HL Deb 18 March 1919 vol 33 cc726-53

Order of the Day for the Second Reading read.

THE LORD CHANCELLOR

My Lords, in rising to ask your Lordships to give a Second Reading to this Bill I am conscious that the subject is one which it is difficult to render extremely interesting, and which involves some consideration of previous Bills dealing with this subject which passed through your Lordships' House and in due course became law. It should, I think, be constantly borne in mind—as I know was done in this House in the case of the first Act in 1915—that these are proposals which are recommended under circumstances that are conceded to be wholly exceptional. We are still living under the actual stress of the war situation, and no one would dare to rise and address your Lordships upon this Bill, or upon the earlier Act without making in the fullest possible manner the admission that these are proposals which economically could never be recommended to this House, and which this House would certainly be very unlikely to accept, unless, as I have said, the circumstances were of an abnormal character.

It is obvious to everybody that the healthy state of things which existed between landlord and tenant before the war—the ordinary economic law of supply and demand—could not make its influence felt under the unusual stress of war conditions. Under an ordinary state of things a man who had a house to let was able to obtain the best price from a tenant in the open market, and where a tenant had premises on a tenancy subject to notice or to a definite term the landlord was at liberty to impose such terms as to rent as he thought fit, and could enforce the terms, whatever they might be, by giving or threatening to give a notice to quit. If he did determine the tenancy, or if it expired by fluxion of time, he was at liberty to take proceedings to recover possession of the premises.

Similarly, in dealing with a mortgagor and mortgagee, when land was mortgaged the mortgagee could, in the absence of express agreement, take such steps as he felt would be in his interest to increase the amount of the rent. The protection that was afforded under the Act already passed to tenants of houses was broadly extended for the protection of the mortgagor. In ordinary times under this system, both in respect of rent and in respect of mortgages the tenant and mortgagor were without any protection at all. It is obviously a system which, of all possible systems, is most likely to encourage that building which is so vitally necessary at the present time. It is conceded that, under the conditions which in the opinion of the Government makes this a necessary measure, for a certain time it must exercise an unfavourable influence upon any prospects of a general revival of the building trade, which the prosperity of the community demands.

In ordinary times the tenant, if evicted because the landlord exercised his right, desiring to increase his rent, would almost always, or at any rate in the majority of cases, be able to obtain a dwelling elsewhere, and a mortgagor would be able to obtain a loan from another. It will be in the recollection of the House that a position of the greatest possible difficulty and gravity was brought about at the very beginning of the war. When war broke out it became immediately necessary, as your Lordships know, that large sections of the industrial population should move from one part of the country to another for the purposes of manufacture connected with the war. There was then in many parts of the country a scarcity of houses of a certain class, and the immediate result was that the tenants of all those houses were absolutely at the mercy of the landlords, who suddenly found themselves, at a time of unexampled national crisis, in possession of a complete monopoly. Even if the landlords were not raising the rents, the tenant who could not obtain reasonable accommodation elsewhere found himself in a position of very great seriousness.

It was in these circumstances, and because of the difficulty that arose both in the matter of rents and of mortgage interest, that the Act of 1915 was introduced. It was a temporary measure, and was so recommended to Parliament. The effect of the 1915 Act was, for a limited period, to give the tenant a security and to prevent the landlord from raising the rent. Of course, the objections to that proposal were pointed out; indeed, they were by no means unknown to the Government when they introduced the Bill in the first place. It was then explained that it was not in ignorance of these objections, but because of the necessities of the time that the proposal was introduced. Under the terms of that Act, as some of your Lordships may remember, the landlord was not allowed to raise his rent. It was pointed out, and with great justice, that that involved a big hardship in a case where the landlord was also a mortgagor. This observation will make it clear that the two subjects, rent and mortgages, are intimately connected and could not conveniently be dissociated either in the original or any consequent measure.

The Act of 1915 was passed by this House after it had been fully explained here, and after it had been explained in another place; and it was passed by your Lordships as an emergency measure and with very great speed—I almost think at a single sitting. The general principle of that Act was that a tenant should not pay more than the pre-war rental, or be disturbed in his tenancy as long as he behaved himself in a respectable manner; and the Act applied to dwelling-houses the rent or rateable value of which did not on August 3, 1914, exceed in the City of London and the Metropolitan Police District £35 a year—your Lordships should notice these figures, because they are varied in the present Bill—in Scotland £30 a year, and in other places £26 a year. Where the rent did not amount to two-thirds of the rateable value the Act did not apply.

In those cases the landlords could only lawfully increase the rent for the following purposes which were defined by the Act. First of all, an increase of rent at the rate of 6 per cent. was allowed on the cost of improvements and structural alterations. Increases of rent on a transfer to the landlord of a tenant's obligation were allowed if the terms were on the whole more favourable to the tenant; and, conversely, the landlord's transfer of his obligation to the tenant became unlawful if the position of the tenant thereby was made worse than it was before. No authorised increase could become effective until the expiration of four weeks after notice in writing served by the landlord on the tenant; and the Act forbade the evasion of its provisions by the exaction of a premium or fine. The landlord by a further section was forbidden to compel the tenant to give up possession so long as the tenant paid the standard rent and any authorised increase,

This Act, though it was reasonably contemplated with anxiety by many persons, as a whole was, I was going to say successful, but I should perhaps be employing a juster form of speech if I said it did not fail to secure the objects which led to its introduction, and the worst mischiefs which had been apprehended did not, in fact, follow. But it was soon discovered that there were one or two cases for which the Act did not completely provide. Accordingly an amending Bill—the Increase of Rent (Amendment) Act—was introduced into Parliament in October, 1918, and that equally received your Lordships' assent after some discussion. The effect of this Act was to exclude from the definition of "landlords" in the 1915 Act any person who acquired ownership since September 30, 1917, by any means other than by reason of a settlement made before that date or under a will or an intestacy. Your Lord- ships will recollect the explanation that was given of the object of that provision. It was to prevent the practice of a person buying a house in order to get into the house himself. All kinds of circumstances led to the adoption of this practice. Perhaps one of the most common explanations was that there were persons who were apprehensive of the air raids. There were other cases as well of people who wished to obtain the advantages of the Act of 1915 and were able to do so by the comparatively simple process of buying the tenancy. With the very necessary object of dealing with such cases the Act of 1918 was passed.

