HL Deb 08 March 1949 vol 161 cc202-11

4.6 p.m.

Order of the Day for the Second Reacting read.

THE PARLIAMENTARY SECRETARY, MINISTRY OF WORKS (LORD MORRISON)

My Lords, this Bill contains only three clauses, and is the smallest Scottish Bill which it has yet fallen to my lot to introduce in your Lordships' House. The object of the Bill is to enable a tenant of shop premises in Scotland who is threatened with eviction to apply to the sheriff to have his tenancy extended for a period of not more than one year at a time. The Bill, which gives effect to the main recommendations contained in the Reports of two Committees of Inquiry, is a temporary measure, and will expire on December, 31, 1950.

As a result of the shortage of shop premises since the war, and the high market value of heritable property generally in Scotland, the problem of shop tenure has given rise to many complaints. In order to meet the growing volume of representations the late Secretary of State for Scotland, Mr. Westwood, appointed on March 28, 1947, a Committee of Inquiry under the chairmanship of Mr. T. M. Taylor, K.C., to investigate the position in which tenants of shops in Scotland were placed at the termination of their tenancies. The Committee, in their Report, published in December, 1947, did not find sufficient evidence to justify immediate legislative action, but recommended that the position should be kept under review, lest it should deteriorate, and suggested the lines which legislation should follow if such a course became necessary.

In view of the serious situation which arose at the May term last year, the Secretary of State invited the co-operation of local authorities in considering cases where the threatened eviction of shopkeepers appeared to justify the requisitioning of their premises under Defence Regulation 51. Requisitioning powers could, however, be exercised only where necessary to maintain essential supplies and services, and could not cover many cases of individual hardship among the 450 cases of threatened eviction submitted by local authorities. Requisitioning undoubtedly had a steadying effect last year, but it is not a solution of the recurring problem of shop tenure in Scotland.

In November last, the Secretary of State, jointly with the President of the Board of Trade, reconvened the Committee of Inquiry under the chairmanship of Mr. H. W. Guthrie, K.C. (now Lord Guthrie), and the Committee were asked to report as a matter of urgency whether, in the light of recent experiences, any modification of the conclusions recorded in their previous Report with regard to shop premises in Scotland was called for. The Committee examined in detail the results of the requisitioning procedure last year, and in their Interim Report they say that it is impossible to escape the conclusion that the figure of 450 cases of threatened eviction, when compared with 150 cases considered in our original inquiry … represents a substantial proportionate deterioration. The Committee, realising that the majority of tenancies expire annually at the May term, also considered that it is most undesirable that particular shopkeepers should be penalised because of the expiration of their tenancies at a particular time. The Committee came to the conclusion that it was right "to offer some temporary protection to tenants" until their whole inquiry could be completed. The Committee therefore suggested that the original recommendation of the Taylor Committee should be put into effect immediately, with the modification that the sheriff should be able to grant renewals of tenancy for a maximum period of only one year at a time.

The Government have accepted the substance of the Guthrie Committee's recommendations, and effect is given to them in the present Bill. A tenant of shop premises in Scotland may in terms of this Bill, apply to the sheriff for a renewal of his tenancy within a period of twenty-one days after the service of the notice to quit or of the passing of the Bill, whichever date is the later. The sheriff may renew the tenancy, for a maximum period of one year at a time, on such terms and conditions as he thinks reasonable. If the Bill becomes law before the May term—and it is the sincere hope of the Government that its passage into law will not be delayed—the effect of this provision will be to enable any tenant who receives a notice to quit operative at the May term to apply to the sheriff for a renewal of his tenancy. The Bill is designed, in the words of the Guthrie Committee's Report, to provide an equitable solution to the problem of conflicting interests of owners and occupiers. In fairness to both landlord and tenant the sheriff is empowered, if in all the circumstances he thinks it reasonable, to dismiss the application; and in certain specified circumstances it is provided that he should not grant a renewal of the tenancy. These circumstances are, briefly, if the sheriff is satisfied that the tenant is in breach of any condition of his tenancy; that he is bankrupt; that the landlord has offered to sell the premises to the tenant at a price to be fixed, failing agreement, by an arbiter agreed on by the parties or appointed by a sheriff; that the landlord has offered the tenant reasonable alternative accommodation, or that the tenant has himself given notice to quit and in consequence the landlord has made other arrangements and would be seriously prejudice if he could not obtain possession of the premises. It is further provided that a renewal shall not be granted if, having regard to all the circumstances of the case, greater hardship would be caused by a renewal of the tenancy than by a refusal so to order. This omnibus provision will enable the sheriff to deal with the wide variety of competing claims which may arise.

