasised that this afternoon.He went on to say:What seems to me to be necessary is to provide such people with access to loan finance so that they can have the work carried out as and when required by the fire authorities."—[OFFICIAL REPORT, 10th July, Vol. 840, c. 1262–63.]The Chief Secretary then announced this particular scheme, which was effusively welcomed on the benches behind him, in spite of the advice from the industry, both small and large hotels alike, and all the organisations representing the industry, that what they wanted was not loans or grants but tax concessions and that this would have been perfectly sufficient to do the job.
The Minister was right to say that it is unlikely that local authorities would 368 receive a very large number of requests for this money. Who will apply? In a letter to me on 19th July the Minister said:This help is primarily intended for those who cannot meet the cost of fire precautions from their own resources and who have been unable to obtain help from banks, building societies or similar institutions.On 19th July the Chief Secretary to the Treasury also said to me:I am bound to say I disagree with the suggestion in your second paragraph that the loan provision will be virtually useless. I made it clear to the House that the scheme would enable local authorities to act as lender of last resort for a small hotel or boarding house keeper who found it difficult to borrow the money he needed from other sources.I am still unable to find the exact section of the industry which will have to depend on this measure. The number of establishments which will use this facility will be very small indeed, not only small establishments but small in number.
§ Mr. Pardoe
Yes, and my local organisation, the Newquay Hotel and Caterers Association. Newquay has a very large number of these hotels and guest houses which it is the aim of the Bill to help. But it is almost impossible to find people who are likely to be helped by it. After all, there are already lenders of last resort. The Council for Small Industries in Rural Areas is a lender of last resort and able to lend for this purpose if necessary.
It is not the lack of credit. That is the extraordinary thing. The Government must get it into their heads that what is stopping progress on fire precautions is the cost of credit.
So what could have been done? I believe that the most obvious way to get the thing going fast was to amend and extent—
§ Sir Hamar Nicholls (Peterborough)
The hon. Gentleman mentioned the Council for Small Industries in Rural Areas as one source from which money could be obtained. What rate of interest would it charge, compared with that in the Bill?
§ Mr. Pardoe
It charges a similar rate of interest—¼ per cent. above the public loan rate. I am fairly sure that that is 369 the rate, but the hon. Gentleman can check it.
The easiest thing that the Government could have done was to extend temporarily the Development of Tourism Act to enable the tourist board to make grants towards the cost of fire precautions. I should have limited that to, say, work begun by April 1974, or perhaps to work completed by April 1975, and I should have made it clear that there would be no grants for fire precaution purposes beyond those dates. That would have caused hoteliers to rush their plans forward.
Secondly, the Government should have announced that all expenditure on fire precautions was tax-deductible. It is extraordinary, as we said during the debate on 10th July, that so far that has not been done by any Government. Thirdly, and much more importantly, all hotels ought to count for depreciation for tax purposes. The only thing that the Government are able to say when we argue this is that sane men cannot tell the difference between hotels and office blocks. The Government act in strange ways. A Government who cannot tell the difference between an hotel and an office block are suffering from a curious kind of visual disease.
The Minister is right to describe this as a modest Bill, as a very small Bill. It is a very small Government gimmick. It is totally useless to the industry, and it is a waste of time introducing it into the House.
§ 10.57 p.m.
§ Mr. Michael Shaw (Scarborough and Whitby)
I welcome the Bill. It is a modest measure, but it will bring some help. I do not want to speak for long, but I want to speak about one aspect of the Bill which I hope will receive consideration in Committee.
I accept that the Bill is aimed primarily at helping the small family business. I accept, too—as indeed was inherent in the 1971 Bill—that there must be considerable cost to many of these small hotels and boarding houses. But, though there may be considerable cost, there is considerable need, and I think that that, too, has to be accepted.
Listening to my hon. Friend it was not immediately apparent—although it 370 is from a perusal of the Bill—that not only has a certificate to be applied for but that a notice has to be served on the proprietor saying that certain expenditure is required. It is only at that stage, as I understand the Bill, that the proprietor can apply to the local authority for a loan.
We have heard tonight that no great speed is envisaged in all this. If I heard my hon. Friend aright, it will be some time before proprietors will be called upon to incur this expense. If I may say so in the friendliest possible manner to my hon. Friend, that was not the impression when all this started. There seemed then to be great urgency about this matter. Indeed, the Bill started because of the urgent representations that many of us made to Ministers concerned about the difficulties in which these small businesses would find themselves.
