§ Order of the Day for the Second Reading read.
§ THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF HEALTH (VISCOUNT ASTOR)
My Lords, it is with a considerable degree of diffidence that I move the Second Reading of such a very technical Bill as this in your Lordships' House, where there are so many possessed of legal knowledge on matters connected with it. Your Lordships have already assisted in passing four Acts dealing with the problem of rent restriction, and amendments to those Acts have been contained in two other measures. That is to say, Parliament has passed six Acts on this particular subject. That fact shows how difficult it is to legislate upon it. At the same time I think it will relieve me of the task, which otherwise I would willingly have undertaken, of explaining the reasons why it is necessary to protect tenants against eviction, or against increase of rents on the basis of scarcity value.
We find ourselves in a position of difficulty owing to the fact that we are trying to control, or to interfere with, the ordinary 815 normal laws of supply and demand. We are trying to stereotype the interest on the capital value of an article which is a perishable article, like most other articles, where there is a great shortage, and where all values are increasing. We are trying to keep down a particular value when almost every other value is going up. In addition to that, we are trying to deal with a subject which is always difficult to handle—namely, the question of rent. Our policy, broadly, is to continue and modify our present scheme of controlling rents, but to do so with the frank and full recognition that this is only a temporary expedient. Our final policy must be to return to normal conditions by withdrawing control and restriction. We realise that it is essential to get back to the ordinary economic basis, and to encourage people to build houses and to invest money in houses. Our policy is to increase public confidence. I realise that, for various reasons into which I do not propose to go, there is, and there has been, a lack of public confidence so far as housing property is concerned. Until we restore that confidence it will not be easy to put housing on a proper footing and to get an adequate number of houses erected by the community. This Bill is a step in the direction of the restoration of normal, uncontrolled conditions.
The Bill is a consolidating measure. It re-enacts many of the existing provisions, and there are certain new points contained in it which are based almost entirely on the recommendations of the Committee which was presided over by my noble friend the noble Marquess opposite, Lord Salisbury. Perhaps I may be allowed, with complete sincerity on behalf of the Government, to express our real appreciation of the work of himself and his Committee, and our gratitude for the thoroughness, skill, and expedition with which they dealt with this extraordinarily difficult subject. We have been able to accept practically the whole of their recommendations. This Bill is virtually based on the recommendations of his Committee, and the Government are truly grateful to them for the work which they did under a high degree of pressure, because he and his Committee appreciated the point which I want to put before your Lordships—namely, [that one of the existing Acts lapses on July].
The Salisbury Committee, as we call it, was appointed in February of this year. It 816 reported at the end of March. The recommendations went before the Cabinet. They were discussed and agreed to in principle by the Cabinet, and then they had to be incorporated in a Bill. That Bill was introduced in another place on May 20. Considering the complicated and technical character of this Bill, I do not think that the Government or the draftsman or the Department with which I am associated can be accused of any unnecessary delay. It was essential to try to get a properly drafted Bill. The Bill was read a second time on June 4. It was very carefully considered in Committee. The Standing Committee which considered this Bill sat three times, morning and afternoon—that is, practically three double sittings—and, in order to get the Bill before your Lordships in good time, realising that one of the existing Acts lapses on July 1, the other House on Monday night sat until after 3.30 a.m. I have gone into this rather fully in order to explain why it was the Leader of the House, when speaking last week, expressed the hope that your Lordships might be willing to take the Committee stage next Monday and the Report and further stages on Tuesday. It is July 1 next Thursday. It is possible—I hope it will not prove to be the case—that there may be some point on which your Lordships are not in entire agreement with another place, and that may possibly involve a certain amount of delay.
Very briefly I wish to put before your Lordships the chief points contained in the Bill. By the previous Acts roughly 8,181,000 houses were covered. In London 611,000 houses, or 88 per cent. of the total number, were included in those Acts. In the rest of England and Wales 97 per cent. of the total number were covered, and in Scotland also 97 per cent. We estimate that the number of dwellings to be brought in for the first time under the Bill now before your Lordships will be 46,000 in London, 261,000 in the rest of England and Wales, and 22,000 in Scotland. That is to say, there will remain approximately only 150,000 dwelling-houses in the country that will not be covered by the Rent Restriction Acts. These figures, of course, are only approximate. They are taken from the Board of Inland Revenue returns for Inhabited House Duty, and are the only figures we have been able to get. I thought it would interest your Lordships to know the number of houses to be included in the Bill.
§ LORD PARMOOR
May I put this question to the noble Viscount—You are not putting in business premises, but merely dwelling-houses?
§ VISCOUNT ASTOR
Yes, dwellighouses. Under the first Rent Restriction Act the houses covered by what is called the standard rent were of the value in London of £35, Scotland £30, and elsewhere £26. These figures were doubled by the Act which was passed last year. We have accepted the figures recommended by the noble Marquess's Committee, and they will now be £105 in London, £90 in Scotland, and £78 elsewhere. That is to say, houses with a rateable value, or standard rent, of the figures I have named will come within the protected limit, within the scope, of this Bill.
We propose to extend the period for another three years. Landlords will be allowed an immediate increase of 30 per cent. or the net rent; that is to say, the rent in August, 1914, excluding rates. This 30 per cent. includes 25 per cent., which I shall deal with presently, for repairs, and after one year an additional increase of 10 per cent. will be authorised. The total increase, therefore, is 40 per cent. on the net rent; that is the rent, exclusive of rates, payable in August, 1914. This is estimated to equal something like 29 per cent. on the standard rent as defined in previous Acts. Mortgagees will be allowed at once an increase of one-half per cent., and after one year another half per cent., subject to a maximum of 6½ per cent. I mentioned just now that an immediate increase of 30 per cent. will be authorised. This includes 25 per cent. of the net rent for repairs. As your Lordships know, the cost of everything has gone up, and during the war it was almost impossible to deal with the repairs of houses. This is an urgent need and we have accepted the figures suggested by the Committee—namely, that 25 per cent. of the net rent should be allowed to landlords to cover repairs. Where the repairs have to be shared between the landlord and tenant there is a provision in the Bill for an apportionment.