We shall soon be able to say that the war is over, and the time is therefore approaching when the Act of 1915 and the amending Act, which I have thought it necessary to explain in order that your Lordships might more closely and clearly follow the present proposals—the time, I say, is coming when unless some further provision is made, temporary mischiefs at least as serious as those which would have arisen if nothing had been done at the outbreak of war will certainly confront the country again. It has been perceived, by the Government for many months past that some proposal must be brought forward for meeting this contingency. Accordingly a very strong Committee was set up under the presidency of a distinguished Scottish Judge Lord Hunter, and that Committee considered the whole situation. It certainly had before it the opinions of many highly competent persons who have studied these matters, and, having given great thought to the matter, it made certain recommendations to the Government. Those recommendations, while they were not adopted in their entirety, form the basis of the proposals which are before your Lordships to-day.

The principal point in which the present Bill does not follow the recommendations of Lord Hunter's Committee lies in these circumstances. Lord Hunter's Committee recommended that the new Bill should be operative for a period of three years after the war. The Government did not accept that proposal, for this reason. It seemed to them that any proposals of this kind, so plainly uneconomic in character, ought not to be adopted or maintained for one moment longer than the evident necessities of the national situation demanded. It is earnestly hoped by those who are responsible in this matter and whose duty it is to give thought and con- trivance to the situation to-day, that it will be by no means necessary to maintain this artificial and unhealthy system for so long a period as was suggested by Lord Hunter's Committee.

If I may invite your Lordships to look at the clauses of this Bill I may, I hope, be able with sufficient clearness to inform your Lordships of the actual changes that are made in the law. Section 1 provides that instead of the period of the war and six months afterwards, which was the provision contained in the 1915 Bill, the Act should continue until March 25, 1921, but that after the original date of I expiry the Act shall be applied subject to Sections 2 and 3. Section 2 (1) authorises a 10 per cent. increase during the extended period, provided that the amount does not exceed 10 per cent. of the standard rent. Now, the standard rent was the rent defined by Section 2 (1) of the 1915 Act in the manner I have generally explained to the House. "No increase is allowed"—the words I am reading were inserted as a result of an Amendment in the House of Commons—"if the sanitary authority, on the tenant's application, certifies that the house in question is not reasonably fit for habitation or is not kept in a remediable state of repair." The landlord can only increase the rent at the expiration of four weeks from a written notice of his intention, and this written notice must inform the tenant of his right to apply for such a certificate. The increase under this section is in addition to the increases permitted by Section 1 of the Act of 1915. Section 3 passes on to the connected subject of the mortgage interest. It enables an increase in the mortgage interest during the extended period to the extent of ½ per cent. per annum. The proviso is that the rate when so increased shall not exceed 5 per cent.; and Section 5 (4) of the principal Act is amended to secure this result.

Section 4 extends the operation of the 11 original Act to houses of greater rateable value. I ought to make an observation upon this proposal, because it formed a subject of considerable discussion in the House of Commons. When the modification in the law which is now recommended was being discussed it was, of course, felt very strongly that it was impossible to keep landlords for a longer period in the extremely unfavourable position in which they had been placed by the earlier legislation. In other words, I think most people recognise that, whatever justification there had been during the war for saying to a landlord that he should make a special and exceptional sacrifice, the time has come when it is not possible to call upon a landlord to make this special and exceptional sacrifice without some concession. Then when it was decided that a landlord must be allowed to charge a certain rent, which is one of the principal changes in the law introduced by this Bill, it became necessary to ask the further question, Should the rental value of the houses to which these proposals relate be the same as, or ought they to be different from, the rental values in the Act of 1915? The matters were much discussed, and in the end before the Bill was introduced in the other House a compromise was reached among those who held different views, and certain proposals were submitted. The majority in the other House who considered it did not agree with the proposals as they had been made by the Government. There was considerable discussion as to the amount of the rent, what one might call the standard rent, or the rateable value; and after a long discussion it was decided that the three-fold distinction between the City of London and the Metropolitan Police District, Scotland, and other places, should be maintained, and the amounts in the Bill as it left the House of Commons are as follows: City of London and Metropolitan Police District, where neither the standard rent nor the rateable value exceeds £70 a year; Scotland, £60; and anywhere else, £52. In case your Lordships had forgotten it, I will mention again that standard rent means the rent on August 3, 1914; or, if the premises were not then let, the last preceding rental; or, if the premises had never been previously let, the first available rental.

Now as to mortgages. Mortgages of such properties are brought within the provisions of the 1915 Act. That Act is amended so as to include these premises; but on the terms that this Act shall apply to mortgaged premises as if the extended period which I have explained to your Lordships were now in force. Any increases before March 4, 1919, in the rate, or whatever the subject-matter of the increase may be, are valid except as to rent or interest falling due after this Amending Bill comes into operation. The prohibitions as to recovering possession of premises are now brought into the Act, but apply only as from the date of the passing of this amending Act.

It remains to consider the effect of Section 5, subsections (1) and (2), which may be shortly explained. Section 5 (1) imposes on the landlord an obligation to furnish the tenant on request with a statement of the standard rent; and makes it an offence, punishable by a maximum fine of £10, not to do so, or to furnish a statement which in any material particular is false. Subsection (2) enables the Court to make an Order for possession where the landlord has acquired the premises since September, 1918, in the following circumstances. One, where the house is required for the occupation of the landlord, or some person in his employ or in the employ of a tenant of his. Two, where the Court—after considering all the circumstances, including the alternative accommodation available for the tenant—is of opinion that it is reasonable. I have already told your Lordships that the amending Act of 1918 had effectively put an end to the practice of persons who bought premises since September 30, 1918, getting an Order of eviction against the tenant who pays his rent and behaves himself; and subsection (2) of Section 5 is a relaxation of the amending Act.