So we should try, in discussing this Bill, to cast our minds back to its origins and to the urgency which was then apparent, rather than follow the more leisurely approach which seems to have followed.
I know of cases in my constituency where proprietors acknowledged the need to carry out this work, knew that at a later stage they would have to apply for these certificates, and that sooner or later their premises would be inspected and they might be called upon at any time—they did not know when—to make their premises fit the proper conditions.
Some of them said that they had been told that this work was necessary and that, if need be, a facility would be given to borrow money from local authorities. They feared that they might be asked to do the necessary work during the holiday season and felt that, having made the application, they should get on with the work, particularly as it became more expensive with every month that passed.
There is, therefore, strong ground in this case for the Bill to be amended so that local authorities are empowered to make loans to those who have already started or even to those who have completed work before a notice under Section 5 (4) of the 1971 Act has been served on them.
This was a matter of some urgency in the early stages when people were 371 encouraged to get on with the work as quickly as possible. I know of cases where the people concerned got on with the work and are now in difficulty.
I know also, because I have examined one case, that these are sound businesses, but that carrying out all the necessary work has been expensive. There have been cases where proprietors have had to make very temporary arrangements for credit to carry out the work and they are now facing the problem of how to rationalise their loan requirements. It would be of great assistance to these people if they knew that they could make an application, when the Bill has gone through, to the local authority for a loan.
I urge my hon. Friend, in view of the history of the Bill, to look again at the necessity for first having to lodge an application for the certificate and then having to await inspection, which, by everybody's admission, may take a long time. During that time the persons are not getting on with the job and are putting their guests at risk. Facilities should be given to those who have got on with the job, even though it turns out that they have jumped the gun.
§ 11.4 p.m.
§ Dame Irene Ward (Tynemouth)
I am delighted to participate briefly in this debate. I listened to the charming way in which the Under-Secretary introduced the Bill. He did so as if it were something wonderful which the Government had thought up: something to help small boarding houses and hotels.
I cannot remember when my hon. Friend became Under-Secretary. I know the present Home Secretary was not there then. It is humorous to hear a Bill with these provisions being brought forward in this way when a large number of us with constituencies containing small hotels and boarding houses went en masse not to the Home Office but to the Treasury. My party has a lot of brains now, and it knows that one cannot have anything, even such a good Bill as this, if one has not got Treasury agreement. We very cleverly decided to descend on the Treasury. The then Treasury Minister, who is very able, attractive and—as a rule—on-coming, did not receive us all that graciously to begin with. However, we had a good go at him and retired.
372 Now my hon. Friend the Under-Secretary introduces the Bill as if it were a wonderful contribution from the Home Office. He might have said how pleased he was that we made that foray on the Treasury and that the Treasury had yielded to us—I wish that the Treasury always had to yield to good ideas—and had allowed the Home Office to introduce this modest Bill. It is a pity the Home Secretary does not admit that this is a modest Bill and say that he will have a go at the Treasury and then introduce a Bill which could not be described as modest.
Most hon. Members want to help the small hotel or boarding house keeper who wants to earn his living and provide safety for his guests. In the efforts to counter inflation we hear much about the problems of the lower-paid and of the pensioners. I support all efforts to help those people, but I also believe in helping those who want to help themselves. I thought that was Conservative philosophy. It is amusing to learn that something different stems from the Conservative Party.
I am sure that all the representations will be to the same effect and that the Bill should not be so modest. What fun it will be when the Selection Committee has to put all those hon. Members who speak tonight on to the Standing Committee. I do not see how the Government will get a majority in Standing Committee, because in our constituencies we are keen supporters of the small hotel and boarding house keeper.
I had hoped and believed that the Home Secretary, to whom I am devoted, thought that I had a brain. However, he has sent me a letter today plastered all over with a great pink label saying "Very important" and "Very urgent". When the attendant came and told me that there was an important letter for me I thought that I would not have my dinner because the letter was so important. But the letter merely tells me that I have not quite as many brains as I had hoped the Home Secretary thought that I had.