The next point I wish to touch upon is the question of alternative accommodation. In this Bill we have tightened up the requirements. We have made it a condition that alternative accommodation 818 should be provided before the landlord is able to obtain possession. We have defined—I will deal with it presently when I go through the Bill in greater detail—alternative accommodation, and we have included a certain number of exceptions, again acting on the recommendation of the Committee.
The only other important question is that of business premises. The Committee presided over by the noble Marquess recommended that business premises should not be included in a Rent Restrictions Bill. They were not out of sympathy with the tenants of business premises, but they rightly pointed out, that it was not so much a question of rent as security of tenure, and that the grievance existed before the war and was not due mainly to the war. The Government took the same view, but the House of Commons took a different view, and the House of Commons overruled the Government and inserted an Amendment including business premises within this Bill. A Select Committee has just been appointed, and perhaps I may read the terms of reference. They are—To inquire into the position of leaseholders and tenants of business premises and to advise whither any, and if so what, alterations in the law are required to remove obstacles to the development of their businesses arising out of conditions affecting tenure, undue restrictions on improvements, and unreasonable increases in rents.Those are the chief provisions in the Bill to which. I desire specially to draw your Lordships' attention.
I will now rapidly go through the Bill, not taking it absolutely subsection by subsection but attempting to draw your attention to the chief points in each clause. Clause 2 deals with authorised increases. An allowance of 8 per cent. is authorised for structural repairs if these are made after the passing of the Bill. For structural repairs made before the passing of the Bill 6 per cent. is allowed. Provision is contained protecting tenants against unnecessary expenditure on structural repairs. In paragraph (b) the landlord is entitled to recover an increase in rates payable by him, and paragraph (c) deals with the 15 per cent. increase in the net rent. Five per cent. is authorised in the first year for houses already included, and in the second year an additional 10 per cent. may be added. Where the landlord is 819 responsible for repairs, another 25 per cent. to the net rent is authorised. If the houses are not in a proper state of repair, not fit for habitation, then the increase which would be authorised may be suspended, but the landlord is given three months in which to put his house into repair. Therefore, the total of 15 per cent. in paragraph (c) and the 25 per cent. to cover repairs amounts to the figure of 40 per cent., which, as I have explained, is the increase authorised over the net rent—that is, the rent, exclusive of rates, payable in August, 1914. We have also a provision that where any differences occur they may be settled by the County Court.
In Clause 3 it is provided that the landlord has to give to the tenant particulars on a prescribed form of the proposed increase, and the prescribed form is set out in the first Schedule of the Bill. I have already explained the increase in the rate of interest on mortgages set out in Clause 4. We consider this is very important in order to encourage the vesting of money in house property.
I should like to go more fully into Clause 5. It deals with the restrictions and obligations on landlords and mortgagees. It provides that there are to be no ejectments unless (a) the conditions of tenancy are broken; (b) there is misconduct on the part of the tenant (and misconduct is explained in the paragraph); (c) the tenant has given notice (there have been recent cases where a tenant has given notice and then has tried to remain on, the landlord meanwhile having made other provision for the occupancy of the house); (d) the house is needed by the landlord for his own use; (e) the house is needed by a local authority, or a statutory body, for the execution of statutory obligations (for instance, to make a new road involving the pulling down of a house, or a larger number of houses); (f) where a soldier has bought a house during the war; (g) where the house is needed by a previous tenant who gave it up in order to join the Army. In all these cases the approval of the County Court is necessary.
As regards the provision of alternative accommodation, we have on page 6, in paragraph (d), defined alternative accommodation as being "reasonably equivalent as regards rent and suitability in all respects." The clause provides that alternative accommodation is to be provided in every case where the landlord requires the 820 building for his own use, but that it need not be provided in the cases which are set out in subsections (1) to (4) inclusive—firstly, where the occupier of the house was an employee of the landlord, but has ceased to be employed, and occupied the house because of his employment; secondly, where possession of the house is required by the landlord for the working of an agricultural holding; thirdly, where the landlord gave up the occupation in consequence of service in His Majesty's Forces; and, fourthly, where the landlord has bought the house and there would be greater hardship if possession were refused to the landlord. Those are the four cases where alternative accommodation does not have to be provided.
I would draw your Lordships' attention to subclauses (2), (3) and (4) of Clause 5. These reproduce provisions in the Act of 1919. They give the Courts wide discretion for variation and suspension, and it is because of these clauses that we have included Clause 6, which is a necessary corollary. Clause 6 deals with the restriction on levy of distress for rent. It is a corollary to the sub-clauses which I have mentioned—(2), (3) and (4) of Clause 5. Clause 7 deals with the calling in of mortgages. Clause 8 prohibits the extortion which has gone on in a certain number of cases, of what is known as "key money." Clauses 9 and 10 deal with furnished lettings and are intended to stop profiteering in furnished lettings. They do not give security of tenure, but they limit the profit to 25 per cent. over the profit of August, 1914. Clause 12 deals with the application and interpretation of the Act. I have already explained the ground on which the figures have been raised.
Clause 12, subsection (9), paragraphs (a) and (b), I would also like to draw your attention to. The previous Acts have artificially restricted rents, and so also the assessable value of old houses. Subsection (9) (a) and (b) of Clause 12 prevents new houses being unfairly assessed as compared with old houses. Clause 12, subclause (2), proviso (ii), is merely declaratory of the existing law as interpreted—The application of this Act to any house or part of a house shall not be excluded by reason only that part of the premises is used as a shop or office for business, trade, or professional purposes.It is, as I have said, merely declaratory of the existing law as interpreted; that is to 821 say, a dwelling house, although part of it is used for business premises, is still a dwelling house.
I have already explained to your Lordships about business premises. Clause 13 deals with them. Clause 15 gives effect to the recommendations of the Salisbury Committee that the statutory tenant should be defined. Clause 16 deals with certain minor points which were contained in the recommendations of the Committee. As I began by saying, I do not propose to go through every subsection of this Bill at this stage, but I have merely tried to bring out the chief points in the Bill. We are living in exceptional times, and this is an exceptional Bill. It is only a temporary measure, and, as I have explained, it is an attempt to deal with real hardships and to deal fairly with all parties. I do not claim that I have made my explanation interesting, but I hope, my Lords, that I have succeeded in some degree in explaining the main provisions of this Bill, although I confess very frankly to a feeling that for any one to explain this Bill he ought to have both the knowledge and the power of exposition of a Lord Chancellor.
