§ Order of the Day for the Second Reading read.
§ THE SECRETARY FOR SCOTLAND (LORD PENTLAND)
My Lords, I have to ask your Lordships to read this Bill a second time, and I will very briefly explain its provisions. In the first place, it applies solely to Scotland, and deals with a question which hitherto has not been treated in the Party sense as controversial. The letting of houses in Scotland is not regulated by statute but by custom, but the help of Parliament is invoked on this occasion on account of the hardship which is felt by tenants of small houses in Scotland under the existing system. For twenty years, I should think, or snore, this question has been before Parliament in one form or another. Many Bills have been introduced by private Members in the House of Commons in the endeavour to deal with it, and some two years ago the present Government appointed a Committee to consider the question, which took evidence throughout Scotland upon the subject, and that evidence and the Report of that Committee are the foundation of the present Bill.
The grievance is as follows. The existing practice in many of the large towns in Scotland is that in February intending tenants are asked to fill up a form which is in effect a binding agreement to enter upon a tenancy in May—that is to say, four months notice is actually required before a tenant can secure the prospect of entering a house for a year. And the mention of a year brings me to the second part of the grievance, which is this—that the tenancy of these houses by practice is for a year in Scotland. Scotland is peculiar in this respect. Long ago the conditions of house letting in England adjusted themselves to the more modern conditions of life and labour of the large working class population. Your Lordships will easily perceive how great a hardship it is to individuals of humble means—mechanics, artisans, working men of all kinds, and even small shopkeepers—to find themselves, no matter what change may occur in their circumstances, held and bound to the occupancy and to the payment of rent for the house for so long a period as twelve months. Not only is I the hardship felt keenly by working men, 1119 whose means fluctuate—for instance, they may want a larger house or a smaller house, or a house in a different part of the town—but it also operates very prejudicially as against the necessity which working men feel so keenly of following their trade from place to place. Shipbuilding may be slack in Glasgow and busy in Belfast. I have known cases of men on the Clyde who have had to pay rent for two houses while they have only been able to occupy the one in the place to which the necessity for seeking work has driven them. Therefore, this question, though the scope of it may not be very large, is extremely important to those who are concerned in it and at the same time difficult to deal with.
In order to obtain the fullest information the Government moved deliberately and appointed a Committee, and the remedy they now propose I will briefly describe to the House. I will first deal with the definition of a small dwelling-house. In towns of over 50,000 population a small dwelling-house is defined as a house of £26 rent and under; in towns of between 10,000 and 50,000 population the limit of rent is £21 and under; and in towns of a population under 10,000 the limit of rent is £15. The Bill proposes that no agreement to take a house or to enter upon a tenancy of such a house as falls within the definitions I have given shall be binding which is of longer duration than two months—that is to say, in future, to bring it down to a practical date, no February agreement shall be necessary to take a house in May, as is the present practice, and no agreement to take a house shall be binding if of a length greater than two months before the tenancy which begins at the expiration of those two months. That deals with the first difficulty and grievance—the length of notice which practice has imposed on the tenants of these small houses.
The second grievance is the excessive duration of the tenancy—namely, twelve months. While the practice is one of yearly letting of houses, it is not the practice for the rent to be paid by the year. The rent is frequently paid half-yearly and even at shorter periods, and the Bill proposes that either the landlord or the tenant shall be entitled to give due notice of the termination of a tenancy on the next day upon which the rent becomes payable. 1120 Due notice is defined in the Bill, and it is longer or shorter according to the length of the tenancy. In tenancies which are longer than three months forty days notice must be given to terminate the agreement; in tenancies of less than three months, one-third of that period at least must be given as notice; and in the case of tenancies under one month at least five days notice must be given. But the Bill endeavours to limit the application of this provision to those who really require its protection. In the first place, all such classes of small houses below the rents I have specified that do not properly come within the category of dwelling-houses are excluded. Inns, hotels, houses which are let with agricultural or pastoral land, houses used in connection with land devoted to horticulture, market gardening, and so forth, are all excluded. Existing contracts are, of course, not interfered with, and, further, as well as the exclusion of, so to speak, individual classes of houses, the Bill recognises that in some of the towns in Scotland, notably in some of the smaller burghs, the provisions of this Bill will not be so widely used as in other towns. Therefore the Bill is adoptive. It comes under the category of Acts which may be adopted by burghs with a population of under 10,000.
