HL Deb 10 May 1938 vol 108 cc956-82

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Viscount Gage.)

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF ONSLOW in the Chair.]

Clauses 1 to 3 agreed to.

Clause 4:

Provisions as to registration.

4.—(1) If the landlord of any dwelling-house let as a separate dwelling immediately before the passing of this Act, being a dwelling-house of which the rateable value on the appointed day did not exceed the respective amount mentioned in Section two of this Act, claims that by virtue of the provisions of Section two of the Act of 1923 the principal Acts had ceased to apply to the dwelling-house before the passing of this Act, he shall within three months after the passing of this Act make to the council of the county borough or county district in which the dwelling-house is situated application in the prescribed form for the registration of the dwelling-house: Provided that …

LORD JESSEL moved, in subsection (1), to substitute "twelve months" for "three months." The noble Lord said: I beg to move this Amendment, which stands in the name of the noble Earl, Lord Radnor. He is unavoidably absent, and is down in his country place, I believe, watching for the rain which does not seem about to fall. This is a very simple Amendment. In Clause 4 the period specified is three months, and this Amendment is intended to increase the period to twelve months. The clause was not much discussed in another place. Under it landlords of pre-War houses of a rateable value between £20 and £35 in the Metropolitan Police District and City of London, and between £13 and £20 elsewhere in England, must within three months register such houses if they are let and have been decontrolled by the landlord regaining possession after 1923. It seems rather a short period, because many of these landlords are small persons and not well acquainted with the intricacies of the law. If they do not register, they are heavily penalised. The clause provides later on that if, on application to the County Court of the district in which the house is situated, the Court not later than one year from the passing of this Act certifies that there was reasonable excuse"— then everything is put into order. I fail to see the reason for retaining three months as against twelve months. If they have failed to register, these men will be brought into Court—no doubt a very good thing for the lawyers, but rather detrimental to the landlords. Many of them own only one or two houses. I think the Government might concede this Amendment. It is not very important in regard to the main provisions of the Bill, and it will certainly be in the interests of these smaller people.

Amendment moved— Page 3, line 21, leave out ("three") and insert ("twelve").—(Lord Jessel.)

VISCOUNT BERTIE OF THAME

I should like to say a few words in support of my noble friend's Amendment. The penalty—and a heavy penalty it is—for not registering in time is the complete forfeiture of the owner's rights of decontrol unless he can prove special circumstances, when the Court gives permission to register after three months. Your Lordships might easily assume that the tenant who registers out of time will be in the same position as a tenant who has registered normally, but that is not so at all. The house, if registered in such circumstances, changes its character and is controlled in all respects, except that it is not quite permanently controlled. It is, however, controlled for the lengthy period of the life or lives of the tenant in occupation, of his wife, and even of some of his family after him, if any of them chooses to obtain possession of the house as against the landlord. Surely there can be no justification for so wanton a dispossession of an owner who, for good reason, has registered after the three months.

VISCOUNT GAGE

Before I deal with this Amendment, I should like to say one word which applies to several other Amendments. We all know that the Rent Restrictions Acts are a compromise, and when any alteration is proposed in the general law the Government are almost bound to be attacked on both sides. When this Bill was being considered in another place, attempts were made to amend several of the clauses which noble Lords want to amend here, but invariably in the contrary direction. We successfully resisted those attempts to give the tenants considerable advantages at the landlords' expense. I hope, therefore, that this Committee will not think it unreasonable if we resist attempts to upset the balance at which we have arrived, unless there is a quite overwhelming case. In these very complicated matters, consequential results are apt to be somewhat unfortunate.

This first Amendment seeks to upset a recommendation of the Ridley Committee which has been adopted by the Government. Perhaps, as my noble friend Lord Bertie has brought in a somewhat different consideration from that originally raised, I had better refer to the origin of this clause. When this system of registration was set up in the Act of 1923 it provided, as we do here, that three months should be a normal time for the registration of houses which were alleged to be decontrolled. The Court, however, was given an almost indefinite authority to allow subsequent registration: that is to say, that if the owner applied to the Court he was nearly always given permission to register. That absence of any limit to the Court's discretion has worked extremely hardly, and even now, five years after the passing of the 1933 Act, houses are still being so registered with the result that the tenant has found himself ejected on to the street without any warning whatever. The noble Lord is quite right; we have had to put in a special clause to protect such tenants in the future.

With regard to future registration under this Bill, the Ridley Committee quite definitely recommended a considerable tightening up of the procedure. They said that, as under the 1933 Act, three months should be the normal time for registration, but that in the case of these late applications not only should the authority of the Court be limited in time, but also there should be laid down fairly strict rules as to what claim should be admissible or not. My noble friend behind me wants to extend the three months' period which has been enforced ever since 1933, and which in the large majority of cases gave ample time to register, and he wants to give everybody, irrespective of whether there is good reason or not, a whole year in which to register these houses. In another place an attempt was made to cut down the nine months' discretion which Courts have now got, and the Government had to resist that be cause we thought there would be hardship on the landlord. Here it is proposed to go right against the intention of the Ridley Committee and leave the whole matter in doubt for a year. We think this would work very hardly against the tenants, and therefore we cannot accept it. I am given to understand that the majority of owners do follow very clearly what is happening in Parliament.