§ Moved, That the Bill be now read 2a.—(Viscount Astor.)
§ THE EARL OF MIDLETON
My Lords, I do not propose to trouble you for more than a few moments. This has been a most difficult question, and the fact that at the invitation of the Government, a few months ago, the whole House agreed to put in force for a few months a very drastic measure is the best proof of the urgency of the question with which the Government are confronted. I ant quite sure that none of us desire to put the slightest difficulty in the way of the Government in dealing with the fear, which then existed, of any action on the part of the landlords, particularly the smaller landlords, which might cause embarrassment and suffering, and we fully recognise the spirit in which this Bill has been drawn. I, of course, cannot help feeling that this interference with free contract between man and man is likely to be extremely embarrassing in the future, and the more you get tenants depending on the law the less we shall have the proper discharge of their duties by landlords with regard to the maintenance of these houses.
I am afraid that, with all the trouble 822 taken over this Bill, there are still some points on which it will be necessary for us to ask the Government to give us further assurances. Take the question dealt with in the clause which has to do with, I will not call it eviction of the tenant, but the restoration to the landlord of the house which he has specially reserved for himself. I do not suppose there is anybody who has to deal, or who has had to deal recently, with house holding and letting on arty scale, who has not found himself confronted with the difficulty of having a tenant who refuses to go, and whom it takes many weeks, with a great deal of litigation, to remove, although he has no right whatever to the premises on which he is determined to remain. There are difficulties, but not in every district, in finding further accommodation. In the case of houses which have been let in connection with a certain employment there is a difficulty. The employment conies to an end, perhaps through inefficiency. The tenant is put out of his employment, takes other work, and says, "I cannot find another house." I believe it has been the experience of many of your Lordships—it certainly has been brought to my notice continually—that the unfortunate landlord or owner of the house, who requires to fill the place of the discharged man with another to look after his machinery or to discharge the functions which the previous man has failed to discharge, loses the services of one applicant after another owing to inability to provide them with a roof. I hope that in Committee we may be able to induce the Government to quicken up the machinery by which, in such cases, the premises may be restored to the person who really has serious need of them. In agricultural districts this sometimes becomes a most pressing matter, and the delay interferes very seriously with cultivation.
There is another point upon which I should like to know the intention of, the Government. Every one is acquainted with the fact that a great number of houses in this country have been given to the tenant—the labourer—as part of his wages. Now conies in the public authority and says, "The wages of this man should not be 20s. a week, but under present conditions they must be 42s. or 44s. a week, or more." in the agricultural districts the authorities have fixed the sum that has to be paid by that man for these cottages at 3s. a week. Every one knows that 3s. a 823 week will not keep a cottage in repair, taking one year with another. What, then, is going to happen where no rent at all has been paid? I cannot find any clause in the Bill which enables an owner in such cases to charge anything or to derive an advantage from the Bill in any way. Where no rent has been charged there can, of course, be no standard rent.
Again, take the cases which occur on so many estates where a good cottage and an adequate garden have been let for one shilling or two shillings a week. The increase allowed by the Bill in those cases would work out at 3d. to 4d. and 5d. a week. The whole thing is exiguous. Houses of the same character elsewhere are let at 8s. or 10s. a week. You will not enable the country landlord adequately to maintain the houses by means of the increased rent which this Bill will permit him to charge. Nor will you increase the rents in proportion to the standard of wages that has been laid down. You will have a man on one side of the road living in a house which was fully rented before the war at 4s. or 6s. a week paying a much larger sum under this Bill, while a man on the other side of the road rented at nothing will not be touched, although his wages have been more than doubled. That seems ridiculous.
We are in a great difficulty in considering these detailed matters. We only received the Bill in the last few hours. We could not tell in what condition it would reach us from another place. I understand that the desire of the Government is to take the Committee stage on Monday next. I would point out that this does not allow us very much time in which to deal with these large questions. I fully realise that the Government have endeavoured to meet the case where genuine large additions have been made by allowing a percentage to be charged upon them. But I should like to be quite clear that this Bill is going to deal with the anomalies in the agricultural districts to which I have referred. Nothing could be more ridiculous than the cases which I can bring to the notice of the noble Viscount—cases where the Agricultural Wages Board fixes the rent of a cottage at 3s. a week notwithstanding that enlargements have been made to the house at great cost in the last three years to enable the agricultural tenant to carry out the duties that have been laid upon him. In many of these cases the landlord has spent £150 to £200 in increasing the accommodation. 824 and while he is not allowed to charge more than 3s. rent the tenant has sub-let the additional room for 10s. a week. These cases do not seem to me to be dealt with in the Bill. Sub-letting is one of the difficulties which ought to be dealt with. We desire sonic system by which it will be possible for owners to keep houses in a proper sanitary condition, and to make some progress in the direction of improving dwellings. In my view, it will be impossible to do so unless we strengthen the Bill in some respects.
§ LORD PARMOOR
My Lords, I do not think this ought to be regarded as a Bill merely determining the relationship between landlord and tenant, or between mortgagor and mortgagee. I should like to say a few words presently on the larger aspect of the Bill. In reference to what the noble Earl has just said, I will add my own experience as to the cost of repairs, particularly in country districts. I am quite certain that anyone who in recent years has kept his cottages in respectable repair has been subjected to a considerable loss. I may give an illustration of the ownership of something like 100 cottages. During the war and since the result has been a loss of about £500 a year. That is because the rents, particularly of country cottages, are almost nominal on the one side, and on the other the cost of repairs has been very greatly increased. When this Bill was before the House of Commons the Minister of Health, who was in charge of it, made this statement—The cost of repairs has gone up two and a-half times.That is rather an under-estimate. But it is a very serious matter, and I agree with what the noble Lord said, in commending the Bill to your Lordships' House, that it is at least as important to ensure that repairs are properly carried out as it is that the new houses should be constructed.