It is not altogether easy to present matters—which besides being a little technical are also historical; each Bill developing from and owing something to its predecessor—in a lucid manner, but I hope that I have not been unsuccessful in the main in telling your Lordships what the result of the present Bill is. It gives to landlords a right, in circumstances which are carefully defined, of increasing their rent. It includes mortgages within the spirit of the earlier Act, and prescribes the rate of interest in dealing with mortgages as a whole. It increases the rent and rateable value of the premises to which its provisions apply. It is the hope of the Government that your Lordships will not be unwilling, having regard to the extreme urgency of the question, to deal with the matter as expeditiously as possible.

The noble Marquess, Lord Salisbury, somewhat misunderstood an observation which I made in answer to a question he asked of the Government earlier in the sitting to-day. I certainly never meant to give the impression to your Lordships that I was in any way ignorant of the fact that, of course, it was for your Lordships here to determine what length of time should be given to the discussion of these proposals. What I had in my mind, and was certainly hopeful enough to think I had explained clearly, was that the circumstances were such, and the needs of the moment were so grave, that it was hoped your Lordships would realise the circumstances and would be willing, if possible, to deal with the matter in the time suggested. I understand that the difficulty arises in these circumstances, that an enormous number of notices to quit have been given at the present time. If this Bill becomes law before quarter day the whole of those notices will be found void, and all the tenants concerned will know where they are exactly, instead of finding themselves, as they are at this moment, in a position of very considerable uncertainty and doubt. I very much hope that I have said enough to make plain the general nature of these proposals, and I need hardly say that your Lordships will find me most anxious, as far as my powers enable me to do so, in the course of further discussion on this Bill, both on the Second Reading and any later stage, to give any assistance in my power. I beg to move.

Moved, That the Bill be now read 2a.—(The Lord Chancellor.)

LORD PARMOOR

My Lords, I think any one who has followed the various Acts which have been passed in connection with the restriction of rents will have had no difficulty in following the very clear exposition which the Lord Chancellor has given on the Second Reading of this Bill, but personally I was most satisfied with the way he emphasised its temporary character. It is quite true, as he has pointed out, that the time during which the Bill will remain in force has been reduced below the suggestion made by Lord Hunter's Committee. I think it is most important that this Bill should be really temporary in character. It is another of those uneconomic Bills which have brought about the existing difficulties, as regards the shortage of cottages and small houses, and no one can doubt that any further restriction of the rights of the landlord as regards rent, and any further difficulty in the raising of money as regards the restrictions on mortgagees, will tend further to discourage what I think is the only remedy for existing difficulties, namely, the building of cottages and small houses on an economic basis.

There are one or two matters which I should have hoped that the Bill might have dealt with, because they are matters which have really created difficulty. For instance, any one interested in the building of cottages, at any rate in country districts—I have no experience of the towns—have felt very strongly that one of the unnecessary impediments which, in many cases, throw unnecessary expense upon a person who is desirous of building cottages, is to be found in the regulations and rules required by various of our local authorities. On many occasions the point has been raised that if these regulations had been more carefully considered they would have had a less deleterious influence as regards the construction of cottages and small houses. I do not say that from any feeling that cottages and small houses should not be built upon a somewhat larger scale than some people would agree with. I think that nothing would be more reactionary than to go back to the worst class of house, merely because it happens to be cheaper. No money can be better spent in social improvement than in building the best class of house you can, having regard to economic considerations.

Another matter which operated harshly against the construction of cottages and small houses is what was known as the taxation of land values. One provision, as your Lordships know, was that site value should be taxed if it had an enhanced value when a sale was brought about. There was a decision in what was known as the Lumley case, which held that although the site value of the land had not been enhanced, yet, if a speculative builder had made a good bargain and the house which he had constructed upon the land turned out a profitable one, he was liable to site value tax. That was obviously unjust in principle. It was throwing a tax upon industry which was intended only to be a tax upon the enhanced site value, and if you want builders to undertake the business of providing small houses a matter of that kind must be rectified. You will not get builders to construct small houses if you subject them to a special tax of this kind, which takes away their profits when they are successful, while they are subject to the ordinary losses in cases where they have chosen a wrong site or have built houses which are not wanted.

The speculative builder, although he is sometimes attacked as a jerry-builder, is after all a man who is necessary if you are to have these houses built on economic grounds, and you ought not to discourage him any more than any other object for which there are social requirements.

Another matter which was dealt with in the Report of Lord Hunter is in regard to the position of agricultural cottages. What is the present position? Agricultural cottages in my district, even before the war, if they were properly constructed—that is to say three bedrooms as a minimum and two rooms—cost anything from £300 to £500. I know of some cases where they cost £500, though perhaps they were unduly luxurious, the great object being the saving of fuel. The rent fixed was 3s. a week, because that is the allowance made by the Agricultural Wages Board. The result is that people who provide cottage property do not get more than 1½ to 2 per cent. on the money expended, and even that entirely disappears in the case of people who take a justifiable pride in their cottages and keep them in a thoroughly good condition. Surely you cannot have a greater disadvantage than settling a price of that kind if you really want cottages to be provided on anything like economic grounds. Let me read your Lordships what was said in the Report of Lord Hunter's Committee, dealing with Agricultural Rents— The Board [that is, the Agricultural Wages Board] have expressed themselves in favour of eventually fixing a wage sufficiently high to enable agricultural workers to pay economic rents for their cottages— That is a perfectly sound principle, and one which Lord Hunter's Committee adopted— The Labour representatives on the Cottage Rents Committee of the Board, in their evidence before us, strongly supported this proposal. The Cottage Rents Committee reported that, taking a typical case, the economic rent of a good modern cottage built before the war would, under postwar conditions, be some 7s. per week. Therefore you see that the very people who are aiming at putting cottages on an economic basis lay down the principle that 7s. a week would be a fair rent; and in their Order—that is the Order of the Agricultural Wages Board of December 6, 1918—it is laid down that, in calculating the benefit which may be reckoned as payment of wages in lieu of cash for the purpose of any minimum rate of wages, the maximum value of a labourer's house shall be 3s. per week. How are you to get good economic cottages, or good cottages at all, provided in these circumstances? You admit that 7s. a week is required, and yet you fix 3s. a week.

