HL Deb 03 May 1949 vol 162 cc198-231

4.54 p.m.

Amendments reported (according to Order).

Clause 1:

Variation of standard rents fixed by reference to new lettings

(2) Subject to the provisions of the next following subsection if the rent so determined by the Tribunal as aforesaid is less than what would be the standard rent apart from this section it shall, as from the date of the determination thereof, be the standard rent of the dwelling-house.

LORD LLEWELLIN moved to add to subsection (2): Provided always that in the case of a dwelling-house the first letting of which occurred between the first day of September, nineteen hundred and thirty-nine, and the fourteenth day of August, nineteen hundred and forty-five in consequence of the landlord serving in any of His Majesty's Forces or other- wise being required to reside elsewhere than in the dwelling-house by reason of circumstances arising out of the war, the rent so determined as aforesaid shall, as from the date of the determination thereof, be the standard rent of the dwelling-house whether the same shall be greater or less than what would be the standard rent apart from this section.

The noble Lord said: My Lords, you may remember that I raised this point during the Committee stage. On this occasion I will not go into it at great length, but will just repeat the reasons why I have put down this Amendment. The only people it is designed to help are, first, those who were moved away from their houses because they were serving in some branch of His Majesty's Forces and, secondly, those who, because they were civil servants, were required to live away—as, for instance, in the case of employees of the Ministry of Food, who were required to leave London and go to Colwyn Bay. Those are the two classes of persons whom I want to benefit by this Amendment, and then only if the Tribunal consider it is reasonable that the rent of the house should be higher than the rent at which it was let at the time the owner was required to leave it.

Many of your Lordships will remember that at one time during the war London and the suburbs were not too pleasant to live in, and if anybody was required to leave his house it was not at all easy to get a tenant to come in and take that house. Therefore those houses were let at abnormally low rents. All I am saying is that those abnormally low rents, having arisen in those circumstances, should not become the standard rents for so long as the Rent Restrictions Acts last. If, in the eyes of the Tribunal, a higher rent would be reasonable, then the owner should be allowed to charge it. The point arises only because the house was first let during that period; it would not have been let at all if the person had not been required to move somewhere else, either through his service in the Forces or in some Government Department. I know that the noble Lord, Lord Pakenham, while admitting that there may be some cases of hardship, said frankly that it would be quite impossible to introduce what would be the "thin end of the wedge" into this measure, and that if we proved many cases of hardship it would be impossible to introduce into this Bill the principle of raising the rent. But the principle is already in the Bill. It is true that, so far as I can understand it, it applies only to Scotland.

On the last occasion the noble Lord, Lord Morrison, introduced some Amendments into this Bill, and he said—I am now quoting from column 1142 of Hansard: It is a common practice in Scotland—perhaps in England as well—for landladies in holiday resorts who depend on letting for their livelihood, to let accommodation at low rents during the winter months. If a tenant enjoying such a low rent applies to a Tribunal, the Tribunal can only approve or reduce the rent, and the rent fixed then becomes the maximum rent which can be charged until the case is again reviewed by the Tribunal as a result of fresh application. The result of the Tribunal's decision is, therefore, to bar the landlady from charging a higher rent for the accommodation during the summer months unless she applies to the Tribunal on the ground of change of circumstances. … What is the difference between that case and the case that I am putting?

The case which the noble Lord, Lord Morrison, is trying to meet for Scotland is the case where the landlady lets the accommodation more cheaply in the winter, for the very reason that there are not so many people going to the holiday resort. The case I am trying to deal with is that where the owner, particularly in London, has had to let his house at a lower rent than that which would be obtainable in the brighter days of peace. Anyhow, we already have this kind of case in the Bill—and very wisely: I am not saying anything against the noble Lord, Lord Morrison. Indeed, on the last occasion on which we were debating this subject, I spoke of the noble Lord's action as an example of the good horse sense of Scotland. Therefore, it is the noble Lord, Lord Morrison, who has introduced this kind of case into the Bill. It is the noble Lord, and not myself, who is inserting the "thin end of the wedge." I suggest that at a time when the Government are apparently not in a position to meet the ex-Service men's claim for a review of the scale of their pensions, they might at least make this concession and see that these men who had to leave their houses in the days of the war, because of the exigencies of National Service, are not penalised by having too low a standard rent fixed for ever after. I beg to move.

Amendment moved— Page 2, line 17, at end insert the said proviso.—(Lord Llewellin)

VISCOUNT MAUGHAM

My Lords, I wish to support very warmly the Amendment which my noble friend has just moved. In doing so, I should like to say that I am not satisfied that the subsection which we are seeking to amend is worded in a very clear manner. For my own part I have considerable doubt as to what is really aimed at by the phrase in subsection (1): Where apart from this section the standard rent of a dwelling-house would be— (a) the rent at which it was let on a letting beginning after the first day of September, nineteen hundred and thirty-nine … I cannot help thinking that that wording probably does not carry out the intention of the Government. This clause, as I understand it, was introduced in the course of the debate by an Amendment which the Government thought fit to accept, and it does not seem to me to be clear.

If the standard rent of the house is the rent at which it was let on September 1, 1939, then, subject to the provisions of the clause, the landlord or the tenant may apply to the Tribunal to determine what rent is reasonable. I am not sure that I know whether that provision is limited simply to cases where there was a continuing letting at that date. I suppose the ordinary case is that in which there is only a weekly or a monthly tenancy. I am not quite sure what is the meaning of the words: … let on a letting beginning after the first day of September nineteen hundred and thirty-nine … It is obviously desirable in a matter of this sort, which affects so many people, to have the language perfectly clear. If it is in doubt, I do not think the Government should have any difficulty in making it a little clearer. At any rate, it is beyond dispute that the whole purpose of this clause is to remedy certain injustices in respect of premises of a particular letting kind as from a particular date.

Whatever may be the exact meaning of subsection (1), there is a case, as my noble friend explained, which calls for amendment. These people have a cast-iron case to put before the Legislature: they have been told to go, to leave their premises in order to do their duty elsewhere—perhaps to go and fight in some other part of the world. Not only are they removed, so to speak, by Government action from the house which they occupy, but they have to go at a time which is probably the worst possible from the point of view of letting their dwellings—many of them of a very humble kind. I cannot understand what possible reason the Government have for saying that those people, for whom my noble friend has made so strong a case, have not as good a right to some amelioration of their position as those dealt with in subsection (1) and the following subsections. I cannot see how there can possibly be any question of the "thin end of the wedge."

The subsection itself provides for an alteration based simply upon the fact that a rent is either too high or too low, and there is a right to have the matter remedied. But these people have been forced, because of particular circumstances connected with the desires or needs of a Government Department—say, of the War Office—to give up their premises. In many cases, the premises were given up on the understanding that as soon as the landlord was able to return, the tenant, who was accepted temporarily, would give up the tenancy to the original occupant. In many cases it could be shown that there was an absolute promise that the temporary tenant would give up occupancy of the premises as soon as the landlord required them. To shorten my remarks, I am talking without very careful consideration of my language here, but to my mind the Government made them go; and the premises were let, in many cases, at a figure a great deal under their value. The people who will suffer if they are turned out are the people who from the very beginning have been dishonourably sticking to the property, contrary to their promise to go out as soon as the owner of the property could return. I have great respect for the powers of the noble Lord who has to reply to this. I know how skilful he is, but I venture to say that no skill in the world could make a good case of this particular matter for the Government if they do not come to some terms and remedy so patent an injustice to which the expression the "thin end of the wedge" is not in the least applicable.