Then I may briefly mention two or three small changes proposed by the Bill. With the extended facilities which the Bill proposes to give to workmen to follow their occupation is given a limitation of the landlords' right of hypothec, by which the household bedding and the tools and implements of the workman, to the value of £10, are exempted from the landlords' right of hypothec. Then there are certain provisions in the case of house-owners in the direction of the protection of their property and interests. Access is given them to the Burgh Court; they are allowed to take such cases not only to the Sheriff Court but to the Burgh Court where such Court exists. If a tenant becomes seven days in arrear of rent, the house-owner is entitled to an ejection at forty-eight hours notice, and, further, the discretion of the sheriff is limited in the increase of that forty-eight hours notice to cases in which special cause is shown.
There is one other important consequence of the provisions which I have 1121 enumerated. It is this, that when this Act comes into force there must inevitably be, in the view of the Government, a change in the system of the collection of rates. People of small means naturally feel it a great hardship to have to pay their rates once a year in a lump sum. The evidence of the Committee goes to show that so great is that difficulty, so great a hardship is it felt by them, that they would even rather pay slightly more and have the privilege of paying their rates in instalments. Besides that difficulty there is this further one, that if during the year in any particular house there is a succession of tenants or even more than one tenant or occupier, under the present system under which the rate collector visits the house only once a year for the collection of rates, on his visit he would not find the man who is truly liable for the whole year's rates in occupancy of the house. There are two different ways of providing for what the Government consider an unavoidable change if this Bill is to be a practical measure. One method of dealing with, I will not say overcoming, this difficulty would be to impose upon municipalities the duty of making more frequent collection of rates. This has never hitherto been done in Scotland, and it would impose upon municipalities the necessity of employing a veritable army of rate collectors at great expense to the communities which they govern, and though the Committee did not give any very certain opinion on this particular point, when the subject is examined it is really found quite impracticable to adopt this suggestion. Indeed, in my judgment, and that of the Government, it is quite impossible to seek a remedy by any such means as imposing upon municipalities more frequent collection of rates.
The other method of dealing with it is by extending the system of compounding. Under the system of compounding, as your Lordships are aware, the owner collects the rates and pays the rates over to the municipality, receiving an allowance, which in this Bill is to be fixed by the sheriff, for so doing. The tenant pays the rates with his rent. There is a special provision in this Bill, to which I shall allude in a moment, enacting that every tenant shall know when he is asked for his rent exactly what he is paying in rent and what he is paying in rates, though 1122 the two sums are paid together. Nobody likes compounding on its merits or as a matter of theory, but it has really been forced upon Parliament by the practical considerations to which I have alluded. Perhaps I may quote a short passage from the Report of the Royal Commission on Local Taxation, presided over by Lord Balfour of Burleigh, which deals with this point. The words are these—However desirable in principle it might be to abolish compounding, it is generally agreed that the practical defects of collecting and enforcing payment among a large number of the poorer classes of the large towns who are weekly tenants and are constantly moving from one tenancy to another are insuperable.''The practice, I may further say, is general in England though it is not general in Scotland, but in regard to two rates it is the practice in Scotland. In respect of houses of a rental of £4 and under in Scotland both the county rate and the burgh rate come under this system of compounding.
There are two objections made to the system of compounding. The first is that the tenant's sense of citizenship and responsibility is weakened because he does not actually himself pay the rates. We endeavour to mitigate any evil which may be anticipated to come from this source by the provision in the Bill to which I have alluded. In Clause 17 it is provided that every owner shall deliver to the occupier of a small dwelling-house at the beginning of an occupancy a receipt-book, rent-book, or certificate, stating the amount payable in name of rent and assessments to the owner and indicating separately on the basis of the last assessments for the time being the proportion thereof payable in name of assessments. The objection to any extension of the system of compounding is that in effect it would, by transferring the payment of poor rate from the tenant to the owner, relieve from disfranchisement as voters such small tenants as do not pay their rates. This at first may seem to some a formidable objection, but I would ask your Lordships to consider exactly the limits of it. In the case of tenants of houses of £4 and under this is the system in Scotland in respect of the burgh rate and the county rate, though it is not more general. If under this Bill you reverse that, you will pro tanto be going back, and, in fact, making the passage of this Bill penalise, so far as it goes, those tenants of small houses.