The Government say that they are to help the lower-paid and under-privileged. I had asked in my letter that the local authorities should be told that they must 373 have a loan scheme. The Home Secretary says:This would deny to the local authorities the ordinary discretion which any lender would be expected to exercise, and would put the ratepayers' money at undue risk: difficulties can sometimes arise when a mortgagor fails to meet his repayments even if security for the debt has been taken.I knew that myself. I know that I have not much in the way of a financial brain, but even I knew that. So our delightful and co-operative Home Secretary need not really have bothered to tell me it, because even I knew it.
The whole exercise is really explaining, in advance of the Committee stage, why we who are here tonight saying what we would like for our small hotel and boarding house keepers cannot have it. That is a pity, for we did so well with the Treasury. But my right hon. Friend was not Home Secretary at the time we made the arrangement with the Treasury, so he really did not know; otherwise he would, I am sure, have agreed with my letters and the letters of my hon. Friends explaining how very strongly we feel about this matter.
It is no use merely saying "We must help the lower-paid." It is a question not only of the low paid but of people who cannot make a very big income from hotel and boarding house keeping because they have not the premises to do so. If, rightly, we are to help the lower-paid, we must also help the people who can make only a little profit, because, thank goodness, we have a lot of very good, hard-working hotel and boarding house keepers who want to make a profit. We think that it is up to us to help them.
Perhaps my hon. Friend the Under-Secretary of State was not in his present position when we made our great foray to the Treasury. But we think that we should have our way. That would, I am sure, thrill the media and the whole House, and we want such co-operation between Socialists, Liberals and Conservatives. We know exactly what we want, and here is an opportunity for the Government to give it to us.
I say "Good luck" to the Standing Committee because it will be a wonderful opportunity for the Government, without running great risks of losing elections and so on, to give us what we 374 want. If they do, we shall be able to say to our small hotel and boarding house keepers "We think you are doing a very good job, and all parties in the House of Commons are united in being prepared to help you." My right hon. Friend will do far better if he gives us our way. If he gets into trouble with the Treasury we can all go back to it and say "The House of Commons has asserted its views. and it is up to the Treasury and the Government to let us have our way in the interests of our constituents."
§ 11.13 p.m.
§ Mr. Robert Adley (Bristol, North-East)
I congratulate my hon. Friend the Member for Tynemouth (Dame Irene Ward) on saying many of the things which I and many of my hon. Friends would not dare to say. She is right in everything she has said, and all power to her for having the courage to say it. This is what the House of Commons is for, as she has said, and she has been renowned over the years for standing up for her beliefs and for the little people.
I declare an interest in the hotel industry, although not in any of the premises this Bill is designed to assist. I also confirm once again, although it should not be necessary, that all of us in this House fully support the Fire Precautions Act. There is no question of any one of us thinking that the Act is wrong or should not be implemented. As the hon. Member for Cornwall, North (Mr. Pardoe) has said, we want to see it implemented quickly and effectively and the Government doing all they can to bring that about.
My hon. Friend the Member for Tyne-mouth has exposed in lurid detail the origin of the Bill. It is not, and was not, initiated by the Home Office.
One of the problems of the hotel industry is illustrated very well by the Act. It was brought to the House as a Bill by the Home Office; yet tourism is the responsibility of the Department of Trade and Industry. Our representations had to be made to the Treasury during the debates on the Financial Bill last year. This is the nub of the problem. The hon. Member for Norwood (Mr. John Fraser) made a good point when he said that the industry should find a way of making itself heard and of having its problems dealt with by the Government 375 on a co-ordinated basis. Most of us here tonight would entirely agree with him. It is inconceivable to me how over the years the industry has allowed itself to be bullied and pushed about, unrepresented in the House. That has been mainly because of its failure to present a united front.
I am glad to see that the amalgamation of the Caterers Association and the British Hotels and Restaurant Association into the new BHRCA has changed all that. There is now an effective and powerful voice speaking on behalf of the industry. Although it has made one or two comments on the Bill, I believe it would reject some of the less friendly criticisms by the hon. Member for Cornwall, North. At least perhaps he will join us in starting up a movement which will enable the hotel and catering industry to acquire a voice and a lobby in the House. Tourism, the largest dollar-earning industry in this country, has long been neglected. We spend much time in the House discussing the problems of the coal industry and the steel industry, which appear to have permanent problems. Yet the tourist industry, which is a success story, does not get discussed anything like as much as it should. Parts of the industry, particularly the small hotel keepers, who are its backbone, have until recently not had a voice which could be heard here to speak effectively for it.
