Lords Sitting of 18 February 1953

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Earl of Strathmore and Kinghorne—Sat first in Parliament after the death of his father.

BRITISH FIRMS IN CHINA
2.36 p.m.
LORD VANSITTART: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government how many members of British firms are still detained in China against their will, and how much these firms have paid to protect them (a) in 1951, (b) in 1952.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, Her Majesty's ChargéďAffaires in Pekin has been notified of eleven specific cases of businessmen who have applied for exit visas but whose departure is being delayed. It is, however, the general policy of the Chinese Government to hold local representatives responsible for the affairs of their principals. Thus the local manager of a firm would not normally be allowed to leave China until his firm's affairs were wound up. Many firms who wish to close are precluded from doing so because official permission is withheld, and to this extent their senior staff can be considered to be detained in China against their wishes, even though many of them have probably not yet formally applied for exit permits.
Regarding the second part of the noble Lord's Question, very few firms took the decision to withdraw from China before April, 1952. In the earlier period of the
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present Chinese régime, the firms who operated at a loss did so in the hope that conditions would improve. Although remittances to China have in some cases since been continued while arrangements for closing down are being negotiated, these have decreased considerably. I am unable to say that any specific amounts have been remitted to China to protect British staff rather than in fulfilment of conditions which Chinese law imposes on firms operating there—however unreasonable some of these conditions may appear to us to be.
LORD KILLEARN: My Lords, is not the treatment of these British subjects and missionaries a gross abuse of normal international practice?
THE MARQUESS OF READING: My Lords, the granting of exit permits is a matter for the Chinese law. We may not approve of the Chinese law, but there it is. We have to accept the situation, subject always to such representations as Her Majesty's representative in Pekin is able to make for their assistance.
LORD VANSITTART: My Lords, whilst thanking the noble Marquess for his full reply, I should like to ask, is this not really a rather harsh return for our recognition of the Chinese Government?
THE MARQUESS OF READING: My Lords, we accorded recognition to the Chinese Government, and, in our view, the presence of a representative in Pekin is still of value.
VISCOUNT ELIBANK: My Lords, I should like to ask the noble Marquess whether it is not extraordinary that in the second part of the Question the noble Lord should be asking Her Majesty's Government to disclose what are items in the trading accounts of these firms. That question does not require an answer, and the noble Marquess need not be troubled.
THE MARQUESS OF READING: My Lords, that being what I was brought up to call a rhetorical question, I think that perhaps it is better left to the two noble Lords to discuss the matter between themselves.

DESTRUCTION OF RABBITS
2.41 p.m.
LORD MERTHYR: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether their attention has been drawn to the successful use in Australia of myxomatosis virus for reducing the rabbit population whether any experiments have been made with its use in this country; and, if so, with what result.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (LORD CARRINGTON): My Lords, we are in touch with the Australian workers who are using this virus for the control of wild rabbits. The disease is transmitted from one rabbit to another by bloodsucking insects, and mosquitoes are the principal means used in Australia. Although appreciable success; has been obtained in that country, the scientific workers hesitate to estimate the future potentialities of the disease. Small-scale experiments with the virus are being carried out by the North of Scotland College of Agriculture on small islands off the west of Scotland, but so far results have been inconclusive.
LORD HAWKE: My Lords, could my noble friend tell me whether these rabbits which are about to perish of myxomatosis will be edible in this country, either in their frozen or in their tinned condition?
LORD CARRINGTON: My Lords, I am afraid cannot answer that question.

THE SUDAN AGREEMENT
2.43 p.m.
LORD KILLEARN: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what opportunity those who have criticisms to raise in regard to the Sudan Agreement will have for expressing them in this House.]
THE MARQUESS OF READING: My Lords, it is open to any noble Lord to put down a Motion on the subject on any day available, and thus secure an opportunity of expressing his views.
LORD KILLEARN: My Lords, while thanking the noble Marquess for his reply, of which I take due note, may I ask whether it is not the fact that the Agreement is animated by mistrust of British good faith, as shown by the provisions fettering the authority of the Governor-General?
THE MARQUESS OF READING: My Lords, that seems to me not to arise in any way out of the Question which the noble Lord put down, but merely to be, perhaps, an unfortunate comment at this stage upon the negotiations which have just been concluded.
VISCOUNT STANSGATE: My Lords, may I ask the noble Marquess whether the Agreement is operative as from the date of signature?
THE MARQUESS OF READING: Yes, it is.
LORD KILLEARN: My Lords, may I put a further supplementary question, in view of the reply of the noble Marquess, Lord Reading, and arising out of Article V, in which we apparently undertake not to cheat? That strikes me as an abnormal provision to make. Is that the normal practice in Treaties?
THE MARQUESS OF READING: The noble Lord's Question on the Order Paper is to ask how he can find an opportunity for expressing views on this Treaty. If he desires to call attention to specific provisions of the Treaty, he has, as I have said, the opportunity of putting down a Motion, or alternatively, presumably, of asking a direct Question. I think it would be unfortunate if at this stage we embarked upon a discussion, by means of supplementaries, of individual provisions of this Agreement.
LORD VANSITTART: My Lords, is not this Agreement subject to ratification? Article XV says:
"This Agreement and its attachments shall come into force upon signature."
There is no provision for ratification.
THE MARQUESS OF READING: My Lords, the Agreement is not subject to ratification. Ratification, of course, is part of the Prerogative of the Crown. It is not a matter which has to come before this House and, as I indicated to the noble Viscount, Lord Stansgate, just now, the Agreement came into operation upon its signature.
LORD VANSITTART: My Lords, surely that is a most unusual provision in any Treaty. I do not think I can recall a previous instance where an international Agreement has not been subject to ratification.
THE MARQUESS OF READING: My Lords, I confess that that statement of the position, coming from the noble Lord, startles me, because, as I understand the position, Agreements are subject to ratification only if it is stated in the Agreement itself that that shall be so; and that is not the position here. Otherwise, ratification is part of the Treaty-making power under the Prerogative, and it is an executive act of the Government. I do not think that, strictly, it is ever necessary to obtain Parliamentary consent. Strictly, that is right, and the only occasion when ratification is at all necessary is, as I say, when it is specifically provided for in the document which is under discussion.
LORD KILLEARN: May I put the point that on December 10,when this same question was asked, an assurance was given by the Leader of the House to the noble Viscount, Lord Elibank, that there was no doubt that Parliament would have to consider the Agreement before ratification? The words used were:
"…That is obviously right."
That was said in this House, and is on record in Hansard of December 10, 1952 (Vol. 179, Col. 892).
THE MARQUESS OF READING: My Lords, the noble Lord says that that is obviously right. For the reasons which I have just given I would not agree, with great respect, that that does represent the position. As I say, the position is that the Agreement comes into force as soon as it is signed. I have the reference to which the noble Lord was referring on December 10, when the noble Viscount, Lord Elibank, asked whether
"there would be a possibility of information being given to Parliament…."
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My noble friend Lord Salisbury said:
"I will consider that aspect."
I see no further reference.
LORD KILLEARN: About halfway down the column.
THE MARQUESS OF READING: My noble friend Lord Salisbury said (Col. 892):
"No doubt Parliament has to consider before ratification…and if it is not satisfied then the only thing to do is to vote against the Government. But I should not like the House to think that I am giving any undertaking to-day that this matter can be discussed in the middle of negotiations and before an Agreement has been concluded."
That was in answer to a supplementary question. I imagine that it was not possible at that time to say whether this Agreement would provide for any formal ratification or not. In fact it has not, and it is in force.
VISCOUNT ELIBANK: My Lords, as my name has been mentioned, may I explain that what I asked the noble Marquess the Leader of the House (of course, it is in Hansard, but I did not catch it in the reply) was this: Whether he could put the Treaty, or whatever it was, before the House in such a form that instead of merely asking questions about it we could have a short discussion. That was my only object.

