§ LORD ABINGER had on the Paper the following Question—To ask His Majesty's Government whether they are aware that in many cases of small landlords great hardships are arising owing to a recent decision under the Rent Restrictions Acts by virtue of which demands are being made for repayment of increases of rents which were hitherto understood to be valid under those Acts; and whether they can see their way to grant a moratorium in such cases, pending the introduction of final legislation on the matter.
§ The noble Lord said: My Lords, I have put down this Question because I have been given to understand by many small householders that they are at present put into a position of very great difficulty owing to a recent decision that has been come to in His Majesty's Law Courts. I think the case itself began in Scotland, but it is understood to be also applicable to England. Briefly the position is this. Before the war men in an ordinary sphere of life who displayed thrift and energy in 320 very many cases put their savings into house property in the shape of cottages, which was considered a most satisfactory form of investment; they could always see it. They did not get a large rate of interest, but they always looked forward to obtaining a sufficient amount as a subsistence allowance in the shape of revenue when they arrived at an older age.
§ The war intervened, and, owing to the exigencies of the war, the Rent Restrictions Act was duly passed. That Act put these little men in this position. They were not able to raise their rent and they were not able to eject a tenant. Their savings, such as they were, are now completely at a discount, because, not being able to get possession of property of that sort, they are not in a position to sell it. Therefore, very large amounts have had to be written off their capital which it has taken them, perhaps, a long time to earn. That position, I understand, was recognised as a hardship and, since rates, taxes and repairs had increased enormously, it was decided that these people should be allowed to raise their rent by 30 per cent. I think that another 10 per cent. was afterwards allowed. I am not talking about the big landlords who can look after themselves quite well, and have lawyers and various other people to advise them, but of the small landlords. In very many cases throughout the large towns in England these little landlords approached their tenants. No objections were made and the increases of rent were paid. There were no protests, and everything appeared to be going on swimmingly until this decision was arrived at in Scotland which seems to have altered the position entirely, because now these unfortunate small landlords are inundated with solicitors' letters demanding the refund of the excess of rent that has been paid to them for more than a year.
§ It must, of course, be obvious to all your Lordships that many of these unfortunate landlords are not in a position to pay. If they were big landlords it would not really matter; the sums could be transferred from the debit side to the credit side and adjustment come to hereafter. But their position is that they are suddenly met with these demands and they are receiving these solicitors' letters. They understand Parliament is going to adjourn, and they want to know what their position is going to be between now and February; because in very many cases I am afraid it will be 321 a very awkward one so far as they are concerned. Therefore I placed my Question on the Paper in the form suggested, simply to impress the matter upon His Majesty's Government, and to ask them whether, in the circumstances, they could take any steps to remedy the grievance. Grievances of that nature have been remedied. Before, I believe.
§ I am given to understand that most of this trouble has come about through the very bad drafting of the Act. I am further informed that some of His Majesty's judges have said that it is an exceedingly badly drafted Act. I do not know whether that is so or not, but from personal experience of this House I can recall something which Your Lordships will remember quite well—that a similar, or morn or less similar, case arose during the tenure of office of the late Government. The noble Viscount who so ably addressed the House this afternoon on naval matters, brought in an Agriculture Bill and we talked about it and debated it for a considerable time. A good many of the clauses were intended to benefit certain tenants. The Bill was duly passed. No sooner was it passed than we were told that it would not benefit those tenants at all; that the Bill was, in fact, so badly drawn that the tenants would not receive any benefit. As a consequence an amending Bill was brought in. If the present position of these unfortunate small landlords is due to any fault in the drafting of the Act I sincerely hope that the Government will see their way to help these unfortunate people. They have been put in this position entirely without fault of their own, and owing to the fact of their having been told, or it having been generally understood, that they were empowered to raise the rents.
§ LORD LAMINGTON
My Lords, before the noble and learned Viscount replies to this Question, may I express the hope that he will be able to give your Lordships some indication of the policy of His Majesty's Government in regard to the continuation of the Rent Restriction Acts? The operation of those Acts has been most unfortunate. In the particular instance mentioned by the noble Lord, Lord Abinger, I understand that the unfortunate decision was arrived at by a majority only of the Judges who were present, and that those who were most conversant with Scottish procedure and /or Scottish circum- 322 stances were entirely opposed to it. Therefore, it is very hard indeed that these Scottish landlords should be muleted in the way in which it is possible they will be if the decision is given effect to in Scotland.