The hon. Member for Cornwall, North referred to the debate on the Finance Bill last year. My hon. Friend the Chief Secretary to the Treasury accused me last year of exaggerating the problems of the small hotel keepers. He said in reply to a Question from me:I have listened carefully to what my hon. Friend has said and have read the letter he wrote earlier this month on the matter. He may be exaggerating the problom."—[OFFICIAL REPORT, 25th April 1972; Vol. 835, c. 1265.]I should like to think that as a result of the experience of many of my hon. Friends in recent months it could be seen that we were not exaggerating the problem, either then or now, and I hope that it will be appreciated that a great deal of help is needed by the small hotel keeper. The trouble is that the problem is still unknown. The Fire Precautions Act was introduced by the Home Office without 376 consultation with either the industry or the Department of Trade and Industry. Every hotel and boarding house should have registered under the Act on 1st June 1972, and we now know that a large percentage of them not only had not done so by that date but still have not done so. My hon. Friend the Under-Secretary, in reply to a Question I asked on 7th December 1972 about how many hotels and boarding houses required to register under the Act had done so, simply said that the information was not available.
Many of us feel that the problems of the industry are still neglected and that the Bill needs a deal of beefing up, and I should like to support proposals put forward by my hon. Friends this evening. It should be mandatory upon local authorities to provide loans for small hotels and boarding houses should they be required. There should be a lower rate of interest than the ¼ per cent. above the Public Works Loan Board rate. I should like to suggest 2 per cent. below that rate. Many of these hotels are in the major towns and cities where there are terraced buildings, places like Bristol and Bath. They are small hotels which would not qualify for the assistance mentioned by the hon. Member for Cornwall, North. Under the legislation such assistance is available only to properties in rural areas.
Facts about the effectiveness of the Fire Precautions Act are hard to come by. There are too few fire officers, and registration is incomplete. I want to quote four current cases which are causing concern, which illustrate well the problems which small hotel-keepers are facing, and which show that we are not exaggerating. A hotel in Berkshire with 22 rooms has been given 190 days to carry out work costing £12,000 under the Act.
I must say to the hon. Member for Norwood that I thought his remarks about fire officers interpreting this Act leniently—remarks echoed by the Minister—
§ Mr. Adley
Very well. I thought that the remarks showed a total lack of realisation of what is going on in and around the country. If I were a fire officer faced with a piece of legislation produced by the Home Office I would rightly consider it my duty to implement it to the 377 letter. I would not like to be held responsible for a fire in my area and subsequently use as my excuse "The Home Office told me I should interpret the law tolerantly." Any fire officer worth his salt will do his job thoroughly. This large sum of money for this hotel will bring in no extra profit.
As my hon. Friend the Member for Hove (Mr. Maddan) said, the freeze is preventing higher charges being introduced. This is a classic example of a proprietor in real difficulty. In a letter to the Chief Executive of the British Hotels, Restaurants and Caterers Association the proprietor says:The rate of interest is likely to be commercial and the loan will have to be repaid so that the Government aid of this kind that is proposed in the next Session of Parliament is, in my view, unrealistic.That is why I and many of my hon. Friends feel it is absolutely necessary for the Government to provide a really attractive and low rate of interest.
I come to the second case which I mention on behalf of my hon. Friend the Member for Isle of Wight (Mr. Woodnutt), who apologises for being unable to be here tonight. He has asked me to raise this case. It is a typical one of a small hotel run by two partners who are slaving away day and night in the season to try to eke out a meagre living from the hotel into which they have both put their life savings. As a result of the Act and the assessment made by the officer I have a letter here which tells me that one of the partners, in addition to having to work all day in the hotel, is now having to work five nights a week in a factory to make ends meet and somehow scrape together enough money to carry out this work. I do not believe that this case is in any way an exception. The cost to this hotel of £7,000 is the result of the burden imposed on the proprietors by the fire officer carrying out the will of Parliament.