THE EARL OF MIDLETON

I rather regret to hear what has fallen from my noble friend. It seemed to me that his general proposition that it might make difficulties if we made Amendments did not meet the case. I have the greatest sympathy with the general principles of this Bill, but I have come across one or two cases of really exceptional hardship, in which control has been carried on really when it was not the intention of Parliament that it should be. I have actually got a case in my own neighbourhood in which control was asked for with regard to a house which had been granted as a kindness, at a very low rent, to an old servant, and then allowed to be carried on by his widow, again out of pure kindness. Actually, although the fact was not known, after the widow had herself died her daughter succeeded in paying a few instalments of rent, and then claimed to continue to occupy the house on the ground that she was the tenant, although really it was wanted for the use of the estate and no other house was available. As the three months' period hold goods, and she had paid rent for three months, nothing could be done. I would ask my noble friend to remember that this is a very big question, and I cannot help thinking that some concession should be made, if only that the three months should be extended to six months.

LORD JESSEL

I am very sorry that the noble Viscount in charge of the Bill has distinctly told us that he cannot accept these Amendments which appear on the Paper. After all, this House exists, and one of its great functions is

revision. Also, I think it has the right to look into the Reports of various Committees and Commissions which are presented to this House. If we are to be told that we are not to revise anything, what is the use of our existing? After all, there are not many Amendments on the Paper, and to say that we are not to have any of them at all appears to me to be most unreasonable. I should like to re-echo the proposition made by the noble Earl, Lord Midleton. If the Government are adamant as regards the proposal to extend the time to twelve months, we are quite prepared, as my noble friend has said, to compromise at six months. I think that is a fair proposition, and I hope it will be accepted. If not, I think we must go to a Division.

VISCOUNT BERTIE OF THAME

May I point out that the noble Viscount, Lord Gage, did not reply on the point which I raised—namely, whether he is prepared to put people who registered out of time owing to some disability in the same position as those who registered normally.

VISCOUNT GAGE

I must apologise to noble Lords. I did not know that we had such control over this House. All I intended was to make a respectful appeal to them, having regard to the difficulties of the Government on these complicated matters. With regard to what Lord Bertie said, it is a different proposition to that which is put down on the Paper. He asks for special consideration for those who are suffering from disability, and I do not think I can answer that without consultation with my right honourable friend. I think it is provided for in the Bill itself, which allows the Courts discretion. I again apologise to your Lordships, but I am afraid I must adhere to my attitude. I may conclude by saving to Lord Midleton that there is in the existing Acts special provision for obtaining possession of a house which is required for estate purposes.

On Question, Whether the word "three" shall stand part of the clause?

Their Lordships divided: —Contents, 39; Not-Contents, 6.

CONTENTS.
Maugham, L. (L. Chancellor.) Aberdeen and Temair, M. Munster, E.
Zetland, M. Onslow, E.
De La Warr, E. (L. Privy Seal.) Stanhope, E.
Airlie, E.
Carnwath, E. Mersey, V.
Northumberland, D. Lucan, E. [Teller.] Ridley, V.
Winchester, L. Bp. Fermanagh, L. (E. Erne.) O'Hagan, L.
Forester, L. Rennell, L.
Addington, L. Gage, L. (V. Gage.) [Teller.] Stanmore, L.
Amulree, L. Hare, L. (E. Listowel.) Strabolgi, L.
Bayford, L. Hindlip, L. Strathcona and Mount Royal, L.
Cautley, L. Holden, L.
Clanwilliam, L. (E. Clanwilliam.) Lawrence, L. Templemore, L.
Mancroft, L. Teynham, L.
Clwyd, L. Marley, L. Woodbridge, L.
Eltisley, L. Merthyr, L.
NOT-CONTENTS.
Grey, E. Bertie of Thame, V. [Teller.] Abinger, L.
Midleton, E. Jessel, L. [Teller.]
Saltoun, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment disagreed to accordingly.

VISCOUNT BERTIE OF THAME moved, in subsection (1), after "dwelling-house" and immediately preceding the proviso, to insert "and for the purpose of such registration subsection (3) of Section two of the Act of 1923 shall be construed as providing that possession of the key by the landlord shall be deemed actual possession within the meaning of the section." The noble Viscount said: Unfortunately for myself, and more unfortunately perhaps for your Lordships, my noble friend Lord Mount Temple cannot be here to-day, so that the duty of moving the three Amendments which stand in our joint names devolves upon myself. The object of this Amendment is to clarify the law, and I think your Lordships will agree that that is a desirable thing. I know it was argued in another place that it was unwise to make a change of this sort, on the hackneyed excuse that it was at the eleventh hour, being at the end of decontrol; but this argument does not hold water, because there are still many cases, and there will be more, in which controversy exists over the time and method of decontrol in the past. Such controversy exists even in the case of Class C houses which have been decontrolled. At the present time there seems to be great confusion in the Courts as to what actual possession is, and what this particular subsection really means. In Hall versus Rogers (1925 Times Law Reports) Lords Justices Scrutton and Bankes said that actual possession means actual physical possession, so that where a tenant left and the owner by his agent inspected the premises, ascertained they were empty, but having no key made no entry, the house was held to be controlled.

On the other hand there have been various decisions where it has been held that actual entry was not necessarily essential, and actual possession may exist where the tenant vacates and hands the key to the owner or agent. This Amendment is in the nature of a compromise between the two extremes. On the one hand there is the extreme where the tenant hands the key to the new tenant. That is sometimes held as decontrol, and sometimes not. At the other extreme it is held that the landlord, to establish decontrol, must enter and keep the house vacant while he has it painted and scrubbed before the new tenant takes over. As to the key being a symbol of possession, the 1923 Act provides that the expression "possession" shall be considered as actual possession and that an owner is not deemed to have come into possession by reason only of a change of tenancy made with his consent. The noble and learned Viscount, Lord Sankey, when Lord Chancellor, speaking during the passage of the 1923 Act, said that what had been actual possession had been the subject of decisions in the Courts, and he was sorry to have to say that the Courts had left the matter in doubt. If this Amendment is accepted the matter will be placed beyond doubt.