I think the worst part of this is that it is a discouragement to people who have a bona fide desire, on social grounds, to put their cottages in the best possible condition; that is to say, those who have not looked on cottages as a source of revenue so much as a means of doing what they can for the improvement of their neighbourhood. If you cut down compulsorily to 3s. a rental which ought to be at 7s., according to the view of the people who have the greatest knowledge of these things, surely you discourage to the utmost the very matter with which the noble and learned Lord on the Woolsack dealt—namely, the provision of proper cottages. As I say, in my view the shortage has come from the meddling and muddling of officials and Departments interfering on uneconomic grounds in matters which ought to be deals with in an economic way. Although I quite admit this Bill is necessary for temporary reasons, I hope it will be purely temporary. Otherwise, it will be another nail in the coffin, and, as it seems to me, the last hope of providing these houses and homes on economic grounds will be taken away, whereas every man in your Lordships' House regards the provision of proper and wholesome cottages as the first of our social requirements.

There is another matter which I may put to the noble and learned Lord on the Woolsack. It is rather a point of detail and it is in reference to subsection (2) of Clause 5. As the Bill of 1918 stands—I have a note of it; it is Section 1, subsection (3)—a person who has since the 30th day of September, 1917, purchased a house—that man is called the "late purchaser"—is not entitled to use his purchase as a means of ejecting the present tenant. He is prohibited from doing that. The tenant is protected under the conditions of the Bill quite fairly. Whereas a man who has had property for a long time and who wants to live in a particular house himself is well entitled to do it, I think, a man who merely purchases a house in order to put in force a power of that kind—in other words, who purchased the house for the very object of ejectment—ought not to be allowed to do so. In the Act of 1918 there was an absolute prohibition.

As the noble Lord has pointed out, there is no longer a prohibition now. There are certain precautions, but the "late purchaser" can now eject his tenant under certain conditions. I need not go into them now, but they are contained in Clause 5, sub-section (2). I want to know why it is that a man who, in this shortage of accommodation, could purchase merely in order to evict or eject—that is what it comes to—should have a better position under this Bill than he has under the existing law—namely, that section of the Act of 1918 to which I have referred. I believe a Bill of this kind is absolutely necessary for temporary purposes, but I earnestly hope that the views expressed by the noble and learned Lord on the Woolsack will be carried out and that this will be merely a temporary measure so that as soon as possible we shall revert to ordinary economic ideas and get rid of this everlasting principle of official meddling and official interference.

VISCOUNT MIDLETON

My Lords, I should be glad if the noble and learned Lord on the Woolsack could reassure us on one or two points which were not mentioned in the course of the excellent speech which he made to us as to the effect of the Bill. I speak as one who is urgently anxious to see the principle of tin Bill carried out and that no avenue should be left open of undue advantage to any class by the necessities of the war, and more especially that the landlord class should not be in any way open to reprobation in this respect. I am bound to say that I think the Bill is remarkable, not for what it contains but for what it omits. When the measure of 1915 was brought forward it was carried under very great pressure. There were only a few hours in which to make up our minds as to what course to take. I ventured then to address some questions to the noble Lord who was at that time on the Woolsack, Lord Buckmaster, who is now sitting behind me, and I ant quite sure from the answers he gave me that the intentions of the Government were not carried out by the Bill, and I do not believe that the intentions of the promoters of the Bill are carried out by the Bill at this moment.

I submit that the real difficulty we have to meet is two-fold. It is not merely a question of rent, but it is also a question of sub-letting. The point which I put to the noble and learned Lord is this—suppose that in a particular locality, by a large agglomeration of troops or munition works or for other reasons, immense pressure comes, what is to prevent a man who has got an absolute certainty to the end of the war at his old rent from sub-letting at three or four times that amount? The noble and learned Lord at that time took the view that a fresh letting would be the result, and that therefore it could be stopped by the Act. I can assure your Lordships that in practice that has not been the case at all. In that part of the world where I happen to live a camp came suddenly of 22,000 or 25,000 men, and the rent of every house went up to a high premium. It actually happened to me not many months ago that the military officers in command—and I felt it particularly because they were Colonial troops—came and said, "Here are our officers, whose wives have come over here and who have to live somewhere within reach of the camp—can you do nothing? The rents asked for are three and four times what the houses have been let for."

I am not finding fault with those who have let them. They have had a great deal to put up with, if I may say so, and many of them have had great sacrifices to make. But still the fact is that there is nothing to prevent any one who has a furnished house at £20 a year from asking £60 or £80 for it. Such cases have occurred. It has been so in the agricultural cases some of which were mentioned by Lord Parmoor. Only last year when the Agricultural Committee fixed 3s. as the highest price to be fixed for a cottage, an owner came to me and gave me these facts. He said, "I took a carter six weeks ago in the neighbourhood of a town and agreed with him for 30s. a week. He said, It is near a town' "—(it was in Surrey)—"'You must find me a cottage or I will not come.'" He hired a cottage for him at 7s. a week and had to let it to him, according to the Agricultural Committee's fiat, at 3s. a week, and the man promptly sublet one of the rooms at 10s. a week. He got his wages raised from 30s. to 39s.; he got 3s. off for the cottage, making 36s., as against what cost his master 37s. before, and then proceeded to let one room for 10s. per week.