LEASEHOLD REFORM
2.46 p.m.
LORD SILKIN LORD SILKIN rose to call attention to the recent statement of the policy of Her Majesty's Government on Leasehold Reform (Cmd. 8713 and 8714); and to move for Papers. The noble Lord said: My Lords, in moving the Motion standing in my name I apologise in advance for what may well turn out to be a somewhat technical and not very thrilling debate. When our eyes are thousands of miles away and things internationally are very exciting, it may seem somewhat of an anticlimax to come home to deal with the somewhat pedestrian problems with which we have to deal from time to time. But I would say two things. First, I put the responsibility for this debate upon the Government. They have tabled a Motion for the Second Reading of a Bill to continue two Acts, a matter about which we have no complaint at all, and they have also submitted a White Paper

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on Leasehold Reform which constitutes the considered policy of the Government and represents in broad outline the lines which subsequent legislation will take. We on these Benches thought that before we actually approved a further extension of the Leasehold Property (Temporary Provisions) Act, 1951, and the corresponding Scottish measure, it would be wise to have a general discussion on the White Paper.
Now I recognise that the White Paper does not necessarily represent the final view of the Government, but it does represent their first thoughts on this matter. When we come to discuss the Transport Bill next week, we shall see how far the first thoughts of the Government, as represented in its White Paper, can travel from the actual measure which is before the House. I imagine that we have a long way to travel from the White Paper we are now discussing before we see what the final views of the Government are on this very vexed question.
THE SECRETARY OF STATE FOR COMMON WEALTH RELATIONS (VISCOUNT SWINTON): The noble Lord is not complaining, I take it, of the process of either self improvement or mutual improvement.
LORD SILKIN: Of course I am not complaining; I am merely stating the fact. I think it is a fact, and if it were not there would not be any use in our discussing the White Paper this afternoon. The main questions in the White Paper—the questions which I think will arouse the greatest amount of interest—are the Government's views on leasehold enfranchisement. I should like to say at the outset that this is not a purely academic question; it is something which affects vitally the well-being of many thousands of citizens in this country. There is no doubt at all that up and down the country, and particularly in the industrial area, of South Wales and of the North, there is considerable apprehension and distress in cases where people are lessees of long leases which in the next few years are coming to an end. These people are apprehensive, not merely about the fact of their leases coming to an end and about their being uncertain whether they will be able to continue in occupation of their dwelling, and on what terms, but
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also about what will be the bill for dilapidations with which they will be faced at the end of the term. I am glad to see that Her Majesty's Government have recognised that this is a problem and that they have applied their minds to it and to allied questions and have placed before this House the results of their deliberations.
I suppose that this question of leasehold enfranchisement is one of the most controversial and difficult questions with which we are faced in the field of domestic politics; and it is not purely a Party question—views cut across all Parties. The Labour Party, in fact, declared itself quite definitely in its Election Manifesto at the last Election in favour of leasehold enfranchisement. Therefore, it cannot accept the policy set out in the White Paper on that subject. But I am bound to recognise that this question has been fully ventilated both in the Report of the Leasehold Committee, where boil sides have stated their views in full and quite comprehensively, and also in the White Paper which is before the House.
If I have any complaint at all about the case that has been presented by Her Majesty's Government in the White Paper I would say that they have tended to underestimate the intensity, strength and breadth of feeling that exist in the country on this subject. As I say, there is very strong feeling in the industrial areas of the country on the matter. Perhaps I may be permitted to read two quotations from the Report of the Select Committee on Town Holdings, which was issued in 1889, a long time age, but which I think is quite valid to-day, otherwise I should not be quoting it. This is what they say:
"But although the legal right of a ground landlord to resume possession of the land and buildings at the termination of the lease is incontestable, and is, in the opinion of the Committee, the only basis upon which the respective rights of less or and lessee can be dealt with, yet the evidence laid before us shows that there is a widely spread sense of injustice among lessees in having, at the end of the lease, to give up the building they, or their predecessors, have erected, or to pay a rent calculated on the principle that such buildings are the property of the landlord. This feeling is probably especially strong in cases where working men and others build their own homes and where, being unable to obtain land, either as freehold or long leasehold, they are practically compelled to build on leases for short terms."

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Then there is another quotation from the same Report which again, I submit, is of equal validity to-day. This is what it says:
"A good deal of the evidence has been laid before us as to places where these conditions exist, such as the Quarry districts of Ffestiniog and Bethesda, and the Mining districts of Cornwall, where large numbers of houses are built by workmen for their own occupation on land previously of little or no value, and where, in many cases, the whole labour and expenditure of preparing the site, erecting the house, and all other outlay on the property is paid by the lessee. It is natural that such a lessee should feel that he is unjustly treated under a system that gives the value of the building and improvements to the less or at the expiration of a term…."
That feeling, I would submit, is equally strong to-day among a large number of lessees in the working classes and the lower middle classes. It does seem repugnant to natural justice that at the end of a term of lease, a long term, when a man has been paying his ground rent and maintaining the property, he should then have to hand it over to the ground landlords without any compensation for improvement, and, probably in a condition which is equal to a new house—which is what most leases provide for.
Therefore, I repeat that there is a very strong feeling in the country on this question. In the Majority Report of the Leasehold Committee (and I think in the White Paper, too) it is said that there is no evidence of considerable feeling on the subject; but I would submit to your Lordships that the Trades Union Congress gives very strong evidence in favour of leasehold enfranchisement—and after all the Trades Union Congress does represent 8,000,000 workers. I should have thought that that was a pretty strong manifestation of opinion in favour of this subject. There has always been a strong radical opinion in the ranks of the Liberal Party. There have been several Commissions on the subject and, except for the last one—the one that reported in 1950—they have all reported by a majority in favour of leasehold enfranchisement. An enormous number of Private Members' Bills have been submitted to the House of Commons. I admit that few of them have had a Second Reading, but there was a time when a Private Member's Bill was submitted to the House of Commons every
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year in favour of leasehold enfranchisement. Finally, this country is one of the few countries that still retains this system. In most countries it has either been abolished or else it has never existed. Even in Scotland, about which I am not qualified to speak, there is, I understand, no leasehold system.
LORD SALTOUN: I beg the noble Lord's pardon, but there are ground leases in Scotland, generally at a much lower ground rent than the neighbouring feus.
LORD SILKIN: I am, of course, bound to accept the correction. This report in the White Paper on the subject of leasehold enfranchisement is a little surprising, too, because it is rather a departure from the policy of the Conservative Party which, I understood, stood for a property-owning democracy. Here was a great opportunity to give to democracy a chance of securing the freehold of their residential properties, a chance which the Government have not taken. I do not propose this afternoon to go into the merits of the question of leasehold enfranchisement. It would take far too long and the question has been fully ventilated in these Reports. It is open to any noble Lord who wishes to study the matter for himself, as I did last night, to make up his own mind as between the two sides. On the whole, subject to the point that I have made, that I thought neither the Majority Report of the Committee nor the White Paper gave full weight to the strong volume of opinion which exists in the country, I think that both sides have expressed their views adequately and fully and, if I may say so, with good temper. I can well understand anybody reading those two views coming down on one side or the other. All I should wish to say, therefore, on the decision of the Government to come down against leasehold enfranchisement is that we on this side of the House stand for leasehold enfranchisement, and we reserve our position on the matter till the time comes when we have to consider a Bill.
I am glad to see, however, that Her Majesty's Government have not let the matter rest at that. They have recognised that there is an evil to be dealt with, and they applied their minds to seeing how this evil can be met in ways other than by leasehold enfranchisement. I should like to discuss the matter, therefore, from