5.11 p.m.

THE LORD CHANCELLOR (VISCOUNT JOWITT)

My Lords, I am very conscious, or at least I think I am conscious, of the fact that the noble and learned Viscount who has just spoken did not expect that I should be replying; I am also conscious of the fact that I fall far short of the mental ability and agility of my noble friend Lord Pakenham. But, seeing that the noble and learned Viscount said that even the noble Lord, Lord Pakenham, could not have persuaded him, it does not seem to me to matter very much—I must do the best I can. In the first place, let me get one or two things clear. When we had a discussion on this matter on an earlier stage of the Bill, the noble Lord, Lord Llewellin, referred to the fact that this clause had been in some way introduced as a result of a Communist Amendment. Like the noble and learned Viscount, I confess that the fact that it comes from that quarter does not at all endear it to my heart. But, nevertheless, the particular point that the noble and learned Viscount had in mind had nothing whatever to do with the Amendment.

Let us see what he is considering. He is considering a certain class of house which, owing to certain circumstances, has been let at something very much below its fair value. This Bill does not bring into rent control houses let after 1939: they were there already. It is the Rent Restrictions Acts which have imposed the standard rent. Speaking broadly, the standard rent is the rent at which the premises were first let. This Bill deals with a very different class of case from that which the noble and learned Viscount had in mind. There are some cases where landlords have been exploiting the situation, and charging too much rent. This Bill says that, with regard to those landlords, and those landlords only, the Tribunal shall have the right to reduce the standard rent, the rent at which the premises were first let, and which ex hypothesi is too high to be reasonable. That is what this Bill does, and that is what this Communist Amendment did. It has nothing whatever to do with the proposition that these houses are under a rent control imposed by the existing Rent Restrictions Acts.

VISCOUNT MAUGHAM

My Lords, I am sure I never said so. I am much concerned on this point. When the noble and learned Viscount says that that is the only thing that the Bill is doing, I do not think that he is right. It is "the landlord or the tenant" who can apply. When a rent is too low, a landlord has just as good a right to apply as a tenant.

THE LORD CHANCELLOR

No, the landlord has not. The effect of the Amendment is to give him that, but the Bill as drafted does not give the landlord that right.

VISCOUNT MAUGHAM

If the noble and learned Viscount will look at the words, they are: … the landlord or the tenant may make application to the Tribunal … There are the words "or the tenant." I cannot help thinking that it is the landlord or the tenant, because it clearly says so.

LORD LLEWELLIN

It is at page 2, line 5.

THE LORD CHANCELLOR

It is true that those are the words but how does the subsection operate? Application is made to find out what is a reasonable rent, but subsection (2) says: … if the rent so determined by the Tribunal as aforesaid is less than what would be the standard rent apart from this section it shall, as from the date of the determination thereof, be the standard rent of the dwelling-house. Therefore, although I agree that it is possible for the landlord to apply to have the rent reduced, he cannot apply, as this Bill is drawn, to have it increased. Therefore, he would not apply.

VISCOUNT MAUGHAM

My Lords, the noble and learned Viscount really must look at the clause again—I say that with the greatest respect to him; I know how busy he is. As I see it, he has not read the subsection in full. The words are: the landlord or the tenant may make application to the Tribunal to determine what rent is reasonable for that dwelling-house, and on any such application the Tribunal shall determine that rent and shall notify the parties of their determination. Supposing the Tribunal say, at the request of the landlord: "The rent is insufficient" and they notify the parties, it is obvious that, when that is done, the rent will be that amount; otherwise, why on earth should the landlord go to the Tribunal at all, if nothing can be done for his benefit?

THE LORD CHANCELLOR

May I remind the noble and learned Viscount, with the very greatest respect, that we are not conducting the Committee stage. We are on Report stage. I beg your Lordships to bear with me when I say that I do not think it is possible to conduct a Report stage on this basis. Now let me say what I have said before. I have read this Bill through, probably a good many more times than has the noble and learned Viscount, and I have had the advantage of discussing it with the experts. Of course, it is the fact that the landlord can apply, but he cannot apply to have the rent increased. All he can get out of an application is the certainty of fixation, so that nobody thereafter can apply to have the rent reduced. That is all he can get out of it. The tenant is the only person who by applying can obtain any reduction. There is no question of an increase. That is abundantly plain. I did not say that the noble and learned Viscount, Lord Maugham, had ever made this point. I did say that if anyone read the observations made by the noble Lord, Lord Llewellin, on Committee stage, they might be drawn to the conclusion that the noble Lord was under the impression—I know he understands this subject very well—that rent control was imposed by this Bill. Of course it was not. The rent control of these houses is imposed by the Rent Restrictions Acts. I hope that is quite clear.

The next thing that is also, I hope, quite plain is that we are dealing in this clause only with the rent of unfurnished premises; we are not dealing with the ordinary landlord who lets furnished premises. That would come under a different Act altogether, the Furnished Houses (Rent Control) Act. With regard to rent control of furnished houses, there is ample provision for an alteration of rent on a change of circumstances. The Scottish application was dealing with the somewhat analogous case of that as between winter and summer. In this clause, we are dealing only with unfurnished premises. Let us consider just how far we have gone. In the particular case that the noble Lord, Lord Llewellin, has in mind, of premises which owing to circumstances were let at too low a rent, as I have already said, the hardship and the burden are imposed by the Rent Restrictions Acts. I have never concealed from your Lordships that hardships are caused to landlords by this provision, but I believe I told the noble Viscount, Lord Buckmaster, the other day that on balance the hardships to the tenant are far greater. Owing to the fact that there has been a shortage of houses, I believe there has been a very serious exploitation of tenants, but I do not doubt for a moment that there are real hardships to landlords.

I believe that there is only one way in which it is possible to deal with this situation—namely, to have a complete and absolute review of the whole position. Perhaps the hardest taws of all are those of 1914, because the change in the value of money has been so complete since 1914, that a rent which was fixed then has little real relevance to the circumstances of to-day. If there was one case that, if it could be put right by rule of thumb instead of by going through each case, I would try to put right, it would be that of the 1914 rent. And I suspect that the noble Viscount, Lord Buckmaster, would agree with me that there you would probably find the hardest case of all. What is the noble Lord doing here? He is selecting particular cases and trying to remedy a hardship in particular cases only. Why in his Amendment does he take in, only houses let after the September 1, 1939? Why not deal with the 1914 cases? Why deal with these two particular categories of premises let after 1939?