As a large number of applications may be made to the sheriff about the time of the May term, the sheriff is given power in Clause 1 (5) to make an interim order continuing a tenancy up to three months until he is able to dispose of the application. Under Clause 1 (6), shopkeepers whose premises have been requisitioned by the Secretary of State under Defence Regulation 51 will be deemed to be tenants who have received notices to quit at the May term, and so will be able to seek a renewal of their tenancy under the Bill. Applications will be dealt with in the sheriff court under the small debt procedure, which is both cheap and expeditious, and to avoid protracted litigation the sheriff's decision will not be subject to review. The proposals will, in terms of Clause 2, apply equally to shop premises owned or occupied by the Crown or by Government Departments.

My Lords, this short but useful measure, the life of which is limited to the period ending on December 31, 1950, has been generally welcomed in another place, and its speedy passage to the Statute Book will meet with great acceptance in Scotland. I beg to move that the Bill be read a second time.

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

4.16 p.m.

LORD CLYDESMUIR

My Lords, I rise to give a welcome to this small but important Scottish Bill—but a qualified welcome, for reasons which I shall explain. I welcome it because it is designed to end an abuse, but the abuse itself should be examined. The abuse has grown up because a small minority of unprincipled persons have been speculating in property —particularly in property which includes shops—and this has brought undeniable hardship to a number of small shopkeepers. I suggest to your Lordships that, in the righteous indignation that we feel against such unsocial and unprincipled people, we should not condemn the majority of decent people who treat their tenants fairly, whether on this side of the Border or on the other side. The Report to which the noble Lord has referred brings the matter out in its proper perspective. There were 4.50 applications for action by the Secretary of State. Of these 450 applications, the Secretary of State rejected 20. He followed up 200 cases and used his requisitioning power in about 50 of them. But, of course, the fact that he was prepared to use it had an important effect upon the others. Therefore, although there is here a serious and troublesome evil, one must view it in its proper relationship to the great majority of people who have decent dealings with each other in our country of Scotland.

I welcome this Bill, also, on another ground. I think it is right that the Secretary of State should now cease to use his requisitioning powers to combat this evil. That he did so was a matter of necessity, and it was used with good effect, but it is using a very heavy engine for a purpose for which it was not really designed. The Secretary of State for Scotland has wisely decided to terminate the use of these powers and to seek legislation. The use of requisitioning had certain disadvantages, because it cut across contracts and it was not possible to take into account the question of individual hardship. This Bill places the sheriff in Scotland in a position of great importance as an adjudicator. We will not quarrel with this, for we have confidence in the ability of our sheriffs to make wise decisions. I think, however, your Lordships should note the very important functions delegated to them.

So much for the welcome; now for the qualifications. I am sorry that the Government have not seen fit to adopt the whole terms of the Guthrie Committee Report. Your Lordships will be aware that in paragraph 19 of the Report of Lord Guthrie's Committee it was recommended that the sheriff should not grant the application of the tenant if any of seven conditions was proved to exist. The Government have accepted four of these conditions, but not the other three. The three which the Government have not accepted are as follows: first, that the premises are required for the occupation of the landlord himself, or his son or daughter if over eighteen years of age, either to open up a new business or to extend an existing business; secondly, that the premises are required for the purposes of a scheme of re-development which might involve demolition, alteration or reconstruction; and thirdly, that if, for other reasons, continued occupation by the tenant was not consistent with good estate management, it should not be granted.

