LANDLORD AND TENANT (RENT CONTROL) BILL

HL Deb 22 March 1949 vol 161 cc546-86

2.41 p.m.

Order of the Day for the Second Reading read.

THE MINISTER OF CIVIL AVIATION (LORD PAKENHAM)

My Lords, the House have just shown how glad they are to see the noble and learned Viscount the Lord Chancellor back on the Woolsack. I know that there is no one who grudged him a moment of the short time he was away, but part of the price has yet to be paid by all members of the House—and not least by myself, because, if he had returned a few days earlier, he would be presenting and expounding this complicated measure, with infinitely more authority and lucidity than are likely to be at my disposal this afternoon. With those few words of apology, I will now turn to the Bill.

This is a short Bill of limited scope. It deals with certain aspects of rent control on which the existing law has been found to be defective. Accordingly, the Bill seeks to remedy these defects, and to remove hardships from which, as a result, a great many people in this country are suffering at the present time. The Bill deals with four main points. First of all, it enables rent tribunals to fix reasonable rents for houses and flats, including parts of houses, let for the first time since September 1, 1939. I would stress those last words—houses and flats let for the first time since September 1, 1939. Secondly, and as a corollary to the first point, it enables the tribunals, where a premium was paid in addition to the rent in the case of these houses, to determine the appropriate amount by which the rent should be reduced on account of the payment of the premium. I would venture to say that those are the two main points in the Bill, but there are at least two other points of considerable importance. Thirdly, it brings within the scope of rent control dwelling houses which have been held to be outside control simply because some part of the living accommodation has been shared by the tenant with the landlord or by the tenant with other tenants. Fourthly, it enables rent tribunals to grant extensions of the period of security of tenure, amounting to three months, to which the Furnished Houses (Rent Control) Act, 1946, entitles tenants of furnished lettings who have applied to rent tribunals to have their rents determined.

As your Lordships are aware, the Bill was fully considered and discussed in another place, and I think I may say that it was not only amended but improved. I will say a word in a moment about one or two of the chief Amendments made. In the result, it received general approval, and was not pressed to a Division on the Third Reading. I hope, therefore, that the Bill, as it comes before your Lordships, will commend itself to the House, and that there will be harmonious and, indeed, even enthusiastic acceptance of the Bill in its present form, at any rate at this stage of its progress here. In examining the purposes of the Bill, I propose, if I may be allowed to do so, to restrict myself to its general principles and not to attempt a detailed exposition of the Bill clause by clause. May I take the first of the four main points? The first object of the Bill is to provide a better control of the rents which may be charged for houses let for the first time—I keep stressing those words—since September 1, 1939. Perhaps I may remind your Lordships that under the Rent Restrictions Acts the standard rent of a house not previously let which comes within the scope of the Acts is the rent at which it is first let—that is to say, that a landlord has hitherto been free on the first letting of the house to obtain the highest rent that he can get for it, and that rent then becomes the standard rent. In other words, up to the present, rent control applies only to second and subsequent lettings. Naturally, in a period of great housing shortage, very high rents can be obtained for houses not previously let, and there is evidence that excessive rents have in fact been charged for such houses, more particularly since the end of the war but also in a number of cases during the war in areas where there was great pressure on the housing accommodation available.

I break off to say that, in speaking of houses, of course, I include flats, an increasing number of which have become available in the last few years by the conversion of large houses. This conversion is naturally a most desirable process, from the point of view of increasing the supply of housing accommodation, but it has often been accompanied by demands for unreasonably high rent, which those in search of homes have had to pay. I think there will be general agreement with the proposition that excessive profits should not be extracted from a situation of shortages, particularly where the shortage is in a commodity such as housing, which is so essential to human existence and decent family life. It seems reasonable, therefore, to extend the Rent Restrictions Acts to cover first lettings that have taken place since the special emergency began with the outbreak of the war, when building largely ceased.

In the light of that consideration, the Bill proposes that, where a house subject to rent control, or part of such a house, is let for the first time since September 1, 1939, the landlord or tenant may apply to a rent tribunal to fix a reasonable rent, and the reasonable rent so fixed, if it is less than the rent previously payable, becomes the standard rent from the date of the determination by the tribunal. Due allowance is to be made for any increase in rent that would have been permitted under the Rent Restrictions Acts. The rent which is reasonable for a dwelling house is to be the rent which is in all circumstances reasonable on a letting of that dwelling house on the terms and conditions, other than the terms and conditions fixing the amount of the rent, on which the dwelling house is let at the time of the application. I should emphasise here that the reasonable rent as determined by the tribunal, if it is less than the previous standard rent, becomes payable only from the date on which the tribunal reach their decision. That is clearly important. There is no provision enabling a tenant to recover any rent he may have paid in the past. Some criticism of the Bill was made in another place on the ground that it would discourage conversion of houses into flats, and also reconditioning, by interfering with contracts already entered into for payment of rent. But some Government intervention is clearly justifiable when one party to the bargain has been placed in an undesirably strong position through no effort of his own; and the extent of the actual interference is limited to the future and is not retrospective.

Another criticism was that conversion and reconditioning would also be discouraged because persons proposing to provide accommodation in this way would not know what rent they could properly charge and, therefore, what return they could receive on their investment. I am glad to say that the provision added to the Bill enabling the landlord as well as the tenant to apply to the tribunal for a determination of the rent, coupled with the proposals recently introduced in another place for the improvement of houses, was one of the factors which assisted in securing agreement to the Bill as a whole. I would particularly stress the provision which was added enabling landlord, as well as tenant, to apply to the tribunal for determination of the rent. I would mention, in passing, however, that certain houses are excluded from the scope of this provision. These are houses under the management of a housing association which normally attract Exchequer subsidy, and the rents of which are approved by the local authority. A development corporation established under the New Towns Act is regarded as a housing association, and this is made clear in the Bill. Also excluded are houses the rents of which are limited by any enactment other than the Rent Restrictions Acts. I could go into that subject at much greater length, but perhaps these matters are more appropriate at a later stage.

I would now pass to the second main point. It is not sufficient merely to provide machinery for fixing reasonable rents. The housing shortage not only allowed exorbitant rents to be obtained but also provided the opportunity for levying excessive premiums—and the second point is concerned with premiums. This, I venture to think is an issue that will tax all those members of this House who are not already expert in this field, but the broad case can be stated quite clearly. Under the existing law, it is generally illegal to charge a premium for the grant, renewal or continuance of a tenancy of a house to which the Rent Restrictions Acts apply—a notable exception being leases for fourteen years or more—and in addition to having to repay the illegal premium the person charging it is liable to a fine not exceeding £100. In practice, however, it is often difficult to prove an offence and to recover what has been paid by way of illegal premium. The Bill, therefore, makes provision in effect for the recovery of part of any excessive premium not already recovered. It does so by enabling the tenant to proceed as follows. On making application to a tribunal to have the reasonable rent determined, he may require the tribunal to determine the rental equivalent of any premium that may have been paid by him or a previous tenant under the same tenancy of the dwelling house. Having had this rental equivalent determined, the tenant can then make sure that its amount is deducted from the reasonable rent.

The determination of the rental equivalent depends on what reasonable rent may be charged. Perhaps I may make this a little clearer by an illustration. Suppose that the lease on a house has been granted for ten years, at a rent of £125 per annum and a premium of £500. We will suppose that the tenant makes application to the tribunal at the end of four years. The problem is, to find the rental equivalent of the premium he has paid. To do that we divide the £500 paid as premium by the ten years of the tenancy, and thus discover that the rental equivalent of the premium is £50. We will further assume that the reasonable rent fixed by the tribunal is £100, against the £125 which in fact this tenant has been paying; so the £100 is what the tenant would have to pay for the remaining six years if no question of a premium had ever arisen. But as he has already paid a premium having a rental equivalent of £50, he actually has to pay, for the remaining six years, only the reasonable rent of £100 minus the £50—in other words £50 a year for six years.

If this gentleman is paying £125 a year, the tribunal would say to him, "You ought only to be paying £100 a year. That is what you will have to pay for the remaining six years." But he says, "I have already paid a large sum in premium." The tribunal then work out the rental equivalent and say, "You will have to pay only £50 a year for the remaining six years, instead of the £125 which you have been paying hitherto." One can put it the other way round. Over the six years, the tenant recovers £300 of the £500 he has paid as premium. Compared with a man who rented a similar house at the same rent, but who paid no premium and who had the same reasonable rent fixed after the same period of time, he would be £200 worse off to-day having paid the premium. So he would not get it all back; he would get £300 out of £500. The Government are going a long way to enable tenants to recover premiums, but they have not made the Act entirely retrospective.