1123 Then I would remind your Lordships that under the Reform Act of 1832, tenants of houses of £10 yearly value and over exercise the franchise irrespective of the payment of rates. Therefore, the people with whom you are really dealing in this Bill, assuming your unwillingness to go back in regard to the £4 tenants and under are the tenants between £4 and £10, and how far do they receive privileges under this Bill which they do not otherwise receive? The £10 people are already exempt from any obligation to pay rates as a condition of their being placed on the voters' roll, and therefore we need not consider them in this matter. It has to be recollected that, after all, these men must and do live somewhere and they will pay their rents—the large majority of them will live and pay rents somewhere. It would be visiting them with an excessive penalty if owing to the lapse of an occasional week, or month even, during the year they should be regarded as not having discharged as well as they could their obligations. I hope I have at not undue length mentioned the principal provisions of this Bill. I cannot believe that it will not meet in principle with your Lordships' approval, and, of course, I shall be prepared to deal in more detail with Committee points in Committee if the Bill should reach that stage. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Pentland.)
THE EARL OF CAMPERDOWN
My Lords, I must apologise for addressing your Lordships at this somewhat unseasonable hour. The audience is not very large, certainly it is not very large on the other side of the House; but I can assure your Lordships that the number of noble Lords present is by no means in proportion to the interest which attaches to this Bill. The noble Lord himself, in his speech, appeared to me rather unduly modest. He said that the scope of this Bill was not large, and he made certain other depreciatory remarks, and being influenced, no doubt, like myself, by the hour, he curtailed his remarks and omitted a great many things that appear to me to require to be mentioned in connection with this Bill.
With regard to the object of the Bill itself, which is to prevent its being necessary that notice should be given as early as the month of February that you intend to take a hour in May—so far as that goes, I do not think there is any difference of opinion. It was 1124 an arrangement made, not very wisely made, as I think, in their own interests, by the house-owners; but still, when we say that that arrangement is no longer to be made it is adding another to the innumerable interferences with free contract which is, I am sorry to say, characteristic of the age in which we live, and most especially characteristic of His Majesty's present Government. With regard also to the tenure, under this Bill it becomes impossible to have any let which extends up to a year, because, as the noble Lord said, simply by giving notice that on the next payment day the tenure will come to an end, the tenure thereby comes to an end whatever its nominal duration may be, provided always that certain notices, which cannot exceed, I think, forty days at the longest, are given. That, too, is a very great interference with freedom of contract, and I believe will be found in practice by no means convenient to a great many working men. That, again, I am not going to call in question, though I think it is a very unfortunate thing that it is found necessary to do this. Moreover, this is not really a grievance which is felt all over the towns in Scotland; it is especially a grievance of the west part of Scotland and more especially the City of Glasgow. As I have said, I do not propose to call those two matters in question.
But I want to ask the noble Lord whether this Bill is not an entirely different Bill from the Bill which the Government introduced in April last. That Bill—and this is one of the several things the noble Lord omitted to tell us—was limited to £15. The houses were not to exceed the value of £15, and, besides that, the Bill might be adopted or not by any town in Scotland. Therefore the Bill of last April was a Bill wholly adoptive, and in any circumstances it was not to extend to houses beyond £15. The noble Lord told us that this Bill was prepared on the recommendations of the Committee. I assure him it is nothing of the kind. Did the Committee recommend that houses of £21 or £26 should be included? No. On the contrary, they said that the extreme figure to which you could go was £20. Just let me read what they did say. They stated, on the first page of their Report—Even in Glasgow a rent of £16 would include probably four-fifths of the houses occupied by the ordinary working men, while in certain other towns that rent would include the houses of all the ordinary working men. Yet, looking to the rising 1125 rents of working houses and to the convenience of a uniform standard, we have dealt with all houses up to £20 of rent as falling within our view.Their Report was entirely limited to houses not exceeding £20 in rent, and £21 and £26 are excrescences for the existence of which no reason whatever has been given to us. As the noble Lord has told us, this Bill is now compulsory on all burghs which exceed a population of 10,000. That, again, is a most important difference. It is only adoptive as relates to burghs below 10,000. The noble Lord omitted to mention this great alteration. But how has this Bill been altered, why has it been altered, and when was it altered? This Bill was read a second time in its original form in the other House, and in Grand Committee the Lord Advocate appeared one day with Clause 2 as it now stands and inserted it in the Bill. The inconvenience of the procedure in Grand Committee has been mentioned to your Lordships already once this evening. Here is another instance of it. Nobody knows what goes on in Grand Committee, and on this particular occasion, so I am informed, no reason whatever was given to the Committee for making the change. Is the noble Lord aware that nearly all the burghs in Scotland are opposed to this?