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that angle. I think it will meet with the agreement of the House if I say that there are, in fact, three problems connected with residential properties. The first is the loss of security which is entailed at the expiration of the lease, the fear of the tenant that he will be thrown on to the streets and particularly in these days of shortage, not be able to find any satisfactory alternative accommodation at a rent that he can afford to pay. Secondly, there is the question of the onerous effect of the repairing covenants which he has to meet at the end of the term; and thirdly there is the failure to make provision regarding improvements which the tenant has carried out at his own expense. I want to say a word about each of these matters.
On the first question, that of security, the Government are making proposals which would mean, in effect, that where a tenant of a ground lease is in occupation, at the end of the term he will have the right to become a statutory tenant thereafter. A "statutory tenant," without being technical, is not quite the same thing as a "rent-protected tenant." His rights are less; he cannot transmit that tenancy to any members of his family, but he himself, at any rate, is secure. The Government are somewhat vague about the rent which will be paid. Of course, I do not expect a White Paper to have all the precision, in every detail, of an Act of Parliament, but I think tenants will want to know what will be the principle upon which their rents will be determined when they become statutory tenants. All that the White Paper says on the subject is that either they will agree the rents with the landlord or, if rents are not agreed, that it will be left to the county court judge to determine a reasonable rent. That is all the White Paper says. There is no guide to the poor county court judge as to the principles upon which he should determine what is a reasonable rent. Of course, people's ideas as to what is reasonable or otherwise will differ. We may have a variety of county court judges, all with different conceptions of what is a reasonable rent, coining to different conclusions. I hope, therefore, that Her Majesty's Government will see their way to defining with somewhat greater precision the rent that will be payable or, at any rate, laying down certain
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principles for the guidance of the county court judges.
Later on in the White Paper, Her Majesty's Government found themselves faced with a similar dilemma in the case of the compensation to be paid in respect of adherent goodwill when a tenancy of business premises comes to an end. They might, of course, have adopted the same principle and said that it must be left to the county court judge to decide how much should be paid in respect of adherent goodwill and that he must adopt a reasonable view. Instead, they have adopted an arbitrary figure of one year's or two years' rateable value, and they have said that there are cases in which hardship might be, inflicted one way or the other, but they feel that it is desirable, to avoid a good deal of controversy, to have some kind of certainty about the matter.
I would suggest that it might be possible to fix a rent in respect of the statutory tenancy on the same kind of principle. Having adopted the policy of the rateable value in one case, why not adopt it in another? And why not say that at the expiration of the term of the lease the rent shall have a definite relationship to the rateable value? Whether the rent should be a sum equal to the rateable value or a portion of it is a matter for consideration. I would respectfully suggest to Her Majesty's Government that that would be a fruitful way of avoiding an immense amount of controversy on the basis of an impossible decision which county court judges are being asked to make. That is all I want to say on the question of security of tenure. I think that the provisions as regards security are satisfactory. Probably it is right that the tenant should have no more than a statutory tenancy at the end of the term, and that the rent should be based upon the rateable value of the premises.
This question of rent is the key to the whole question. It is the key to the question of leasehold enfranchisement. Leasehold enfranchisement on certain terms would be of no value it all to the tenant. If the price that the tenant had to pay represented the market price of the reversion, then it would be of no great value to him, except that he would have the opportunity of buying the freehold. But in the case of most tenants it would be quite impossible for them to purchase. On the other hand, it would be quite

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wrong to fix a price which was represented only by the ground rent and which took no account of the reversion of the property. I should have thought that the fair thing was to take some figure between the two. Similarly, I would submit that a fair and reasonable rent is a rent in between the two, and in my opinion it should be the rent which would be payable, or which would have been payable if the premises had been subject to rent restriction. The White Paper suggests that at the expiration of the term the tenant should become a rent-restricted tenant under the Rent Restrictions Acts, as regards security of tenure; but my own view is that he ought also to be a rent-restricted tenant on the basis of something like the rent which he would have had to pay if he had been a tenant at a rack rent and a controlled rent.
I have already referred to the question of the repairing covenants, which are one of the most serious factors in connection with these long leases—this obligation on the tenant, at the end of a long term, to restore the premises, in effect, to the condition in which they were ninety-nine years ago. It is unfortunate that this question has been somewhat bedevilled by bad landlords; and even in this House I shall submit that there are bad landlords, just as there are bad tenants. That is my own experience. I have come across cases where a lessee was anxious to carry out improvements to his premises, improvements which were not permitted under the lease but which were nevertheless definite improvements—for instance, the putting in of a second bathroom. Before he was allowed to do so by his landlord he had to pay the landlord's surveyor's fee and his solicitors' costs, and he had to agree to an increased rent because of the greater value of the premises. He also had to agree to restore the premises at the end of the lease to the condition in which they were; in other words, to take away the second bath-room—not that the landlord would want him to do so, but it was a lever with which to extract, if he could, a bigger sum in respect of dilapidations. I have known cases where landlords have extorted considerable sums from lessees for permission to change the user of premises—perhaps to have an office or a consulting room. They have made the
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unfortunate tenant pay a higher ground rent in respect of the same premises, and so on.
All these things have tended to create a prejudice among a great many tenants, to cloud the issue and prevent this question from being considered objectively. In my view there is a case for a somewhat new definition of restoration of premises to their original condition. It is unreasonable to expect that a house which is ninety-nine years old should be restored to the condition in which it was at the beginning of the lease—and that, in effect, is virtually what lessees are required to do. I think that it should be clearly understood that regard must be had to the age of the premises and to what is reasonable; and it is certainly unreasonable to require a lessee to remove improvements that he has made in the course of his lease, merely in order to put the house back in the condition in which it was before. Her Majesty's Government are recommending that there should be a code settled by them, which code would become the normal practice. I do not think they propose that this code should be compulsory, but I understand that it would be generally accepted as the right kind of relationship between the landlord and tenant. I would ask Her Majesty's Government to consider going further, and to ensure that where there are these provisions for full repairs they should be worded in a manner which would not compel the lessee to do anything at the expiration of his lease other than what was reasonable having regard to the age of the property, to its environment and to all other circumstances.
The White Paper proposes protection to occupying tenants of premises where the rateable value is within the rent restriction limits. It gives no protection to people outside those limits, on the view that people who live in houses over the limits are in a position to look after themselves and do not need protection. I am not so sure of that, however. I am not at all sure that people who are living in premises with a higher rateable value than the normal rent restricted rateable values are not almost as much, if not just as much, in need of protection, when their leases expire, as others are. It seems to me to be somewhat anomalous that protection should be given for lessees within the rent restriction limits, that there should be protection for lessees of