Amendment moved— Page 3, line 25, at end insert the said words.—(Viscount Bertie of Thame.)

VISCOUNT GAGE

This Amendment refers to registered houses, and therefore to houses which have been, or which are alleged to have been, decontrolled in the past through obtaining vacant possession. Your Lordships will understand that we are not proposing to decontrol any more houses, except some of the subdivided houses, in this way in the future. Therefore I think we ought to consider what effect, if any, it would have on those houses mentioned by my noble friend over which there has been some dispute before the Courts in the past. An owner might say it was quite true that he had tried to get possession of a house and failed, but with this new provision he might try again and possibly succeed. It seems to me that that might give rise to some confusion because there has been a great deal of litigation in the past as to what has constituted actual possession. And it is quite true that there has been considerable difficulty. But I understand that now the practice of the law is fairly well established. The second type of house to which the Amendment refers consists of houses which have been decontrolled in the past but have not as yet been the subject of any dispute. It would not be a case there of reopening litigation. Although this Amendment pm-ports to be a simplification of the law, I am not sure that it is. What for instance would happen if it were proved there were two keys to the house? I do not feel very convinced at present with what the noble Viscount has said, but I will certainly look into the question very carefully, and if there are any legal conundrums which can be solved, I feel sure we shall do everything we can to meet the position. But for the time being we think the Amendment might cause more trouble.

VISCOUNT BERTIE OF THAME

After what my noble friend has said I would not think of pressing the Amendment, but I hope he will give it his best consideration so that litigation may be avoided.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Clause 5 agreed to.

LORD MARLEY moved, after Clause 5, to insert the following new clause:

Increase of rent in respect of replacements.

" .For the purposes of subsection (1) of Section seven of the Act of 1933, fixtures and fittings shall not be deemed to include new fixtures or fittings provided to replace existing fixtures or fittings in pursuance of an order of the sanitary authority, or replacements of fixtures or fittings due to the disrepair of the fixtures or fittings replaced."

The noble Lord said: This is a relatively small point. We are anxious to have a new clause inserted after Clause 5, which deals with the right of the landlord to add 25 per cent. to the standard rent in order to cover repairs. There has been a good deal of difficulty about this. When the Committee over which I presided inquired into the question of repairs, we found that there were many cases in which the 25 per cent. increase was being paid, though repairs were not in fact being done. One of the reasons for that was that the cost of repairs had gone up very much during the years immediately following the War, but by the time the Committee over which I presided inquired into this matter we found that the cost of repairs had come down so considerably that, in fact, the allowance was ample to cover the cost of repairs. The Report of my Committee pointed that out in these words: It is, however, clear that the permitted increase, though not excessive, is now, owing to the fall in costs, sufficient to enable a conscientious landlord to carry out all necessary repairs on an adequate scale. Then we went on in our Report to say: We are satisfied that owners can no longer claim that the permitted increase is not adequate for its purpose. The evidence which we have received, however, shows that in many districts repairs are not being adequately carried out although the law provides ample machinery of a varied character for securing that they should be.

The law is not, of course, clearly understood by tenants, and I suppose that in only 10 per cent. of the cases in which rent might be withheld because repairs have not been carried out is a reduction of the rent made, because the remaining 90 per cent. of tenants are not aware of their rights. The effect of this is that if over a long period repairs are not carried out year by year, premises tend to fall into a state of such disrepair that the houses are no longer in good and tenantable condition and become a danger to health. The result is that a sanitary certificate is issued for perhaps quite large repairs in consequence of the neglect over a number of years. The sanitary authority makes an order. The object of this Amendment is to secure that when such repairs are carried out as the result of an order by the sanitary authority the landlord should not have the right to charge 8 per cent. extra rent on account of the cost of repairs ordered by the sanitary authority because of neglect in the past.

A similar, but not at all the same, Amendment was discussed in another place, and there was a full and very sympathetic debate. The Solicitor-General, who spoke for the Government, in refusing to accept the Amendment then proposed, which, as I say, was not the same as the Amendment now before your Lordships' House, used these words: I say with regret that I cannot accept this clause because something of art apparent case can be made for doing something of the kind which the new clause seeks to do. And he went on to say that he hoped he was revealing no secret when he said that for a very considerable time recently the Government had been wrestling with the problem as to whether anything could be done along these lines. That is of course no secret. We know that the Government wrestle with these problems continually, and even the Committee over which I presided were not able at that time to suggest a remedy.

As the Solicitor-General pointed out, it is extremely difficult to draw the line between what is an improvement and what is a repair, but in the concluding stages of that debate the Solicitor-General used these words: I should like to add one thing. I do not intend to give any undertaking at all, but in the light of the discussion which has taken place we will look into the matter again and see whether there is any reasonable way in which effect can be given to some of the desires expressed by honourable members on all sides of the House. I do not intend, (and I hope the House will not misunderstand), to give an undertaking that the Amendment will be made in another place. I have no reason to think that the discussion has removed our difficulties, but we will look into it again, and if it should prove a more attractive problem we will see what can be done in another place. We believe we have made it more attractive by modifying the Amendment which was moved in another place. We have removed from our Amendment all reference to improvements so that now it deals only with repairs. There is no question of improvements involved in this. The landlord's right to charge extra rent is limited only in the case of repairs and not in the case of any improvements which may be made. That was perhaps the fault of the Amendment in another place, and that has been corrected in your Lordships' House in order to make this Amendment more attractive anti more reasonable. I feel certain that the use of this House as a revising Chamber will appeal to very many of your Lordships, and that the Government will desire to accept a provision of this kind on this occasion. I beg to move.