Where the letting is for less than seven years, it has been found necessary to assume a letting of that period which may be taken as a reasonable estimate of the time the tenant expected to stay when he took the letting. I might pursue that point a little further if pressed, but perhaps for the moment I have inflicted almost enough mental arithmatic on the House. In cases where the premium is so excessive that the rental equivalent exceeds the reasonable rent, the tribunal fixes a date falling at the end of a rent period and so calculated that if the letting were to continue to that date the rental equivalent would be less than the reasonable rent but as nearly as possible equal to it. That, I feel, would supply a reasonable intelligence test to students, but I will attempt to illustrate that also with an example.

Let me go back to the example I gave—that is, a lease for ten years at an actual rent of £125 per annum, with, let us suppose, a reasonable rent fixed after four years at £100 a year. In the case I gave the premium was £500, but let us suppose that the premium had been grossly excessive—shall we say £2,000? With a ten-year tenancy, the rental equivalent would be £200, or twice as much as the reasonable rent. In this kind of extreme case the tribunal will assume that the tenancy is for twenty years; the rental equivalent of the premium becomes £100 a year, the reasonable rent (the rent that the gentleman has to pay for the rest of the time) has been fixed at the same figure; so that the tenant, in the extreme case where a very exorbitant premium was paid, can live rent free for the remaining sixteen years; and after all he has gone through and the calculations made on his behalf, who shall say that he has not earned a degree of immunity!

VISCOUNT SIMON

Is he bound to stay for twenty years?

LORD PAKENHAM

No one can be forced to stay for twenty years. But let us look at it fairly and squarely. After all, the man has recovered only £1,600 of the £2,000 that he paid, and he would be £400 worse off than a friend who took a similar house without a premium at a similar rent, and who had it reduced to a reasonable rent at the same time; and he would be £500 worse off than a friend who took a similar house and paid a reasonable rent from the beginning. No one can say that this gentleman has scored unduly. What he has got back is most of the exorbitant premium which was originally inflicted upon him.

I would add just two points in this connection. The first is that the right of recovering a part of the premium in this way ceases when a new tenancy is granted to a new tenant, but it does not cease when there is an assignment of a tenancy. Secondly, where the ownership of a house has changed since the premium has been paid, the tenant has no right of recovery against the new landlord. He may, however, recover in a lump sum from the landlord to whom the premium was paid—that is, the original landlord—the amount of the premium he would have been able to recover by deduction from the rent had there been no change in ownership.

I must mention, though I do not wish to detain the House unduly, that the Bill contains other provisions about premiums. As I explained earlier, premiums are generally illegal under the existing law. The Bill, with limited exceptions, makes illegal all premiums for houses to which the Acts apply, whether they are required for the grant, continuance, renewal or assignment of a tenancy—I stress that phrase. One of the chief criticisms of the Bill as originally intro- duced was that, while providing for the recovery in part of premiums charged by landlords, it allowed tenants, who make no contribution to the provision of accommodation, to charge premiums on assigning leases. This has been put right, and I am hopeful that this fact also will endear the Bill still mere effectively to your Lordships. Certainly it had a great effect in another place. The provisions in the Bill relating to premiums are, I must acknowledge, somewhat complicated, but I hope that the explanations I have given will enable them to be readily understood. I venture to say, however, that no one will criticise the purpose of the Government in trying to ensure the partial recovery of excessive premiums paid in the past.

I now come to the third and fourth points, which are only of slightly less importance than the first and second. On the one hand, there is the matter of the bringing of tenants of shared rooms within the protection of rent control and, on the other, there is the extension of security of tenure to tenants of furnished lettings. I hope that the relevant provisions will prove less controversial than those which I have already touched upon.

To take first the sharing of rooms. The Rent Restrictions Acts apply to a house or part of a house let "as a separate dwelling," if it is let unfurnished, and falls within the limits of rateable value—that is, £100 in London, £75 elsewhere in England and Wales and £90 in Scotland—specified in the Acts. The tenant of such a house is protected by the Acts against unauthorised increases in rent and against eviction without the sanction of the court. In 1943, it will be remembered, the Court of Appeal held that a letting by which the tenant shared living accommodation with his landlord was not a letting of a house as a separate dwelling. Subsequent decisions have shown that a kitchen, used for cooking only, constitutes living accommodation, and that a sharing between tenants destroys the protection of the Act just as effectually as sharing between a tenant and a landlord. These decisions have caused widespread concern, and have defeated the original purposes of the Act. The Bill sets out to remedy this particular defect. It draws a distinction between tenants who share rooms with their landlords and those who share them with other tenants. As was pointed out by the Committee over which the noble Viscount, Lord Ridley, presided with so much skill, and whose Report has been so widely studied, it would clearly be undesirable for an arrangement to share living rooms between landlord and tenant to be brought within the Rent Restrictions Acts, and, in effect, rendered permanent. Accordingly, the Bill proposes in such cases—that is, where the tenant is sharing with the landlord—that the tenant shall have the right to appeal to a rent tribunal to fix a reasonable rent, and shall thus be able to obtain three months protection, with the possibility of extensions. This last is a matter with which I will shortly deal. Tenants who share living accommodation with other tenants will be given the full protection of the Rent Restrictions Acts, in their tenancy of the accommodation which they occupy separately—for example, bedrooms, or, it may be, living rooms. The power of a landlord to modify a tenant's right to use accommodation shared with ether tenants—for example, a kitchen—will be restricted by the Bill, and any modification on his part which goes further than a variation in the number and identity of the other tenants with whom he must share can be authorised only by the county court. I can imagine that it might be very irritating, when you had arranged to share a kitchen with people you liked, if they were to disappear and people whom you did not like were set in their place. But, clearly, one could not insist on the personal charm of one's co-tenants as a matter of right.

So much for the third point; I now come to the fourth. Under the Furnished Houses (Rent Control) Act, 1946, the tenant of premises let furnished or with services can apply to a tribunal to fix a reasonable rent, and once the tenant has applied to a tribunal no notice to quit served on him can take effect until three months after the case is decided, unless the tribunal reduce this period. It was hoped when this provision was passed that landlords would refrain from turning out their tenants at the end of three months simply because they had appealed to a tribunal. It has become plain, however, that, in very many cases, evictions do follow on these appeals, and that many tenants who are being charged excessive rents are not prepared to apply to a tribunal because they are afraid of being turned out. In suitable cases, the Minister of Health has allowed requisitioning, to prevent hardship, but requisitioning is not always—and perhaps not usually—the appropriate remedy. The Bill, therefore, will give tenants who have been to a tribunal, have had their rents determined and have subsequently received a notice to quit, the right, unless on the original application the tribunal decided to reduce the normal period of three months, to apply to the tribunal again before the notice expires, for postponement of the notice to quit. This right will also apply to tenants who share their rooms with their landlord.

If I am a tenant, and I go to a tribunal and have my rent determined, and the landlord comes along and says that I must clear out, I have the right to apply to the tribunal again before the notice expires. On application, and after giving both parties the opportunity of being heard, or of submitting representations in writing, tribunals may extend by not more than three months the time before the notice to quit can take effect. The tenant, if he continues to receive notices to quit, can make fresh applications at intervals, and the tribunal can give fresh extensions—but never more than three months at a time. The system will thus be quite flexible, and will allow full account to be taken of any changes of circumstances.

My Lords, as I said at the beginning of my speech, this is a short Bill. I fear that it is complicated, but that is inevitable in view of the nature of the subject. I have set out its main principles. I know that there are many of your Lordships who have given many years—more years probably than I have given hours—to the study of these matters. But I hope and believe that the House will feel that this Bill does what it says—namely, remedies certain defects—and I hope that your Lordships will feel that it is a Bill which should be given a warm welcome and a Second Reading to-day. I beg to move.

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

3.10 p.m.

LORD LLEWELLIN

My Lords, it is rather refreshing, if I may say so, to see the noble Lord, Lord Pakenham, who is usually thinking in the air (I do not, of course, use that expression in any offensive sense, for it is a thing that is in the nature of his job), grounded for a while with these rather duller subjects, with which it seems largely my fate to deal in this House. However, I think his head was a little in the air when he thought this Bill might receive enthusiastic acceptance in the House. I feel that it would be wrong to give enthusiastic reception to a Bill which imposes more restrictions, and which has its whole roots in the present scarcity of dwelling houses.