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business premises of all kinds, whatever the rent or the business may be—whether it is a profession, a shop or anything else—but that just this class of person, who I understand from the White Paper represent about 10 per cent. of the population, should be left out. It is perhaps extraordinary that I should be defending the cause of these people from these Benches; but we are a non-class Party, and we believe in looking after the interests of all sections of the community, not merely the interests of 90 per cent. of them. We think that this unfortunate 10 per cent. should equally get the benefit of the security of tenure which is afforded to the remainder.
In the White Paper there is a recommendation that nothing shall be payable to a tenant in respect of improvements to his premises. That seems to me rather strange. It is not in accordance with the recommendations of either the Majority or the Minority Reports of the Committee, and the ground for it seems to be quite illogical. The case that is made against giving the tenant anything for improvements which he has effected is that in many cases these improvements were not sought by the landlord; that he does not want them; that they are of no use to him; that he would rather be without them, and so on, and that they may even be burdensome to him if he resumes possession of the premises. Nobody has suggested that there should be indiscriminate compensation, regardless of the nature of the improvements. The case that is made is that where the improvements to the property have the effect of increasing its value, and they are surrendered by the tenant, the tenant should be recompensed only in respect of the increased value. Nothing could be fairer than that. I hope that Her Majesty's Government will seriously consider this matter, and see whether something cannot be done to compensate the tenant for the improvements he has effected to his premises and, furthermore, to encourage and not discourage tenants from making these improvements.
I know that there is the legalistic view, which is put forward in the White Paper. It is to the effect that the tenant made the improvements with the knowledge that he would have to get out at the end of his term, and that he would have to surrender the premises, with all improvements, to the ground landlord. But we
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are seeking to adjust the relationships, and to make them mere equitable as between landlord and tenant, and it certainly was inequitable that that should have been the case. I trust, therefore, that we shall put this matter right. This morning I had a letter from a gentleman whom I do not know, but who gives me this case in respect of improvements that have been carried out by him. This is what he says in his letter:
"I purchased this house in 1928 with some 28 years of lease (out of 99) still unexpired. The rateable value at that time, as a single house, was £230 per annum. I then spent some£5,000 on converting the house into six flats…to-day the rateable value is£904 per annum."
The writer then goes on to say that he had rather a lean time during the war, but that he is now getting rent in respect of these flats. But the lease expires in 1956, and then he will get nothing. According to the terms of the White Paper, all his expenditure will have been frustrated; and he will certainly not have received by way of rent anything to compensate him for the£5,000 he has spent. I hope that Her Majesty's Government will have regard to that kind of case, which can be multiplied to a considerable degree.
I have already referred to the question of business premises. I welcome most cordially the decision of Her Majesty's Government to extend the definition of "business premises," to cover professional premises and all other types of business. I feel that perhaps it is a good idea to fix the compensation in respect of adherent goodwill on the basis of rateable value. But, on the whole, the amounts suggested are not very generous. I feel that two years' rateable value, the case of a person who has built up goodwill in a period of more than fourteen years—and it may be considerably more—is most ungenerous. The normal value of the goodwill is two years' purchase of the profits of the business. It would be a very poor business where the profits did not exceed the rateable value. On the other hand, there will be many cases where there is no goodwill at all, or very little. I appreciate that Her Majesty's Government have been anxious to avoid the immense amount of litigation that might ensue if each case had to be considered on its merits, and if people were put to proof as to the goodwill attaching to their businesses. Therefore I have no quarrel with the principle of attaching the amount of

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compensation to the rateable value. But when the time comes for consideration of this matter, in the form of a Bill, I think that Her Majesty's Government might consider something rather better than a maximum of two years. My own view is that in respect of goodwill which is the result of more than fourteen years of effort, at least three years', and possibly, four years', rateable value would not be unreasonable.
There are two other points to which I should now like to refer, in relation to the question of business premises. Normally the tenant of business premises will have an automatic right to renewal; but there are two exceptions. One of those exceptions is where the landlord requires the premises for the purpose of his own business. As I have said before, I do not expect this White Paper to have the precision of an Act of Parliament, but this is a very loose term, and I should like some explanation of what is in the minds of Her Majesty's Government when they speak of "the purpose of his own business." Of course, a man can make anything his own business if he wishes to. Had the Government in mind that the landlord must be in the same line of business as the lessee, or that he could go into that line of business? Suppose the business is that of a tobacconist, and that the landlord is in some other business altogether but wants the premises in order to run the shop, say, as a newsagent's. Would he be entitled to have the premises? Would that position qualify him for getting possession? If it did, this would give the landlord a considerable loophole, and the security of the lessee would become rather tenuous. This question will, of course, be defined much more closely when the time comes, but if the noble Lord who is shortly to speak for the Government, or the noble and learned Lord on the Woolsack, who is to reply to the debate, can more clearly explain what is in the minds of Her Majesty's Government on that point I shall be grateful. The other exception to the automatic right to renewal of the tenancy of business premises is in cases where the landlord requires the premises for the purpose of redevelopment. I take it that that means approved redevelopment; that it would not be open to a
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landlord merely to say, "I want to redevelop"; that he must have a scheme which has been approved by the local authority, or some other authority, and which he wants to carry out.
Yet another point. The compensation in respect of the adherent goodwill is payable only when the tenant has made a request for extension of his lease and the landlord requires the premises for his own purposes. If the tenant does not make a request, or if he is entitled to a renewal of his lease and does not ask for it, he is not entitled to the compensation. That, again, is in complete conflict with the unanimous view of the Leasehold Committee. In their view, the compensation should be payable regardless of whether or not the tenant wants a new lease. After all, the landlord gets the benefit of the goodwill, and he ought to pay for it. May I just quote a few relevant sentences from the Report? They occur in paragraph 208 on page 73:
"It has been suggested to us that a tenant who voluntarily forgoes his claim for renewal, when this is the principal relief, should not be able to claim compensation instead. We think that in the few cases where this situation is likely to occur, hardship might be caused by refusing compensation. e.g., to a small shopkeeper on the point of retirement, and we see no serious grounds for objection by the landlord to the payment of compensation assessed on the existing basis"—
I hope, therefore, that Her Majesty's Government will look at this point again to see whether they can be a little more generous, at the expense of the landlord, to the person who is giving up his lease on the ground of old age or for some other good reason.
I am afraid that many of the points I have taken are in the nature of Committee points, but I saw no alternative. The only big principle involved in the White Paper is the question of leasehold enfranchisement. The other matters I have discussed are important, and I thought it right to give Her Majesty's Government the considered views of noble Lords on this side of the House, so that when the time comes for introducing legislation, which I hope they will be able to do in the next Session of Parliament, they will have these views before them. I must apologise for the considerable length of my speech, but I have done my best to make it as short as possible. I beg to move for Papers.
3.32 p.m.
LORD MESTON: My Lords, the Government are to be congratulated on deciding to tackle this difficult problem, and I think we should like to pay some tribute to the Leasehold Committee, whose Report is the basis, or at all events the background, of the important document which we have before us to-day. As for Part II of the White Paper, which deals with the enfranchisement of leaseholds, I am glad that the Government have decided to reject this idea altogether. The matter is so clearly set out, in such moderate language, in eight pages of this White Paper that there is little that I need add on the matter. But I should like to make one comment. It is extraordinary to me that a certain political Party, which is not normally well disposed towards landlords, should be trying to invent a new way in which certain people might become landlords. That appears to me to be illogical, but perhaps there is some explanation of it.
As to Part III of the White Paper, which deals with security of tenure for residential tenants, I have never concealed my views on the Rent Restrictions Acts. These Acts may be necessary, but they are an abomination of desolation. They should have been abolished years ago, and the business of determining fair rents for all properties in the country should have been confided to fair rent tribunals, with a right of appeal, both on fact and on law, to the High Court. Nothing has been done in that connection and, although I am not a prophet, I may say that nothing ever will be done. In the meantime, we must consider the specific proposals in Part III of the White Paper. I dislike any extension of the Rent Acts, or any extension of the application of the existing Acts, but we have to remember that the Government probably take a different view of the matter, and we must deal with things as we find them. The extension of the protection of the Rent Acts to the ground lessee where the ground rent is less than two-thirds of the rateable value is, in the circumstances, both logical and acceptable. As to the machinery for enabling a ground lease to be converted into a statutory tenancy, it is satisfactory to see that a reasonable rent will be fixed by agreement or by the tribunal and will be the standard rent for the period of the statutory tenancy. I should like a little more information
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about what is meant by the word "reasonable." In particular, I should like to know whether it will take into account the greatly increased cost of repairs which may fall on the landlord.
Then there is the proposal that where a tenant is occupying under a lease of more than twenty-one years, the tenant shall have security of tenure on the expiry of his tenancy, even though the rent under that tenancy is less than two-thirds of the rateable value. I am not quite clear why this suggestion is made, as I do not think it will apply to many properties. So far as it does apply, however, it appears to me quite reasonable, and no doubt will find a place in future legislation. I am glad to see that a special security of tenure scheme for tenant occupiers outside the rateable value limits of the Rent Restrictions Acts has been rejected by the Government. When I read that in the White Paper I said to myself, "Let us be thankful for small mercies."
Part IV of the White Paper, which deals with business premises, is undoubtedly the most interesting and most attractive part of the whole document The Landlord and Tenant Act of 1927 was well-intended but has not proved very effective in practice. As your Lordships know, the value of goodwill is a value not to the tenant but to the landlord. If a landlord states that at the expiration of a tenancy he wishes to let the premises for a purpose other than the existing purpose, then the item of goodwill virtually disappears. In any event, the element of goodwill, if it exists, raises all kinds of academic and confusing arguments about the various classes of goodwill—which are known as "cat," "rat," and "dog goodwill." The only goodwill that counts is the "cat goodwill," which remains attached to the premises. As your Lordships know, the eat is a noble animal, and if he finds that premises are acceptable, he will remain there, whoever is the owner. On that basis the only type of goodwill that is worth a farthing under the Landlord and Tenant Act, 1927, is the goodwill known as "cat goodwill." As a matter of fact, goodwill is always troublesome, wherever one finds it. It is a snare and a delusion in the balance sheets of companies. It imports an illusory and often fictitious figure into the purchase price of going concerns—in