Amendment moved— After Clause 5 insert the said new clause.—(Lord Marley.)

LORD JESSEL

Before the Government reply, I should like to ask the noble Lord, who so eloquently moved this Amendment, at what stage was the original Amendment moved in another place, and also whether any further discussion took place on the Report stage.

LORD MARLEY

The Amendment was moved on the Committee stage on April 12. I am not aware whether, in fact, any further discussion took place on this particular clause.

VISCOUNT GAGE

As the noble Lord has said, the Solicitor-General in another place did promise to look into this matter, and, as he said, the Government have wrestled with it, but, I am afraid, we have wrestled in vain. Although the noble Lord did give a survey of the existing law there are one or two things that I think he omitted. Standard rent is made up of a number of factors, one of which is an allowance for repairs. I know the allegation is that the landlord takes the allowance and does not do the repairs. The answer to that is that the tenant ought to use his statutory right, go to the local authority and secure a certificate that the house is not fit. If he does get that certificate, as the noble Lord knows, he can withhold the 40 per cent. increase.

The noble Lord said that the tenants did not avail themselves of that provision because of ignorance. All I can say with regard to that is that we have up to a point met that in this Bill by saying that in future every tenancy and the conditions of the tenancy shall be recorded in the rent book, which shall be compulsory, and in the rent book has to be put the address of the sanitary authority to whom application should be made. I think, therefore, that we have covered the tenants as far as we can against that particular form of abuse. We must leave something to the initiative of the tenant. Then the law goes on to say that if the owner puts improvements in the house he can charge the tenant an extra 8 per cent. of the value of the improvements. But the improvements must be of a reasonable nature, and if they are not, the tenant has the protection of the Court. In spite of what the noble Lord has said about limiting this new clause to repairs, I do not think it is possible to exclude improvements in considering repairs. I think we all agree that owners ought to improve their houses as well as keep them in repair. The whole object of this 8 per cent, increase was to encourage owners to improve their houses.

The question arises, supposing an owner replaces some derelict fixture by something which is both a replacement and a fixture, and an improvement results, ought the extra rent to be allowed for that improvement or ought it to be entirely considered as a repair? It seems to me that it is a bit of a repair and a bit of an improvement, and, theoretically, an apportionment ought to be made, so much being allowed in respect of repairs and so much given to the owner in respect of the improvement. But as your Lordships will understand, it is difficult to devise any formula to put into an Act of Parliament which would act as a sort of automatic guide in these matters. If any real grievance is felt by the tenant he can at present take the matter to the Courts. I agree that causes of litigation ought to be removed, but I am not entirely convinced that the proposed new clause would reduce litigation.

It is quite true that if a local authority orders a thing to be done they are confirming that there was something unsatisfactory going on, but the fact of their wanting something to be done to put right some defect does not necessarily rule out the fact that the owner might replace it with something a great deal better and costing much more, and in respect of which he would be entitled to extra rent. I realise that this Amendment is limited to repairs, but it would affect improvements as well, and would tend to deter owners from doing the very thing that is desired—namely, gradually to improve their houses. We think that it would be undesirable to have that deterrent at the present time when decontrol, as we believe, will become possible in the course of the next few years. I would also like to suggest to the noble Lord that if some formula could be devised the sums involved would very often work out in rather a ridiculous way. Supposing, for instance, that fixtures to the value of £20 were put in by the owner, 8 per cent. of £20 represents a weekly additional rent of 7½d. Suppose we were to apportion this and say that 4d. was to go to repairs and the remainder to improvements, is it really worth all this trouble? The tenant would have an extremely small advantage, and there would be great risk of discouraging other owners from making improvements. For these reasons, and because of the safeguards that have been put in the Bill to protect the tenant in the way of giving him information as to what his rights are, I would suggest that the law had better remain as it is.

LORD MARLEY

I am very disappointed at what has been said by the noble Viscount, although I must acknowledge his sympathetic treatment of the point we have put. I cannot help thinking that some formula might be found, and even though £20 were the sum and the amount of weekly rent additional is only 7½d. it does make quite a difference when there is very little money available to pay the rent. The noble Viscount knows as well as I do that 7½d. extra per week does really mean so many fewer pints of milk each week, or so much less to spend on food, and it really might make quite a difference to these very low rented people if £20 were spent to put right years of neglected repairs. I hope that it will not be thought that I am suggesting that all landlords neglect their repairs. I am dealing only with a few special cases of people who do in fact neglect repairs. £20 represents a failure to repair of only perhaps £1 a year over a number of years, or something of that kind. Therefore it will not seem unfair that the landlord should be to a small extent penalised even to the extent of 7½d. per week when he has neglected repairs over a number of years, which neglect has in fact finally made the house uninhabitable. I am not going to press this Amendment to a Division—that would be absurd—but I am going to ask the noble Viscount, because of the sympathy of his reply, whether he would look into the question before the next stage of the Bill and still see whether some formula may not be arrived at to help in this matter. I hope very much that I may have the support of the noble Viscount, Lord Ridley, on this point, though I do not know what he feels about it. If it were possible I am certain the new clause would bring about an amelioration in conditions to a number of suffering families.