Not one of the main points to which the noble Lord has drawn our attention would need to be dealt with at all had we overcome the scarcity of housing accommodation. Were there plenty of houses, a tenant of a furnished house would not wish to stay there against his landlord's wishes, which always makes circumstances somewhat difficult. Were there plenty of houses, the Rent Restrictions Acts need not be extended to people who share part of the accommodation. Were there plenty of houses, the rents of houses first let since 1939 would by now be adjusting themselves. Again, were there plenty of houses, no one would have any chance of asking for a premium, and no one would think of paying one. Therefore, the first conclusion we may legitimately draw from the very introduction of this Bill, despite what may be said up and down the country, is that little has been done in the past four years to solve this problem. Indeed, in the last year—the best year, so far, in the administration of the present Government—the number of houses built is less than two-thirds of what was being built annually in the years just before the war. It is the failure to solve this vital problem which gives birth to rent restrictions of any kind. Partial success brings the gradual elimination of various classes of houses from rent restriction, and complete success should see these Acts disappear altogether.

Let me now deal seriatim with the four main provisions of the Bill which the noble Lord has outlined to the House. First there is the extension of security of tenure to tenants of furnished flats. I think that on this matter the Minister of Health has been rather naïve in his utterances. When introducing this Bill on Second Reading in another place, he said: If honourable Members will cast their minds back, they will recall that we were at that time asking people to share their homes"— that was in 1945–46— particularly with returning ex-Service men. I was apprehensive that if we tied a landlady or landlord and a tenant by Act of Parliament to a propinquity which would be repugnant to either of them, or to both, it might have the effect of losing accommodation which might otherwise be available. In other words, I was apprehensive that people would not let rooms if, having let them once, they could never get rid of the tenant. So the Minister limited the extension of a tenancy by a rent tribunal to a period of three months. What is to be the position now? A tenant can go to the tribunal and although he is turned down by it time after time, he may get an extra three months each time. The Minister induced landladies or landlords to take in a tenant—it was more often the former than the latter, because, if I may say in parenthesis, in the popular mind landladies are thought to be more sympathetic.

LORD PAKENHAM

Why?

LORD LLEWELLIN

I believe it may be because we have not yet Peeresses sitting with us in this House! Whether that be the case or not, the Minister induced landladies and landlords to take in a tenant and make accommodation available, on the ground that there would be no compulsory permanency. Now he brings in a provision to make those tenancies permanent. His earlier promise may have led some people "up the garden path," but, apart from that, I feel the Minister was right in the view he took in 1946. The present provisions may make people reluctant to tie themselves to tenants, perhaps for ever. This tendency may mean the drying up of sources of additional accommodation. That is the only comment I will make on this provision, but it is obviously one that we cannot enthusiastically welcome.

The second main point in effect means the reversing of the decision in the case of Neal v. Del Soto. I do not think anyone will quarrel with this provision. It was long thought that, in the administration of the Rent Restrictions Acts, if two tenants shared a kitchen and lavatory accommodation, they were within the ambit of the Acts. It is only lately that that position has been reversed by a court decision, and I, for one, think it right to restore the position as originally understood.

I come to the third main point—namely, the right given to the rent tribunals to review the rent of houses let for the first time since September 1, 1939. This is contrary to the Report of the Ridley Committee, which the noble Lord who moved the Second Reading of the Bill so rightly praised. Indeed, it is contrary to common sense, if we are aiming to have more houses built for letting. It is true, as was pointed out by the noble Lord, that under the Bill as it comes to us—in contrast to the position under the Bill as it was first introduced in another place—the landlord may apply to the tribunal to ask what rent will be applicable to a house. What I would like to ask is this—and perhaps the noble Lord can answer the question when he winds up the debate: Does that apply only to a house already built, or could a landlord apply to ascertain what would be the permissible rent were he to build a house on an ascertained site and to an ascertained plan?

Even more important, perhaps, is the question: Can he apply to the appropriate tribunal to ascertain what rent he would be allowed to charge were he to convert an existing house into two or more flats, before he actually gives orders for the conversion to take place? If a landlord cannot do this, it is unlikely that he will build houses to let, or that he will undertake to put these conversions in hand. It is one thing as a business risk to assess what the public may be prepared to pay; but it is another thing to decide what exact assessment a tribunal, with no rules to guide them, may make in a particular case. That is the kind of risk that few people who were thinking of building houses to let, or of converting houses into two or more flats, would be prepared to take, unless they were giver some means of knowing in advance what they were likely to recoup. If this provision is not now in the Bill, it is one of the matters we should look at in Committee to see if we can make it possible for a prospective builder or converter to take this course.

I now come to the fourth main matter—namely, the vexed question of premiums. I suppose premiums have existed in connection with house property ever since the time when the ground landlord gave a long lease at a low rent on a convenient and accessible plot of land, on condition that the lessee built a house upon it. The lessee having built that house, and no longer, perhaps, wishing to live in it himself, assigned the lease to someone else and, quite legitimately, asked for a premium, in part to recoup him for the cost of building the house. The premiums between willing lessors and willing lessees, took into account, of course, the amount that had to be paid in rent and also the number of years that the lease still had to run. That was all quite legitimate, and, indeed, after this Bill has been passed it can still go on in respect of any houses not within the ambit of the Rent Restrictions Acts.

What we all deplore is the charging of a premium in respect of the lower-rented houses, which are far too few for the demand, when there is no reason whatever to demand a premium except the scarcity of houses. It has always been illegal to charge a premium in regard to a rent-restricted house, and it is only in the case of the category which happened to escape rent restriction that a landlord—and, indeed, a tenant who has a lease to assign—can legally charge a premium. So we shall probably all agree that in the case of scarcity to stop that practice in the future is a proper step to take. Why should a man in a much bombed town be able to make additional profit for the sole reason that his house happened to be one of those which escaped the ravages of the enemy? We know that although the great majority of good landlords have never done anything of the sort, there are some landlords who have.

When we come to the retrospective application of the prohibition of premiums, however, we are entering on a field of legislation in which Parliament should always be watchful and of which people in this country are always rightfully suspicious. It seems to me that it can be justified only on a similar ground to that on which Parliament has in the past agreed to the reopening of, say, a contract of money-lending, because one man has taker, advantage of another man's extremity to such an extent as to make his act unconscionable from the general point of view of the community. Where that state of affairs exists, speaking for myself, I think it is right to reopen the case. I blame the Government, however, for not having been more prompt in dealing with this evil. We know from Mr. Bevan's own words—because the Bill did not originally date back beyond V.J. Day—(I quote from Column 577 of Hansard): The fact is that there were not very many lettings of this kind during the war. That is what he said in his opening speech, in answer to an interruption by Mr. Piratin. Therefore, there was no great need to deal with this matter during the war, but there was every need to deal with it promptly when it arose. Had the Government done so, there need have been no retrospective clauses in this Bill. The prohibition which is now to be put upon exacting premiums could have been effected in 1945, or at any rate early in 1946.

So long as the rent charged takes the premium into account, there is nothing unconscionable where a landlord has spent a considerable amount of money on a conversion which is a beneficial operation, making two or more flats available where there was only one house before, and has agreed with a tenant immediately to recoup him on a part of the cost of that conversion. Indeed, it may well be that this landlord, who is helping to solve the housing problem, having the ready money available which the premium secures, will perhaps have sufficient funds to make further conversions and provide more living accommodation to the general good of the community. That is the kind of factor the tribunals should take into account; otherwise, they will impede this side of the housing programme.

In connection with these applications for reconsideration of premiums paid, there should be a limit on the time within which applications for their reconsideration must be received. If a man feels aggrieved by a premium that he has paid, he may be relied upon to put in his claim within a reasonable time. During the subsequent stages of this Bill I shall suggest an Amendment to impose a time limit of twelve months within which a man must make an application—that is the time limit imposed under the Public Authorities Protection Act, when an action is contemplated against a public authority. Otherwise, we may get a position where a tenant says: "I have freely made a bargain, and I do not intend to re-open it"—being quite content with the bargain he made with the landlord. Yet, on his death, his executors may feel it their duty to re-open the whole transaction in the interests of the estate. That is a kind of action that I do not believe is really within the contemplation of this Bill. The Bill is intended to deal with a man who feels aggrieved and comes to the tribunal to get his bargain reopened. It is not intended to remedy the grievances of anybody else.