THE EARL OF CAMPERDOWN
I am very much surprised to hear that the noble Lord is not aware of it, because I think almost every other. Scotsman in this House is aware of it. I have here a petition from the City of Edinburgh, which I will take this opportunity of presenting to your Lordships' House, against it. They protest against the Bill for a variety of reasons. They say, first, that the maximum limit of £26 is excessive and ought to be restricted to £15; secondly, that the compounding clauses are not necessary to the attainment of the purpose of the Bill; thirdly, that under Clauses 12 to 17 the petitioners would require to levy and recover from owners burgh assessments properly chargeable against occupiers and pay to owners the commission fixed by the sheriff; and, fourthly, that this would increase the 1126 burden on the occupiers without any compensating advantage. The way they prove that is this, that any compounding allowance such as is given under the Bill to owners, the amount of which so far as experience goes has not been less than fifteen per cent., will fall to be met by the general ratepayers; and in Edinburgh, so the petitioners state, it would mean, at fifteen per cent., the sum of £12,000, or, in other words, an additional penny on the rates. They state that the system of compounding is open to objection, and that the compounding clauses in the Bill would have an indirect effect on the voters' roll.
If it were not so late, I would enlarge upon these matters. But here is the City of Edinburgh petitioning your Lordships' House against this Bill. The Convention of Royal Burghs is opposed to it. I myself have received within the last four or five days letters from several large towns—from Perth, Ayr, and other towns. The Convention of Royal Burghs sent out a circular-letter shortly after this alteration was made in the Bill, and the answers, I think I may say without exception, were entirely unfavourable to the Bill. Have the Government who altered their Bill given the burghs any opportunity of stating their case? Did they give them any opportunity of stating their case before the alteration was made, and at whose instance was the alteration made? It is said that it was done at the instance of certain members of Parliament; but did those members, supposing that that was so, consult their burghs? At all events, no opportunity was given to the burghs of stating their case against the Bill. The noble Lord stated that the Bill proceeded on the Report of the Royal Commission. I can assure him he is quite mistaken. He went even so far as to say that the Local Taxation Commission rather approved of this proposal of compounding. I do not think that was quite a fair interpretation of the words which the Commission used. The Commission stated that they disapproved fully of the principle of compounding, but they added that in certain cases it might not be necessary to abolish it.
§ LORD PENTLAND
The noble Lord will see, on reference to the notes which were taken of the words I uttered, that I quoted an extract from the Report of the Royal Commission on Local Taxation and left it to stand for itself.
THE EARL OF CAMPERDOWN
The noble Lord did quote the words as they stood, but he omitted to quote other important words. The Commission also stated—It is most desirable that all classes of the community should, as far as possible, be made liable to personal payment of rates in order that they may appreciate directly the effect of economical or extravagant administration.As we are on this subject, let me tell your Lordships that the Royal Commission on the Poor Law have reported in the strongest terms against compounding. The noble Lord, in his speech, did all he could to minimise the effect of this placing of the rates upon owners. I wonder whether he is aware that in Glasgow—I take his instance of Glasgow—the action of making owners pay all the rates on houses up to £26 will have this effect. Out of 175,000 houses nearly 160,000 will be compounded for; in other words, the owners will be made rate collectors for all the rates except in respect of 15,000 houses. The noble Lord might, at all events, have informed us of the enormous change which he was proposing to make. With regard to placing occupiers on the register, is he aware that under this Bill an occupier can easily get on the municipal register without paying rates to anybody? It is not merely direct payment of rates. Supposing that the owner does pay the rates, and then the occupier does not pay him. In that case the occupier is on the register although he has not paid his rates. A state of things like that, it seems to me, is very undesirable.