I remember very well that at the time of the last Government I was charged to go round and see what could be done to help the various seaside and holiday resorts on the South Coast. I remember the circumstances there. The Government put out notices requesting the people who lived in those towns to leave and, as good citizen, many of them did leave. They were carrying out the wishes of the Government of the day. They were not required to do; they were requested to go. Why are those people left out? This Amendment, therefore, applies to a very limited category of people over a limited period. As I have said, I concede at once that inevitably there are hardships to landlords in the whole of this legislation, and I hope that the day will come when one Party or another, whichever are in power, will be able to review the whole matter—if you like, with some sort of rent courts up and down the country determining what rents are reasonable. But that would be a colossal undertaking, and no Party could possibly contemplate such a thing at the present time. In those circumstances, to select certain types "out of the bag," on a purely arbitrary basis, and say "In these cases we will allow an increase in rent, and in these cases only will we allow an increase in rent," would be to make the position far worse.

I believe that people will stand a good deal of hardship, but if they think that the fellow next door is getting his hardship attended to, and their hardship is not being attended to, they will not stand for it. You can imagine two houses side by side, one with a man who left because he was requested by the Government to leave, and the other with a man who left because he was required by the Government to leave, and one man is going to have his rent increased and the other is not. I think that would be grossly unfair. Further, let us remember that when these people who have left their houses and want to get into possession again claim from the county court judge that they should have their houses delivered over to them, the matter turns on the balance of hardship; and if it is the sort of case about which we have just heard, then it is probable that the owner will succeed in obtaining possession of his house. In a very large number of cases, of course, that happens.

I concede at once that up and down this whole field of legislation there are landlords whom the shoe is pinching very badly. Secondly, I concede that the only way to deal with this situation is to have a complete review of the whole thing. You cannot apply a formula only to certain classes. If you do that, and do it on a purely arbitrary basis, you may make confusion worse confounded; you make the hardship worse felt. I rest myself on this simple proposition. I do not understand on what principle of justice you can possibly apply this to the post-1939 cases and leave entirely out in the cold the 1914 cases. Anybody who has studied this matter will agree that the 1914 cases involve the greatest hardship of all. Therefore, I am unable to accept this Amendment. We cannot in this Bill, as it seems to me, embark upon the question of raising rents unless we do it for everybody. We can do it for everybody only if we do it as a result of an inquiry, and we cannot do that now.

LORD LLEWELLIN

My Lords, as always, I have listened with interest to the noble and learned Viscount, because he invariably puts his case so well. It seems to me that his case comes to this: that there is unfairness; we cannot cure the whole unfairness because it is a colossal undertaking, so let it remain a colossal undertaking and do not let us do a little now which might encourage others to do a little more later on. My suggestion to your Lordships is that, if there are these injustices, we ought to cure now such of them as we can. I cited the cases of people who were required to move away because once we get into the realm of cases concerning those who were requested generally by notice to go away it is difficult to prove whether they left in pursuance of that request or whether they were going anyway.

Those concerned in the two classes to which my Amendment refers left to do something towards winning the war. I am not saying anything about the elderly ladies who moved from a coast resort because they were requested to, in order to clear it of people; I am not saying anything against their patriotism. But other persons were active in the Services, or were working for the Government in some capacity which required them to move. Such people moved definitely because they were helping to win the war by so doing. The reason why I did not go back to 1914 is that we are here seeking to do something for a clearly defined category. The two classes I have included have obviously let their houses at rents that were low because of the multitude of houses, whereas it is usually scarcity value which prompts action under the Rent Acts. For those reasons, I suggest to your Lordships that we should send this matter back to another place, where it was never considered, in order to give them an opportunity of saying whether or not they will do something about these deserving classes of people of whom I speak to-day.

On Question, Whether the said proviso shall be there inserted?

Their Lordships divided: Contents, 58; Not-Contents, 19.

CONTENTS
Rutland, D. Marchwood, V. Gifford, L.
Margesson, V. Hatherton, L. [Teller.]
Cholmondeley, M. Maugham, V. Hawke, L.
Reading, M. Portman, V. Howard of Glossop, L.
Swinton, V. Hylton, L.
Buckinghamshire, E. Trenchard, V. Ker, L. (M. Lothian.)
De La Warr, E. Llewellin, L.
Dundonald, E. Ailwyn, L. Lloyd, L.
Fortescue, E. [Teller.] Amherst of Hackney, L. Luke, L.
Lindsay, E. Amulree, L. Meston, L.
Munster, E. Belstead, L. O'Hagan, L.
Onslow, E. Borwick, L. Rennell, L.
St. Aldwyn, E. Broughshane, L. Rochdale, L.
Carrington, L. Roche, L.
Bridgeman, V. Charnwood, L. Saltoun, L.
Buckmastcr, V. Clanwilliam, L. (E. Clanwilliam.) Sandhurst, L.
Chaplin, V. Sempill, L.
Elibank, V. Clwyd, L. Strathcarron, L.
Falmouth, V. Clydesmuir, L. Teviot, L.
Hailsham, V. Derwent, L. Teynham, L.
Long, V. Gage, L. (V. Gage.) Wolverton, L.
NOT-CONTENTS
Jowitt, V. (L. Chancellor.) Ammon, L. Lucas of Chilworth, L. [Teller.]
Amwell, L. Morrison, L.
Addison, V. (L. Privy Seal.) Crook, L. Mountevans, L.
Faringdon, L. Pakenham, L.
Huntingdon, E. Henderson, L. Rochester, L.
Holden, L. Shepherd, L. [Teller.]
Hall, V. Kershaw, L. Williams, L.
St. Davids, V.

Resolved in the affirmative, and Amendment agreed to accordingly.

Clause 2:

Prohibition of premiums on grant or assignment of tenancy

(4) Notwithstanding anything in subsection (2) of this section, an assignor may, if apart from this section he would be entitled so to do, require the payment by the assignee—

(b) of a sum not exceeding the amount of any expenditure reasonably incurred by the assignor in carrying out any structural alteration of the dwelling-house;

5.38 p.m.

LORD PAKENHAM moved to add to paragraph (b) of subsection (4): or in providing or improving fixtures therein, being fixtures which as against the landlord he is not entitled to remove. The noble Lord said: My Lords, this Amendment gives effect to an Amendment moved by the noble Viscount, Lord Buckmaster, in Committee. He will recall, and the House will recall, that I had the pleasure of accepting that Amendment in principle, and promised to incorporate the noble Viscount's idea in the Bill. That we are now doing. This Amendment gives the assignor of a tenancy the right to require from the assignee reasonable payment for any fixtures which he may have provided or improved and which are not removable because they vest in the landlord—that is to say, they are the landlord's fixtures which the assignor has provided or has himself improved. I hope that the House will feel that this Amendment does give effect to the undertaking, which was given to the noble Viscount during the Committee stage. I beg to move.

Amendment moved— Page 3, line 34, at end insert the said new words.—(Lord Pakenham.)

VISCOUNT BUCKMASTER

My Lords, may I thank the noble Lord for so kindly meeting my views and what I believe were the views of your Lordships' House on this matter? I only hope that this action on the part of the noble Lord will be a happy augury for the future.

On Question, Amendment agreed to.

LORD PAKENHAM

My Lords, I rise at once in the spirit of the noble Viscount's last remarks to move this Amendment, which is also intended to meet the noble Viscount's point. It is a Government Amendment consequential on the one which has just been carried. I beg to move.

Amendment moved— Page 3, line 40, leave out ("as aforesaid") and insert ("or in providing or improving any such fixtures as are mentioned in the last foregoing paragraph").—(Lord Pakenham.)