Another Amendment which I would like to see made is one to limit the operation of the Bill, when it becomes a Statute, to, say, a period of five years. It is interesting to reflect that the Minister of Health, when he introduced the Furnished Houses (Rent Control) Act, 1946, referring to the House of Commons, said: The House will note that, at the end of 1947, the measure will die. This is my own estimate"— he added, "perhaps vague," although I think it was perhaps inaccurate— of the period when the worst housing stringency will have ceased to exist. This Act extends the provisions of that Act, as has been explained to us by the noble Lord. It will be interesting to see whether, if we put down an Amendment to limit the Act to five years, the Government will resist it. If they do, it will show more than anything else their complete lack of confidence in the success of their housing programme. If we cannot get rid of this Bill and these measures within five years, and if they do not estimate that we can, then it will not show much faith in the success of the Minister's efforts in connection with the housing programme.

Although this is a measure which I suppose no one would wish to see permanently or at all on the Statute Book, for it is one which would be completely unnecessary if scarcity conditions did not prevail, nevertheless, there are provisions in it which in existing circumstances should be made, and there are some which, in my view, at any rate, should have been made before. Therefore, my advice to your Lordships would be to give this Bill an unopposed Second Reading to-day. Incidentally, I notice that the concluding remarks of the Minister of Health in another place were these: I trust we can now let the Bill go to another place, where I hope the reflections will be amiable and even more speedy than they have been here. I can, in return, assure the Minister that if he will show some amiability to the few Amendments we may think fit to offer, it will go without saying that he need have no anxiety that there will be any delay in giving him this Bill.

3.37 p.m.

LORD MESTON

My Lords, subject to certain criticisms, I think this Bill is Justified and should receive a Second Reading. There are certain provisions of the Bill which it is not easy to understand—namely, subsection (3) of Clause 1, the proviso to subsection (1) of Clause 2, subsection (6) of Clause 2 and the proviso to subsection (4) of Clause 3. Those provisions are all rather obscure. However, as Aristotle said, Rent Acts are meant to be passed and not understood.

Let me come to the point as quickly as possible. Is Clause 1 of the Bill really justified? Supposing that the rateable value of a house is £90, and the house was let for the first time in June, 1946, at £450 per annum, then £450 becomes the standard rent. After making every reasonable allowance for the increased cost in every direction, it might well be that a rent of £450 would be taking an unfair advantage of the shortage of housing accommodation in the country and, therefore, it might be a rent which ought to be reduced. So far so good. But if the same house was let, say, in 1941, during the blitz period, for £70 per annum, then £70 would become the standard rent. The noble Lord, Lord Pakenham, explained the Bill extremely carefully, but he did not tell us whether, under Clause 1, it is open to the landlord, as well as to the tenant, to apply to the tribunal to increase the standard rent up to what might be regarded as the reasonable rent. Perhaps the noble Lord can inform me of that point, before I criticise the matter any further—I gather that the answer is in the negative. If that is the position, I think it is very unfair, because during the war a certain number of people let their houses in London for the first time at a very small rent, one considerably below the reasonable rent which could be charged to-day.

In this connection, there is another small point which I wonder whether the Government have taken into consideration. Where the rent charged is less than two-thirds of the rateable value, then the Rent Acts do not apply. In the example which I have given, two-thirds of £90 is £60, and so, if the rent charged for the first time since 1939 is less than £60, the Rent Acts will not apply to that tenancy. And in these circumstances I presume that the landlord can go to the tribunal and have a reasonable rent fixed, which might well be in the region of £200. Perhaps the noble Lord will reply to that point when he comes to sum up on the Bill.

Moreover, this power of the tribunal to determine what rent is reasonable is not subject to appeal. The object of an appeal is not only to attain uniformity but also to attain a greater degree of fairness. By way of analogy, may I cite an actual case which arose on the Furnished Houses (Rent Control) Act of 1946? In that case the chairman of the tribunal set up under that Act said, in open court, that he had been told by the Minister of Health that the Minister had been told by the Attorney-General that the tribunal were not to take Schedule A income tax into account in computing the outgoings payable by the landlord. Whether that was fair or unfair I do not know, and I do not venture to say; I merely suggest that a matter of that description raises a point of principle which ought to be the subject of appeal. The objection to an appeal, especially to an unlimited appeal, is the question of costs. If you have money you appeal to the High Court. If you have more money you go on to the Court of Appeal. If you have more still, you go on to the House of Lords. After that, if you have any money left, you take a taxi-cab and drive to the bankruptcy court! Therefore, no one can have recourse to appeal with equanimity. One way out of the difficulty is to make an appeal to a nominating judge. The cost of such an appeal is a small matter, and the same thing could happen under this Bill as has happened under the Pensions Acts.

With regard to Clause 2 of the Bill, I wonder whether the noble Lord, Lord Pakenham, would clear up a point which has been raised by the Law Society. The words in subsection (1) of Clause 2: and has not been fully repaid or recovered raise some doubt as to whether Clause 2 is intended to deal only with illegal premiums under the previous law, or whether it applies to tenancies of fourteen years and upwards, or whether the clause applies in respect of any tenancy where application is made to the tribunal.

Clause 3, which is one of the most important clauses, prohibits the imposition in future of a premium on the granting or assigning of a tenancy. This would be commendable if only it did justice to all the people who had already paid premiums. Subsection (4) of Clause 3 enables an outgoing tenant who has in the past paid a premium to his landlord—mark the word "landlord"—to require a proportionate part of that premium to be paid by the incoming tenant who is an assignee. But I am unable to understand why the outgoing tenant should be debarred from recovering a proportionate amount of a premium from an incoming tenant by way of assignment in those cases where the outgoing tenant had himself in the past been an assignee and paid a premium to the previous lessee. I know of a case where a tenant took from a lessee an assignment of a lease of a house, within the limit of the specified rateable value, for a period of thirty-five years, and paid a premium of £4,000. If the tenant remains in occupation for thirty-five years, no hardship will arise, but if the tenant finds it necessary, for business or other reasons, to go and live elsewhere before the thirty-five years have expired, he will not be able to recover a proportionate, or any, part of that premium from anyone to whom he may assign the residue of his term. Moreover, many people have deposited their lease with their bank as security or part security for money advanced by the bank to pay the premium in the first instance. That security will now become worthless, and if the tenant cannot replace the lease by some other security the bank are not likely to be satisfied with an outstanding unsecured loan, and will probably call in the loan, which may put the borrower in a great difficulty.

Subsection (6) of Clause 3, which enables an assignor, by agreement with the assignee, to require the assignee to make the payments mentioned in paragraphs (a). (b), (c), and (d) of that sub- section, is intended to be very fair; but I think it would be still fairer if the words "if it is so agreed" were omitted. Suppose, for example, that the assignor were to pay a half-year's rates in advance, and were then to assign his tenancy during the currency of that half-yearly period; the assignor would normally, in accordance with the usual practice between landlord and tenant, be entitled to charge those rates, or a proportionate amount thereof, against the assignee. But under the Bill as at present drafted, if the assignee did not agree to pay those half-yearly rates, or the proper proportion thereof, that would be the end of the matter, and the assignor could do nothing. I feel that it would be fairer, therefore, to omit the words "if it is so agreed," so leaving it lawful for the assignor, if he so wishes, to require payment of the items mentioned in paragraphs (a), (b), (c), and (d) of subsection (6) of Clause 3.

Clause 4 and the First Schedule, which deal with a premium paid to a predecessor of the landlord, are commendable; and so is Clause 5. But I should like to know whether the Government consider it fair that a landlord or outgoing tenant should ever be allowed to make it a condition of the grant or assignment of a tenancy that an incoming tenant must purchase any furniture or fittings at any price whatsoever. Of course, it is a perfectly proper condition to make by agreement between all parties, but is it right that such a condition should be imposed at the unilateral option of the landlord or the outgoing tenant? The two points I wish to emphasise are these. Under Clause 1 of the Bill, the landlord, as well as the tenant, should be entitled to apply to the tribunal to fix a reasonable rent—which may be above the standard rent. That would deal with cases in which people have let their houses since the war for the first time at a rent which was obviously a very small amount. Secondly, under Clause 3, I think that on assignment an assignor should be entitled to recover part of the premium paid in the first instance, whether he has paid that premium to his landlord on the grant or continuation of the tenancy, or to a lessee from whom he took an assignment of the tenancy.

3.49 p.m.