At this hour of the evening I am not going to protract my remarks, but I must point out to the noble Lord that this Bill will require very serious and thorough examination in Committee, and I hope he will give us plenty of time. I believe that the representatives of various towns are in London at the present time. I hope they will go and sec the noble Lord. At all events, they have made representations to many members of your Lordships' House; and when we are in Committee I hope the noble Lord will give us information as to why the scope of his Bill was altered, and inform us at whose instigation the alteration was made, and whether the burghs who object to it had any opportunity of stating their case.
My Lords, I do not propose, to detain your Lordships long, but I must say a word or two in support of what has fallen from my noble friend Lord Camperdown. He has very fully stated the case. The Convention of Royal Burghs represents every royal, police, and other burgh in the whole of Scotland with the exception of one small burgh in the North—I do not know the name of it—and the whole of these burghs are unanimous against many of the clauses of this Bill. That is clearly stated in the Memorandum of the Convention. Besides that, I have a considerable number of memoranda from towns and burghs in Scotland, and they all, without exception, endorse the statements made in the Memorandum of the Convention of Burghs. The Convention not only represents the whole of the burghs in Scotland, but also a population of 2,918,000, which is a very considerable proportion of the inhabitants of Scotland.
There are one or two things which, late though it is, I would like to say regarding this Bill. I will state to the House what the effect of such a measure as this would be upon the rates of the burgh of Ayr. There are 5,531 houses at a rental under £21; of these 674 houses are between £15 10s. and £21, the total valuation of these being £11,932. The assessments on these houses are £2,349, and the rebatements to occupiers through inability to pay are £30, and arrears of rates, for the same year, £24. This Bill makes provision for rebatements to owners in respect of their paying the tenants' rates. LA us take that at fifteen per cent. The loss to the burgh on the houses between £15 10s. and £20 at their present valuation would be £352, as against £30, plus £24, now. If we take houses under £15 and deduct fifteen per cent. allowed to the owners, there would be no real gain whatever. In England I believe the rebatement allowed to owners is twenty-five per cent. If the same percentage were given in Scotland, the loss to the rates would be infinitely greater, and this would have to be made up by those who would not benefit by the Bill.
The whole of the burghs from which I have heard and also the Convention object to the clauses which enfranchise those who do not pay the rates. I believe that Scotsmen are quite proud of paying their rates direct, of knowing what they have to pay, and of having the franchise as a result of paying 1129 their rates, and they would be very loath, I think, to the provision in the Bill passing into law. On the municipal voters' list in Ayr in the year 1908–9 there were 5,357 persons with rents up to £21, and there were 1,009 who did not possess votes because they were in arrear and did not pay their rates. This Bill would, therefore, give an addition of nineteen per cent. to the voters. I think there is a great deal in the Bill which will most certainly need careful consideration and amendment, and I hope your Lordships will assist us in amending the Bill when it gets into Committee.
§ LORD CLINTON
My Lords, I desire to add a few words. I am afraid that the noble Lord in charge of the Bill will consider that it has not received a hearty welcome from us. I have sympathy with the main object of the Bill—namely, the alteration of the period for which houses can be let. I have no doubt this period in the past has been inconveniently and unpleasantly long. I gather that that has always been the main object of the Bill, and I think it is very unfortunate that the Government should have wandered so far away from that object in bringing in the highly contentious and mast objectionable features of compounding for rates, which have received from us and from most people in the country the very strongest opposition. The noble Lord himself, in introducing the Bill, remarked that he and others were strongly opposed to the principle, but he said that in altering the period of letting it was necessary to alter also the incidence of rate collection. More frequent collection could not, he said, be placed upon the local authority on account of the labour and cost which would be involved, and so he quietly places the cost and labour upon the owners of the houses. Under the Bill the labour is now placed upon the owners of the houses to collect these rates—
§ LORD CLINTON
As this loss is to be made up to the owners, what reason is there why the local authority should not undertake the work themselves? They have their experts in rate collecting. I will not say any more at this stage, but I trust that your Lordships will, in Committee, show that you are strongly opposed to any extension of this system of compounding.