Case No. three concerns a small hotel in Dorset which has to pay £650 for materials alone. It is a very small property which showed a surplus of only £1,000 at the end of the last trading year. The letter says:The total of £650 is purely for materials. No element of labour is included at all. According to our accounts for last year we 378 had approximately £1,000 left after running expenses, to be divided between us as our wages and to meet any improvements. I think you will see that an outlay of £650, which will in no way improve our profit performance without sizeable price increases, will result in some difficulty. At the same time we are having to improve standards as the public demands change.That is not an untypical case.
Case No. four is a small hotel in Christchurch, Hampshire. The proprietor tells me:under the new Act I am being forced to spend what I estimate may cost me between £500 and £700.This letter is dated within the last few days. It goes on to say of the freeze:With the freeze as it is at the moment I read that I shall not be allowed to put my prices up to cover either this or the increased cost of food, facilities, rates, etc. This will personally hit me very hard. I am also affected by VAT which in my case is discriminatory as most of my opposition are cheap rate bed and breakfast amateurs who unfortunately appeal to the majority when money is scarce.This is the problem of the small man trying to run a legitimate business which is his only source of livelihood.
§ Mr. Michael Shaw
Can my hon. Friend tell me whether in these cases any of the money has already been spent, because this Bill applies only to those who are still intending to spend, not to those who have started to spend?
§ Mr. Adley
He has not so far had to spend the money, although he was originally told in 1969 a different story from the one he is now being told. There has been a continuing change in legislation and he has not yet had to expend any of this money.
Those are just four examples. The need is real for assistance for these people, and the rate of interest is vital. I am sure my hon. Friend the Under-Secretary of State will agree that it is absolutely crazy to put a financial penalty on safety. That is what motivates us all in our request for the lowest possible rate of interest. We are interested in having the work done without making it financially prohibitive to the owners of the premises.
The chief executive of the British Hotels, Restaurants and Caterers Association writes as follows:Clause 1(2) of the Bill provides that any loan made shall bear interest at a rate 379 higher by one-quarter per cent. than the rate provided for under Section 36(4) and (5) of the Fire Precautions Act 1971. At a meeting of our National Council yesterday this provision was the subject of considerable concern as it was felt that the whole object of the exercise could be jeopardised, at least so far as hotels are concerned, if the rate of interest was higher than that normally payable in respect of local loans. In fact, the view was expressed that loans for this very special purpose should be at a rate of interest lower than the rate normally charged. If you can help on this we shall be most grateful.My hon. Friend said that he had discussions with the Association of Municipal Corporations, the fire officers and the local authorities. What discussions has he had with the British Hotels, Restaurants and Caterers Association, which is the main representative body of the hotel and catering industry? Secondly, will the work he has mentioned be authorised by the county authority or the new district authority?
After all that, I end by thanking my hon. Friend for his continuing concern and assistance. I apologise for being a bit mean and tough, and for badgering him. I pay a personal tribute to him for the trouble he takes to understand an industry for which his Department is not responsible. I thank him for his courtesy and assistance, and I hope that in Committee the arguments we have put forward will be persuasive, not just by numbers but by their common sense.
§ 11.27 p.m.
§ Sir Anthony Meyer (Flint, West)
I support everything that has been said by my hon. Friend the Member for Bristol, North-East (Mr. Adley), who has played a key part in getting this less-than-fully-satisfactory measure. I am reluctant to look a gift horse in the mouth, even if it is a broken-winded, three-legged, walleyed nag with no teeth.
I pay tribute to my hon. Friend the Under-Secretary of State, who has been most helpful and courteous and has gone out of his way to help us. This is a Treasury Bill, and it was to the Treasury that we made most of our representations. The Bill reflects our relative success in getting our point of view across to the Treasury.
None of us would for a moment dispute the necessity for the Fire Precautions Act. What has emerged from the debate is the feeling that, on the contrary, the Act should be applied with more speed 380 and vigour. What has also emerged is that the impact of the Act on hotels should have been part of a coherent policy directed towards the promotion of the tourist and hotel industry. Such a coherent policy is sadly lacking, and we shall pay for it, because the day of reckoning that is coming when the Act is fully applied will have terrible consequences for a large number of small hotel keepers. We do not want the day of reckoning to be put off. We want it to be advanced so that there may be no risk of life-losing fires occurring. Therefore, it is necessary that there should be a coherent policy of support for the hotel industry. I am bound to say that the present measure is a less than satisfactory part of any such policy.