VISCOUNT BUCKMASTER

My Lords, I should like to join your Lord- ships in an expression of pleasure at seeing the noble and learned Viscount on the Woolsack restored to health. I am sorry that this afternoon I shall not be crossing swords with him, although I shall have the pleasure of once more enjoying some of the brisk and friendly exchanges in which, in the past, I have indulged with the noble Lord, Lord Pakenham. Having, as your Lordships may be aware, spoken at considerable length not long ago on a matter closely related to this, and having listened to the full and forcible speeches of previous speakers this afternoon, I do not feel it right to detain your Lordships at any great length now. I hope I shall avoid any mathematical calculations, but at the same time I cannot be expected to respond to those expressions of endearment towards the Bill which we heard from the lips of the noble Lord who moved its Second Reading.

The main purpose of this Bill is to protect a tenant who, through a premium, has been made to pay too much for the accommodation which he has taken. In so far as any premium is extortionate, I gladly and cordially support the principle of this Bill. Indeed, I hope that I am second to no one in condemning rapacity and extortion wherever these may be found, wherever these may exist. I am not conscious of ever having publicly recommended any procedure involving factors such as these, but it does not follow that in considering these matters extortion is always involved. Before the late war, it was the normal and proper thing to sell leasehold properties at a price which W as reflected in a reduction of the rent. Now, under this Bill, such a transaction becomes illegal in the case of a rent-restricted property unless the rent is less than two-thirds of the rateable value. Perhaps I have not put that clearly, but what I am saying is that if the rent is less than two-thirds of the rateable value the sale is possible; otherwise it is impossible. That applies however long the lease may be. It seems to me that from this many curious consequences may flow. To one of them the noble Lord, Lord Meson, has called attention. A man has borrowed money, we will say, on a leasehold property. Security for the loan was the price at which the lease could be sold in the market. That security has gone. What is now the position of the mortgagor; and what is the position of the mortgagee?

Another problem that presents itself to my mind is this—and if I am at fault through not having digested the Bill as I should have done, I am sure the noble Lord, Lord Pakenham, will forgive me. What is the position of a man who has bought a leasehold, who dies, whose estate has paid duty on the market value of the leasehold, and the asset now is valueless because it cannot be sold? I do not know the answer. Perhaps the noble Lord, Lord Pakenham, will be able to provide it.

LORD LLEWELLIN

He gets it back out of the Treasury.

VISCOUNT BUCKMASTER

I am grateful to my noble friend and hope that he is right. It is true, of course, that as the law stands at present there is the possibility of abuse. In particular, it is undesirable that the tail end of a lease should be assigned for value—I am speaking of rent-restricted property—because in such a case there is in fact the transfer of a statutory tenancy. In such a case, the new tenant who has paid the premium will step in for the few months that are left of the short term, and will then himself become the statutory tenant protected under the Rent Restrictions Acts. This may be the very thing which the landlord is anxious to avoid and, as I say, in substance it is a transfer of a statutory tenancy which is at the present moment illegal. But, in order to prevent a transaction of that nature, or in order to curb extortion, I hardly feel it necessary that we should proceed as far as this Bill invites us to go. For, as I have already said, all leases within its ambit, however long their duration, can no longer be bought and sold. Further, its provisions are retrospective for ten years. I venture to think that the majority of your Lordships would, without any qualification, condemn retrospective legislation and would consider that it should never be passed if by any means it could be avoided. It would seem indeed that His Majesty's Government have employed a very powerful long-range weapon to demolish this particular target.

My noble friend, Lord Llewellin, has said that this Bill is a confession of failure on the part of the Government, in so far as their housing policy is concerned. But it is more than that. It must in itself automatically reduce the supply of housing accommodation. It will do so most certainly for three simple reasons. It will do so, first, by extending the protection given to the tenant of furnished rooms; secondly, by depriving the owner of a house of any encouragement to convert it; and, thirdly, by prohibiting the sale of small leases. If we consider the question of the "furnished" tenant, with which my noble friend Lord Llewellin has dealt, we can see the difficulty at once. In matters such as these we are dealing with small things. We are dealing with little people with one or two rooms. The tenant is in close relationship to the landlord, almost a domestic relationship. Is it likely that a man is going to let a room on terms of what one might almost call "family contact" if he can never turn the tenant out? Would it not be far better for him to go without the rent than run the risk of saddling himself with an incubus from which he never could escape?

On the question of conversion, there is, as I understand this Bill, little encouragement for a man who has a large house to subdivide it and to provide additional housing accommodation for the public. Let us imagine a man, a private individual, who owns a house within the ambit of this Bill. He spends substantial money and he splits the house into three flats. We will assume that each one of those flats has a rateable value under £100 a year. What has happened? He has perhaps trebled the accommodation, yet he will have to hand back the premiums which he has charged and out of which alone he can recover the cost of the conversion. It is not very likely that a man will be tempted to split a house up in such circumstances. The noble Lord assures me that the cost of the conversion may be taken into account in assessing the rent. I would remind him, in the first place, that there is no express instruction whatever to the tribunal to do so; moreover, where a man is a private individual the premium which he would receive would be free of tax. He would receive a free of tax payment to cover the cost of splitting up the house. To give him a rental equivalent is to give something upon which income tax and sur-tax may be payable, which is a very different proposition. So it can be seen how this Bill will tend to reduce the amount of accommodation available.

Finally and obviously to prevent the selling of small leaseholds would reduce the supply of such leaseholds. That is axiomatic. At present, if a man wants to move from one town to another and go to another employment, he can usually find in the market a leasehold which he can buy. That will not now be possible. All that can now happen is that he will have to exchange. A man who lives in Bedford and wants to go to Oxford will have to advertise and try to find people who will exchange houses with him. There is no other way in which his problem, as I see it, can be resolved, unless he should be lucky enough to find a freehold for sale with vacant possession.

I suggest that these unfortunate consequences which spring from a Bill which, as I have said, has much to commend it, are the inevitable result of piecemeal legislation in this matter of rent restriction. In all seriousness, I should like to ask the noble Lord, Lord Pakenham—I am sorry that I cannot ask the noble and learned Viscount—why, if we are to nibble at this matter, we must attack it from one side only and never from the other? Why, if we are to have a piecemeal legislation, must it apply only, and must it be right to apply it only, to redress the hardship of the tenant, and be utterly wrong to use it to relieve an injustice where a landlord is concerned? I cannot illustrate this point better than by the question of cost of services. As your Lordships know, the Committee over which my noble friend Lord Ridley presided, recommended as a matter of priority that the increased cost of services should be allowed as an increase under the Rent Restrictions Acts. Every time this has been proposed, the Government have answered that it was impossible because piecemeal legislation was wrong.

To prove my case I have to refer to something that the noble and learned Viscount who sits on the Woolsack said, though unfortunately he is not in your Lordships' House at the moment. When this point was raised before, on November 18, 1947, the noble and learned Viscount said: We want to follow out the recommendations of the Ridley Report. He then quotes from the Ridley Report: In our opinion, it is urgently necessary that the present chaos of overlapping statutes should be replaced by a single comprehensive Act. He then goes on to quote: If this recommendation is not accepted we should have no confidence in putting forward the rest of this Report. That was the answer—that there must be a single comprehensive measure, and until that, justice could not be done. My Lords, we need not leave this with the noble and learned Viscount. We can reinforce the argument by turning to the Minister of Health—always a fruitful source of support in matters such as this. When this subject was raised in another place it was suggested then that services in regard to rent-restricted property should be dealt with by tribunals—not, one would suppose, a very unreasonable thing to put forward; that tribunals properly elected should settle the cost of those services. What did the Minister of Health say? He said this: I am not prepared to allow the tribunal to consider any properties Covered by the Rent Restrictions Act. He went on to say: Once we entered that troubled field we should not know where to stop. Well, he has spent a good deal of time in that troubled field; and so far as can be seen he is going on spending his time there, because, although both in this House and in another place it has been the declared policy of His Majesty's Government not to legislate piecemeal, they have been doing nothing but tinker with and patch up these Acts ever since.