§ THE MARQUESS OF LANSDOWNE
MY Lords, I do not think that any of my noble friends who have criticised the Bill from this side of the House desire to dissuade your Lordships from giving it a Second Reading this evening, and therefore it is not necessary for me to detain you for more than a moment. The Bill certainly contains some provisions which at first sight appear to be of a startling description. At the same time I have no doubt that the noble Lord who introduced it is perfectly correct when he tells us that there is in Scotland what has been felt as a longstanding grievance with regard to the terms upon which house property of the kind which is desired by the working classes can be let in the present condition of the law. There is, I understand, a general desire that what I think is spoken of as the letting season should be shortened, and I understand that that desire is regarded as a reasonable one by most people. But I confess that when in order to meet this grievance, we are told that the owner of a house rented at £26 a year is to be deprived of the power of letting that house to a willing hirer for a period of a year, and that he is also deprived of the power of entering into an arrangement with his tenant three or four months beforehand in order to bring about such a transaction, that does seem to me to be, on the face of it, a somewhat extraordinary proposal, and I think my noble friend, Lord Camper-down, was perfectly justified in reminding the House that this limit of £26 which we now find in the Bill in regard to the larger burghs is really an afterthought, and that the Bill as originally introduced by His Majesty's Government suggested a limit, not of £26, but of £15. There is another very important change which the Bill has undergone since it was first put forward by His Majesty's Government. In its original shape it was, unless I am mistaken, adoptive in the case of all burghs. It now becomes compulsory in the case of the larger burghs. I think it is likely that when we arrive at the Committee stage attention will be particularly directed to those parts of the Bill which deal with the question of compounding for rates. I have heard several debates in this House on the subject of compounding. We had an important debate in 1906, and again, I think, last year, and on all those occasions I have heard it laid down by those most competent to speak on the subject, and by no one with more authority than my noble friend Lord St. Aldwyn, that compounding was, in 1131 principle, a vicious system, and that every attempt should be made to minimise the evils of that system. The noble Lord in charge of the Bill quoted the authority of the Royal Commission on Local Taxation, presided over by Lord Balfour of Burleigh, and my noble friend, Lord Camperdown, I think rightly, objected that the quotation really hardly did justice to Lord Balfour's views. May I remind the noble Lord, because my noble friend did not take the point, that Lord Balfour's Commission although admitting the great difficulty of collecting and enforcing the payment of rates, made that observation with regard to the members of the "poorest classes"? I am not at all sure that the Commission had in their mind when they used those words persons inhabiting houses for which a rent of no less than £26 a year is paid. That is not all. The Commission went on to add that the witnesses who had expressed this opinion with regard to the difficulty of getting rid of commutation all considered that the adoption of the system of compounding should remain optional with the local authorities. But here is a Bill which, far from making it optional, makes it, unless I misunderstand the scheme of the Bill, compulsory in the case of these burghs.
§ LORD PENTLAND
I fully acknowledge the objections in theory to compounding, and my purpose in quoting the Report of the Royal Commission on Local Taxation was to show that the difficulties which we had to meet in this Bill were practical difficulties which the Royal Commission acknowledged to be great.
§ THE MARQUESS OF LANSDOWNE
My reading of the Report of the Royal Commission was that they pointed out the difficulty of getting rid of compounding, but this Bill creates compounding where it does not exist at present. The noble Lord referred to the fact that compounding prevails in England. So it does. It also prevails in certain cases in Scotland, but the fact of the system existing in those cases does not seem to me a sufficient reason for creating the system anew where it does not 1132 exist. The reason for creating it is that the local authorities will find it very troublesome to collect rates from these small householders. I have no doubt they will. That is a serious argument; but I do ask the noble Lord to set against that argument the much greater evils which I believe are due to the existence of compounding where you find it. So long as you have compounding, so long will the people who pay the rates in this country really fail to appreciate the great danger to which as a nation we are liable from the steady growth, the inordinate growth, of the rates; and I think that is an argument which in these days of municipal extravagance we cannot sufficiently lay to heart. There remains the point also made by my noble friend, that this Bill, although it comes to us ostensibly as a Bill intended to meet a grievance felt in many parts of Scotland, is, unless I am misinformed, opposed tooth and nail by some of the most important burghs. But these are all matters which we can bring up in Committee, and I really only rose because I thought it due to the noble Lord to warn him that these points were likely to be seriously taken at a further stage of the Bill.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House on Monday next.