On Question, Amendment agreed to.

LORD PAKENHAM moved, in subsection (5), to delete all words in the proviso down to and including "repealed," and to insert: Provided that where an agreement has been made since the said twenty-fifth day of March and before the commencement of this Act, and the agreement includes provision for the payment of a premium which could lawfully be required under the enactments hereby repealed but which, if paid in pursuance of the agreement, would be recoverable, wholly or in part, by virtue of the foregoing provisions of this subsection. The noble Lord said: My Lords, this Amendment is mainly drafting. The object of this proviso is to make it clear beyond any doubt that agreements to pay premiums between the dates mentioned are voidable at the option of either party. A premium already paid is dealt with under the substantive part of the subsection. I do not think there has been doubt at any stage about this matter, but I have been advised that it is desirable to include this Amendment to make what is plain, plainer still.

Amendment moved— Page 4, line 14, leave out from the beginning to the second ("the") in line 17, and insert the said proviso.—(Lord Pakenham.)

LORD LLEWELLIN

My Lords, so far as I am concerned, I have no objection to this Amendment. As the noble Lord has said, it has generally been agreed that the clause has this effect, but it is just as well to make it clear in the Bill.

On Question, Amendment agreed to.

THE EARL OF MUNSTER moved, after Clause 2 to insert the following new clause:

Annual value for Income Tax where rent reduced.

"Where the standard rent of a dwelling-house is by virtue of a determination by the Tribunal under section one of this Act different from what would be the standard rent apart from that section the annual value of such dwelling-house for the purposes of Schedule A of the Income Tax Act, 1918, shall, as from the date of such determination be equivalent to the rent determined by the Tribunal to be the reasonable rent and section one hundred and thirty-eight of the Income Tax Act, 1918, shall apply as if such annual value as aforesaid had been ascertained by a valuation verified by a person of skill under that section."

The noble Earl said: My Lords, your Lordships will remember that I raised this question at the previous stage. I have no wish to weary the House with further explanations. Perhaps the noble Lord could give me some information as to the result of the inquiries which he told me he would make between the Committee and the Report stages of the Bill. I beg to move.

Amendment moved— After Clause 2, insert the said new clause.—(The Earl of Munster.)

LORD PAKENHAM

My Lords, my right honourable friend the Chancellor of the Exchequer has given his personal attention to both Amendments brought forward by the noble Earl. I am glad to say he was able to do this, though hard-pressed, before leaving for Italy. I am glad to inform the House, as regards the Amendment now before us, that my right honourable friend has considered the clause and thinks it unnecessary, because any appropriate relief could be claimed under existing taxation law. The existing provisions of income tax law enable an owner of property to appeal to the local body of General Commissioners of Income Tax in cases of this kind. Whether one is looking at this matter from the point of view of the landlord or of the tenant, I can assure the noble Earl that in the opinion of my right honourable friend this is already met by the existing law.

THE EARL OF MUNSTER

My Lords, I am much obliged to the noble Lord and beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

THE EARL OF MUNSTER moved, after Clause 2 to insert the following new clause:

Relief from Death Duties on houses in respect of which the rent has been reduced or a premium is prohibited.

" .—(1) The following provisions of this section shall have effect where—

  1. (a) the rent payable in respect of a dwelling house is reduced in consequence of a determination by the tribunal under section one of this Act; or
  2. (b) a leasehold interest is subsisting in a dwelling-house at the twenty-fifth day of March nineteen hundred and forty-nine.

(2) If it is proved to the satisfaction of the Commissioners of Inland Revenue:—

  1. (a) that estate duty has been paid, or is payable in respect of a dwelling-house or of the leasehold interest in a dwelling-house and the dwelling-house or leasehold interest in a dwelling-house was valued for the purpose of that duty as at a date in the case of a dwelling-house to which paragraph (a) of the preceding subsection relates before the date of the determination by the Tribunal and in the case of a leasehold interest under paragraph (b) of the preceding subsection before the twenty-fifth day of March, nineteen hundred and forty-nine.
  2. (b) that the persons to whom the interest in the dwelling-house or the leasehold interest in the dwelling-house passed beneficially on the death on which the duty was payable were the same persons as were beneficially interested at the date of the determination by the Tribunal or at the twenty-fifth day of March, nineteen hundred and forty-nine, as the case may be, and
  3. (c) that the interest in the dwelling-house or the leasehold interest as the case may be was the same in all respects and with the same incidents at the date of the determination by the Tribunal or at the twenty-fifth day of March nineteen hundred and forty-nine as the case may be and at all dates relevant for the purpose of ascertaining the duty: and
  4. (d) that the dwelling-house or the dwelling-house in which the leasehold interest subsists was in the same state at the date of the determination by the Tribunal or at the twenty-fifth day of March nineteen hundred and forty-nine as the case may be and at all dates relevant for ascertaining the duty
the amount of the duty payable in respect of the dwelling-house or of the leasehold interest shall, where necessary, be reduced by repayment or remission of duty so as not to exceed the amount which would have been payable in respect thereof if the principal value of the dwelling-house or of the leasehold interest had been equal to the value of the dwelling-house subject to the limitation of rent imposed by the determination by the Tribunal or to the value of the leasehold interest as affected by the provisions of section three of this Act.

(3) Where the Commissioners are satisfied that the provisions of the last preceding subsection would have had effect but for all or any of the following facts, that is to say:—

  1. (a) that the requirement in paragraph (a)of the preceding subsection is not fulfilled in that the duty was paid or payable on part of the interest only; or
  2. (b) that one or more of the requirements specified in paragraphs (b) to (d) of the preceding subsection are only partly fulfilled
they may grant to any of the persons paying or bearing any of the duty such relief by repayment or remission of duty as may seem to them just and reasonable.

(4) The last two preceding subsections shall have effect in relation to any legacy or succession duty becoming payable on the principal value of the dwelling-house or leasehold interest as they have in relation to estate duty, subject, however to the modification that for the references to the death there shall be substituted references to the happening upon which the legacy or succession duty became or becomes payable."

The noble Earl said: My Lords, this Amendment was also raised in Committee and I will not weary the House with all the facts I endeavoured to put before the, House on that occasion. I hope the noble Earl is now in a position to make a statement on this Amendment. I beg to move.

Amendment moved— After Clause 2, insert the said new clause.—(The Earl of Munster.)

LORD PAKENHAM

My Lords, I am sorry on this occasion to have to inform the noble Earl that my right honourable friend the Chancellor of the Exchequer, again having considered the proposed new clause, cannot see his way to introduce legislation to grant relief from death duties in the circumstances proposed in the clause. I hope, therefore, that the noble Earl will feel, as this is a Privilege Amendment, that it should not be pressed at the present moment.

LORD LLEWELLIN

My Lords, in view of the vast size of some death duties, I think it would not make much difference either way if this provision were included. I do not think it would mean either much more going to the Exchequer or much more coming out of the pocket of the payer of death duties. Therefore I suggest that, having raised the point, we should leave it there. In any event, this Amendment cannot be incorporated in the present measure. It would have to be of general application and be inserted in a Finance Bill.

LORD PAKENHAM

I am grateful to the noble Lord.