I followed the very clear statement that the noble Lord made upon the actual provisions of the Bill, except as to one. I am not quite sure what he said regarding rating. Does he mean that new houses are to be rated on some different principle from old houses, or does he mean that in the case of both old and new houses the same principle is to be followed? The basis of rates now-a-days is upon the rent actually paid. I will not ask the noble Lord for an answer at the present moment, but I did 825 not quite follow him when he referred to that part of the Bill, which is an extremely important part. You cannot alter the relative positions as between different houses without impinging upon the basis of all rating in this country—namely, equality of burdens between rateable premises which, on the rental basis, may be supposed to have the same value.
The noble Viscount said that normal conditions were to be restored as soon as possible. What has been the effect of there being abnormal conditions? Again, may I quote what was said on the Second Reading by the Minister in charge of the Bill—Restrictive provisions have had a most desolating effect on the provision of houses in this country.Every one who has any knowledge of the subject will entirely agree with that. That statement, I would point out, is made by the Minister of Health, whose Department is responsible for providing the new houses which are required as quickly as possible. And yet he comes forward and admits that the restrictive legislation which is now in force has had a most desolating effect on the provision of houses.
If I might apply that to this present Bill, what will the result be? At present there is great difficulty. This Bill affects the security both of the landlord and of the mortgagee, who lends money for the purpose of building new houses. So far as the landlord is concerned the practical security which he has, namely, of getting rid of a bad tenant or of using his house for the purpose for which he probably originally constructed it, are very seriously interfered with am not now going to discuss the extent to which there is interference—and whereas a mortgagee Would ordinarily have the right of calling in his money he is prevented from doing it. And how can you expect that money will be lent when it is lent under such conditions? As far as I understand the Bill, the maximum percentage allowed to the mortgagee is 6½ per cent. Every one knows that a larger percentage than that can be obtained at the present time in other directions. So that not only do you impinge on the security which is one of the reasons why landlords build houses of this kind, but you put a limitation on the rights of a mortgagee which, in my opinion, must have a detrimental effect on he lending of money. I have no doubt 826 the noble Viscount knows quite well that, if these houses are to be provided except on the most extravagant terms, it is of the utmost importance that you should not drive away people who are willing to lay out money for this purpose, but that you should as far as possible guarantee them in their security and encourage them to provide such money.
As regards the desolating effect on the provision of houses in this country of the existing restrictions the Minister in charge in another place said, "Scores of instances are brought to my notice every day." And how does he seek to remedy it? Having found that your legislation, by its restrictive character, has counteracted the very purposes for which you passed it, you introduce further restrictions. What must be the result of that, for that is exactly what is done in this Bill? Scores of instances are brought to the notice of the Minister every day of the evil effect of existing restrictions, and those restrictions are in substance maintained, and additional ones are imposed. How can we wonder, in these circumstances, that there is a difficulty, which has become one of the most serious social difficulties of the time, in the provision of new houses.
Then the Minister went on to say that this was not anticipated. Apparently the evil effects of legislation are never anticipated. You bring in new restrictive measures, and you hold out new hopes, and the hopes are not realised, and the effect of the restrictions is almost always detrimental. That is a point of view from which I desire to consider this Bill. It seems to be forgotten that when you are dealing with rents it is not so much that all other prices have gone up, but that you are estimating rents in money and the money value has depreciated. Therefore, when you talk of not putting up rents it really means that they have naturally depreciated, probably to about one-half what they were worth before the war, estimated in the real value of money. It is a great fallacy to estimate rent in sovereigns, and not to allow for its depreciation. This depreciation in rent has reduced them below a remunerative level. I desire in every way to protect a tenant. I do not think I have ever discharged a tenant in my life, and if you protect the tenant I suppose you must also introduce some protection for the mortgagor as against the mortgagee. But I cannot come myself to any other con- 827 clusion than that the effect of this Bill will be further detrimental to the building of new houses and to the repair of existing houses—two matters of the utmost social importance at the present time. I admit that a Bill of this kind has to he passed, but I anticipate that the ordinary result will follow—namely that further difficulties will be raised by this Bill in the provision of houses.
§ LORD LAMINGTON
My Lords, the noble and learned Lord has shown very clearly by some instances the detrimental effect of this kind of legislation, which, in seeking a remedy, only emphasises and increases the evil. That being so, I should like to ask why it is necessary that this Bill should have three years' operation. The noble Viscount, in his very clear exposition of the Bill, said it was a temporary expedient. Three years is more than a temporary expedient. We all understand how, during the war, legislation of this character was necessary, but I fully agree with Lord Parmoor, and, indeed, with the noble Viscount who introduced the Bill, that the sooner you get rid of this legislation the better.
I presume that when three years was fixed the idea was that a sufficient number of houses would be built by that time to overtake the demand. It does not look like that at the present time. For myself, I believe that these Government Housing Acts are retarding building of every description to a degree that is almost inconceivable except by those who are actually engaged in the building trade. I believe they would fully support my statement. Just as the noble and learned Lord mentioned how legislation of this character produces evil never anticipated by the Government, so, indeed, the whole origin and evil of the shortage of houses is really the Act of 1909–10. It is fully admitted that up to that time houses had been provided, even to a superfluous degree, but that the legislation which was called, I think, the "Poor Man's Budget" has ended in producing the present situation. And, after all, this Bill is not going to produce further accommodation. It will only penalise those who in the past have spent their money by making provision for buildings according to our idea of civilisation. It is in this respect that Bills of this character are so harmful. I would therefore ask he noble Viscount whether some explanation can be given of 828 why it is necessary for the Bill to remain in operation for three years.
As a minor point I would like to ask whether he would make clearer Clause 12 (9) of the Bill. I understand that is with regard to buildings which may be erected at the present time or in the future. I do not understand all the provisions of that subsection, and perhaps later my noble friend will give some explanation upon it.
§ THE MARQUESS OF SALISBURY
My Lords, I hope that your Lordships will allow me to say a few words upon this subject, of which I have a certain special knowledge. In the first place, may I express my great obligations to my noble friend opposite for the very civil way in which he, speaking on behalf of His Majesty's Government, has been good enough to refer to the labours of the Committee to which I belonged. I should like also to take this my first opportunity of saying how much the Government are indebted, and how much I was indebted, to the co-operation of my colleagues upon that Committee. I do not suppose that any chairman ever had a Committee which worked with such harmony as the one over which I had the honour to preside; and they brought a special knowledge of every aspect of the I question to bear which made, I need not say, the labours of the Committee much more easy and much more fruitful.