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other words, it is an undiluted nuisance. I am glad to see that the intention of the Government is to abolish altogether the element of goodwill in this connection. The granting of a new lease at a fair contemporary market rent to a sitting tenant is a far more satisfactory way of dealing with the matter.
I agree with what the noble Lord, Lord Silkin, has said about the basis of compensation. I do not suggest that the statutory basis of compensation which is suggested is wrong, but it will be interesting to know why that should be related to the rateable value of premises and how much that will mean in certain specific cases. I agree that there should be no power of contracting out of the provision relating to security of tenure.
Passing on to deal with Part V of the White Paper, which deals with a number of miscellaneous matters, I entirely agree with the Government that no compensation should be paid for improvements to residential premises, as distinct from business premises. Those who are concerned with the administration of building societies know that borrowers frequently ask for a further advance, on the ground that they have carried out some purported improvements to the property. On examination it is frequently found that the so-called improvements do not add one single farthing to the value of the security. On that ground, among other grounds I am very pleased that the Government have decided that no compensation should be payable for improvements to residential premises. As to repairs, I have no personal motive in saying so (I am not a director of an insurance company, and I hope I do not look like one), but I think it is a thousand pities that in the past there has not been intensive propaganda urging tenants to take out insurance policies in the nature of lease redemption policies which would make available a sum of money for carrying out repairs at the expiration of the lease. If that had been done in the past there would be far fewer slums in this country. In the majority of cases the annual premium payable on such a policy would be relatively small and would not cripple the tenant. However, that is only a suggestion of perfection, and we have to face the position which arises when leaseholders are faced with
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a substantial bill for repairs at the end of their lease. I do not think that the enactment of a code of standard repairing covenants will go any distance towards solving this problem.
The proposal to extend the Leasehold Property (Repairs) Act, 1938, so as to apply it to all classes of property, whether residential or business and irrespective of rateable value, requires much more consideration. The general rise in prices, which is continuing and which shows no sign of rescission, is not a temporary phase, but is likely to become permanent. I am sorry for everybody, including myself, that prices have risen, but I am unable to see why because of rising prices an extra cushion should be provided to tenants any more than to other sections of the community. Reverting to the rather painful subject of the Rent Restrictions Acts, I would point out that no consideration whatever is given to landlords of controlled properties on the ground that the cost of repairs has increased materially in the last few years. Yet here the Government are proposing to provide an extra cushion to tenants by extending the provisions of the Leasehold Property (Repairs) Act. 1938. I hope that the Government will consider this matter most seriously, because, as I have said, the rise in prices is not a mere passing phase, but is something which is likely to exist permanently, and I fail to see how any good can be done by selecting tenants, as distinct from landlords or any other section of the community, for special consideration.
Finally, as to the revision of the law relating to restrictive covenants, I disagree entirely with the suggestion that an absolute covenant against assignment or sub-letting should be construed as a covenant not to assign or sub-let without the landlord's consent. I am totally unable to understand why such a suggestion has ever been made, but, as I have said before, I am a simple person among a lot of very clever people, and I have no doubt at all that the Government will give a reply to that and to other matters in a few moments.
LORD BALFOUR OF BURLEIGH: My Lords, I did not want to interrupt my noble friend while he was speaking, but I should be interested to know why he said he hoped that he does not look like an insurance company director. I

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am a director of an insurance company, and proud of it, and my noble friend sitting behind me is chairman of a very good one. I personally felt rather hurt at the noble Lord's remark.
LORD MESTON: What I meant to say was that I was sorry I did not look like a bank director.
3.44 p.m.
LORD MANCROFT: My Lords, if one who is, unfortunately, neither a bank director nor an insurance director may at this moment intervene in the debate, it may possibly be for the convenience of the House; because I should like to address myself to the Second Reading of the Bill which is on the Order Paper after the Motion of the noble Lord, Lord Silkin, and which, as he explained to your Lordships, is closely linked with his Motion and with the White Paper. Then, if that is agreeable to your Lordships, my noble and learned friend on the Woolsack will be able to wind up the debate and deal with the many questions which have defeated me. If that is also agreeable to the House we can then take the Second Reading of the Bill rather more formally than usual. I should like to begin by thanking the noble Lord, Lord Silkin, for having given us the opportunity of discussing this matter this afternoon and also for the moderate and reasonable way in which he has put his point of view forward. Indeed, I should like to congratulate the noble Lord, also, on having successfully resisted the temptation to utter those happiest words in the English language, "I told you so." Two or three nights ago I availed myself of the pleasure of reading the speech which the noble Lord addressed to your Lordships upon the last occasion when we debated this matter. He was gloomy, and full of prophecies. Most of his gloom has been justified, and almost all his prophecies have come true. This I will try and explain, as shortly as I can, in a moment.
As to the Bill itself, I propose to deal with only the English part of it. I think your Lordships will agree, having heard the recent brush between the noble Lord, Lord Saltoun, and the noble Lord, Lord Silkin, that this is a wise move on my part. Those of your Lordships who in looking at the Scottish portion of the Bill, are intrigued to know what "sist" means, and how exactly you terminate an "ish,"
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will please be so good as to address yourselves to my noble friend Lord Selkirk who, if your Lordships wish for explanations of the Scottish provisions of the Bill, will do his best to explain them. The English portion of this little Bill which is before the House to-day is quite a simple matter. All it does is to extend the operation of two temporary measures which were introduced by the last Government and which were originally designed to stay alive for two years only. They came into operation on June 24, 1951, and the operative provisions that were drafted into the terms of that Act would have run for two years from the beginning of the Act, and would, therefore, have expired by midsummer of this year, 1953. The simple and plain purpose of this little Bill is to extend those provisions until Christmas, 1954. Your Lordships may well have fallen into the same trap as I did, and thought that you could do that merely by substituting "three and a half years" for "two years" in the original Act, but it has been explained to me by those who read and understand mathematics that if we tried to do that, and the Act were to end at Christmas Eve, 1954, it would be three and a half years and one day. That is why slightly different wording is required. This new Bill, therefore, expires at midnight on December 24–25, 1954.
May I weary your Lordships for a moment by reminding you of what was the purpose of the Leasehold Property (Temporary Provisions) Act, 1951, introduced by noble Lords opposite? Part I of the Act extended to the end of what is called the protected period any long lease of a house which would otherwise expire before that date, provided that the lessee himself was in occupation on the date of expiry. The effect of our new Bill upon that particular part of the old Act will be as follows. Any lease which was extended by the 1951 Act will automatically continue until 1954. Any long lease which has not yet expired, bat which would expire between midsummer of this year and Christmas of next year, will be automatically continued until Christmas of next year, provided, of course, that the conditions of the 1951 Act still prevail—that is, that it is held on a long lease and the lessee is in occupation. Part II of the original Act applied to shops. If a shop tenancy of any length was due to expire during the protected period the