THE EARL OF MUNSTER

I thank the noble Lord and beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 7:

Provisions where tenant shares accommodation with landlord

7. Where under any contract—

  1. (a) a tenant has the exclusive occupation of any accommodation.
    2. 215
  2. (b) the terms on which he holds the accommodation include the use of other accommodation in common with his landlord or with his landlord and other persons, and
  3. (c) by reason only of the circumstances mentioned in paragraph (b) of this section, the accommodation referred to in paragraph (a) thereof is not a dwelling-house to which the principal Acts apply,
the Act of 1946 shall apply to the contract notwithstanding that the rent does not include payment for the use of furniture or for services.

VISCOUNT BUCKMASTER moved to add to the clause: but for the purposes of this section the said Act shall apply as aforesaid as if Section eleven of this Act had not been enacted.

The noble Viscount said: My Lords, the Bill is now in a different form and this Amendment previously related to Clause 9. I hope it is innocuous. Its purpose is to give some protection to a landlord in a case, and only in a case, where he is sharing rooms with a tenant. There is no need to take up your Lordships' time on this matter, because the proposal is a simple and elementary one. It is clear that in the case of shared accommodation very difficult and delicate relations arise and an altogether intolerable position is established if a landlord feels he can never rid himself of a tenant. Under the Furnished Houses (Rent Control) Act he could give a tenant three months' notice. That power has now disappeared. The noble and learned Viscount who sits on the Woolsack knows that I pay great attention to what he says, and in answering this Amendment on Committee stage he urged that a period of three months was too short, that we should be very careful about what should be done and that we should rely on the discretion of the tribunals—I am paraphrasing rather roughly what he said. I say at once that I am not wedded to three months as a period of time for this proposal. I would be quite happy if the period were twelve months. But I urge that there should be some finality. If there is no finality, we shall certainly diminish the accommodation available. People are not going to let rooms or share them if in no circumstances and at no time can they be rid of unwanted tenants. I hope that, having shown my readiness to accept a much longer term, the noble Lord who replies will be able to tell me that my Amendment, at least in principle, is accepted. I beg to move.

Amendment moved— Page 7, line 30, at end insert the said words.—(Viscount Buckmaster.

LORD PAKENHAM

My Lords, while I sympathise with the kind of case which the noble Viscount clearly has in mind, if he will allow me to say so, he went rather further than he intended when he talked as though a landlord could never get rid of a tenant. He will fail to get rid of a tenant only when it is judged unreasonable by the body of fair-minded citizens composing the Tribunal. Therefore, he is not tied to a badly behaved tenant in unfair circumstances. It rests with the Tribunal to give him relief. I would remind the House that it was decisions of the courts, unlooked for at the time of legislation, that gave rise to the insecurity from which the tenant is being relieved in this part of the Bill. I would stress that but for those unexpected court decisions the tenant would have been entitled, in a case of this kind, to the full protection of the Rent Restrictions Acts and the landlord could have removed him only by obtaining an order from the court and providing that other accommodation was available, or on other certain very limited grounds. The protection given in the Bill is not nearly so extensive as that originally anticipated or intended, and therefore I am afraid the Government are clear that the protection we are extending cannot be further diminished, as the Amendment proposes.

I am ready to concede that there are difficult human problems. The last thing I want to do is to waive them aside and treat them as of no account, but I can only repeat what my noble and learned friend the Lord Chancellor said earlier, "We must leave it to the Tribunal." I would add that the Minister will take steps to see that the considerable feeling in both Houses of Parliament about this matter is conveyed to the Tribunals, so that they may realise the kind of difficulty with which the landlord may be confronted. Though I have not met the noble Lord in fact, I hope that I have met him to some extent in spirit by that last assurance, and I would ask him to consider whether in the circumstances he cannot withdraw his Amendment.

VISCOUNT BUCKMASTER

My Lords, I appreciate the courtesy and conciliatory nature of the noble Lord's reply. I should have felt happier about it had I felt happier about the composition of the Tribunals, many of whom perform their work admirably. In view of the fact that the noble Lord has offered to bring this point particularly to their notice, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 9 [Certain sublettings not to exclude operation of principal Acts]:

LORD PAKENHAM

My Lords, this is a drafting Amendment. I beg to move.

Amendment moved— Page 9, line 41, leave out ("not").—(Lord Pakenham.)

On Question, Amendment agreed to.

5.52 p.m.

Clause 11:

Power of Tribunal under Act of 1946 to extend security of tenure.

(2) On an application being made under this section—

  1. (a) the notice to quit to which the application relates shall not, unless the application is withdrawn, have effect before the determination of the application;
  2. (b) the Tribunal, after making such inquiry as they think fit, and giving to each party an opportunity of being heard, or, at his option, of submitting representations in writing, may direct that the notice to quit shall not have effect until the end of such period, not exceeding three months from the date at which the notice to quit would have effect apart from the direction, as may be specified in the direction;

LORD LLEWELLIN moved to add to paragraph (b) of subsection (2): Provided that where the lessee is occupying premises a part of which is also in the occupation of the lessor the Tribunal shall in no case grant extensions hereunder which would in total exceed six months. The noble Lord said: My Lords, this Amendment deals with a similar problem to that dealt with by the recent Amendment of my noble friend Lord Buck-master. I seek to limit this "repugnant propinquity," as I think the Minister of Health described it in another place, of two persons living in the same house. Originally, in the Furnished Houses (Rent Control) Act, the Minister allowed an extension for only three months. As I told your Lordships last time, he was quite naive about it in the other place when he introduced this measure, saying: "If I let them think, when we were asking for more accommodation, that they were perhaps going to have their tenant there for term after term and could not get rid of him I should not have got the offers for accommodation I then got." He was quite frank about it. But this Tribunal, equally, can go on giving a three months' additional term, both when the lessor is living outside the premises and when the lessor is sharing part of the premises with the lessee.

I am not by this Amendment seeking to deal with the question of furnished premises where the lessor is not living in part of them. But I suggest that we ought to have a distinction between premises which are shared between the lessor and lessee and those which are not. I would suggest that the right way to make the distinction is by having a maximum period of six months for the continuance, at the Tribunal's behest, of this "repugnant propinquity" in the case of the lessor who is sharing accommodation with a lessee. In the other cases, by all mean; let it run on; I do not mind that so much. But when you have actually taken somebody into your house who turns out not to be compatible, then I think there ought to be a limit to the amount of time for which the Tribunal can order the letting to continue; and I suggest that a reasonable period is one of six months.

I know that the noble Lord, Lord Pakenham, says that he will circulate these Tribunals to tell them there is this strong feeling in both Houses of Parliament on this particular matter, but I am not certain that that is the way to deal with tribunals or courts of law. I think Parliament ought to put clearly in the Act of Parliament what it wants, and let that be the guide, rather than a sort of circular letter going oat from the Ministry giving a kind of hint behind the scenes as to what line the Tribunals ought to take in coming to their decisions. My words may not be the right words, but I think we ought to show the Tribunals, in the terms of the Bill itself, that we feel there is a distinction which they ought to draw, between the case where the lessee has separate premises and the case where the lessor is trying to get rid of a person actually sharing the house. I beg to move.