Take again the question of repairs. I can give an instance from my own estate, and it has occurred to a number of other people. One tenant came to me and asked that as he had to cultivate a much larger acreage and get additional labour, would I add rooms to two of his cottages. I did so. The actual cost of the addition of the rooms was £150. It never occurred to me, following the practice of all landlords in providing cottages, to make an addition for what you have to do for the tenant. The tenant himself got the men, and within a few days of the wages of his labourers having been raised by the State the labourer sublet one of these rooms for 10s. The whole object of the State was that a man should not pay more than 3s. I find no fault with any man in any class of life, and particularly the labouring class, who does all he can to increase his income, but it really is not carrying out the object of the Bill as the Government put it forward. For this reason I ask the Lord Chancellor to seriously consider whether before going into Committee some clause limiting subletting might not be inserted. I do not want to dwell upon the question of repairs I think in these days it is terrible to reflect upon the insanitary conditions of some habitations which have not been condemned by the local authority. I had a case before me this morning which I think is worth mentioning. It is a case where the owner had some two or three hundred houses, and he kept a large staff to look after them. His rents have never been raised, but the wages of those living in the cottages have been raised 100 per cent., and the wages of those he has to pay have been raised 100 per cent., while the cost of the material he uses has been raised from 50 per cent. to 100 per cent. If he continues to employ his present staff and use the materials the cost at this moment considerably exceeds the whole of the rent he still receives. I know there are some of your Lordships who would continue under these circumstances, but it is almost impossible to expect any man, when the State steps in and fixes higher wages and stereotypes lower rents at the same time, to be asked to pay higher wages and not recoup some portion of the cost. The reason I bring these questions before your Lordships is that it really is retarding the improvement in the condition of housing, which it is the whole object of everyone to promote. These are two points on which I hope something may be done.

There is a third point, and it is this. The Bill is not put forward in a hurry. It is the result of long consideration, as the Lord Chancellor his told us, and might we not ask that something which is more than a stop-gap should come forward if the Government at any time, and I hope they may, deal more drastically with this question. Has it ever occurred, it must have occurred to those who sat on the Committee, that you are only dealing piecemeal with this question. Look at what is occurring every day to make it more difficult. I take an instance of what I mean. The City of Cork has had the great advantage, as I think, for the last three years that Mr. Ford, who emigrated from the County of Cork many years ago, has desired quite apart from any profit, genuinely to advance the condition of the neighbourhood from which he came and has established there a very large motor factory. Owing to the circumstances of the war he was unable to complete the whole of the building because the Government could not allow the material to be used. I believe his ambition is ultimately to have 10,000 persons employed. Conceive what that means, Someone will have to find houses for these people to live in. Is it right that anybody who may have come in solely for the purpose of gain and put up a huge factory in an already overcrowded neighbourhood should have no responsibility whatever for finding the houses in which the people are to live? Half the overcrowding, and half the iniquity of the horsing question, arise from the fact that commercial firms limit, or have been accustomed to limit in a great number of instances, their building to the building which will produce exactly the return for which they look. Ought they not to have some larger responsibility in this housing question? Take the case of Mr. Ford, which I mentioned a moment ago. If in the course of this year it is, possible to complete those buildings and bring that large population there the local authority, or in the last resort the Government of this country, will have to do for a commercial undertaking that which surely the commercial undertaking ought to have some responsibility for doing.

These are points which seem to show that this measure is not only uneconomical, but I hat it is rather crudely brought forward seeing that we have had three and a half years' experience. If it is to have the effect the Government desire I earnestly hope they will not insist too much on the date, the 25th of March. In some way the difficulty ought to be got round so that there should be no grievance on the part of those who are affected, and we should then be allowed the necessary time to, consider the points which I have mentioned, which are only put forward with the view of making the Bill as effective as possible.

EARL GREY

My Lords, I am sure that the general acceptance which has been accorded to this Bill will show that we have no desire to do anything except pass the Bill after consideration. At the same time the remark which fell from the Lord Chancellor when he reminded us that the principal Act, of which this is an amendment, was passed through all its stages in your Lordships' House in one day does, I. think, make it necessary for us to give the Bill at least as thorough an examination as we can, and so far all the speeches which have been delivered, and the explanation of the Lord Chancellor himself, have dealt with the need from the occupying tenant's point of view, an end which I freely admit must be paramount. At the same time I think that it would be a very great misfortune if your Lordships gave a Second Reading to this Bill without in any way looking at what it is that we are asking the property owner to do.

Lord Hunter's Committee, in paragraph It, used the following words:— To put owners in as good a position as 1914 a 35 per rent. increase in net rental should be permitted. In a later paragraph they state, in effect, that trade union officials who gave evidence before the committee agreed with that statement. Let us bear that in mind that to put owners in as good a position as in 1914 demands a 35 per cent. increase. Yet what are we offering them? We offer them nothing at all for this year. We offer them, as the Bill has reached us, a contingent 10 per cent., if they get a certificate of good repairs, in 1920; and that remains until March 25, 1920 On the other hand, from the beginning of next year approximately, mortgage owners will be able to raise their interest, where it does not reach 5 per cent., by ½ per cent. When that operates roughly the increased mortgage internet will amount to at least on an average 6 or 7 per cent. on the rent paid, and therefore the increased sum of 10 per cent. which you offer will hardly begin to cover the extra cost of repairs which is put upon the owner.

I mention this very striking discrepancy between what Lord Hunter's Committee admitted that they are entitled to and what we are offering them, because I think it ought to be recognised that the property owners, through their spokesman on Lord Hunter's Committee, accepted the recommendations of that Committee. The recommendations of that Committee, which the noble and learned Lord on the Woolsack claimed as the basis of the Bill, went very much farther than the Bill does. It is true that from one point of view they recommended a period of three years, and that that period has been cut down, but on the other hand they recommended that the initial 10 per cent. should not be contingent upon repairs. It was in point of fact not intended to meet the cost of repairs, but was intended to meet the cost of the extra mortgage and increased insurance. They further recommended that subsequently there should be another increase of 15 per cent., which should be contingent upon the house being kept in repair. Therefore, when the property owners have conceded that for the purpose of the national interest they will accept those terms, which fall so very far short of what Lord Hunter's Committee admitted they were entitled to, we ought to take notice of that, and of the very patriotic altitude which they have adopted.