In regard to the figure of ¼ per cent about the Public Works Loan Board rate, I agree that there should be an element of subsidy, although I feel that the sooner we get on to a system of tax allowances to meet costs the better.
The only really fresh point in this discussion relates to the discretion of local authorities to make loans. What is likely to occur under the local government reorganisation proposals is that in the new areas where tourism bulks large tourist industry representation may well be very much less than representation on other matters. Such local authorities may feel under much less obligation to make the loans which are provided for in this measure than do existing local authorities which fully reflect the needs and anxieties of the tourist industry. I hope that the Bill will be amended in Committee to make this activity mandatory rather than discretionary.
§ 11.30 p.m.
§ Mr. Ian Percival (Southport)
In a brief speech I wish only to emphasise the feelings of dissatisfaction expressed by many of my hon. Friends in this debate. None of us wants to be ungracious or to look a gift horse in the mouth, but I hope that this debate will have made it clear to Ministers, whether they be in the Treasury or in the Home Office, that, while we are glad that the Government are doing something to facilitate the speedier implementation of these important provisions, we hope—and indeed expect—to see improvements at the next stage of the Bill.
I wish to mention two matters. One relates to the observation made by my 381 hon. Friend the Member for Tynemouth (Dame Irene Ward) that in this Bill we are dealing with people who are in a small way of business, who are working for themselves and supporting themselves and who, by their own efforts, are making a real contribution to the life of towns whose inhabitants most of us taking part in this debate represent. I hope that that alone will be considered to be a good reason for giving them rather special consideration.
It must be said that the group of people with whom we are dealing in this debate have been left out of account compared with the treatment which has been afforded to many other groups in the amount of attention which they receive from the House and from the Government. Many of us who represent these people feel that they have been left fairly far behind in the thinking and actions of successive Governments.
I wish to mention the point raised by my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw). The Bill as it stands could assist only those who have not yet spent any money. A person may already have expended money and may find himself in even more difficulty than a person to whom the Bill in its present terms applies. If such a person has had to raise money quickly, he may find himself paying a very high rate of interest. It could not in any sense be described as fair if he were left to go on paying a higher rate simply because he had been obliged to and had carried out work at an earlier date, whereas if he had not been obliged to and had not carried it out until after the Bill came into force, he would be assisted and would be called upon to pay a lower rate.
While expressing those views, I end as I began by endorsing in general terms what my hon. Friends have said. I hope that we have all made it clear that we mean it when we say that we are glad that our Government are taking this action, but we hope that they will not spoil it by being niggardly about it, and that they will do what is necessary to ensure that this step will be useful.
§ 11.36 p.m.
§ Mr. Wyn Roberts (Conway)
I echo my hon. Friend's commendations of the Minister and express the hope that we 382 shall see some improvements in the Bill as it goes through the House.
The Minister referred to similar loans for housing. That legislation authorises loans at a rate of up to ¼ per cent. above the Consolidated Loan Fund or other borrowing rate as opposed to the proposal in the Bill of a fixed and immutable rate of ¼ per cent. over the Public Works Loan Board rate. The Government must justify rather more than so far the fixing of the rate in this instance while allowing discretion in the other instance.
We are all anxious that hoteliers and boarding house keepers should proceed as quickly as possible to the implementation of the Fire Precautions Act, but there must be some significant stimulus to them to go ahead with that implementation. I support the plea for cheaper loans on that account.
I should not go so far as to say that the cheaper loans should be fixed at 2 per cent. less than the rate specified in the Bill, but I urge the Government to consider a provision for loans such as already exists in similar housing legislation.
The one point which may be urged against the Bill is why the ratepayers of any local authority area should support the hoteliers and boarding house keepers in their midst. The answer is very simple. It is basically that most of these holiday local authority areas rely extensively for their prosperity on the hotel and tourist trade.
I welcome the Bill. But I ask my hon. Friend to give full consideration to the point that I have made.
§ 11.40 p.m.
§ Mr. A. P. Costain (Folkestone and Hythe)
In an earlier intervention I made a point which I hope that my hon. Friend the Under-Secretary will be able to answer. In a constituency like Folkestone a number of hotels and boarding houses are nearing the end of rather long leases. Some of them have only four or five years to run. I am pressing ground landlords to extend leases of this kind, but I am not sure that it will be possible. I shall do my utmost to persuade them. But in such cases it will be difficult for a local authority to grant loans under the Bill. How can the authority decide 383 whether the security is good enough? If it is decided not to be, what is the unfortunate proprietor to do? Many of them have retired early to go into the hotel business. They want as much as anyone to make their hotels safe. Generally speaking, the hotels are safe, though they may not be up to modern standards.