Amendment moved— Page 10, line 40, at end insert the said proviso.—(Lord Llewellin.)

LORD PAKENHAM

My Lords, I expressed sympathy with the point of view put forward by the noble Viscount, Lord Buckmaster, and, if I may say so, I express still more sympathy with the point of view put forward by the noble Lord, Lord Llewellin, because his Amendment is of the same kind but, from our point of view, more moderate; he comes further towards us than did the noble Viscount, Lord Buckmaster. Indeed, I can see that the noble Lord, Lord Llewellin, is anxious to help, because, from our point of view, his Amendment is more moderate than that suggested in another place under this same heading. However, I am afraid the arguments that I attempted briefly to unfold just now hold good also against this Amendment. In our view, we must leave discretion in this matter to the Tribunals. That makes it impossible to give them this kind of legislative instruction the noble Lord would like to see them given; and it makes it impossible to inform them that if the landlord continues to protest after six months, out the tenant must go. We feel that is impossible, particularly in view of the fact that originally, before these court decisions to which I referred earlier, the tenant was thought to have the protection of the Rent Restrictions Acts.

LORD LLEWELLIN

Not furnished.

LORD PAKENHAM

We are now talking about unfurnished premises, and we are applying to unfurnished houses the machinery of the Furnished Houses (Rent Control) Act. No doubt the noble Viscount, Lord Buckmaster, will confirm that. I am sorry if the noble Lord is a little suspicious of these instructions which I mentioned, and I shall be only too pleased to discuss with him (I cannot give any promise at this stage of the Bill) how in his opinion the undertaking I have just given could be most effectively implemented. I cannot give the exact form the words would take, but I am anxious to meet the noble Lord, as I am sure is my right honourable friend the Minister of Health. I appreciate that this Amendment, unlike that of the noble Viscount, Lord Buckmaster, refers to furnished, as well as to unfurnished premises—I think that was the point which was in the noble Lord, Lord Llewellin's mind. What I said in regard to our dealing here with unfurnished premises, as well as furnished premises was correct.

LORD LLEWELLIN

We are dealing with both.

LORD PAKENHAM

We are dealing with both. I am sorry that I cannot meet the noble Lord, because I know he has tried to meet us. But in view of what I have said further about this directive to the Tribunals, I hope that the noble Lord will feel able to withdraw his Amendment, as did the noble Viscount, Lord Buckmaster.

LORD LLEWELLIN

My Lords, I intended my Amendment to apply mainly to furnished premises, and I was a little surprised when the noble Lord first said that it applied only to unfurnished premises. I think we are now in agreement that it applies to both furnished and unfurnished premises. It would not be helping me if the noble Lord accepted my Amendment, if I may put it in that way, but I believe that it would be right from the general housing point of view. If you are to have a Tribunal which may continue three months at a time—possibly for years—a tenancy which is repugnant to the landlord, I do not believe that as many landlords will take other people into their houses as would otherwise be the case. That is the reason why I put forward this Amendment.

I believe that by doing this the Government are cutting off part of the potential housing accommodation, and I should have thought that that was one of the things they would not want to do. But they are doing so by keeping on this unfortunate right of the Tribunal, because when the landlord lets a house he will know what the decision may be, and that he may be landed with a tenant whom he will never be able to get out. It is a very different matter when you are sharing your own house with him than when he is merely living in a house which belongs to you further down the street. I should have thought that, from the Government's own point of view, they would be wise to accept my Amendment or, at any rate, to accept it with regard to furnished lettings only. I do not intend to press it at this stage. I think refusal to accept it is short-sighted, from the point of view of the Minister of Health, because he will be putting this barrier between himself and getting more of these lettings. If he takes that line, then I am not going to press the matter to a Division, and I beg leave to withdraw my Amendment.

LORD SALTOUN

My Lords, I am sorry that my noble friend is going to withdraw this Amendment, because I think that both Houses of Parliament should be very slow before they sign a blank cheque to the Administration in matters of this kind. I am not insisting upon it going on, but it is with great regret that I hear my noble friend is withdrawing his Amendment.

Amendment, by leave, withdrawn.

6.3 p.m.

VISCOUNT BUCKMASTER moved, after Clause 12 to insert the following new clause:

Amendment of 9 and 10 Geo. 6. c. 34

" .—(1) Where the Tribunal is satisfied on the application of a lessor that the net annual sum received by him in respect of a dwelling-house in respect of which he is under a contractual obligation to provide services was less during the year ending on the twenty-fifth day of March nineteen hundred and forty-nine (in this section referred to as 'the later year') than the net annual sum received in respect of the dwelling-house during the year ending on the twenty-fifth day of March nineteen hundred and thirty-nine (in this section referred to as 'the earlier year') by reason of the increased cost of providing such services in the later year over the cost of providing similar services in the earlier year the Tribunal may notwithstanding the provisions of the principal Acts increase the rent payable in respect of the dwelling-house to such an extent that if the rent had been so increased during the later year the net annual sum which would have been received by the lessor during that year would have been equal to but not greater than the net annual sum received by him during the earlier year.

(2) In this section the expression 'lessor' means the lessor for the purposes of the Act of 1946. The expression 'services' has the same meaning as in the Act of 1946. The expression 'contractual obligation' includes an obligation to which a lessor is subject by virtue of the provisions of section fifteen of the Increase of Rent and Mortgages Interest (Restrictions) Act, 1920. The expression 'net annual sum' means as regards the later year and the earlier year the rent payable for the dwelling-house after deducting therefrom the cost of providing the said services and any sums payable in respect of rates."

The noble Viscount said: My Lords, this is an Amendment expressed in rather more words than I should have wished, but at the same time I believe it is simple and I believe also that it is one of some substance. Let me say at once what is the purpose of this Amendment. It is to allow the landlord of rent-restricted property to recover the increased cost of services where those are provided. I would emphasise that it is to provide him with that increased cost and with nothing else. He is not entitled under this Amendment to receive from the Tribunal one penny piece in regard to his rent as distinct from the cost of services. In no sense whatever is it an attempt to make a general increase of rents. I would emphasise also that it does not touch the pocket of the working-class. Their accommodation is not usually such as to provide a contract for services.

I do not think it is necessary for me to quote any figures to show to what extent the cost of providing services has risen. I do not think either that your Lordships will disagree that it is very much in the interests of the community as a whole that the services should be provided: that the water should be hot, that the radiators should be warm, that the lift should function and that the porters should be present. All those things represent a very heavy added burden imposed on the landlord in addition to the burden of rent restriction. His property is rent-restricted already—I am not complaining of that—but in addition he has to bear this added cost of services.

As to whether this proposal is reasonable or not, I think we can see straight away that it is. The Ridley Committee dealt with this matter some four years ago, and they said that it was reasonable, that it was right, that the landlord should receive the increased cost of services. They said that this question was one which should be dealt with on a basis of high priority, and in no other paragraph of the Report do you find words expressing such urgency. That was four years ago. Since then, costs have been mounting all the time, and your Lordships will realise that the men who provide those services are bound by law to do so. They can be sued, in fact, for that which involves them in a loss. A second point which would establish the justice of the case, if it is not already apparent, is this. The Government themselves, in the Furnished Houses (Rent Control) Act, said that this was a just thing. They allowed the Tribunals to give the landlord the increased cost of services where the flat had a rateable value of over £100 a year. They admitted that it was perfectly right that if the rateable value was over £100 the landlord should receive such proportion of the cost of these increased services as the Tribunal deemed appropriate. Yet, if he is a small landlord—in which case the services are just as necessary as they are in a case of large property—he is denied his right. He cannot go to the Tribunal and ask for the added cost of these services.