I feel in a rather unusual position in speaking on this Bill—I see a sarcastic smile on the face of my noble friend opposite—not merely because I am supporting one of the measures of His Majesty's Government but because I agree with a great deal of the criticism which is levelled against legislation of this kind. In truth, I think that is the universal opinion. None of us would select legislation of this kind as a suitable and wholesome method of making law if there were any other alternative. It is because there is no other alternative that legislation of this nature has been enacted. If my noble friends would look at the evidence which has been laid before Parliament they would see that there was almost universal agreement—not merely the witnesses from the tenants but the witnesses who came forward to plead the interests of the landlords—that a continuance of these Acts for a limited period was absolutely necessary.
§ THE MARQUESS OF SALISBURY
May I say to my noble and learned friend that no one would have judged from the speech he delivered just now that he thought this legislation was necessary.
§ LORD PARMOOR
I do not think it is. However, I only meant, when I interrupted the noble Marquess, that I had read the evidence given before his Committee.
§ THE MARQUESS OF SALISBURY
I am sure that my noble and learned friend, who is a most industrious man, has done so. Then he will recognise the accuracy of what I say
§ THE MARQUESS OF SALISBURY
— that there was a general agreement that it was necessary. Then it is no good denouncing this kind of legislation. If every one who is interested in the subject agrees that legislation of this nature is necessary, I think the plain man will assume that it has got to be passed into law. But, of course, that does not prevent the cogency of a great deal of the criticism of my noble and learned friend and of my noble friend Lord Lamington. It is perfectly true that if you outrage economic law, as we were compelled to do, you will not get off. There is an inevitable nemesis, and one of the forms of the nemesis is that you have a system of law which is illogical, a system of compromise which you cannot defend in detail. All you can say is that in a matter of prime necessity like housing the alternative to legislation is that people would be rendered homeless—
§ THE MARQUESS OF SALISBURY
That is the evidence. Or in the alternative would be charged rents which every one, including the landlords' witnesses, admits would be exorbitant. That being the case, all you can do is to meet in the best way any criticisms which are made. You can mitigate the objections to this kind of legislation, smooth off the corners, and make it quite clear that it is only of a temporary and transitional nature. That I take to be the line which my noble friend 830 the noble Viscount opposite said was the policy of His Majesty's Government. I do not mean to say there is not immense difficulty in arriving at that particular condition of compromise. Any one who has sat on the Committee would have realised that was so, as your Lordships realise it. But you are forced to face that particular dilemma. May I say that I do not admit the criticisms of my noble and learned friend Lord Parmoor that this Bill involves further restrictions, except in so far as it prolongs the existence of the Act—
§ TUE MARQUESS OF SALISBURY
I shall have a word or two to say upon that in a moment. But as regards the further restrictions, of course the restrictions are very much mitigated in the Bill, immediately, and in the near future still more so. It is in the nature of a substantial relaxation of the severity of the Acts as they exist at the present moment. But although you must, in consequence of the famine in houses, provide for a fixity of tenure—subject to certain conditions—for those who occupy these houses, that is no reason why you should not at the same time provide that the people who are given this privilege should pay an adequate rent. They ought to pay an adequate rent.
If I may say so with great respect, it makes me very indignant when I see that there are threats in certain parts of the country that, even against the very moderate increase of rent which is suggested by the Committee and by the Bill of His Majesty's Government, there will be resistance in the shape of a strike of tenants against the payment of this very moderate increase. That is a most unreasonable thing, a most unjust thing; because the great majority of occupiers are quite able to pay an increased rent. A certain number of most pitiful cases exist, cases whose existence the Committee recognised, where the occupier has great difficulty in paying an increased rent. We made a recommendation in reference to them. The Government have to a certain extent followed that recommendation, though not entirely. There must be elasticity in dealing with cases of that kind; but in the broad, general case of the well-paid artisan, of the well-paid miner, of the well-paid cotton operative, there is no reason in the world why they should not pay a 831 reasonable increase of rent considering that their wages have enormously increased, and also considering that the owner of the premises—very often a much poorer man than themselves—is entitled to have something resembling the true value of his property represented in the rent. The only limitation I would put upon that statement is that the change from the existing state of things to what I call a much more healthy state of things must not be too cheap. I am convinced that it would he a mistake in public policy if Parliament were to enact legislation under which the rent would rise very rapidly from its present condition to the full reasonable rent. Therefore I think the Government have been well advised in allowing the rent to be raised gradually.
My noble friend Lord Lamington (who is not now in his place) is of opinion that this gradual rise in the rent ought to be completed in less than three years. I do not think I agree with him. I believe that if you are to have a gradual rise of rent in stages, three years is not too long a period over which to spread it. That, of course, is a matter of detail and a matter of opinion, but it is the view I form from the evidence. I wish to make it quite clear that in my opinion, and in that I believe of most of my colleagues, the limitations of rent which were proposed by the Committee and which have been accepted by the Government were only transitional. What we hope is that within a certain limited period—we suggest for the present three years—a normal state of things will he restored.
I have spoken up to now in full approval of what has been proposed by His Majesty's Government. There remain, however, one small point and one big point on which I should like to offer something in the nature of criticism. In the first place there is the point which was submitted to the Government by my noble friend, Lord Midleton. That is the case of agricultural cottages let at unduly low rents. I do not ask the Government to make any reply on it for the moment, but I should like them to consider whether some provision is not required in this case. If you have what is nowadays really very little more than a nominal rent of, say, 2s. or 3s. a week for a house in the country—such things do not happen in towns—then 25 per cent. upon the net rent for repairs will amount to a very small sum indeed. I doubt whether a landlord would be able to do much in 832 respect of repairs with that 25 per cent. At any rate, I suggest that the Government should consider the point, which, however, is a small one.
There is a much more important point and one upon which I believe, although I am going to criticise the Bill, that I really possess the complete agreement of His Majesty's Government. It is with regard to business premises. The noble Viscount has told your Lordships very fairly what has been done about those premises. He has said truly that the Committee, while sympathising very greatly with those who stiffer certain hardships which exist in the case of business premises and recognising that in many cases there is an attempt to impose extortionate rents, were unable to recommend that these premises should he included in these Acts. The Government shared that view and, so far as I know, share it still, but they were overridden by the House of Commons. I cannot help thinking that the House of Commons considered this matter under very difficult circumstances very late at night, and did not fully realise the difficulties in the way of including business premises—at any rate, of including them in the manner in which they have included them.