I think that there is a duty upon your Lordships to see whether there is not some way in which, without seeking to extend the 10 per cent. which is proposed in the Bill, we cannot do something to alleviate the hardship which we are inflicting. One of the recommendations of Lord Hunter's Committee, which perhaps naturally cannot be included in this Bill, was that some relief might be given under Schedule A of the Income Tax. Although I quite recognise that that cannot be included in this Bill, I hope that the Government, before the Bill leaves your Lordships' House, may give us some ground for hoping that perhaps that consideration may be extended to property owners when the Finance Act comes to be dealt with. That would be a real and definite help to the property owner, and it would be a course which would inflict no further charge of any sort upon the occupying tenants. After all it is the occupying tenants that the Government are seeking to assist.

I am very glad indeed that the noble Viscount, Lord Midletor, touched upon the question of sub-letting. The Bill, as introduced in another place, sought to deal with sub-letting, but not in any way upon the terms recommended by Lord Hunter's Committee. Lord Hunter's Committee called attention to the fact that sub-letting was really in its present phase entirely a new phenomenon since the introduction of the original Bill, and although they did not embody it in a specific recommendation, they nevertheless stated in the body of their Report that they were of opinion that sub-letting should not be allowed. I believe that it is quite true—as a point of law it has been decided in the Courts—that any separate letting is entitled to a standard rent, and that any single room let is entitled to a standard rent, but that provision is really not known and is very easily evaded. All you have to do is to put a straw mattress into the room, or 7s. 6d. worth of furniture into it, and you can call it a furnished-letting, and immediately you are able to take that room outside the operations of the Act, furnished rooms not being included in the principal Act or any of its amendments.

Mr. Fisher went out of his way to notice this evil of sub-letting in the speech with which he introduced the Bill, because he said that he knew himself of a case in which a house, the standard rent of which was £18, was sub-let for £80. He further stated that that was typical of a very great number of cases. Therefore the Government admit that the evil exists, but the only attempt that they made to deal with it in their Bill was that where it can be proved to exist the landlord should be entitled to share in the plunder. I am very glad that particular provision was struck out of the Bill in another place, and I should be sorry to see its re-insertion here; because it entirely and, radically departs from the principle of the Bill, which is to give protection to occupying tenants. At the same time I should like to endorse the hope which fell from the noble Viscount who has just sat down that before the Committee Stage is reached the noble and learned Lord on the Woolsack may devise some method of stopping the sub-letting of furnished rooms, for that is really the principle evil.

There is one other matter that I wish to refer to. We all hope very much that the restrictions will be withdrawn as soon as possible. We cannot help having in mind that the shortage of houses is not entirely due to the war, but is very largely due to the feeling of nervousness which followed upon what happened in 1909. The Attorney-General, in discussing in another place how long this would last, used these words— We are now engaged in discussing not how long this shall last, but what is the immediate period in which it shall in any event last. He therefore particularly invites tenants to anticipate that when the tenant's period which we are incorporating in this Bill is drawing to a close they should have another chance and the subject will again be reviewed. And if the outcry is sufficiently loud no doubt they will again get their way. That, I think, would be a serious statement if this was a Bill merely to extend the time of the principal Act.

But you are not only extending the time, you are extending the principle of the Act to a new class of houses. At the same time that you discourage the building of smallest houses, the Government is preparing a great building scheme which will, I hope, do a great deal to remedy the shortage which is the whole basis of the ills from which we suffer. And therefore at the end of this period we may hope that the feeling which has made this extension necessary will disappear. But when you come to deal with the middle classes the Government have not the slightest intention, as far as we know, of building that class of houses, and if you couple up the discouragement of the building of middle-class houses with an Act of this nature you are taking a short cut to the position where the Government will be called upon to provide not only houses for the working classes but houses for the middle classes too. I should view that position—and I am sure all your Lordships will—with the very greatest misgiving.

I have had the benefit of hearing the views of several gentlemen whose business it has been in the past to build middle-class houses. They say that it will be impossible for private enterprise to build middle-class houses to let in future because there will be no sale. They take it for granted that this Bill will go through and if you create this uncertainty as to the future of the building trade it is quite obvious, as they only build to sell, that there will not be anything like such an amount of capital subscribed for building to sell as there would be for building to let, because you can only build to sell if you find your customer first.

Therefore I hope that the Government will bear in mind that the uncertainty which they are creating in middle class houses is far more serious than anything which concerns the working class houses; because, whereas in the one case they are themselves providing a remedy, in the other case they have no intention of providing a remedy, and they are frightening off the only people who can do so. They are coming into that vicious circle of perpetuating the scarcity which roakes the introduction of this Bill necessary.

There is one other matter in which I should like to suggest that it might be possible to give a little further relief. The principal Act lays it down that the extended period will begin six months after peace has ken declared, and peace has been defined to be the time when Treaties ratifying the terms are exchanged. No doubt it was necessary when the principal Act was passed to introduce a vague term like that. But would it not be more satisfactory now to substitute a definite date when this very limited increase allowed to landowners should be allowed to operate? I suggest that a date such as six months hence might be fair to the landlords and not unfair to the tenants. Because, supposing the Treaty ratifying peace was postponed for a good many months—as we hope it will not be, but it obviously is possible—then you are very rapidly eating into the time during which you are willing to give sonic relief to the property owners. In view of the Hunter Committee Report this dole which you are offering to the property owners is very much less than what they are entitled to. In equity, they are entitled to it now and we do not suggest that anything should be given till next year. I hope that the Government, before this Bill leaves your Lordships' House, will recognise the very patriotic part which the property owners have taken in agreeing to a compromise.