Particularly as regards the first kind of case, I feel some regret that the Government have not adopted the view of the Committee, and I propose at a later stage to return to this point and try, with the help of my friends, to devise an Amendment which may meet the difficulty expressed by the Secretary of State in Committee. In the Scottish Grand Committee the Secretary of State pointed out that if the first condition were included—that is, the one about a landlord requiring the premises for himself or his son or daughter—the sheriff would have no option but to make an order for possession, and then an unscrupulous man might recover possession and sell or re-let at a profit shortly afterwards. He did not see a way round that difficulty. The Secretary of State thought that the point was better covered by the provision in the Bill regarding hardship. I believe it would be possible to devise an Amendment which would safeguard the position by using something like the form of words which has been a part of all Rent Restrictions Acts up to date. That is to say, the paragraph concerned might be limited to the case of a landlord who reasonably required the property and, I suggest, it might be limited to landlords who have purchased before the commencement of the Act. I hope to return at a later stage to this point and see whether any Amendment can be devised which would meet the valid objections of the Government.

Then, as regards the other recommendation about alterations and demolitions for re-development schemes, I feel that this should be included, and I believe we can devise an Amendment to provide that the landlord should re-acquire possession if, in the sheriff's view, the scheme of reconstruction could be carried out only by the giving up of possession by the tenant, and that such re-development was essential. These may seem to be points of detail, but I feel they are points of principle. In combating one evil let us be sure we do not create another; and though the Bill as at present drafted contains provisions against hardship, I should feel much happier if the recommendations of both the Taylor Committee and the Guthrie Committee had been accepted. After all, those two Committees were presided over by most eminent and unbiased men, Mr. Taylor and Lord Guthrie, and they included representatives of important interests who could not be in any way regarded as biased on one side or the other. They gave the matter very careful consideration; and I do not yet feel that the Government have quite satisfactorily explained their reluctance to adopt fully all the provisions which the Committees recommended.

This Bill is a temporary measure, based on an interim report, and I presume it will be followed by more permanent legislation in the course of time. So far as it goes, and subject to the observations I have made, I welcome it. But it would be wrong to suppose that Scotland or the United Kingdom or, in fact, the world in general is made up entirely of knaves and fools. There are still some honest people about, and the law of contract between two willing parties should not be unduly hampered. We should not assume that no one is fit to sign a contract with his neighbour. We shall, therefore, watch the working of this Bill closely when it becomes law. For my part, and I am speaking for my friends also, we shall do our best to facilitate the Secretary of State's desire that it shall be on the Statute Book if possible by the May term.

4.25 p.m.

VISCOUNT ELIBANK

My Lords, may I support what the noble Lord, Lord Clydesmuir, has said regarding this Bill? Like him, I welcome the Bill. It is the result of very careful consideration by Lord Guthrie's Committee, and, so far as one can judge from their Report, they have examined the matter from every point of view and have come to good conclusions on all of them. Now the Government apparently have arrived at the conclusion that, whilst nearly all the recommendations in that Report ought to be adopted and have been adopted, there are three to be omitted—for what reason one cannot quite understand. Lord Clydesmuir has just referred to these particular recommendations seriatim and has explained why in his opinion they should be included; and I wish to support his contention. I cannot for the life of me see why, if a landlord has a son or daughter of adult age whom he wishes to succeed in the occupancy of his own property, for the purpose for which that property was designed and used in the past, that son or daughter should not be allowed to do so. Neither does Lord Guthrie, and he recommends that that provision should be included.