I would ask any of your Lordships who take an interest in this question to look at the evidence on pages 145 to 147 of the Blue-book. It is quite short and I am sure that they would be very much impressed with that evidence, because it contains within it both the strength and the weakness of the case for the inclusion of business premises. It is the evidence of a witness who came before us as representing the interests of tenants of business premises in the City of London. He asked that he should remain anonymous, because he was afraid of the consequences which might follow when his evidence became public, if it were known who had given it. The only relevance of the fact to my present observations is that it was impossible for us therefore to check his evidence, but that really does not affect its cogency. He was a man labouring under a very real and well-founded grievance. The rent which he was asked to pay was extortionate. It was an enormous increase upon the previous rent, because of the power which the landlord no doubt possessed owing to the famine in houses. That was the strength of his case. He was entitled to consideration and your Lordships will 833 find in the Report which we signed and presented to the Department that we recognise that these extortionate rents require to be dealt with.
But do not let your Lordships think that this was a poor, friendless man, who came, under the pressure of his poverty, for relief from Parliament. He was the representative of a company which was paying £4,000 or £5,000 a year in dividend, at the rate of from 15 per cent. to 20 per cent. on its capital. It was very well off. Even the extortionate amount of money which he was asked to pay was trivial in comparison with the profits which his company was making. There was no question of poverty, or of great, unendurable hardship. That is the first point. What is the next point? He admitted that it was in the power of his company to pass on much of this extra burden to the public. Of course it is. That is where business premises differ essentially from dwellinghouses. The tenant of business premises, either through the commodity which he sells, by raising the price, or in the fees which he charges—if he is a professional man he raises his fees—is able to pass on to the public a large part of the burden, and he does so. That is no reason why he should be treated with injustice, of course; but it is a reason why he should be treated on a totally different footing from the tenant of a dwellinghouse, because, otherwise, be will be paid twice over for his grievance—paid in the increase of price or in the increase of fees, and paid also by the action of Parliament in restricting his rent. I say that is not just. It is quite right to prevent him being charged extortionate rents, but it is not right, that he should be treated on the same footing as the tenant of a dwellinghouse, and I ant convinced that if the House of Commons were to reconsider this point they would agree that that is not fair.
The effect of the Amendment which they have inserted in the Government Bill is not merely to prevent extortion, but it is to reduce the rent which a man should pay far below what he ought to pay. Why do I say that? I say it because the witness himself said so. If you look at the evidence you will see that this witness who came to us for relief asked that his rent should not be allowed to be increased more than 50 per cent, and the House of Commons says it is not to be increased more than 40 per cent. Is it likely that this man, who 834 appeared to plead his own case, would have under-stated his case? Of course not. Yet the House of Commons has positively suggested—I am sure they did not realise it—that this particular man, and there are an enormous number of others in a like case, should have a lower rent than he himself asked for. This man's rent before it was raised was £45 per year. If a business paying to its shareholders £4,000 or £5,000 a year can be carried on in premises in the City of London paying an old rent of £45 a year it means that there is an enormous number of such businesses whose premises will come within the terms of the Bill (which as your Lordships know is £105 a year) under the Amendment of the House of Commons. They have put business premises on exactly the same footing as dwelling houses; and what is proposed is to include an enormous number of these rich businesses paying £5,000, £10,000 and £20,000 a year, and give them relief not merely from an extortionate rent but from a reasonable rent, and even give them more relief than they actually ask for. I am quite certain that this matter was not considered by the House of Commons, and if your Lordships think fit to alter it and resubmit it to them I feel sure they will see that the proposal they have made is not defensible. I must apologise to the House for dwelling so long on this particular point, but owing to the arrangement of business we shall have but a short time in which to deal with this Bill, and I was very anxious at the first possible opportunity to press upon the Government the cogency of this case so that they might consider it before the Committee stage, and then we might, perhaps, be able to arrive at some amicable agreement as to what ought to be done.
From what I have said I am sure your Lordships will see that the Committee were anxious to do justice. We were not in the least "retained" on the one side or the other. We were there to arrive, in difficult circumstances, at the best conclusion we could. We are gratified that in the main the Government have accepted our recommendations, and we are still more gratified that the House of Commons, except in the one particular I have mentioned, followed their example.
§ LORD SHANDON
My Lords, I do not intend to enter upon the wider questions which naturally arise under this Bill, but I wish to direct the attention of the Government, and also of the noble Viscount 835 who introduced the Bill, to a difficulty which I think will arise unless it is corrected. In one way it is a point to be considered in Committee, but it is also a question of principle, and, I think, ought to be mentioned now. The provisions of Clause 5 have been explained fully by the noble Lord except in the particular respect to which I ask his attention.
Clause 5 says that no order or judgment for the recovery of possession of any dwelling-house to which this Bill applies, or for the ejectment of a tenant therefrom, "shall be made or given unless …" Now the word "unless" is covered by no fewer than five paragraphs. The five pargraphs seem to be complete in themselves. They deal with certain settled facts which have to be considered and on which the County Court Judge is to give a determination. Then the subsection continues—and in any such case as aforesaid, the Court considers it reasonable to make such an order or give such judgment.These last words are exclusive of what has gone before or they are in some way to be read in connection with them. I am sure it is my fault, but I have failed in the short time I have had to read the Bill to reconcile completely the subsection. If you read it in this way, "No order or judgment for recovery of possession shall be made unless the Court considers it reasonable to make such an order or give such judgment" that is complete in itself, but it gives no help or guidance. The difficulty is that if you are to read it at all as containing reasons which are reasonable it is not very easy to find them, and if they do exist there is nothing on which the last words of the subsection can operate.
My attention was attracted to it when I came to read the paragraph dealing with local authorities exercising statutory undertakings, who are compelled to establish that the premises are reasonably required for the purposes of the undertaking. Some cases were represented to me as not coming within that section, and as being quite as important. There are many charitable bodies and associations controlling large sums of money which are not technically local authorities and which cannot be said to be acting under statutory provisions. In consequence, they are to be quite at large. A particular case mentioned to me was one in which merely for the symmetry of their buildings and more accommodation for their staff they proposed a large 836 clearance, dispossessing tenants who had been in occupation for many Years. I thought at first that the clause might cover this case, but I do not think it does.