LORD BUCKMASTER

My Lords, the noble Viscount, Lord Midleton, referred to an incident that took place when the measure which is known as the principal Act was passing through your Lordships' House. My recollection of what occurred is in entire agreement with his own. And the point which he then made is one which is of importance, and I desire to emphasise it. It seems to me important to consider for a moment what it is that lies behind this Bill. I understand it to be this, that owing to Government action during the course of the war, building has been impossible, and the result is that there is a shortage of house accommodation, and the landlords in several districts have got a monopoly of a valuable commodity, which they could use for the purpose—of raising the rent most harshly and unjustly against the tenants. It is to avoid that obvious injustice that, as I understand it, the Government have introduced this Bill.

It is quite obvious that, as the noble and learned Lord on the Woolsack said, the terms of the Bill are in flat defiance of all economic law. And they can only be justified because the Government, having broken the economic laws to begin with, must continue to break them in order to prevent the full mischief which results from their own act. I think it is well for us to consider, as we pass this measure, what the inevitable results must be if economic law is in the future to be continually set aside. Take for example this very question with regard to the building of houses. Owing to the circumstances that have raised the price of food, it has become only just and necessary that wages should rise too. The cost of all materials has risen as well, and the result is that if to-day a house were to be built, to be let at the same rent as a house of the same character would have commanded before the war, it would cost anything from, I suppose, 50 per cent. to 100 per cent. more than it did four years ago.

A NOBLE LORD

More than that.

LORD BUCKMASTER

More than 100 per cent. See what the result of that is. The result of that must be that, if it is to be undertaken as a commercial enterprise, the man must demand double the rent; and side by side with that you find a Bill which says that no man who owns a house in this position can at the moment increase the rent more than the amount permitted by the Statute. The matter does not end there; because the Government, realising that this is the result, have now undertaken to meet a limited section of the demands for housing accommodation by pledging the national credit to make good the deficiency that would undoubtedly arise were economic laws to maintain their unrestricted course. The result from that, of course, will be that greater demands will be made upon the produce of other industries for the purpose of financing and of supplementing the building industry so as to keep the rents down. Do not let us be under any misapprehension about that. Some other industries will have to pay. At the same time, while this demand is going to be made on other industries, you find that all these other industries are being attacked in a variety of ways. They themselves are being the subject of demands made for increased wages based upon the fact that prices have risen during the last four years and that life has become much more hard. The satisfaction of those demands reduces, again, their profit; and little by little you find, as these laws are one by one interfered with, that the net result of it all is that there is a less and less amount of money which can represent the national wealth, and that we are day by day rendered less competent to meet the ever growing burdens which the war has thrown upon our resources.

I want to call attention to that for the purpose of bearing in mind how urgent must be the need of the people in these houses to justify the Government in the measure they have introduced. But if it be true, as the noble Viscount says, that a man who is in occupation of one of these houses is at liberty to sub-let it so that he may get by virtue of his tenancy the full benefit of the very shortage and necessity which the Government has declared shall not be used as a lever in the hands of the landlord for raising the rent—if that be the position, then I can only say it ought in common justice to be remedied before this Bill passes from its Committee stage. When the matter was before the House on a previous occasion I remember taking a strong view—the matter came suddenly before me in Committee—that there should be no difference between landlord and tenant, and between tenant and sub-tenant. It seemed to me that they must stand on the same footing; and I so assured him. I greatly regret if it be the case that it is found that my assurance was of no avail, and that I made a mistake. But if I did, I feel satisfied that the noble and, learned Lord on the Woolsack would agree with me that it is of the utmost importance that the mistake should be remedied; because I was never informed by the Government I had made any statement except a statement in complete agreement with their views; and I think nothing reflect more to the discredit of our Legislature than that statements should be made as to the meaning of a Bill, when it is passing through either House of Parliament, which should be found, on the interpretation of the Law Courts, not to be the actual meaning which the language has conveyed. Therefore if there were a mistake I am sure the noble and learned Lord on the Woolsack would be as anxious as I am that it should be remedied without delay.

VISCOUNT HARCOURT

My Lords, I have no intention of making a speech on the general provisions of this Bill, with which under the necessities of the case I am in full sympathy. But some friends of mine in the country have asked me to endeavour by a question in this House to clear up a doubt which exists in their minds as to the operation of this Bill on the letting and the rent of smaller cottages in certain parts of England. I propose therefore to put a question to the noble and learned Lord on the Woolsack, not with a view to its being answered to-day but with a hope that some elucidation will be given by the Government or by the noble and learned Lord at a later stage of this Bill.

Some of your Lordships will know that in the Southern counties it has been the habit—an unwise and uneconomic habit, think—to let many cottages at a nominal rent, very often 1s a week, to employees either of the owner or of the farmer. That is and has been, in feet, merely a subsidy towards the low rate of wages which existed before recent legislation was passed. The point that has arisen on which my friends wish to have some light, is whether, if an employee occupying a cottage at ls. a week were to leave his employment though remaining in that cottage, it would be permissible of the owner or the farmer to raise the rent to what may be called the normal, say 3s. a week, the owner or the farmer having no longer any interest in subsidising his wages? The other point is one which arises especially out of the war. There have been men occupying cottages—eat either 1s. a week, or what I have called the normal, 3s. a week—who have gone to the war. Whilst they have been away the landlord or the farmer has very properly allowed the wife to occupy the cottage rent free for the whole of that period. The question which arises is whether, when the man returns to his work and occupies that cottage—whether it is his old work or new work—it will be permissible under this Bill for the landlord or the farmer to charge what I have already called the normal rent for the cottage? I think it is a point which wants clearing up; and I only express the hope that some explanation on these two small points may be given at a later stage of the Bill.

THE LORD CHANCELLOR

(who was indistinctly heard): My Lords, several observations have been made by a number of your Lordships about which, perhaps, it would be expected that I should say a word. No sponsor of this Bill in either House has introduced it with any particular pride; in fact, the atmosphere in both Houses has been very apologetic; and certainly in the circumstances I have found myself fortunate in the reception which the Bill has met with among your Lordships.