VISCOUNT RIDLEY

I know that this particular matter was not actually mentioned in the Report of the Committee, but it was nevertheless discussed during the meetings of the Committee at great length. I think that members of the Committee appreciated, as your Lordships will also, the difficulty, the real difficulty, that exists in this matter, but so far as the new clause which has been suggested by the noble Lord, Lord Marley, is concerned I rather doubt whether it would in fact achieve the object at which it is aimed. In the first place, one must make a distinction between the difficulty of the tenant being able in fact to get his house repaired, or failing that to get the permitted increase of rent withheld, and the difficulty of hat would be a fair portion of any increase which might or would be made legal on account of a repair to the house which might include an improvement. If the fittings are new ones they may be of an improved type and then it might be arguable that there was an improvement. Having in mind that the general effect of the Rent Restrictions Acts is not to improve the quality of houses—your Lordships will know that many houses do deteriorate because it is difficult to improve them while they are under control—I think that any Amendment which would result in reducing the amount of repairs to houses, which might well he kept in reasonable condition for some time if landlords were encouraged to repair them, would be a misfortune. I agree that there is a difficulty, but I am afraid that I do not know the remedy.

LORD MARLEY

May I point out that this only applies to repairs carried out by order of the sanitary authority? The landlord would have to do them in any case.

THE SECRETARY OF STATE FOR INDIA (THE MARQUESS OF ZETLAND)

That no doubt is quite true, but it is desirable that we should not do anything to discourage the modernising of working-class houses by the landlords. While it is true, as the noble Lord, Lord Marley, says, that this only applies to prescribed repairs, it is very often desirable that repairs should take the form, to some extent at any rate, of an improvement.

LORD MARLEY

And the landlord can charge extra for that.

THE MARQUESS OF ZETLAND

If you make this Amendment the landlord will be discouraged from making any improvements and will merely make the absolute minimum of repair which he is bound to do under the order of the sanitary authority. At any rate, that is how the matter strikes me. On the other hand, I have a good deal of sympathy with the point of view put before your Lordships by the noble Lord, and a great deal of sympathy was expressed on behalf of the Government in another place. The Government then promised that they would see whether it was possible to find a formula which would meet the case as submitted to them. They have, I am assured by my right honourable friend the Minister of Health, done their very best to do so, but they have failed to find a formula which did not give rise to more trouble than it disposed of. Nevertheless, since the noble Lord has pointed out that the form of his Amendment is not precisely the same as the form of an Amendment moved in another place, I am quite willing to give an assurance that we will give further consideration to this matter in the light of the particular form which his Amendment now takes, with a view to seeing whether it it is at all possible to meet him in any way. I am afraid I cannot say more than that, but I willingly say that.

LORD MARLEY

I am very greatly obliged to the noble Marquess for the sympathetic attitude he has taken up, and I am quite sure your Lordships and the country will be glad of that sympathy. In the circumstances I will not press the Amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7:

Miscellaneous Amendments.

(2) In computing whether any and, if so, what increase in the rent of a dwelling-house to which the principal Acts apply is permissible under paragraph (b) of subsection (1) of Section two of the Act of 1920 (which paragraph relates to increases of rent corresponding to increases in rates) the amount of any allowance made to the landlord under any of the enactments relating to allowances given where rates are paid by the owner instead of by the occupier shall be treated as part of the amount payable by the landlord in respect of rates.

(6) The period fixed by subsection (2) of Section eight of the Act of 1923 for the recovery by a tenant or mortgagor of certain over-payments is hereby extended, in relation to payments made not earlier than six months before the passing of this Act, to two years from the date of payment.

THE LORD CHAIRMAN

I have a manuscript Amendment handed in by the noble Viscount, Lord Gage, to insert at the end of subsection (2) the following proviso: Provided that this subsection shall not come into operation with respect to any dwelling-house in England until the date on which a demand for the general rate in respect thereof is first made on or after the first day of October, nineteen hundred and thirty-eight, not being a demand for a sum which had already been demanded before that date.

VISCOUNT GAGE

I beg to move this Amendment. It is a perfectly simple one, and I think a non-controversial one, but nevertheless as by reason of a combination of departmental circumstances it is brought before your Lordships at very short notice, I may perhaps be allowed to explain it. If any noble Lord thinks that it ought to be given further consideration I would be prepared to withdraw it now on the understanding that I should be at liberty to put it down again at a later stage. The Amendment is simply devised to save trouble to the owners—trouble which may arise because of the date at which this Bill is clue to become law. As your Lordships know, the owners pay the rates of certain controlled houses—that is, houses below the compounding limit—and add a proportionate amount to the rents which they collect. It therefore follows that whenever the rates go up or down the rents also go up or down. Rates are usually made in April and October and calculations of the alteration of the rents obviously follow. But owing to the introduction of subsection (2), reversing the Nicholson versus Jackson decision, if this Amendment were not made an extra calculation would have to be made forthwith right in the middle of a rating period. To save owners the trouble of making several million calculations now and sending out an equal number of notices, we suggest that this Amendment should be accepted and the whole thing postponed to October when it would be normally done.

Amendment moved— Page 6, line 24, at end insert the said proviso.—(Viscount Gage.)

VISCOUNT BERTIE OF THAME

I have no wish to make myself obstructive in any way, but I should like to consult those representing small property owners in this matter, and I hope that my noble friend will not take exception, should I find that they are against this proposal, if I put down an Amendment to leave it out on the Report.