531
tenant could apply to the county court for a new tenancy, but of not more than one year, and the court would decide the rent. That, I understand, has been frequently complied with. The Act has been widely used and, so far as I can understand, used satisfactorily. The effect of the new Bill upon that part of the old Act will be to give the right to apply to the court for the renewal of a shop tenancy up to Christmas, 1954, in favour of any tenant whose tenancy is due to expire before that date.
That, very briefly, is the purpose of the Bill, and I would say at once that Her Majesty's Government present it to the House with reluctance. We should have preferred to present to the House some more permanent measure. This is the point upon which the noble Lord, Lord Silkin, said he had told us so. He said that the time would come when this Act would expire and we should not yet be in a position to present a permanent measure to the country. That is true, though not, I think, for the same reason as the noble Lord, Lord Silkin, thought. There has been, I expect he may have noticed, a change of Government between that speech and his speech to-day. We criticised that Bill when we were in Opposition. We moved Amendments against it, and I think we carried some as well, so it is no good my standing at this Despatch Box and trying to pretend to nurse a great love for the Act of 1951. But this fact does obviously stand out a mile. To attempt to amend that Act, instead of just extending it, would undoubtedly produce a great deal of hardship and much confusion. So Her Majesty's Government have reluctantly decided to extend this Act for which they have no love, rather than amend it. We are, therefore, copying the Socialist portrait, warts and all.
The reason we have chosen the date of Christmas, 1954,is this. The Jenkins Report, of what was formerly the Uthwatt Committee, after the late Lord Uthwatt of still much-lamented memory, was put before the country in June, 1950. The Bill which eventually became this temporary Act of 1951 was not introduced until November, 1950, and the Government of the day announced that they would not be ready with permanent legislation for some considerable time. There
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was then a two-year standstill. I do not doubt for one moment that noble Lords opposite can well say that had they still been in power they would have produced, in this two years' interregnum, their permanent legislation. But we have had fifteen months to consider it, and we are not yet in a position to produce the permanent measure which we should like to lay before the House. As the noble Lord, Lord Silkin, has generously pointed out, the skeleton of the body is here in this new White Paper. The general principles of the legislation which Her Majesty's Government have in mind are quite clearly laid out and put before the country. But it is clear, I think, from a perusal of this White Paper—and I am certain that the noble Lord, Lord Silkin, with his technical knowledge on this subject, will be the first to admit it—that it is obviously going to be an extremely difficult Bill to draft. It is going to be a draftsman's dream.
EARL JOWITT: A nightmare.
LORD MANCROFT: It is going to be our nightmare, but it will be the draftsman's dream. Whichever way one looks at it, it will be an extraordinarily difficult Bill, and therefore, although Her Majesty's Government regret that they are not in a position to put permanent legislation now before the House, that may be an advantage. It may be the fact that now the general policy can be thoroughly and, I hope, amicably threshed out, and that the very difficult and technical points can be talked over by the experts and by those who are interested, and we may—who knows?—eventually be able to produce an agreed measure. Certainly it will require a great deal of debate, and Her Majesty's Government welcome criticism and comment on this White Paper, so that we may get the best possible solution to this very vexed matter.
We hope that a Bill will be introduced into Parliament next Session and, we also hope, passed. Christmas, 1954, has been chosen because there might conceivably be a risk of not getting the Bill by midsummer of 1954, after a proper discussion. After all, the 1951 Act was nearly six months before Parliament. Then, of course, provision must be made for the transitional period between the end of this Bill and the permanent legislation, and probably an interval after the Royal

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Assent would also be required for people affected by the new measure to put their affairs in order. So much for the Bill which foreshadows the permanent legislation in the White Paper.
May I now offer a few words upon the White Paper? I think it is fair to say that it is a good White Paper. It has had a good Press. It is the common function of Oppositions, when they are in Opposition and they wish to find a stick to beat the Government, to say: "Ah, but did you see what the Economist said about you this morning?" Governments can use the same stick, and I am happy to inform your Lordships that the Economist regards this as a good White Paper. So does the Conveyancer and so do a large number of other journals which I do not expect normally find their way on to your Lordships' library tables. Two of the journals which I read upon this subject have gone so far as to praise Her Majesty's Government for a White Paper which, they say, appears clearly to have been written in English. The White Paper deliberately devotes more space to what the Government do not intend to do than to what the Government do intend to do, and that for a reason which must have made itself apparent from the length of time—I am not complaining in any way at all—which the noble Lord, Lord Silkin, devoted to this most vexed, long-standing and troublesome question of leasehold enfranchisement. I do not propose to follow the noble Lord, Lord Silkin, on to the Tom Tiddler's ground of leasehold enfranchisement.
LORD OGMORE: Why not? May I say that I understood that the main purpose of the White Paper was to refute the idea of leasehold enfranchisement. It is rather odd for the Government spokesman to say that he is not going to deal with it.
LORD MANCROFT: If the noble Lord will allow me to continue my sentence. I will try to explain why I do not propose to deal with it. It is because it is dealt with at very great length and in very great detail in the White Paper. All I want to say about it is this. Her Majesty's Government would have had two reasons for dealing with leasehold enfranchisement. One would have been the political reason, and one would have been the practical reason. I want to
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assure the House that the reason why Her Majesty's Government have taken the attitude they have about leasehold enfranchisement, and why they have adopted the point of view so clearly set out at length in the White Paper, is not primarily because they hold strong political views upon it, but because they are convinced that, practically-speaking, it is not possible. That is the reason why it has not been included in the permanent legislation. Of course, as the noble Lord, Lord Ogmore, is well aware, the minority view was put forward by Mr. Leslie Hale, the Member for Oldham, and Sir Lynn Ungoed-Thomas, the Solicitor-General, in the late Administration. That was neither a wild nor an extravagant view; it was a very reasonable and moderate view. It is discussed in detail and, despite the moderation of that view, Her Majesty's Government have come to the conclusion—for the reasons I have just explained to the noble Lord, Lord Ogmore, and which are set out in great detail in the White Paper—that they do not propose to follow the view put forward by the Minority Report to the Jenkins Report. I think that the proposals put forward in this White Paper and, therefore, foreshadowed in the Bill which is before your Lordships to-day, are eminently reasonable.
I believe that, ultimately, when both these Bills are on the Statute Book, we shall have achieved a valuable and much needed measure of reform of which Her Majesty's Government may well be proud. It will be a measure of reform not governed by political prejudices and not controlled by concessions to extravagant views on either side in politics. There is nothing in the legislation which Her Majesty's Government are putting forward to-day, or envisage in the near future, which can be of the slightest assistance and encouragement to a grasping, greedy or a bad landlord. There is nothing in this legislation which can give any encouragement to a negligent or untrustworthy tenant. It is the reasonable man in both cases whom this legislation seeks to assist; and I submit to your Lordships that that assistance is given. We recommend this temporary Bill and recommend most cordially the contents of the White Paper. The temporary Bill is the pill which we now have to swallow