The noble and learned Lord, Lord Buckmaster, said that the uneconomic vices of this Bill were to be traced to the uneconomic vices of the first Bill. I admired rather the somewhat graceful manner in which the noble and learned Lord divorced himself front any association with the first Bill; I gathered that he made an accidental acquaintance with it and happened to read it in a railway carriage. Yet I think that the noble and learned Lord was in charge of that Bill in this House. However, the lesson I think is this—that if a country finds itself involved in grave and incalculable conditions the necessity arises, even for the most economically minded, to recommend steps to be taken which outrage every canon of economics, and of which it is exceptionally disagreeable to become the sponsor. I quite agree with the noble and learned Lord that not only the House of Commons, but your Lordships, were stampeded into passing a thoroughly bad Bill. But if both Houses had not passed the Bill there might have been disturbances in this country which would have rendered it difficult, if not impossible, to win the war. The pressure was recognised by every one as extreme. The noble and learned Lord, Lord Parmoor, asked me a question as to Section 5, subsection (2). As my noble and learned friend has not waited for the answer, and as the matter relates more conveniently to the Committee stage, perhaps I may be forgiven if I postpone any answer.

The most substantial criticism made upon these proposals was that indicated in the first instance by the noble Viscount, and insisted upon in a greater degree by Lord Grey, and also referred to by my noble and learned friend who spoke last. I confess that, had I been asked on the first occasion on which this matter arose, to offer an opinion as to the legal position of sub-tenants, I should have given the answer which he gave. I still suspect that that answer is true. I was, I confess, a little astonished when your Lordships were informed by Lord Midleton of the extent to which this practice has prevailed, and I am not at all sure that the explanation of the circumstances may not possibly be found in what was said by Lord Grey. I think it might possibly be true that the abuse was confined, or almost confined, to the cases of the sub-lettings of furnished tenements. I do not know whether it is true, but I will have the matter inquired into between now and the Committee stage. I will consider with those who are more competent than myself whether the abuse is as grave as we have been told it is, and whether, if so, it admits on the Committee stage of a remedy.

My noble and learned friend spoke with great weight on the general economic conditions in which to-day we move and have our being. He raised topics wider than those dealt with by the present proposal, and I say frankly that I agree with most of what fell from my noble and learned friend. The difficulty in which we all find ourselves is that the Government as a whole, those in another place, your Lordships here, in different degrees and in a variety of functions, are called upon to assume responsibility for the tremendous effort of restoring the conditions of peace after the tremendous upheaval which has taken place. The task with which we are all confronted at this moment is to determine, of proposals none of them in themselves attractive, most of them in themselves distasteful, which is the most necessary and the least mischievous. I fear it will be my task during the next few months to recommend many proposals, in relation to which I can apply the term "recommend" only, because I cannot say "approve"; and I hope I hat my noble and learned friend will repeat both in this House and outside the eloquent warning, most of which has my entire sympathy.

I was asked two questions by the noble Lord who spoke last, the subject-matter of which is entirely novel to me. He was considerate enough to say that an answer during the committee stage would be sufficient, and I will not lose sight of the feint to which he was good enough to call attention. I hope I have, to the complete satisfaction of your Lordships, answered most of the points which have been raised by your Lords-hips, and I cannot at this stage usefully add more.

THE MARQUESS OF SALISBURY

My Lords, we are grateful to the noble and learned Lord on the Woolsack for the very considerate manner in which he has met the speeches that have been delivered during this debate, but I confess that I thought he opened a rather formidable vista to your Lordships when he told us he was going to be responsible during the next few years—or was it months? let us hope it was only months—for a number of measures of which he could not say he approved, but which he would be prepared to recommend to your Lordships. I hope it is not so bad as all that; and for my own part, although I am not in any sense responsible either for the principal Act or for this Bill, I am not prepared to adopt altogether an apologetic vein. On the contrary, the conditions of the war prescribed the Act and this Bill, and we have nothing to be ashamed of in passing its Second Reading. The fact that there is a shortage of houses owing to the suspension of building operations during the war has got to be met by legislation, and there is no need for any apology.

If the noble and learned Lord on the Woolsack had said that although he did not apologise for the principle of the Bill he did apologise for some of its provisions then I should better understand his attitude. There are certain provisions which are open to criticism. The provision as to sub-letting, which has been the subject of debate, even if it should turn out that this opportunity of evading the plain intention of the Statute only exists in the case of furnished tenements, will I think require very careful consideration as to whether some amendment is required. It may be impossible to insert an Amendment applying to furnished tenements which does not do more harm than good, but let us have the matter very carefully looked into. As regards the rest of the Bill, all I can say is that as the Government found themselves upon this very admirable report of Lord Hunter's Committee, I am a little surprised that they have not adopted the recommendations of Lord Hunter's Committee throughout. That is a subject of criticism. Lord Hunter's Committee recommended ninny provisions which do not appear in the Bill. That is a matter which we shall require to investigate in committee.

I confess I think that this House is bound to try and do justice to, and they are immensely sympathetic towards, the occupying tenant, and do not desire that he should be held to ransom because of the shortage of houses; but at the same time some consideration must be had for the owner, who in numerous cases is quite as poor as the occupier, and whose living to a large extent depends upon the rent he can get. It is, therefore, surprising that the Government, having adopted the proposal of Lord Hunter's Committee up to a certain point, suddenly stopped. They allowed 10 per cent. They have not allowed anything more, although at a particular period, as the House is well aware, Lord Hunter's Committee proposed to go further. I do not desire to prejudge any of these questions. I earnestly hope that by the time we have finished with this Bill the noble and learned Lord on the Woolsack will not only be able to recommend it but be able to approve of it as well, and I hope we shall assist him in the operation.

TRE LORD CHANCELLOR

My Lords, what I said was that, in relation to the subsisting crisis, I both recommended it and approved of it. If we were living in a perfect world I should neither recommend it nor approve of it.

On Question, Bill read 2a, and committed to a Committee of the Whole House.