VISCOUNT GAGE

I have already promised that if anyone wants to have the Amendment postponed I will postpone it.

THE MARQUESS OF ZETLAND

I understand that the noble Viscount does not suggest postponing the Amendment. I gather that he is quite willing that the Amendment should be made, but that if, after consultation, he finds the Amendment is detrimental to owners, we should not take it amiss if on Report stage he moves to omit it.

VISCOUNT BERTIE OF THAME

That is so.

THE MARQUESS OF ABERDEEN AND TEMAIR

It occurs to me that this only applies to England, and that therefore in one year you have in England rates covering only half the year while in Scotland it will apply to the whole year. That does not seem quite fair.

VISCOUNT GAGE

The answer to that is quite simple. It does not apply to Scotland because the Nicholson versus Jackson decision does not apply under Scottish law. Therefore this particular calculation will not have to be made in Scotland.

EARL GREY moved, after subsection (2), to insert the following new subsection: (3) The making up or sewering by a local authority after the date of the passing of this Act under the provisions of the Public Health Act, 1875, or the Private Street Works Act, 1892, of a street or part of a street which provides a means of access to a dwelling-house to which the principal Acts apply shall be deemed to be an improvement to the dwelling-house within the meaning of Section two (1) (a) of the Act of 1920 and the amount of the apportionment or final apportionment in respect of the dwelling-house shall be deemed to be expenditure on such improvement and the provisions of the said Section two (1) (a) of the Act of 1920 shall apply accordingly.

The noble Earl said: This Amendment is designed to fill a gap in the Rent Restrictions Acts which I do not think would have been left there originally if Parliament had foreseen how wide that gap would grow. Under the law as it now stands the landlord may increase the rent of a controlled dwelling-house by an amount not exceeding 8 per cent. of the capital spent on improvements. The Acts of 1920 and 1935 made no allusion to the making-up of roads by public authorities under the Private Street Works Act, 1892, or the Public Health Act, 1875. It has therefore been held that the compulsory road charges which fall on landlords cannot be accepted as improvements in respect of which increased rents may be charged. This ruling disregards the fact that a house on a good road is more valuable than a similar house on a bad road. Undoubtedly by improved access the house is itself improved, and the whole cost is at present left on the landlord with no power to recover any of the expense to which he has been put. I suggest that, if town planning and public municipal improvements had been as common in 920 as they are to-clay, provision would have been made to prevent that from happening.

At the beginning of our discussions this afternoon the noble Viscount in charge of the Bill suggested that, as this was a very evenly balanced Bill, it would be extremely difficult for the Government to accept any Amendment which might interfere with that balance. This particular Amendment, however, though it would undoubtedly help landlords in one respect, would help tenants in another, and therefore escapes that condemnation. As the Act now stands, it undoubtedly handicaps properties with low rental incomes from obtaining good roads. Many subsidiary roads on private estates which might be more rapidly improved are long unmade. I speak with some experience, for during the last thirty years I have been a director of a company which has developed estates on the outskirts of many large industrial towns, and we know what a handicap this position has been to us. I do not know that it is a very serious result, but if it handicaps a large company, it must handicap small owners much inure in the correct development of their estate. It not only makes more financial difficulty for the landlord, but it also prevents good roads from being built for the benefit of the tenants on these estates. I beg to move.

Amendment moved— Page 6, line 24, at end insert the said new subsection.—(Earl Grey.)

VISCOUNT GAGE

I entirely agree that it is quite possible to prove a real evidence of hardship to the owners. I was trying to think out whether it was not possible to take a very extreme case where the amount of the road charges, plus the amount which the owner had to spend in repairs, would exceed the controlled rent which he was entitled to charge. Having agreed, however, that there is a hardship, I should like to turn for a moment from the owner to the tenant and take a case which does not always occur but is not entirely unheard of. I would ask your Lordships to take the case of a tenant of a cheap house, a humble sort of house, with a piece of garden attached to it, possibly rented at four or five shillings a week. By reason of this garden it might have a rather longer frontage than usual, and if it stood at the corner of a road, which is again not unheard if, it might have a hundred feet of frontage attached to it. The cost of making up roads and putting in sewers, as your Lordships are aware, works out roughly at about £1 a foot, so if there are one hundred feet, the road charges would be £100. Eight per cent. of £100 is £8. That would in itself nearly double the tenant's rent, and in addition he would have to pay extra rates, because the rates would probably be increased owing to the improvement. It would be a serious matter for a labouring man to find his rent put up by that amount. I quite agree that it would be an improvement, but is it the sort of improvement of which the tenant would feel that the benefits were equivalent to all the extra money he was paying?

I quite realise that the reply is that, even if these improvements were not appreciated by the tenants, they would be still less appreciated by the owner, because he would get no advantage from them at all for the time being, and he would have to find £100 down. Of course that is a temporary hardship. But the difference surely would be that, although that hardship exists for the time being, when the house becomes decontrolled the value of the land on which it stands becomes very much increased, because the owner will be able to sell the house, or replace it and perhaps build more houses and sell the land to somebody who has enough money and is willing to pay for the improvements. The cost would be in the nature of a capital charge on the land. You cannot consider these improvements in the same way as repairs; they are a permanent addition to the capital value of the land. I suggest that the admitted hardship of having to wait for decontrol, which after all is to-day a feasible possibility, is not so great as the hardship which might be caused to the poor tenant by doubling the rent for improvements which he probably does not desire at all. Therefore the law, imperfect though it may be, had better stand. I should like to emphasize that this point has been made before, and at a time, too, when the argument of the noble Earl would probably have had greater force, because many more houses were under control and decontrol was much further off. Nevertheless, Parliament never has allowed it, and the time seems late now to make this highly controversial innovation.