This Bill gives no right of appeal, but in Ireland the right of appeal will unquestionably exist owing to the peculiar constitution of the County Court there. But when you have a number of County Court Judges deciding what is reasonable you will have no certainty; and what is reasonable on one side of the fence, as we say in Ireland, will be unreasonable on the other. I suggest that this is a matter which might be dealt with by an alteration in Committee, and if I put down an Amendment I wish it to be clearly understood that it is for the purpose of enabling the point to be dealt with and not in any hostile spirit to the Bill.
§ LORD BLEDISLOE
My Lords, I dislike legislation of this character as cordially as I fancy the noble Marquess in his heart of hearts dislikes it, but I cannot help recognising that in the abnormal conditions under which we live, and in order to avoid serious social and industrial unrest, it is necessary, at any rate for the present, to perpetuate this artificial interference with economic laws. This Bill in my judgment is full of illogicalities and inconsistencies, and my experience of the last few years leads me to believe that when you commit serious breaches of the economic laws logic and consistency become impossible.
I am a little disturbed by the condition of the owners of agricultural property, and particularly cottages, under the operation of this Bill. I am not quite sure whether Lord Midleton was right in suggesting that under the Bill it would not be possible in every case to resume occupation of a cottage where it was really necessary for the working of the farm to which it was attached. As I read Clause 5, subsection (1), the case is fully covered, assuming that you have in existence a county agricultural committee, such as is referred to in that clause. As a matter of fact there are only three counties in England and Wales where such a body exists, and I would venture to ask the noble Viscount to consider whether some provision should not be made to fill the lacuna which will exist until, under the Ministry of Agriculture Act, county committees are set up all over the country. 837 With regard to the other point raised by the noble Earl, to which the noble Marquess more recently referred, I think it is a very serious omission from the Bill that no provision is made for the case where agricultural labourers' cottages are let either at no rent at all or at a rent which is very far below the economic rent of such a house. Of course, as I have just been reminded, the standard of 3s. at which the value of an ordinary labourer's house has been put by the Agricultural Wages Board is, under existing conditions, quite ridiculous as representing the real value to the tenant of such accommodation, and of course it creates no inducement whatever to the landlord to execute such repairs as are reasonably necessary in order to put and maintain such buildings in a state fit for human occupation. I see there is a provision in subsection (1) of Clause 12 that the rateable value can in certain cases be substituted for the standard rent. I wonder whether to meet such a case as this you could substitute the words "annual value" for "rateable value," because it is quite certain that the annual value, as distinct from the rateable value, generally based upon the rent, must in the case of such cottages be considerably greater than that at which the Central Wages Board have fixed it.
I should like to call the noble Viscount's attention to Clause 12, subsection (2) and the position of what are known at the Ministry of Agriculture as cottage holdings under that clause. I am inclined to think that cottage holdings, which after all are intended to be economic units and worked at a profit by the occupants, ought to be included in that clause and thereby excluded from the general operation of this Bill. There is no particular reason why those persons, if they are earning their livelihood out of cottage holdings, should not pay a reasonable amount of rent as representing the full occupancy and accommodation which they are enjoying. I regret sincerely that under Clause 16 of the Bill that noxious institution the compound householder is perpetuated. I should like to see the compound householder cease to exist henceforward by Act of Parliament. When you have—and I can point out to the noble Viscount cases of the kind—when you have in mining and in semi-industrial districts persons occupying cottages of which the rents are 3s. per week, or £8 per year, and enjoying wages of anything from £4 to £6 per week, while the landlord is expected in 838 addition under the compounding system to pay the rates, it seems to me that it is an anomaly that ought to be swept away for ever.
I should like to refer to the abolition, under Clause 8, of the premium on letting houses, and I believe also flats as parts of houses. This provision is confined, as I understand, to premises having an annua value of not more than £105. Throughout London, and to some extent in provincial towns, to-day, enormous premiums are being charged prior to the letting of premises to people of very moderate means, before those unfortunate persons can enter the premises at all, and I do not see why, now that you have an opportunity of penalising the imposition of such premiums, you cannot extend the limit beyond the very low figure of £105 per annum.
I entirely agree with Lord Parmoor in his criticism of Clause 4 of the Bill, which restricts the interest on mortgages to no more than from to 1½ per cent. above the standard interest which was in fact paid in 1914. A large number of persons in this country, quite poor persons, depend for their whole income upon mortgage interest, at no more than 4 to 4½cent., and it seems very hard that in these days, when the Bank rate is up to 7 per cent. and, Government securities yield 6 to 7 per cent., these unfortunate persons alone in the community are not to get the benefit which is obtainable as interest on Government stock. I confess that I think some provision ought to be inserted so as to enable the mortgage interest in such cases to be somewhat advanced.
There is only one other point to which I wish to refer. Under Clause 2, 8 per cent. is allowed on the expenditure on what are called improvements or structural alterations. I do not think that those words are sufficiently comprehensive. Surely it ought to be allowed in certain cases of replacement and reconstruction. There are cases very familiar to me, living in a mining district, where subsidences occur, and it would not be sufficient either to seek to improve a cottage which has suffered in this respect or to make structural alterations. The whole place has to be rebuilt, reconstructed or partially replaced, and indeed in f many rural districts to-day cottages are being, at very considerable expense, reconstructed so as to make them fit for human habitation because it is wholly impossible to get new houses put up at anything like a reasonable cost. I venture to hope, in 839 spite of the pressure of time, that the noble Viscount will allow reasonable Amendments to be made in order to make this Bill as fair as it can be made, under this unfortunate uneconomic system under which we live, for many persons who are in fact poor but whose income depends largely or wholly upon agricultural or other real estate.