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in order eventually to enjoy the jam which I can assure your Lordships is included in the White Paper.
4.1 p.m.
THE EARL OF SELKIRK: My Lords, the noble Lord, Lord Silkin, said he was interested not in 90 per cent. of the people but in 100 percent. of the people. But he was wise enough not to extend his attentions to the people of Scotland. As, however, his Motion includes a reference to the White Paper dealing with Scotland, perhaps I may be permitted to say one or two words. With reference to leases in Scotland, the second clause of the Bill deals with that matter. We have a White Paper for Scotland, just as for England, and it is obvious that there is a tremendous area of common interest. The Report which we had was produced by Lord Guthrie, a Judge of the Court of Session and is unanimous. In the second place, the Report makes it abundantly clear that what has been found in Scotland has very little bearing on the position in England. With your Lordships' permission I will read the relevant passage.
"…the position in Scotland in the matter of ground leases is so completely different from that obtaining in England that no comparison of possible solutions to the problems of lessees north and south of the border would be useful."
The reason for that is simple. In history, in law and in psychology, the outlook in this matter is entirely different. Leaseholds would not normally have been used but for the fact that for a certain period landlords believe that the nature of their tenure, of their entail, precluded them from using the feu. The use of leaseholds was a second best, and was used upon occasions. I should like to quote another passage from the Report—the Report, incidentally, of a body which was appointed by the last Administration and which, I believe, included representatives of all points of view on this subject. The passage I should like to quote is as follows:
"Indeed, we are satisfied that the usual practice of Scottish landowners, so far from showing an insistence on their legal rights, has been generous."
The Report goes on to recommend that the normal practice and usage in Scotland should be continued and, in one particular, be made statutory.
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I will turn to other recommendations of the Report. It recommends that a tenant in his permanent home should have a statutory right of conversion from lease to feu, provided that the lease was granted before 1914 and provided that the length of the lease was at least 50 years. The Report goes on to give the basis of the payment to be made to the landlord for conversion—namely, the value of the property with vacant possession at the date of the enabling Act deferred at 5 per cent. compound interest for the unexpired period of the lease, but subject to an assumption, where the unexpired period is less than thirty years, that the lease has still thirty years to run. This means that no tenant will be called upon to pay more than about one-quarter of the market value of the property. This payment can be met partly in cash and partly by creation of a feu duty. The Committee recommend that where a Government Department, local authority or development corporation are the landlords, they may refuse to grant a feu. In such cases the tenant would have no statutory right. The Rent Restrictions Act, the Committee say, should not be extended to ground lessees in the ordinary way, but an occupation or rack-rent tenant should continue to be protected by those Acts when the ground lease fell in. The Committee further recommend that the statutory right of conversion should also apply to manses occupied by ministers and houses occupied by Trust benefices; and, finally, that the Tenancy of Shops (Scotland) Act, 1949, should not be extended to business premises other than shops. I apologise for these few remarks, but as no mention has been made of Scotland, I thought it well to recall that Scotland was, in fact, included in the noble Lord's Motion.
4.5 p.m.
LORD LLEWELLIN: My Lords, I should apologise to the noble Lord, Lord Silkin, for not having been able to hear the speech with which he opened this discussion. I may, perhaps, say in excuse that some months ago I promised to go and address a luncheon meeting to tell them what good work your Lordships' House was doing in the Legislature of this country; and I had to keep that engagement. That is why I am late and I apologise to your Lordships. When

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we were discussing the Act which we are now continuing for another eighteen months, the noble Lord made several prophecies. I find, on re-reading the speeches which I made then, that I, too, made one prophecy. Lord Silkin had said that the Government of which he had ceased to be a member would at some time have to make a decision on this matter; and when I spoke I said that I did not feel that it would be that particular Government. That has come true; and it is the present Government who have to make the decision.
The outstanding question, and the one which creates the most sympathy, is that of the man whose ancestors took a ground lease of a plot of land for perhaps ninety-nine years and built a house on it; and new, when the term is coming to an end, the lessee may find himself at any moment out of his home and the place in which his forefathers lived. It is always a sad thing to see that happening. But there are many families in this country to-day who since the war have had to give up living in the homes in which they and their forefathers had lived for much longer than ninety-nine years. Some of them had lived in those homes for 300 or 400 years. These people have had to give up living in their homes because of high taxation, high rates or high costs of upkeep. We have sympathy with all the people who have to leave their old family homes. They do not, of course, get any compensation—and there is no reason why they should, for all this is due to the difficulties of the times in which we live and the appalling expense which the country has to bear in paying for two wars, and so forth.
Should we pay compensation or not in the case of these people whose leases fall in? Should we by legislation take away from the lessors something which rightfully belongs to them? Nobody can say it was wrong to grant a long lease on a low ground rent for a private individual. The Office of Crown Lands have set that example for years, and they are still doing it to-day. Under recent legislation, the Town and Country Planning Act, for which more than anybody else the noble Lord, Lord Silkin, was responsible, if the local planning authority acquire land under that Statute they are allowed to dispose of it only under a long lease not
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exceeding ninety-nine years. Under the New Towns Act, which was a Bill similarly brought in by the late Labour Government, a development corporation is allowed to dispose of the land it acquires only under a long lease not exceeding ninety-nine years. So these long leases cannot be said to be things that are against the public interest. The granting of them cannot be said to be an immoral proceeding. Therefore, it would be quite wrong, in, my submission, for Parliament to take away the lessor's rights without paying him some compensation. It may not be the original lessor or his descendants who are now the ground landlords. The rights may well have been bought by trustees, or by people who were anticipating the falling in of the lease and acquired the landord's interest for perfectly bona fide considerations. Surely it would be wrong for Parliament to take away those rights without paying some compensation for them.
Is this a case where the taxpayers of the country as a whole should pay compensation to a private individual, whose forefathers entered into a contract and who has no right in law at the time the lease expires? Would it be right for the State to pay compensation to enable that individual to acquire a freehold which was never his? That is the short, simple proposition. It is often right for the taxpayers of the country as a whole, or for the ratepayers of a local government authority area, to pay compensation when they want to acquire something for the national good or for the local good but it would be carrying matters rather far if taxpayers were to be charged with compensation given for the individual gain of a private individual, however much we sympathise with him. As I believe, we cannot in this country deprive landlords of rights without paying some compensation—because we still live on the pleasant side of the Iron Curtain; those things are done on the other side, but on this side we do not do them. If we cannot do that, then we have to make up our minds whether this is a case for transferring the freehold from the lessor, or the inheritors of the original lessor, to the inheritors of the original lessee.
I personally do not see why the country as a whole should be charged so that these people should get the freehold of

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premises conferred upon them as of right. However, I do see every reason why these people should be treated as they would be treated if it were not a long lease, if it were the ordinary kind of weekly tenancy which would be embraced by the Rent Restrictions Act. I see every reason why those people should be given that security of tenure, at a proper rack rent to be agreed between the landlord and the tenant, or to be settled by the county court if they cannot agree. Those are the Government's proposals upon this subject, and I think that that is the right way of dealing with it. We shall not then get people turned out of their homes by unscrupulous landlords—a good landlord would not do it, in any event, but there are some unscrupulous landlords who might do it—and the tenant will be protected from them. I think that this is the right way of dealing with that problem.
I want to say only one thing with regard to the other part of the White Paper, and that is on the question of goodwill of business premises. The fact that the term "business premises" is used may mean that something much wider than has hitherto had protection is involved, because a factory does not have goodwill such as a shop has; nor does a store; nor do many other premises which can be called "business premises." I should like that point looked into before the new legislation comes along—whether it is the intention of the Government to widen the scope so as to include such buildings as factories, storehouses, docks, railway lines or whatever it may be. I should have thought not, but we are largely giving up the test of goodwill. By doing that, therefore, these other kinds of premises, which were not included in previous legislation, may now be brought in. I am sorry to have intervened at this late hour. I have been bold enough to step on to Tom Tiddler's ground, as I think it was called earlier in the debate, but I thought this point of view needed to be put, despite the sympathy we have for anybody who, for any reason whatever, is no longer able to live in the home in which his forefathers lived and which he has long considered to be the family home.
4.19 p.m.
LORD OGMORE: My Lords, I have listened with considerable interest to the various speakers on the subject that is before us to-day, a subject which will affect, I presume, hundreds of thousands, if not millions of people in this country. As I see it, the policy of the Government involves a further freezing of the relationship between landlord and tenant, or, to put it, I suppose, more accurately, the bringing into the refrigeration process of a larger number of landlords and tenants. There is already to a large extent a freezing of this relationship, under the Rent Restrictions Acts. I doubt whether any of your Lordships would say that the Rent Restrictions Acts are not necessary in principle. Whether the principle of refrigeration should be extended in this way is a matter of argument. If we agree that some such standstill arrangement as this is necessary, then possibly the Government's proposals in the White Paper form a basis for reasonable argument, and might form a basis for the future relationship between the landlords and tenants concerned. I myself think that if this is so, then some of the provisions are obviously desirable—for example, the proposal in Part IV of the White Paper whereby:
"The Government accept the general proposition of the Leasehold Committee that improved security of tenure should be made available as a permanent measure to all business tenants, including tenants of premises used for professional purposes."
I fully agree with that. I believe that it is necessary and desirable to extend to a wider class of business premises, including professional premises, the protection already given to shops under the Leasehold Property (Temporary Provisions) Act of 1951. There is no real reason why the protection afforded by that Act should concern itself simply with shops. Many other businesses and professional premises should come under the same umbrella. There are other details of a like kind, some of which have been mentioned by my noble friend who preceded me. If ever this measure comes before the House I think we should consider those points in Committee.
In my view, however, more radical measures are needed. I do not think it is possible to deal with this huge subject by tinkering with it, and by extending what I have called the refrigeration process in the way that the Government