There is one other matter to which I fear I must refer—namely, that of the tribunals. As your Lordships know, under the Furnished Houses (Rent Control) Act these tribunals can reduce the rent downwards but in no circumstances can they increase it. The same principle, as I understand it, operates hem. If the premium charged was too low owing to circumstances of enemy action or otherwise, there is no means of giving the landlord relief. I have been at some pains in relation to this matter and I have consulted one of your Lordships who has an unrivalled experience, and I invite my noble friend to contradict me, if he can, when I say that never in the history of this country have tribunals been set up which are told to find in one way and never in the other. I would like to ask the noble Lord what the trade unions would say if they were told that their proper and just complaints were to be brought before tribunals instructed that they could reduce wages but, whatever happened, could never increase them. Yet that is the kind of justice we get from His Majesty's Government in matters such as this. I feel that little or no useful purpose would be served by my speaking any further on this subject. To my mind His Majesty's Government have, for a very small advantage, laid themselves open to the accusation of injustice. Much, indeed, will have to be said in Committee. I can only hope that when that stage is reached the Government will show themselves willing to accept such modifications of this Bill as it is right and reasonable for your Lordships to demand.

4.5 p.m.

VISCOUNT RIDLEY

My Lords, I find this Bill a very difficult one on which to comment. As many of your Lordships have said, many of the provisions are most welcome, but it is difficult to welcome them in their present context. There is a temptation to range over the whole subject of the Rent Restrictions Acts, but I must avoid it. I cannot, however, refrain from making a short reference to the end of the debate which we had recently on the Motion in the name of the noble Viscount, Lord Buck-master. I listened with great attention to what was then said by the noble and learned Lord who sits on the Woolsack on the subject of the new scheme of rent control which was proposed some years ago by the Committee of which I was Chairman. When the noble and learned Viscount replied to the suggestion that a new system was required, he spoke of the matter in terms of consolidation of the existing Acts, and he used some such phrase as: "We cannot consolidate, because there is need to change." But the whole basis of the Report which this Committee made some years ago was that it was not consolidation which was required; it was not extension of the present Acts which was required, it was an entirely new Act, leaving out, perhaps, 80 per cent. of the mass of legislation which at present exists.

There was recommended some maintenance of control, based on a rational system of estimating what the rent should be, in fairness to both parties and, particularly in the present circumstances, which may continue for some time, with the object of protecting the tenants from exorbitant demands. I feel that the present Act, although it contains provisions which will do good (provisions which were recommended by our Committee), will, on the whole, make the general situation more difficult. I think it is the twelfth in the series of Acts, all of which refer to earlier Acts, and all of which have to be understood and followed by those concerned in matters of this sort.

The different bases of assessing the rents of houses under Clause 1 of this Bill are, indeed, almost ridiculous. Up to now, the 1939 Act, which deals with houses let since that date, is one basis of settling the rent. By that Act the standard rent is either the rent payable at that date, or the rent at which the house was first let after that date. That series of provisions is to be modified by adjustment, downwards, which will be made by a tribunal. All the other houses within the various Rent Restrictions Acts are controlled at a level which is based on the rent at which they were let, some many, many years ago. How we can ever think there can be fairness as between one tenant and another and, on the other hand, as between one landlord and another, in a system of that sort, is entirely incomprehensible to me. Indeed, if one looks carefully enough, I believe it is possible to find cases where the rent of a house is based on the figure at which it was first let before the beginning of this century. Moreover, when one sees the proposals in Clause 1 for varying rents, it makes one think that it is almost "shabby" to start tinkering with and adjusting such a small number of the rents. It is doing the work by small instalments, and making it more difficult as one goes along.

As to the question of the one-way decision by the tribunal, there is what seems to me a very odd statement in Clause 1 (1). Whatever the tribunal consider a reasonable rent they must communicate to the tenant. Following that, it is stated that only if that reasonable rent is less than the present rent is there to be a change. The tribunal is capable only of reducing, and not of increasing, the rent on an application. What I do not understand is why, having that in mind, they should com- municate to a tenant the rent which they think reasonable. According to the words that follow, if they think the rent is reasonable, but it is more than the tenant is at present paying, the Bill has no effect, and it does not matter whether the tribunal think the rent reasonable or not. That is, perhaps, a matter merely of the wording, but it is a statement which has puzzled me ever since I first saw it.

One must admit that the function of these tribunals is not quite the same as those dealing with furnished houses. There is no need for the tribunal to be able to increase rents of furnished houses, because those rents are not controlled; only applications for reduction are made, since the landlord of a furnished house has no difficulty in increasing the rent. If the tenant applies to the tribunal and the rent is reduced, of course, that condition no longer applies. It has generally been held that the reason why a tribunal should not be empowered to increase the rent of a furnished letting is probably adequate. But I cannot see, under this clause, the argument on which that one-way application of the determination is based.

It has been admitted, I think, by all Parties, that there are cases where inability to raise rents has led to hardships on the owners of the property. The present Bill does nothing to help overcome that difficulty. Even if it is held that the ownership of property deserves no encouragement or reward, I think there is another way of looking at it—namely, as a matter of public policy and interest. If it is a fact that in many cases the rent which is being paid is not adequate to enable the owner to maintain the property in a reasonable state of repair, surely that is a matter of the most vital importance. I remember that some live years ago, when our Committee were at work, we had a good deal of evidence to that effect, and we all know that the cost of building materials and labour has considerably increased since that date. Indeed, is there not some evidence of that in the new Housing Bill, which, I understand, is being introduced in another place, and which offers subsidies at the public expense for the modernisation and repair of houses which have fallen into a bad state? Is it not probable that many such houses have fallen into a bad state through lack of repair, and that in a number of cases that is quite probably due to the fact that the rents paid are not sufficient to enable the owners to keep them in good repair? Would it not have been better to ensure that the rent met the cost of repairs, even if it left nothing over by way of a return for the investment of the owner of the property?

One cannot deny that the universal raising of rents under any legislation proposed for rent restriction would inflict considerable hardship on a number of tenants. I do not think that anyone would support such increases at the present time. But I do think that tribunals concerned with unfurnished lettings should be able to deal with the most extreme cases, where houses are in fact suffering from lack of repair. On that point, it is interesting to note that under the 1939 Act to which this present Bill applies, there is no mechanism—I think I am right in saying—whereby the tenant can apply for a reduction of rent owing to lack of repairs. If such a provision had been included in the 1939 Act, as it was in some of the earlier Acts, it would be perfectly logical to say, on the one hand, that the tenant has a right to reduction of rent if the house is not kept in a proper state of repair and, on the other, that the landlord or owner has a right to a rent adequate to enable him to keep the house in order so long as he is willing to do so, but that if he does not do so his rent will be reduced. I would like to see a clause to that effect inserted in this Bill, followed by an alteration in this clause allowing for raising of rents in appropriate cases. I do not know how many such cases there would be under this Bill which, of course, applies only to post-1939 houses. There would probably be only a small number of houses for which it would be justifiable to claim increases. Houses were let at the beginning of the war, when the air raids started, in areas where people would not normally be anxious to let, and they were let cheaply at that time. The inclusion in this Bill of some provision to sort out rents, I should have thought, would be the introduction to bringing into some sort of relationship all houses which come under the earlier Acts, and so removing the worst of the anomalies.

With reference to the question of premiums, I regret taking up such an attitude, but I consider that if the Government had listened to our Committee three years ago all premiums would have been made illegal at that time, and it would not have been necessary to introduce now legislation which is, in fact, retrospective. The noble Lord, Lord Pakenham, in his dextrous mental arithmetic (at least it was mental arithmetic for your Lordships), touched upon cases of premiums for all houses let for, I think, seven years. Such a demand for a premium was, and is, illegal in respect of houses which come within the scope of the Acts. As I understand Clause 2, it applies to premiums on houses let for fourteen years or over, which was legal and is legal up to the present time. With regard to extortionate premiums illegally charged, I think there is no question but that every member of your Lordships' House would support a system designed to get something back from them.

It is a little more difficult, when one considers a premium which was legally charged on a lease granted for fourteen years or more, and which was not in fact extortionate. Unless I have misunderstood this, it seems to me that Clause 2 allows the tenant to get back a premium which is not here defined as extortionate and was at the time of payment a legal premium. Furthermore, such determination of a tribunal for the repayment of the premium is made independently of the rent which the tenant is paying. Therefore it is not possible to say: "Yes, you may have paid a premium but your rent is very low, so that is all right"; or to say: "You are paying a high rent and you paid a high premium; therefore you will get some of it back." It is a simple statement: "As you paid a premium you will get it back in a certain way." It is well known that in a number of cases it suited the tenant as well as the owner to pay a modest premium (here again I would be strongly against an excessive premium) and a low rent, rather than to pay no premium and a high rent which would by itself have been proper. While the intention behind the clause is one which I should applaud, owing to the fact that it is retrospective and irrespective of the rent actually paid and, so far as I can see, irrespective of whether a premium is excessive or not, it seems to me a rather clumsy method of doing what might have been done three years ago with a great deal more simplicity.