From the point of view of equity, we know that in these days property is not regarded with the same degree of sanctity as it was in the past; things are done to-day which many of us would prefer not to see done. At the same time, in a small measure of this kind, which everybody agrees should be passed, why omit something which must be regarded as a matter of equity? I hope that the Government will listen to what Lord Clydesmuir has said with regard to that point and also to what he said with regard to the second point, which dealt with schemes of re-development involving demolition, alteration or reconstruction. Here again, it might be very necessary to take those steps for reasons which would be obvious to all of us; and yet the landlord may be deprived of the ability to do so, and, in being so deprived, he may also be deprived of future profit. I do not like to use the word "profit" because everybody on the Government Benches dislikes it so much; but after all, this future profit is a fair claim and a fair process; it may happen some day that the noble Lord opposite will buy a house and sell it at a profit, and feel very pleased that he has done so. But it is, of course, important to prevent anything being done which would not be fair. That was the view of Lord Guthrie and his Committee.

Now we come to the third point, which is: If, for other reasons, continued occupation by the tenant would not be consistent with good estate management. That is a perfectly clear request or demand to make. In the Government's own legislation with regard to farming, for instance, a farmer or a landlord may occupy land but if, in the opinion of the Government, the work done on it is not consistent with good farming or good management, he is liable to be deprived of his farm and his property; it may be taken from him and handed over to someone else to farm and to manage. This is indeed a similar case. The landlord may say, and rightly say, that the occupation of the tenant would not be consistent with good estate management. Here again Lord Guthrie and his Committee have recommended that that provision should be included. I hope that, when my noble friend puts down his Amendments, on Committee stage of the Bill, as he has stated he will, the Government will be able to see their way to accept Lord Guthrie's recommendations in toto and not only in part.

4.33 p.m.

LORD MORRISON

My Lords, I see no reason to be dissatisfied with the qualified welcome that this small Bill has received. I entirely agree with the noble Lord, Lord Clydesmuir, that it affects only a small number of people. Certainly there is a danger, if one is not careful, that the general public will get the idea that the great majority ate doing these wicked things. As some of us know, if it were not for small minorities of wicked people, many laws would not need to be passed at all. That is the case here. I also agree with the noble Lord that the method adopted in this Bill is better than requisitioning. I can claim no special legal knowledge, but it is a little hard to see how it is possible for a local authority as a permanent policy to requisition shop premises merely on the ground that the landlord is seeking possession of the property It seems to me that the only reason why the local authority could requisition shop premises on a permanent basis would be that the supplies to the people who live in the locality were put in danger. Therefore, we are agreed that this is a better policy than requisitioning.

The noble Viscount, Lord Elibank, takes up largely the same position as the noble Lord, Lord Clydesmuir. They have both given notice that they propose to try to devise Amendments. I welcome that, and say that the resources of the Scottish Department are at their disposal for consultation because, in a Bill of this sort, if we can secure agreement readily it is far better than fighting it out and one side or the other carrying it by a majority. This Bill went through all its stages in another place without a Division. I am quite sure that we shall emulate them in that respect. I would point out to both noble Lords that, with regard to premises required for a landlord, or for his son or daughter, it was not thought there would be a right to evict the tenant in every case. Under the Bill, the sheriff can decide whether or not to evict the tenant. The test which the sheriff will have to apply is the test of hardship—which is the greater hardship. However, I do not want to go into that now; your Lordships have further business to do. Already, we have made a "gentlemen's agreement" that we will get together and try to devise Amendments which will be satisfactory to all.

I would like to conclude by saying that I give a qualified welcome to the discussion, not only the discussion that has taken place but the discussion that will take place on the next stage. The qualification is on one point—namely, that everybody who can move in Scotland may move on a particular day, a custom which is unknown in England. That is the critical point of this Bill. Everybody who can possibly move, and who wants to move, will move on May 28. Therefore, it is essential that all those who welcome this Bill should help to see that it is put on the Statute Book as long before May 28 as possible. With that qualification, I hope that we shall be able to satisfy Scotland.

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