My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) referred to the fact that we had made a foray on the Treasury. In fact, it was more like a posse. But, having drawn gunsmoke, only today I have received a letter from my agent saying that this Bill should be got through quickly. I hope that every pressure possible will be brought to bear on the Treasury to get the Bill through quickly.
§ 11.42 p.m.
§ Mr. Lane
With the leave of the House, I wish to reply to some of the points which have been raised in the debate. If I do not cover them all, I can assure hon. Members that all that they have said will be considered carefully before we begin the Committee stage. Many of these points are matters which can be gone into further in Committee, and we all hope that the Bill will emerge from its Committee stage an even better one than it is at present.
First, let me put one matter straight. Unwittingly, I may have caused some misunderstanding. There is great urgency in carrying out the Fire Precautions Act in the interests of public safety. There is no question of going slow on it. The purpose of this Bill is to keep up the momentum that we all want to see by removing possible financial obstacles. When I said that I did not expect that authorities would be flooded with applications, I meant that we envisaged the Bill being applied with urgency but also steadily in other words, not all at once and in a rush in every individual locality. As this is only a means of lending of last resort and we expect in most cases any necessary loans will be readily available from banks, I should be surprised if the local authorities were flooded with applications all at once in any area. But it is very important to get on with this work urgently.
§ Mr. Lane
I am aware of that. We envisage a varied apparatus of lending money of which this local authority provision may be a very important part for the smaller people about whom my hon. Friends are concerned.
I come, then, to the point raised by my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) about leaseholders. If my hon. Friend looks at Section 36(3) of the Fire Precautions Act 1971 he will see a definition which means that the local authority has to be satisfield that the person applying for a loan in the premises concerned is either someone owning the freehold or someone who has a lease for a period which must not expire before the final date for repaying the loan. That is the best answer that I can give at the moment, but I hope that it will enable a large number of leaseholders to be covered.
I am grateful to the hon. Member for Norwood (Mr. John Fraser) for his general welcome to the Bill. He raised many matters, not all of which I can adequately reply to now. One point concerned smoke detectors. We do not expect that smoke detectors can be required directly under the 1971 Act, because their purpose is to protect property, whereas the Act is more concerned with the provision of means of escape. If smoke detectors are installed as an additional safeguard to property it may be that the fire authority could accept a lower standard of certain means of escape requirements under the Act. So there would be a kind of compensating effect to a proprietor who had installed smoke detector equipment.
The hon. Gentleman's main concern was the speed with which we are getting on with this matter. I accept all that he said about anxieties over the effects of fires. We had the reminder of Exmouth. My London home is in Bayswater, so I am well conscious of this point. Without going much further into detail, I should point out that, according to our information, some of the figures quoted by the hon. Gentleman about the total number of premises involved and the degree to which hotel keepers have not yet applied for certificates were exaggerated. My information is that progress has been good. At one large resort over half the hotels and boarding houses applied for certificates some time ago, 385 and progress is being maintained. It will certainly take a few years to get the Act fully carried through. I do not want to put a precise time on it. My feeling about the situation, having discussed it with fire authorities and visited two or three areas, is that there is plenty of urgency and that those concerned have this point very much in mind.
The hon. Gentleman asked about the guidance for fire authorities in going to high risk premises which might not yet have applied for certificates and whether they could forestall the applications. All competent fire authorities know where their high risk premises are situated, and they will not wait for an application for a certificate.
The last point which I should like to try to meet directly related to using fire brigade manpower more productively. This is being done throughout the fire service. There is a move away from using firemen for duties which can be carried out by unskilled staff, particularly since the Cunningham Report. A special committee of the advisory council is at present considering ways of providing for the better use of operational firemen's time in all respects. Again, if I may amplify this point from my experience of visits to different areas, the fire authorities are certainly redeploying their manpower to apply this Act as urgently as they possibly can, given their present establishments.