May I now refer to the clause on furnished tenancies, whereby tribunals may extend the right of occupation? In the original Furnished Dwellings Act, which applied only to Scotland, and in the later Act which was a copy and applied to the rest of the country, there is the same provision that the tribunal may order up to three months' occupancy if there is a determination of rent. When our Committee sat, we took a good deal of evidence of the work done up till then by the Scottish tribunals. So far as I can remember, the number of people who gave evidence and suggested that security of tenure should be increased beyond three months was very small. There were a few. It is significant also to remember that the question of security of tenure of furnished rooms was considered not only by this Committee but also by two previous Committees. They all came to the same conclusion and advised against any excessive control of the freedom of movement in and out of furnished rooms.

This is not a matter between a landlord on the one hand, as a person one thinks of as holding an investment in property, and a defenceless tenant on the other. Nine times out of ten it is a matter between two people in very similar financial positions, occupations and way of living, one of whom has a house and the other shares part of it. If they fall out and start to take legal proceedings on matters of occupancy, situations of the greatest difficulty can be created in the day to day relations of one set of human beings and another set living under the same roof. I think it is asking for trouble between individuals to go so far as is here suggested. Had it been said that on an application to the tribunal a further three months could be given (I think it can be argued either way whether three months or six months is the better) it would be different. But under this clause the extension can go on for ever. There is no limit to the number of times a tenant of furnished rooms can go to the tribunal and get an extension. I think that is going to create more personal difficulties than it will solve.

I have seen it stated that in these days housing should be a service provided by the Government and local authorities rather than a matter for investment and return on that investment. But in legislating we do not want to run the risk of ignoring the fact that there are actually in existence houses still owned by individuals, corporations and companies. While that state of affairs exists, legislation should be careful to see that it is kept going for so long as it is necessary to retain it. There is no doubt that every house decently habitable is necessary at the present time. Is it not a reflection on the present state of the rent restriction laws, including the present Bill, that the more it becomes national policy for local authorities to build a larger number of houses and to become landlords of a larger number of people, the more attractive relatively it becomes for the tenant, if he has arty choice, not to live in a local authority house excluded from these Acts?

Seven or eight times out of ten a tenant has a lower rent, often lower than that of a pre-war house built by a local authority and certainly lower than that of a house built by a local authority or anybody else since the war. In a house under private ownership he has security of tenure under these Acts and has his rent controlled. Furthermore, under these Acts he has a legal claim to have his house repaired and to withhold his rent if it is not repaired. Therefore, by leaving local authority houses out of these Acts, which I think is inevitably the thing to do, we are making it more and more attractive to people with any choice not to live in local authority houses. It almost seems to me that by allowing policy to go in this direction the Government are defeating their own object of extending the number of houses which local authorities own and manage.

I think this whole legislation is too difficult, too rigid and too complicated. I fear that the method by which the provisions of the Bill have been put together, presented and added to existing legislation will add to their complication and difficulty. There are various details in the Bill which make the actual particulars of the control of rent even more rigid than some of the provisions in the previous Acts. If this Bill is passed as it is, it will make it even more necessary to scrap the whole lot and start again with a new measure, taking the best out of them all and modifying them into a reasonable system. I do not think any of us would wish to oppose the Bill, because the provisions about premiums, applications to tribunals and other necessary matters are going to be to the benefit of tenants. I regret, however, that the Bill has the blemishes I have suggested. I regret still more the fact that an attempt is being made to continue fiddling about with these complicated Acts, and that the Government have not faced up to confining them in one useful measure. If the matter were approached from the beginning, I do not believe that it would be anything like so difficult or intricate as is often supposed.

4.30 p.m.

LORD PAKENHAM

My Lords, I am grateful to the House for the general tone of the discussion, and for the way in which the Bill has been received. I asked for enthusiasm, but I do not think that I succeeded in eliciting that. The Minister of Health, who looms so large in the minds, sleeping and waking, of your Lordships, called for amiability; and where my blandishments have failed he appears to have succeeded. The noble Lord, Lord Llewellin, set a very amiable tone. I do not think the House would wish a Minister who is not departmentally concerned with a Bill of this kind to attempt to go into great detail at this stage. I am sure that the right course for me is to consider carefully with my advisers and, where proper, with the Minister, everything that has been said to-day, rather than to chance my arm and attempt to deal in a perfunctory way with points raised by those who have given much thought to them. I would, however, touch on one or two points that have been raised by different speakers. The noble Lord, Lord Llewellin, asked whether by this Bill a landlord can find out from a tribunal what rent he would be allowed to charge if he built a house or converted an existing house into flats. The answer is that he cannot find that out in advance under the Bill, but he will be told by the local authority what rent he can charge when he receives a licence under the Housing Act. That is provided by the Housing Bill which is now being considered in another place.

LORD LLEWELLIN

May I just ask whether that decision by the local authority will be binding in any way on the tribunal?

LORD PAKENHAM

I would like to go into that matter further. I am advised that the answer meets the main point that appeared to be in the noble Lord's mind, and I am hopeful that in fact it does so. The noble Lord also suggested that a time limit should be placed on the period during which an application can be made to the tribunal for the consideration of a premium. That is something which I will place before my right honourable friend, and we can perhaps discuss it before we reach another stage of the Bill. The noble Lord was inclined to the view that the operation of the Bill might be limited to five years. Surely he would agree that the Bill should run for a period corresponding to the period for which the Rent Acts run. Those Acts expire six months after an Order in Council is made declaring that the emergency is at an end. It would seem desirable that this Bill should run for a corresponding period. I need hardly say that we are all as anxious as the noble Lord that that day will come soon. I will return at the end of my speech to the implication in the more general remarks of the noble Lord, when he said that this Bill—I do not for one moment agree with him—is evidence that the Government admit that they have failed.

VISCOUNT SWINTON

Evidence of their success!

LORD PAKENHAM

I give way to the noble Viscount, but unless he is being ironical I do not follow him. The noble Lord, Lord Llewellin, said that to bring forward this Bill was evidence of failure. I will rebut that with some vigour when I reach my concluding remarks.

LORD LLEWELLIN

What I was saying was that deeds are more effective than words. This is the deed.

LORD PAKENHAM

The Bill appears to be a deed—a deed which the noble Lord is ready to support at this stage. I entirely agree with the remark the noble Lord has just made to the House, but it seems to me slightly less original than the remarks to which we usually look forward with such pleasure from him. We all agree that deeds are more helpful in this physical sphere than words.

The noble Lord, Lord Meston, raised a number of intricate points which I would like to consider carefully. He appeared to be under one possible misapprehension. Since no houses were built during the war, only owner-occupiers could let their houses for the first time. There can, therefore, be only a very limited number of such cases, and certainly not sufficient to justify a measure allowing for the possibility of increases in rents of houses let for the first time since 1939. The noble Lord made a number of other points which I would desire to consider at rather greater length. I would just mention one comparatively minor suggestion of his. He would like to leave out from Clause 3 the words. "if it is so agreed." I am doubtful whether there is much in that point, but we will certainly look into it, and it may be that something can be done to meet the noble Lord.

The noble Viscounts, Lord Buckmaster and Lord Ridley, both spoke with eloquence and knowledge from a certain point of view. The noble Viscount, Lord Buckmaster, appeared still to be smarting under rebukes by the noble and learned Viscount the Lord Chancellor on an earlier occasion, but I do not think he departed at all from his spirit of amiability. I can only repeat to him some of what the noble and learned Viscount said on the last occasion, although perhaps adding one quotation from Tom Paine—not a writer with whom I have otherwise a great deal of sympathy. The noble Viscount may remember that Tom Paine said of Burke's Reflections on the French Revolution: He pitied the plumage and forgot the dying bird. If I may say so, the noble Viscount is in danger of pitying the landlord and forgetting the poor tenant.

VISCOUNT BUCKMASTER

With great respect to my noble friend, in the first place, I do not think the noble and learned Viscount the Lord Chancellor ever rebuked me—he disagreed with me. In the second place, I do not forget the tenant. What I ask is that the scales of justice should be held equally.