With great respect to the noble and learned Viscount the Lord Chancellor, who is not present, I cannot feel that the argument which he adduced against the noble Lord, Lord Llewellin, and with which I did not find myself in agreement—that this deals with an isolated section of the community—applies at all. We are not attempting to increase rents; we are attempting to remove a great injustice and a great anomaly. The noble Lord, Lord Pakenham, said that it was not necessary, because before the war, when these rents were fixed, landlords had 15 per cent. voids. I should imagine, if he will allow me to say so, that that was a very high percentage. I cannot see any business being conducted on such a basis and showing a profit. However, if we accept a figure of 15 per cent. voids, does it not follow that flats were almost impossible to let? With such a figure, flats cannot be let, with the result that the rent control is unduly onerous. My own feeling is that it would be more in the neighbourhood of 5 per cent., and there will still be voids owing to damage by enemy action. I believe this Amendment is a moderate one; I believe it to be reasonable; I believe it to be just and I hope it may commend itself to the noble Lord. I beg to move.

Amendment moved— After Clause 12, insert the said new clause.—(Viscount Buckmaster.)

VISCOUNT MAUGHAM

My Lords, I rise only to say that I support this Amendment. I cannot see that it is unfair in any way, and I think it will probably have the effect, as my noble friend Lord Buckmaster has said, of preventing a number of voids which we all hope to prevent.

LORD PAKENHAM

My Lords, I am sorry to inform the noble Viscount, Lord Buckmaster, that we cannot accept this Amendment. The noble and learned Viscount the Lord Chancellor made it quite plain that we could not accept the first Amendment that was discussed; and if I might venture to distinguish between unacceptable Amendments, I should say that this one was slightly more unacceptable than the one originally moved by the noble Lord, Lord Llewellin, and carried by your Lordships. But that is a purely personal view. I hope the House will not think me disingenuous if I say that, while I cannot hold out any hope of either Amendment being considered in the other place, I think it possible that the other might suffer damage and be contaminated by the presence of this one, and that therefore noble Lords who voted for the other Amendment should think twice before supporting this one in the event of a Division. That, I think, is the argument most calculated to appeal to certain noble Lords.

There may well, of course, be cases of hardship here also; but I cannot repeat too often what the noble and learned Viscount the Lord Chancellor said at the beginning: that we do not deny that there may be quite a number of cases of hardship which landlords are undergoing which it is not sought to relieve by this Bill. There are also a great many cases of hardship suffered by tenants which we are not attempting to relieve by this Bill. We are attempting only to relieve hardships suffered by tenants in certain limited cases, and not attempting at all to relieve the hardships of landlords. We have discussed earlier why it is impossible to relieve the hardships of landlords, short of a really comprehensive measure. I think many of your Lordships, even those who voted for the first Amendment, realise that if we were to attempt to secure complete equality we should have to bring in a much more elaborate Bill, and immense labour would be required. With great respect to the noble Viscount, Lord Buckmaster, I would suggest that the Ridley Committee did not single out this proposal to quite the extent that possibly he had in mind. I have not a copy of the Ridley Committee's Report with me though I have read it carefully.

VISCOUNT BUCKMASTER

I have a copy here and will pass it across to the noble Lord. I would draw the noble Lord's attention to pages 25 and 26.

LORD PAKENHAM

The recommendation of the Ridley Committee was to the effect that Tribunals should be set up to deal with rents of all controlled houses, and that the kind of case in which the noble Viscount is interested should have high priority. But that could not be done until these Tribunals were set up; it would be untrue to the doctrine of the Ridley Report to say that in advance of these comprehensive Tribunals this particular kind of work should be started on its own. So much for what the Ridley Report has said. I can only repeat what I said earlier, that there is no evidence at our disposal that as a class the owners of flats are suffering undue hardships. I am not denying that hardships may exist; but, as the noble and learned Viscount who sits on the Woolsack said earlier, we really cannot begin to pick on one particular kind of landlord and say, "Your hardship must be rectified, even though the hardship of no one else is rectified." I am afraid, therefore, we cannot make an exception in this case.

The "thin end of the wedge" has been mentioned. The noble Lord, Lord Llewellin appeared to be attempting to drive a wedge between the noble Lord, Lord Morrison, and the rest of us on this side. But I think we should agree after the speech of the Lord Chancellor, that that attempt has proved a blunt instrument, and the attack was beaten off. I hope that the noble Viscount, Lord Buck-master, will realise that we cannot in this Bill attempt to rectify all or most of the hardships of landlords. It would be unfair and improper to single out this particular category, as we have no information to indicate that they are suffering from any particular hardship at the present time.

6.17 p.m.

LORD LLEWELLIN

My Lords, as the noble Lord mentioned me particularly once or twice, perhaps the House will not mind if I say a few words. My remarks were not meant in the least as an attack or as an attempt to sever the noble Lord, Lord Morrison, from his colleagues. I merely pointed out that when we were talking about the "thin end of the wedge" we ought to bear in mind that we had already got a provision in this measure whereby the Tribunal could increase the rent of a dwelling-house in cases within the ambit of this Bill. That is in black and white in the Bill.

Be that as it may—it has not much relevance, if I may say so, to what we are now discussing—it is a simple fact that there are many agreements whereby the owner of premises has agreed to provide perhaps a lift, heating, porterage, lighting and so forth to those who are tenants in the place. Now, the Government and this House have already accepted the fact that where the rateable value of a house in respect of which one of these agreements has been made is over £100 a year, it is right that the landlord shall have an increase to meet the increased costs of these services. That was agreed here when we were discussing the Furnished Houses (Rent Control) Act, and I should like to refer to the argument put forward by the noble and learned Viscount the Lord Chancellor. He said that if these matters are to be dealt with they must be dealt with wholesale. I am content to rely on that argument and say that the Bill deals only with the case of houses of a rateable value of more than £100 a year; we are now asking whether we ought not to do the same thing in regard to houses with a rateable value of less than £100 a year. This does not mean any increase in the rent, but it does mean an increase in the payment for services, the costs of which have gone up tremendously. The price of coal, for instance, has gone up enormously in the last few years, and so have the wages of liftmen and others. Yet still the owner of these premises is expected to provide these services at a loss—that is what it comes to—and, if the Government have their way over this Amendment, that is what Parliament will be seeking to do—to make him go on providing these services at a loss.

So far as I am concerned, if it is right that there should be this increase for these extra costs of a house of a rateable value of over £100 a year, I think it is equally right in the case of a house of a rateable value of under £100 a year. To my mind, there is no distinction whatever. The noble Lord, Lord Pakenham, suggested that the Amendment which I have moved, and which your Lordships were good enough to carry in my favour an hour or so ago, would be contaminated if it went to the other place associated with the Amend- ment of my noble friend. I do not mind my Amendments being contaminated with an Amendment that does justice, and that is what this Amendment does. The noble Lord, Lord Pakenham, has given me no assurance about my Amendment in another place, so I would recommend your Lordships to send them

Resolved in the affirmative, and Amendment agreed to accordingly.