§ THE EARL OF READING
My Lords, I desire to call attention only for one moment to certain provisions of this Bill for the purpose of directing the noble Viscount's attention to them in order that they may be considered before we come to the Committee stage. I would desire also that the noble and learned Lord, the Lord Chancellor, would give his attention to Clause 17. This clause in this rather voluminous Bill introduces one principle which is totally novel, and which I do not remember to have seen in any Bill that has found its way to the Statute Book. Under subclause (3) power is given to the Lord Chancellor to make Rules enabling a Court to revoke or vary any former decision of the Court if it appears just to do so in view of subsequent circumstances or material facts having been concealed. notwithstanding anything in the Act proving that the decision of the Court is to be final and conclusive. That may introduce a very important and novel procedure n our administration of justice. If it is intended to reform the administration of justice it ought not to be done in a clause of this kind in a Bill of this character. It caused me surprise when my attention was called to it. Hitherto a decision of the Court, once pronounced, has been final and conclusive. There are, of course, appeals to the Court of Appeal in the High Court, or to the House of Lords, but there is no means by Rules of enabling a Court to revoke a decision which it has once given. There would be no finality in a decision if Rules are to be made to this effect. I do not want to discuss it at this particular stage of the Bill, but I desire to call the noble Viscounts attention to it, because I cannot but conceive that there must be some misapprehension in the minds of the draftsmen, or of those responsible for the Bill, in introducing a clause of this character. It not only destroys the finality of the judgment which is to be pronounced; it also enables Rules to be made which do not give the ordinary safeguard. Rules of Court have to be laid on the Table of your Lordships' 840 House and of the other House, but Rules made by my noble and learned friend on the Woolsack do not stand in that category. It does seem a remarkable procedure to provide that the learned Lord Chancellor—however eminent and fair-minded he is, as he assuredly will be—should have power to make Rules which destroy the finality of the judgment of the Court, or at least provide that the Court may revoke its own decision if by reason of subsequent circumstances it finds it expedient to do so. I cannot really think that this matter has been seriously considered.
§ THE LORD CHANCELLOR
My Lords, I shall follow the example of my noble and learned friend by not at this stage debating the point which he himself has not fully debated. This subclause was inserted by the House of Commons. It was not in the original draft of the Bill, and I agree with my noble and learned friend that it may properly be a subject of discussion in the Committee stage. I think, however, that my noble and learned friend will himself agree that even if the condition be an unusual one it is not to be completely dismissed for that reason, or because of apparent prima face extravagance.
The circumstances are, of course, of a wholly unusual and unprecedented character. We have found ourselves in Parliament chasing fugitive conditions. Over and over again we have thought and hoped that there might be some degree of finality in the difficulties for which we were attempting to find a solution. A few months ago it became necessary to re-constitute the whole method of dealing with the matter. It was thought in another place, I understand—I have not read the debate—that there would be many cases in which any Court which had dealt with the matter on an earlier occasion would itself wish to correct and vary its decision in view of circumstances that had notoriously changed. In other words the object, I understand, of those who inserted this subclause was to enable steps to be taken which would produce the same result as occurs to-day when a Court gives liberty to apply, or in a workmen's compensation case where the fact that a decision has been given does not dismiss the matter for all time, but, if the situation changes, the applicant is at liberty to go to the Court and ask for a variation of the Order. The true analogy is not that of ordinary litigation, but the Awards given in those matters to which I have referred. I will content myself now merely 841 with expressing the hope that your Lordships will not prematurely reach a conclusion upon a provision which is no doubt singular, but which deals with a very singular and indeed unprecedented state of affairs.
§ VISCOUNT ASTOR
My Lords, I do not propose to reply at any length, but I desire to express again my gratitude to the noble Marquess opposite (the Marquess of Salisbury) not only for the assistance that he has given us in framing the Bill, but for relieving me of the task of dealing with such criticisms as have been directed against it. He has explained to your Lordships quite clearly that the abnomal time through which we are now passing must exist, for at least three years. I sincerely trust, although I do not say so with absolute confidence, that at the end of the three years we may be back in normal times.
With reference to some of the queries put to me, I may say that I do not propose to deal with them all now, because some of them can be better dealt with in Committee. The noble and learned Lord, Lord Shandon, raised a question regarding Clause 5. As to that I would point out that two conditions have to be fulfilled before an order for ejectment can be made. The first condition is set out in paragraphs (a), (b), (c), etc., and the second is contained in the paragraph to which the noble and learned Lord referred—namely, where the Court considers it reasonable to make such an Order. The Court would probably not consider it reasonable that a man should be evicted for the technical reason, for example, that he was one day late in paying his rent. I think that the noble and learned Lord, if he reads the clause again, will find that it is quite clear.
As to the query put to me by the noble Lord, Lord Lamington, regarding Clause 12, I desire to say that, this clause is intended to see that new houses are not put in a less favourable or more unfavourable position than old houses in the matter of assessments. In the present state of the housing shortage it is difficult for an Assessment Committee to determine the rent at which a house might reasonably he expected to let, and in order to help them in their assessment, and at the same time to prevent new houses from being unfairly rated as compared with old ones, the clause defines 842 strictly what should be taken as the estimated rental or gross value.
§ VISCOUNT ASTOR
No, it is merely to arrive at the assessment. My noble friend Lord Bledisloe raised a point on Clause 12—I think subsection (1). It allows a reasonable amount of land to go with the house but excludes a small farm. That is to say, it allows a paddock, perhaps surrounded by a fence, to be included, but would not include within the scope of the Bill a small farm. The points which were raised by certain noble Lords connected with the agricultural labourer raise very big issues, which I am sure your Lordships would not now expect me to go into—namely, whether the Agricultural Wages Board was right or not in fixing 3s. as the maximum amount, which may be deducted from an agricultural labourer's wages, and so on.
I should like to say this about the point raised by the noble Marquess in regard to business premises. I do not believe that the House of Commons inserted this clause in order to deal with exceptional cases. I think that they were probably impressed by the amount of real hardship which existed in a large number of cases, and it was probably because of this that they put in this clause. The Government feel that this clause, having been put in and meeting real grievances, ought to remain in the Bill perhaps with a slight amendment.
I think this debate has shown that it would be quite impossible at this moment to remove all restrictions; that it would lead to a great deal of social unrest, and would not assist in the provision of houses; that something was necessary, and that on the whole the proposals which have been incorporated in this Bill, which were contained in the Report of the Committee, have dealt fairly with what is admittedly a most delicate position.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.