LORD PAKENHAM

There again I think the noble Viscount has given voice to a sentiment which is completely impeccable. So far as that goes, again, we are all at one. Unfortunately, circumstances have favoured the landlord, and we are in that sense redressing the un- fair balance which has been established by circumstances over which we have had no control. The landlord has had a pretty good time these last few years. I speak as a very small landlord—I happen to own a few cottages—but as one who at the moment is certainly paying more in repairs than he is getting in rents. If it is thought that the landlord has not had a good time, let me turn to the value of property. I find that the selling prices of houses with vacant possession in 1948 exceeded the 1939 level by approximately 250 per cent.; and without vacant possession they exceeded the 1939 level by 95 per cent. These figures are based on records of the Valuation Office, Board of Inland Revenue. The cost of living index rose between 1914 and 1937 by about 100 per cent., and the index of retail prices has shown an increase of 9 per cent. since then. I am bound to say that most people who were landlords before the war, and are landlords now, are richer men in relation to the rest of the community than they were at that time. I should have thought that that was something which could hardly be disputed.

VISCOUNT RIDLEY

The noble Lord makes a general statement which admits a number of particular cases which are not the same. What the noble Lord says is perfectly true in a large number of cases, but what I would emphasise is that among the public at large there are certainly a number of landlords who are unable to maintain their property—I would not say the majority.

LORD PAKENHAM

If they were hit as hard as the noble Lord suggests, it would usually be possible for them to sell the property.

LORD LLEWELLIN

They have been giving property away in Glasgow. It is true that some landlords who have been able to give vacant possession of their property have found that its value has appreciated. But the landlords being discussed to-day are those who own rent-restricted houses. They cannot give vacant possession of their property, and those are the people to whom the noble Viscount, Lord Buckmaster, was referring.

LORD PAKENHAM

The figures supplied to me—which I have no reason to question—give a figure of 95 per cent. as the increase since 1939, even without vacant possession.

VISCOUNT SWINTON

Surely the noble Lord realises that one cannot draw a general conclusion from an agglomeration of particular instances. A number of landlords have done very well, and a number have done extraordinarily badly. It is being suggested that, while it is quite right to deal with the landlord who has done very well it, will also not be unreasonable to deal with the landlord who is doing very badly, and have equal justice all round. The noble Lord might as well say that, because a large number of profits have been made by private enterprise and large losses by nationalised industries, the whole lot should be lumped together.

LORD MESTON

You cannot sell a rent-controlled house full of tenants at any price. If any noble Lord contradicts that, all I can say is that his name must be Herodotus.

LORD PAKENHAM

In that case, I am prepared to accept the classical title given me by the noble Lord, because I was making inquiries this morning—

VISCOUNT SIMON

He was the father of history.

LORD PAKENHAM

Yes, and I suggest he is the father of something else as well! If the noble Lord is offering it as a compliment, I accept it, not only with amiability—to use the current word—but enthusiasm. The simple fact is of course, that if this were an Act for lowering some rents and raising other rents, it would be an Act which would fall hardly on many tenants. The simple fact of which the House is well aware, is that at the present time there is a grave shortage of houses, and tenants are suffering through no fault of their own. This is an Act to help the tenants. If people can think of legitimate proposals for helping the landlords the Government will always be ready to consider them. But this is an Act to help tenants, and I would be humbugging the House if I attempted to conceal that purpose from your Lordshps.

I am glad to find that this Bill has the broad approval of noble Lords, and certainly of the noble Lord, Lord Llewellin. The noble Lord said that he was not going to divide the House on the Second Reading, so its general purpose is one which the noble Lord entirely endorses. It is really what I may call the wing forwards of the Party who have descended upon this Bill. I am not sure they have not followed the habit of getting off-side; and I am not sure that they may not have to be sent off the field. The noble Viscount, Lord Buckmaster, if I may put it in a personal way, seems to have taken the place in the Conservative Party which I myself vacated some years ago.

The noble Viscount, Lord Ridley, of course, has the highest claims to speak on this subject to the House, and I can well understand his becoming a little fretful, while remaining amiable, that his Report has not been carried into legislation. I once helped with a Report which your Lordships may remember, the Beveridge Report. As soon as that was published we all became excited because it was not at once carried into legislation. But it has now reached the Statute Book, through the help of the Lord Chancellor and others, and with the co-operation of this House. The noble Viscount, therefore, should not despair in this matter, because the Government accept in principle the main recommendation that there is need for a consolidating Act. But I can only repeat what the Lord Chancellor said last time—and I think the noble Viscount, Lord Ridley, did not dissent from it today—that preparation is necessary. We cannot just add the present Acts together, and tell the draftsmen to get to work. It is necessary to revise and reform before this great Act comes forward, and surely the noble Viscount will agree that it will be a most complicated business when it comes, for which there is not time at this moment. But without any doubt whatever, the time will come.

I do not think your Lordships would wish me to attempt to deal with all the intricate points raised this afternoon. I hope the House will think that I am accessible throughout all stages of this Bill, as we always are, whether by private or public discussion. I would just allude, as I close, to the remarks, friendly and perhaps even humorous, of the noble Lord, Lord Llewellin, about the situation. When I say "humorous," I do not mean that he faces at all lightly, any more than I do, the housing shortage in the country. But he poked a little fun at us for bringing forward a Bill which seemed to admit that the Government's housing policy had not succeeded. I do not think it is ever wise in the course of a struggle to say that one has conquered or that one has succeeded. Therefore, I will not say that the Government's housing policy has succeeded. I will say only that it bids fair to succeed.

The House is fond—noble Lords opposite in particular—of quoting from the Minister of Health, and, making use of the same licence, I would refer to the speech that he made in moving the Second Reading of the Housing Bill in another place on March 16. He made the very strong point that, so far as one could judge, there are more homes per head of the population to-day than there were in 1939, so that we have already begun to improve on the 1938–39 position. That is surely something which the House might ponder upon, and upon which the Government and all those who have helped the Government, whatever their Party, should clearly be congratulated. It may be asked: How does that square with this assertion that there is a housing shortage? That seems to be a reasonable point to be brought up in reply. Again I ask permission to quote the Minister of Health. He is quoted very often—sometimes, I am sure, not quite in the way he would select.

I venture to refer noble Lords to his speech where he points out that there are three reasons why, in spite of the fact that there are more homes per head, there are these long queues of people wanting houses. First of all, people are getting married earlier than they were; secondly, the old people are anxious to live in their homes and are showing a certain resolution to-day in requesting to be allowed to continue in their homes in the autumn of their days, rather than be forced to go and live with relatives. Thirdly, more people than ever before have money in their pockets, and people are therefore able to ask for houses who were not able to ask before. There are the considerations which the Minister of Health has put forward.

The facts are hardly in dispute. They appear to be that between June, 1939, and December, 1948, the population in England and Wales increased by 1,750,000. It appears that approximately 560,000 additional homes have been provided, and, taking the generally accepted view of 3.5 persons to the family, we have provided for just under 2,000,000 persons; so in fact we are rather better placed per head than before the war. Nevertheless there is a grave shortage of houses and people are not adequately housed at the present time, in spite of the fact that the Government have done more, and have helped the country to do more, than was expected or than has ever before been accomplished immediately after a great war. I am rather surprised that the noble Lord, Lord Llewellin, stressed so much the comparison between the last year before the war and the most recent years. Obviously a comparison of that kind is hardly one he would care to push very far.

LORD LLEWELLIN

I must say that the whole of the building industry was far better organised after this war than it was after the 1914–18 war. I have always stood up for the noble Viscount the present Leader of the House; he had a much more difficult position to deal with than had the Minister of Health after this war. If we were building 350,000 houses a year, as we were, just before the war, I should have expected that that position would have been reached again four years after the end of the war.

LORD PAKENHAM

We have only the comparison between the two periods. I myself believe that we should have had still more houses at this time if the noble Viscount, Lord Addison, had been Minister of Health, because I think he would have made the best Minister of Health. We have had the second best one as it is. I do not mind where that reaches, because I am not going to accept any possible implied reflection on my noble friend the Leader of the House. He did all that was possible. But the Minister of Health, who is much criticised in this House, has, in my opinion, done a first-class job. I frankly believe that some noble Lords will look rather foolish for having criticised the Minister of Health so much, because in regard both to the Health Scheme and to housing he will have the last laugh—and, on the whole, it will be a laugh in which the whole country can join. I hear mumbles, but I do not associate them with the noble Viscount. When all is said and done, the housing shortage is still grave. But a great deal has been accomplished, and I myself think that in this great task the whole country can go forward together to a conclusion which most of us expect will be much happier than appeared likely a few years ago.

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