6.28 p.m.

First Schedule [Transitional provisions as to premiums]:

LORD MESTON moved to add to paragraph 5: (4) Where before the commencement of this Act a premium has been lawfully required, and paid, in respect of the assignment of a tenancy to which section two of this Act applies, then nothing in this Act shall prevent the requiring, on any assignment of the first-mentioned tenancy or of any subsequent tenancy of the same dwelling house, of a premium not exceeding an amount which is proportionate to the unexpired residue of the term granted when the premium was first paid. The noble Lord said: My Lords, I rise to move the Amendment that stands in my name. The matter arises in this way. If I take a grant of a tenancy from my landlord and pay my landlord a premium, and then subsequently I assign my tenancy, I am entitled to recover part of that premium from my assignee. On the other hand, if I enter into occupation

both there together to see what happens to them, and in the hope that we may see justice done. I hope that the House will support my noble friend Lord Buckmaster in this Amendment.

On Question, Whether the said new clause shall be there inserted?

Their Lordships divided: Contents, 40; Not-Contents, 14.

CONTENTS
Cholmondeley, M. Maugham, V. Hawke, L.
Reading, M. Portman, V. Hylton, L.
Swinton, V. Llewellin, L.
Buckinghamshire, E. Trenchard, V. Lloyd, L.
Dundonald, E. Luke, L.
Fortescue, E. [Teller.] Belstead, L. Meston, L.
Lindsay, E. Carrington, L. Polwarth, L.
Munster, E. Charnwood, L. Rochdale, L.
Onslow, E. Clanwilliam, L. (E. Clanwilliam.) Roche, L.
Saltoun, L.
Bridgeman, V. Clydesmuir, L. Sempill, L.
Buckmaster, V. Derwent, L. Strathcarron, L.
Falmouth, V. Gage, L. (V. Gage.) Teynham, L.
Hailsham, V. Gifford, L. Wolverton, L.
Margesson, V. Hatherton, L. [Teller.]
NOT-CONTENTS
Addison, V. (L. Privy Seal.) Crook, L. Mountevans, L.
Faringdon, L. Pakenham, L.
Huntingdon, E. Holden, L. Pethick-Lawrence, L.
Lucas of Chilworth, L. [Teller.] Shepherd, L. [Teller.]
Ammon, L. Morrison, L. Williams, L.
Amwell, L.

in the first place by taking an assignment of a lease from a lessee and pay that lessee a premium, then, if I subsequently assign my lease, I am not entitled to recover any part of that premium from my assignee.

I appreciate the distinction which exists between these two cases. If I pay a premium to my landlord, I may be entitled later to recover that premium from my landlord. On the other hand, if I enter into occupation by paying a premium to a lessee from whom I take an asignment of a lease, I am not entitled under the Act to recover any part of that premium from the lessee to whom I paid the sum of money in question. However, that difference appears to me to make no real distinction. What I am suggesting in this Amendment is merely a transitional provision which I could illustrate by the following example. A friend of mine recently entered into occupation of a house by taking an assignment of a lease for thirty-five years from a lessee, and he paid to that lessee the sum of £4,000.

LORD PAKENHAM

Would the noble Lord take this fairly slowly, as I want to get down the particulars?

LORD MESTON

A friend of mine recently entered into occupation of certain premises by taking an assignment of a lease of thirty-five years from a lessee to whom he paid a premium of £4,000. Under this Amendment, if, say, at the end of seventeen and a half years my friend desired to assign his lease, he would prima facie be entitled to charge, or to try to charge, a premium not exceeding £2,000 to his assignee. Quite frankly, in this particular case my friend did not deposit his lease with the bank by way of a security for an advance of money, but there have been many cases in which lessees who have paid premiums to other lessees have been obliged to deposit their leases with the bank by way of security for an advance of money to enable them to pay the premium in the first instance. In such circumstances, under the Bill as at present drafted, the security will be worth absolutely nothing. It is true that we all hope that as time goes on more houses will be built and that demand and supply will become equated. Therefore it is perfectly true to say that as time goes on the possibility of recovering premiums will be diminished. Quite frankly, I think that that will be an admirable state of affairs—in fact, it is a very good argument for the acceptance of my Amendment. However, I feel that to-day there are a large number of people who will suffer real hardship if this Amendment or some similar Amendment is not accepted. Therefore, I hope that the Government can give it serious consideration on this occasion. I beg to move.

Amendment moved— Page 17, line 50, at end insert the said new sub-paragraph.—(Lord Meston.)

LORD PAKENHAM

My Lords, first of all I would like, on behalf of the noble and learned Viscount the Lord Chancellor, to say how sorry he is that he was called away, because he was looking forward to replying to this Amendment himself, and he had gone into it very carefully. But the answer he would have given the noble Lord is, I am afraid, that which I am going to give him, though I have no doubt it would have been couched more solicitously. I am afraid the answer is that we cannot accept the noble Lord's Amendment. To put it briefly, I sup- pose the real objection to the noble Lord's proposal is that where it operates effectively it operates where no premium has been paid to the landlord. That is really the whole point of the noble Lord's Amendment; it covers the case where a premium has been paid but not where it has been paid to the landlord.

The difficulty about it—and in our view the insuperable difficulty of giving effect to it—is that where a premium has been paid to the landlord, whoever has paid that premium can recover it from the landlord; and in that way the landlord who has received the original sum does, in fact, have to repay it, or part of it. But in the noble Lord's case there is really no one from whom the amount could be recovered; and, therefore, the only effect of the noble Lord's Amendment would be to allow someone who has himself been exploited to pass on the act of exploitation and continue it indefinitely. Therefore, weighing it all up, we have reached the conclusion that it would be wrong to help this process of exploitation. A stop must be put to it somewhere, and although we are sorry for those whom the noble Lord is trying to help, and who in some cases have been exploited, we cannot give effect to his idea because it would not enable the act of recoupment to be made at the expense of the landlord who would have received the premium—because in such a case he would not exist—and would merely pass on the act of exploitation indefinitely.

LORD MESTON

My Lords, I thank the noble Lord for his reply. While I appreciate the fact that this Amendment would, in effect, pass on the exploitation which has been referred to, that does not strike me as being any reason why the Amendment should not be accepted. It is a purely transitional matter. It deals with a number of very hard cases, and as between A and B. and C and D, in my submission it can do no real injury. However, it is clearly a matter which cannot be pressed, and, thanking the noble Lord again for his reply, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Second Schedule [Minor Amendments]:

LORD MORRISON

My Lords, this Amendment is consequential upon Amendments made in your Lordships' House during the Committee stage. I beg to move.

Amendment moved—

Page 21, line 18, at end insert— ("Section three…In subsection (1) in paragraph (a) after the words 'such entry' there shall be inserted the words '(or in a case in which a particular period is specified, in respect of that period)'")—(Lord Morrison).

On Question, Amendment agreed to.