My hon. Friend the Member for Hove (Mr. Maddan) referred to two or three points. One concerned the discretion of local authorities. We can no doubt go into this matter in Committee. We believe that there would be very strong resistance by local authorities to any proposal that they should be compelled to make loans to anybody who applied for them. I am not aware of any public body that is required by statute to provide loans to the public as of right without regard to various circumstances, such as creditworthiness or the merits of the scheme for which the loan is required. If we were to compel local authorities to provide loans in the way that some hon. Members seem to want, we should be putting the ratepayers' money at risk, because difficulties can obviously arise if a mort- 386 gagor fails to meet his repayments, even if security for the debt has been taken. I cannot see why we should be more generous to commercial enterprise in this Bill than the House wanted to be to the owners of dwellings covered by Section 36 of the main 1971 Act. This is on a discretionary basis——
§ Mr. Adley rose——
§ Mr. Lane
I suspect there is not much between us in practice. Possibly my hon. Friend is reading too much into "discretion". I have no doubt that there will be no serious difficulties given the clear will of the House that local authorities should help in that way. I do not see serious difficulties by local authorities hanging back.
§ Mr. Lane
We will go into that further in Committee.
My hon. Friend and other hon. Members raised the matter of whether prices could be put up during phase 2 or phase 3 or whenever. That is something which I should not like to answer off the cuff. I will consult my right hon. and learned Friend the Minister for Trade and Consumer Affairs. No doubt we will discuss the matter further at a later stage. I realise how important it is to a number of businesses concerned.
May I say to the hon. Member for Cornwall, North (Mr. Pardoe), who brushed the Bill rather contemptuously aside, that I described the Bill as modest because I want to put it in perspective. It will have an important part in maintaining the progress which we all want to see in getting the main Act implemented. I reject the suggestion that it is either a useless gimmick or a waste of time.
My hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) raised a matter of understandable concern; namely, the uncertainty of businesses which have already started work in anticipation of being required to do it. My hon. Friend wanted to know how 387 they will stand under the scheme. We have that problem in introducing any new scheme of this kind in any area of national life. There are always transitional situations. However, we would like to look further into the matter. Undoubtedly, we shall have an opportunity to explore it in Committee.
My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) was a little unkind. She accused my Department of taking all the credit for the Bill. Far be it from that. I remind my hon. Friend that I said in my first speech that a decision was arrived at among the Departments concerned—the Department of Trade and Industry, the Home Office and the Treasury. It was announced by my hon. Friend the Chief Secretary to the Treasury in July. We are doing in the Bill precisely what my hon. Friend said the Government would do. That is the position, neither more nor less. There is no discrepancy or lack of cohesion between the Home Office, the Treasury and the Department of Trade and Industry. It is the purpose of the Bill to help people in a small way of business. If we find that we can, within the limit which we have set, improve the Bill from that point of view in Committee, we shall seriously consider doing so.
My hon. Friend the Member for Bristol, North-East (Mr. Adley) was a little unfair when he said that the original Act was drafted without consultation. That was not the case. There was considerable consultation. Up to a point, I have answered his question about making it mandatory on local authorities, and we shall go into it further in Committee.
Several hon. Members have talked about the rate of interest. I should like to think about this in view of what has been said. To keep it in perspective, we should remember that the interest to be charged under the Bill—I per cent above the PWLB rate—is likely always to be appreciably lower than the borrower would have to pay on a loan from a bank or a financier. I have explained why we felt it right, after discussion with the local authorities, so as to ensure that the Bill got a fair wind from them after its passage through the House, to set the rate ¼ per cent above.
My hon. Friend mentioned four cases of worry in which, apparently, fire authorities were demanding too much of 388 particular hotels. I would remind him that the basis of the Act is that only work can be required which is reasonable in all circumstances. If this has not been argued fully with the fire authorities in these cases, then it certainly should be.
My hon. Friend asked whether we had had discussions with the hotel trade before drawing up the Bill. We did not do so, because this was a Bill designed to give particular help to them, and consultation, we felt, was not required. However, we will naturally take into account the views and reactions of the trade during the debates ahead. In answer to his other question, it is the district councils which will administer the scheme, because they are the building authorities.
I think that I have covered, at least in brief, the main points raised. Others we shall consider very carefully before the Committee stage. In the spirit of welcome, although critical welcome, which has been expressed, I commend the Bill to the House.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).