There is another point to which I should like to call attention. The noble Lord said that the Act was passed owing to the exigencies of war. I never could understand that. These Rent Restriction Acts did not increase in any way the supply of houses in this country, and there is nothing to show that the ordinary law of supply and demand would not have been operative during the war. The whole of this difficulty has arisen owing to the discouragement of building by private enterprise. Now we have reached a position in which those houses that were built by means of the Government grant are let at a rent of perhaps one-third and in some cases one-fourth of their true economic value, while other people who were able, owing to their own energy and self-denial, to build houses are not allowed to get anything approaching an economic rent. Thence it is that the present shortage of housing accommodation in the country has arisen. I hope that the noble Viscount in his reply to this Question will give your Lordships some indication that these Acts, if they do lapse, will not be renewed, and that the law of supply and demand, the most just law there is, will be permitted to become operative.
§ THE LORD CHANCELLOR (VISCOUNT CAVE)
My Lords, I have no doubt that the noble Lord who has just sat down is aware that the Rent Restriction Acts do not expire until June next and that, of course, it will be necessary to consider in the meantime whether they shall be renewed, and if so, with what changes. A Committee has been appointed to consider and advise upon that matter and is engaged upon its duties. Until that Committee has reported it is impossible to say what decision the Government will recommend Parliament to take.
With reference to the Question asked by the noble Lord, Lord Abinger, I agree that it is a very serious question. The position is exactly as he stated it. The Rent Restriction Act, speaking generally, forbade the raising of the rents of houses of a certain size. The Act of 1920 provided 323 that rents might be raised within certain limits on giving a notice, of which the form is contained in a Schedule to the Act. But it is also provided that rents should not be so raised unless a landlord would but for the Act have been in a position to obtain possession of his property by the time fixed for raising the rent. Some landlords or their advisers read those two sections together, as they have been read by the House of Lords in a recent decision, and they instructed their agents to give, or themselves took the course of giving, notice to quit, and with that notice to quit a notice to raise the rent when the time for quitting arrived. They followed what has now been held to be a right course.
Other owners of houses, large and small, took another course. They were advised, or they came themselves to the conclusion, that all they had to do was to give a notice to increase the rent, and they gave that notice. I believe, in many thousands of cases, that notice was accepted by the tenant as being sufficient. The tenant thought his rent was lawfully increased, and he paid rent at the higher rate. That went on in some cases for a year, or for more than a year, and during all that time these higher rents have been paid without complaint by the tenants. But some time ago the point was raised, first in England, and then in Scotland, whether that was enough, and after litigation it has been held by this House that the mere notice to raise rent was not effective. To be effective it should be accompanied by a notice to quit. Therefore, in accordance with the Act, all rents paid in excess of the previous rents merely on a notice to increase must be repaid by the landlord to the tenant, or, if not repaid, may be set off by the tenant against future instalments of rent.
I have not a word to say about the decision. I was not a party to it. I accept it as laying down what would be the effect of the Statute. Of course, it is true, as the noble Lord says, that for these landlords, and especially the small landlords, who took what has been held to be a wrong course, a very serious position has arisen. I have made special inquiry as to whether the landlords affected are the big men or the small men, and I am told by the authorities in the West of Scotland, where the point is specially important, that the majority are small owners—owners of one or more small houses. To them, I agree, it is a serious matter. It is very strange that, 324 although there are cases in England—the noble Lord seems to know some—where the point has arisen, there has been little complaint from England. I think that is due to the fact that the English Courts decided this point some time ago. Landlords took warning, and at once resorted to the proper steps, and no real crisis has arisen south of the Tweed. Oddly enough, in the East of Scotland, in Edinburgh and the district round Edinburgh, the same course has been followed, and, although there are exceptions, there are not very many cases of hardship in that district. It is in Glasgow, and in the district round Glasgow, and in the West of Scotland, that the decision has come as a surprise, and has produced something amounting to a crisis.
As to what course the Government is going to advise Parliament to take, the matter requires investigation. There are points that still require to be cleared up, such as the effect of the decision on rates, and matters of that kind. It has to be considered what course is to be taken, and whether it is right to alter the Statute because the effect of it has been misunderstood. With a view to arriving at a decision, His Majesty's Government have referred the matter to the Cabinet Committee for consideration and report. It is hoped their Report will be received before the commencement of the new session. I am afraid it is impossible to deal with the matter earlier, but an announcement has been made that if that Committee should recommend legislation then the matter will be taken in hand at once, and that, if legislation is proposed, Parliament will be asked to make it retrospective so as to date back to the present time.