EARL GREY

The noble Viscount has chosen a rather extreme case, in which he suggested that the rent of the cottage might be doubled if this were allowed. But there is always a happy medium, and if the Government thought that that was going too far, they might easily put a limit beyond which an increase of road charges might not go. It might even be a very moderate limit. The only satisfaction the noble Viscount holds out is that we should wait for the cheapest class of houses to be decontrolled. I do not know whether he is thinking of his grandsons or his great-grandsons! It will not give us a great deal of comfort if we are in the position of having to wait.

VISCOUNT GAGE

I will certainly consider the matter further, but I do suggest that houses of this character would be semi-rural houses and not in the hard core of the towns. I think the noble Earl might be a little more optimistic.

VISCOUNT RIDLEY

This was one of the matters discussed very carefully at the recent Committee, and I do not doubt by the Committee presided over by Lord Marley, and the conclusion was reasonably come to that this is one of the many problems involved in rent restriction on which it is impossible to find hard and fast reasons for a decision one way or another. If this Amendment were accepted to remedy hardships in one case, it is probable that it would cause hardship in another, and on balance would impose greater hardship all round. Most important factors have been mentioned by Lord Gage, and I hope your Lordships will remember this in connection with general rent restriction, that the law as it stands is very much in line with the spirit of this Bill; that is to say, that although it may be held to be unfair to restrict one form of property rather than another, it is on the whole necessary. I think the most consistent way of dealing with this matter is to leave it as it stands at present.

Amendment, by leave, withdrawn.

VISCOUNT BERTIE OF THAME moved, in subsection (6), to leave out "two years" and insert "twelve months." The noble Viscount said: In moving this Amendment I would point out that in another place the Under-Secretary of the Ministry of Health endeavoured to justify the extension of twelve months, which was the period originally in the Bill, to two years for the recovery of over-paid rent, because "the Government was most anxious to meet the wishes of the Opposition on this question and," to use his own words, "make this very substantial concession." Nothing more, no argument, no explanation was given. It is certainly a very substantial concession, and one which I hope to prove is unjustifiable, which probably accounts for the fact that the Under-Secretary was so sparing of his own words in giving way to the Opposition.

My noble friend below me just now relied upon the Ridley Committee. The Ridley Committee, therefore, proves to be a double-edged sword, because the Ridley Report says that hardship may be caused to landlords who have quite innocently calculated the permitted increase of rent on a basis which may subsequently be held by the Courts to be wrong. The Committee were unwilling to suggest any alteration of the law which might operate harshly, and pointed out that the landlord was not entitled to recover under payments. At most the Committee recommended the extension to twelve months, but now the Government have accepted two years. It was suggested in another place that landlords were experts in housing legislation, and that tenants were not, but I think I can fairly say that all Housing Acts are extremely difficult to comprehend, and that view is borne out by the fact of conflicting decisions in the Courts. I beg to move.

Amendment moved— Page 7, line 42, leave out ("two years") and insert ("twelve months").—(Viscount Bertie of Thame.)

VISCOUNT GAGE

It is quite true that we are here departing from the recommendations of the Ridley Committee, but not, I suggest, on a matter of principle. It is also suggested by my noble friend that we did so without giving any reasons, except fear of the Opposition. I have some reasons which I hope will persuade your Lordships, and I assure my noble friend that we usually have reasons besides mere terror of the other side. I will ask your Lordships to take this matter back a little way. In the early days of rent restriction, I understand, if an owner was discovered charging his tenant more than he was allowed to charge under the Act, that amount was treated as a debt due from the landlord to the tenant, and accordingly was recoverable, under the Statute of Limitations, up to a period of six years. We all know that these Acts are very complicated, and as time went on it was found that this procedure was causing great hardship to certain owners, who quite ignorantly were breaking the law and suddenly found themselves called upon to pay comparatively large sums of money.

That situation was reviewed by a Committee presided over by the noble Earl, Lord Onslow, and in 1933 Parliament agreed to limit the liability very considerably, and it reduced the period during which an overcharge might be recovered from six years to six months. The Ridley Committee found that this very considerable reduction led equally to abuses, because some of the less scrupulous owners, using very flimsy excuses, overcharged, with the idea that even if called upon to refund by the Courts they might get away with a good deal more than they were called upon to repay, because of the long period during which they had overcharged. In other words, the Ridley Committee found that the period of six months was not acting as a sufficient deterrent in cases of this sort.

I think your Lordships will agree that the law ought not to be evaded. It is obviously wrong, if there is a law, that it should not be maintained, and the question is what is the best period which will act as a sufficient deterrent to unscrupulous owners, and at the same time not act with undue harshness against the purely ignorant owner. It is a matter for compromise, and by a majority the Ridley Committee recommended twelve months. The minority wanted to go back to the original six years. In another place there was a general feeling that an increase to two years would be appropriate, because it was felt that by this time owners as a class know fairly well what are the proper rents to be charged, and that there would not be many cases of overcharge arising from ignorance, although there might be through—I will not call it deliberation but some intention to evade the Act. By that period of two years we propose to stand, and I would like to point out that we resisted a proposal made by the Labour Party in another place to take up the Minority Report and extend the period from six months to six years.

VISCOUNT RIDLEY

The Committee over which I had the honour to preside having been used to-day as a two-edged sword, I find myself in rather a difficult position. I will not trouble your Lordships with a quotation from the Report, because it would be rather long. Briefly, I think the only thing to remember is that there is really no reason why there should be any limitation for this period, except for the one fact that the complications of these Acts are so great that many landlords have honestly and genuinely made mistakes, and even without making mistakes have found themselves in error owing to certain judgments delivered from time to time. As a result of those judgments very often it has been found that large blocks of houses have been paying higher rents than they should have done. In that case it is reasonable that a very great deal should be paid back, even though the higher rent was not charged dishonestly and there was no intention to profiteer. The decisions which are known as Nicholson versus Jackson and Gregory versus Strood Estates would both in different ways automatically cause corrections to be made in the rents of a large number of houses.

There is one clause in this Bill which has the effect of reversing one of those decisions, but it is not beyond the bounds of possibility that the same thing might happen again. The problem is therefore to try to fix such a period as will deter a landlord who wishes to take more than he is entitled to take, and a period which would not really be unfair or too hard on the well-meaning and honest owners of property, who for various reasons might nevertheless be overcharging. As to whether it should be two years or one I find it very difficult to have a firm opinion. One must remember that what we are considering is the right to reclaim money which has been paid illegally. On the face of it I think one should incline to the opinion that the longer period is probably the just and fair one. I do not think that your Lordships should accept this Amendment, although it is in the same sense as the Report which was made by my Committee.

On Question, Amendment negatived.

VISCOUNT BERTIE OF THAME moved to insert at the end of subsection (6): Provided that such extension shall not apply to premises to whose decontrol no objection has been raised during the previous five years. The noble Lord said: I first propose to quote the salient features of a case which has recently been brought to my notice and which I am told is typical. In 193o a block of about forty houses was bought from executors. It was managed by a firm of house agents. At the time of completion a firm of solicitors, at the request of the purchaser, furnished a list of houses which the firm said were decontrolled. On the assumption that the list was given in good faith the purchaser asked for no proof of decontrol. But to satisfy himself he looked at the Voters List for 1923 to see if there had been any change of tenancy and, although that is no proof, it is certainly a kind of prima facie evidence. He also marked in red ink all the rent books of such houses as being decontrolled. In spite of that, only last year a tenant claimed that his house was still controlled, on the ground that when he entered in 1923 he received the key from the outgoing tenant, and that consequently the owner or his agent never legally went into possession. How is it possible after the lapse of thirteen years to prove decontrol in such a case, especially as during the last five or six years no objection to the claim had been raised, although the tenant had had notice of the claim, since the rent book was clearly marked?

Then again, Class B houses which have been decontrolled by possession since July 31, 1923 (almost fifteen years ago), will have to be registered, and records may have been lost owing to various causes, such as death or change of ownership. If registration as in Class C is no proof of decontrol, of what use is it? Even with present Class C houses it has been extremely difficult to satisfy County Court Judges on decontrol. One case reported was to the effect that an agent produced the office books showing a break in tenancy and, although in that case the house was registered, the Judge would not admit decontrol unless the man who actually decontrolled the premises was brought into Court. It might be impossible to produce him, as he might be dead or untraceable. A more recent case dealing with a Class B house claimed that the house was decontrolled and the claim was not questioned by the tenant—who, by the way, had only paid two or three weeks' rent in twelve months. The Judge asked the agent applying for possession if he had decontrolled the premises and, on being told that he had not but that the office books were in Court to confirm the claim, the Judge simply non-suited the applicant without reason or explanation. Every tenant of a decontrolled house—whether registered or not it makes no difference—is in a position to dispute the validity of decontrol and put the owner to the trouble and expense of furnishing sufficient proof to satisfy the Judge. The whole scheme is bad and unfair, and I do not think it works as it was intended. I hope I have shown your Lordships the difficulty of proving decontrol sufficiently to persuade you to support this Amendment.

Amendment moved— Page 7, line 43, at end insert the said proviso.—(Viscount Bertie of Thame.)

VISCOUNT GAGE

My noble friend has put his case very persuasively, and I quite admit that there is again in this matter a very strong probability that hard cases arise, but I must again ask your Lordships to turn to the effect in the other direction. On the last Amendment I had occasion to explain that one of the objects of extending the period for which overcharges might be recovered was to circumvent the unscrupulous owner. I understand that cases of this sort are brought to light as often as not when, for instance, the tenant falls into arrears with his rent and an action arises in the Court, and during the course of the action it is discovered that for a considerable time past the owner has in fact been overcharging. In such cases it seems to me that if those overcharges have been made over a long period that is all the more reason for reimbursing the tenant.

The noble Viscount has suggested that it is unreasonable to reopen these cases if the tenant has been a long time in possession without apparent discomfiture. I agree that if tenants were often moved in this way to take the owners to Court after so long a period, and if they had had no reason for the delay, it would seem unreasonable; but, as I have explained, I do not think that is the way the majority of these cases arise, and whether it is or not, one has to consider these other cases. They are discovered, as I have said, fortuitously and indirectly, owing to some other action, and I cannot see why the noble Viscount should want to apply the rule that the greater the offence the less the penalty. The owner who has been overcharging for an exceptionally long period would apparently get off scot-free. A very good reason also why the Amendment should not be accepted is that the word "objection" is, I am informed, rather vague in its effect. Would some casual remark be evidence of objection or would it have to be recorded in writing? For that reason and for the much more important reason I at first adduced I am afraid we must resist this Amendment.

On Question, Amendment negatived.

Clause 7, as amended, agreed to.

Remaining clauses agreed to.

Schedules agreed to.