It is thought probable that that announcement, which has been made and published throughout the country, will lead to this position— that tenants, who at present have this legal right, will not be induced to press it beyond what is reasonable, because they will know that if legislation is passed later, and if Parliament agrees that it shall be retrospective, it will date back to the present time. I am afraid that is the only answer I can give to the noble Lord, but I can assure him that the matter is thoroughly understood by the Government, and that they will do their best to find whether a grievance exists, and if it does, to suggest a remedy.
§ LORD BUCKMASTER
My Lords, I am bound to say that I think the answer of the noble and learned Viscount on the Woolsack is as satisfactory as could be expected in the strange circumstances of this matter. I should have regretted greatly if he had acceded at once to the demand that was made by the noble Lord who asked the Question, and, out of compassion, had promised that something should be done in a set of circumstances which, upon investigation, may not prove to be quite so meritorious as at first they seem. I admit that I am not greatly impressed with the statement about the person who has put his savings into houses, and who, it is suggested, has been greatly injured because he has not been allowed to use the peculiar position that the possession of small house property enables him to be placed in for the purpose of extracting the last farthing out of the wretched people who have to live in his houses.
After all, what have the owners of these houses suffered as compared with people who have put their money into other investments? Suppose that, instead of putting their money into cottages, they had put it into Government stock, they would have been worse off, because they would not be able to get as much as they got before the war. Or suppose that they had put it into industrial undertakings, unless they had put it into something that made a great profit during the war they would have found themselves much worse off indeed. All that has happened is that they have been restricted to that percentage on their investments that they received before the war broke out. It does not appear to me that that is a hardship at all, though I agree with what Lord Lamington said, that it is of the utmost consequence that you should allow free play to the laws of supply and demand.
But he will admit, I think, that you must allow the free play of the laws of supply and demand only when economic conditions are normal. To allow the free play of the laws of supply and demand when you have artificially restricted the output of houses, and consequently caused immense pressure upon the poorer population, does not seem to me to be a doctrine that is consistent with humanity, even if it is with economy. The result will be that you let unrestricted powers be placed in the hands of these landlords over the poor people who have to live sometimes in single 326 rooms and sometimes in very tiny houses. That will be conceded. There is no doubt about it, for one knows that at this moment the accommodation for the poorer people of this country is wholly and shamefully inadequate. Nobody disputes that.
I am glad, indeed, to hear that this matter has been the subject of very careful consideration, and I sincerely hope that the noble Viscount on the Woolsack will not think that everybody is in agreement as to the desirability of removing from these poor people this small safeguard which at present this Act affords. I have only to add this, that the noble and learned Viscount himself will, I am certain, recognise that the legislation he is proposing is of a most unusual and drastic character, and that if it be proposed to introduce an Act of Parliament which is to enable people to be deprived of the legal rights that they at present possess merely because somebody has misunderstood what an Act of Parliament provided, it is a novel process in the history of legislation and one which may be productive of very grave mischief indeed. I trust that that matter also will be taken into consideration by this Committee.
§ LORD ABINGER
My Lords, I desire to thank the Lord Chancellor for the full reply he has given to my Question. The noble and learned Lord, Lord Buckmaster, seems to object rather strongly to the idea that any of those people are suffering. Before the war they were earning small incomes; since the war they have earned nothing at all. We have discussed this question for years and the noble and learned Lord and myself would never be at one. The reason is plain. During the last Parliament he got up one day and apparently thought he was speaking for the whole House when he said: "I suppose all of us are more or less Socialists." All I can say is that a great proportion of the people of this country, and of Europe, are anything but Socialists. 1Ve strongly object to all these schemes.
The noble Lord who sometimes sits beside him, speaking yesterday on the Irish Bill, said that the stability of this country rested on the freedom and trust placed in the people. Certainly, and you cannot have freedom and trust unless you cease to penalise industry. The noble and learned Lord would like to see every industry and every person penalised. He would like to sit down in a beautiful law 327 court and make the people subject to the law. If he took any part in any industry—I do not believe he knows much about trade—if he, for instance, was selling a pair of boots he would cut the foot to fit the boot, not cut the boot to fit the foot. The answer given by the Lord Chancellor will be appreciated by many people in England and Scotland who do not desire such socialistic measures.
§ LORD BUCKMASTER
I am sure the noble Lord will appreciate my forbearance when I tell him that I could have pointed out that the whole of his speech has been out of order. I might have drawn attention to that a little time back.
§ LORD ABINGER
I beg the noble and learned Lord's pardon. I thought I had a right of reply. I hope your Lordships will forgive me.