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propose to do. The noble Lord, Lord Mancroft, spoke at some length, but he did not go into the question of leasehold enfranchisement. He gave the rather curious reason. I thought, that because the reasons regarding it were in the White Paper there was no need for the Government spokesman to repeat them in this House. As my noble friend Lord Silkin had already repeated them at some length, it seemed to me very odd that the first spokesman from the Government Front Bench did not deal with those matters and did not refute the arguments that had been put up by my noble friend Lord Silkin. I would at once acquit the noble Lord, Lord Mancroft, of any suggestion of being unfair or discourteous to the House. Possibly he intended to leave this matter to his noble and learned friend the Lord Chancellor.
LORD MANCROFT: Perhaps I may intervene for one moment. I am glad to hear the noble Lord's last remark, because I should not like him to give the impression to the House that I was being discourteous in not having discussed the most controversial point. I deliberately avoided it because, as I explained to him, it was set out in detail in the White Paper and, furthermore, because I was concentrating almost solely upon the temporary provisions of the Bill which is down on the Order Paper for Second Reading to-day. I would also remind the noble Lord that I am not the only spokesman of Her Majesty's Government in the House to-day.
LORD OGMORE: I appreciate that. I do not think it is an argument for the Government spokesman to say that because the Government's views are set out in the White Paper there is no need for him to repeat them. After all, this is a place of debate, and it does not necessarily follow that everyone who comes here has to read up all the White Papers which the Government have published. The House expects the arguments of one noble Lord to be controverted, if possible, by the next, if that next one happens to be the Government spokesman speaking after the spokesman for the Opposition. I think that unless we get the clash of the hammers between the two Front Benches it rather spoils the debate. I do not accept the view that, because something is mentioned in a
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White Paper, there is no need for arguments to be adduced in this House.
The noble Lord, Lord Mancroft, certainly gave as poor a reception to a Bill as anything I have ever heard when he described the Bill which the Government propose to continue in operation as being one which he did not love and which was full of warts. That, I presume, was an allusion to Cromwell. He, presumably, loved his warts—at all events, he was quite happy to have them painted. But Lord Mancroft is ashamed of the warts in this Bill, and I think it is rather odd for the Government to propose to this House and to the country a Bill which they talk of in such a disparaging way. To my mind the noble Lord was quite right in talking of it in a disparaging way. Many other people in this country think that what is needed is a far more radical alteration of the law, and in fact some measure of leasehold enfranchisement.
I speak with some feeling on this subject, because it affects particularly the part of the country from which I come, South Wales. The problem has been with us there for just about a hundred years. In the early lays of the Industrial Revolution in Wales the little valleys among the hills in which coal was found were populated only by a few scattered hill farmers, and there grew up villages and towns to satisfy the needs of the hill farms. I believe that Lord Llewellin's ancestors, and those of Lord Lloyd and myself, were all, at one time hill farmers in South Wales, and by a coincidence we are all here to-day. At all events, very soon there came a drastic alteration in the appearance of the locality. Coal was found, and the Industrial Revolution got into full swing. As a result, there was a need to build a large number of houses. These houses were built, and often they were very poor houses indeed, even at the beginning. One hundred years of life, together with the subsidence that exists in a mining district, have not improved them. In many cases they are to-day little more than hovels.
The houses were poor because in some cases, to my knowledge, it was the intention of those who put them up that they should be poor. Some fifty years ago, in my own town of Bridgend, an architect whom later I knew well was approached

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by a business man to put up some of these houses for sale. He drew plans, and there is no doubt that they would be called "desirable residences" if they were put up for auction to-day. But the person who was employing him turned down the project. He said, "I do not want comfortable houses; I want uncomfortable houses. We are putting up these houses in order to get a licence for a public-house that we are going to build, and if you build people comfortable houses the people will not go and drink in the public house."
There were various reasons for the erection of these houses, but all of them indicated that in all probability the houses would be badly built, as indeed they were. Now of course the time has come when the original leases are falling in, and we in South Wales were perturbed a year or two ago by the fact that a number of people in the City of London and elsewhere had bought up blocks of these ground rents and had served dilapidations notices for very large amounts on the owner-occupiers of the premises, saying, "Either you buy the freehold or you pay for the dilapidations, notice of which we have given." That was the position in which many of these owner-occupiers, working men, were placed: either they had to pay exorbitant sums for the dilapidations, and of course lose the premises, or they had to pay large sums—far more than they were worth—for the freehold reversions. In that way, a property which perhaps was worth only£40 or£50 might go for£300 or£400. The same thing happened in the residential areas, in the towns of Cardiff and the like. There, too, quite a number of houses were built on these great estates. By a singular coincidence, it seemed, about a hundred years ago, or perhaps from a hundred years ago to fifty years ago, there was a considerable number of eligible young heiresses in South Wales, and they were picked up and married by noblemen and gentlemen from outside. These gentlemen developed large estates on the land of the heiresses, and the result, in many cases, has been that, in respect of these estates, the reversions have been in the hands of very few people indeed.
Quite apart from the housing aspect, there was another aspect which has had really bad results in South Wales.
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Cardiff, at the present moment, and some of the other South Wales ports, are in a very serious position. The noble Lord, Lord Lloyd, the Under-Secretary for Wales, the Parliamentary Under-Secretary of State for the Home Office, will confirm this, I am sure. Cardiff was built up very largely on its coal exports. It was the greatest coal-exporting port in the world. It used to export something like 30 million tons of coal a year, and it has never had any spread of industry which could come in and assist the port now that the original export trade has practically ceased to exist. Unfortunately, very little coal is now exported from Cardiff. I have always been given to understand that the reason why Cardiff has not a wide range of industries, such as Swansea has, is that the land was in the hands of one or two people who refused to sell it, and, in fact, would grant only very short leases. The result has been that many industrial firms, who might have been inclined, or induced, to take leases of premises, long leases, or to buy pieces of land and erect factories, decided that they would not do so and went elsewhere—particularly to Bristol. It is significant that Bristol was built up as a centre for the Midlands when, in many ways, South Wales was far more convenient for that purpose. It is not only bad transport which has resulted in Cardiff being so badly placed in relation to the Midlands: it is also due to the fact that years ago people could not get land there when they wanted it.
It will be said, I have no doubt, that this system, the leasehold system, is both desirable and necessary. If that is so, I am surprised that it has not been copied in other countries and, indeed, in many parts of England. If it is as desirable as we are sometimes told, I suggest that it should be taken from South Wales. It was exported there about a hundred years ago—it is not the old Welsh land system. We shall be glad to re-export it to England where it is desired, because it is a fact which the Front Bench opposite cannot escape that in South Wales there is a unanimous opinion—and it is held by all political Parties, including that of noble Lords opposite—against the system. It is part of the Labour Party's policy in general terms that there should be leasehold enfranchisement. To my

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knowledge, it has been the view of the Liberal Party—and if am surprised that nothing has been said to that effect from the Liberal Benches to-day—for many years. And it is the Conservative policy. In fact, the late Under-Secretary of State foe the Home Office, the Welsh Under-Secretary, Mr. David Llewellyn (who I am sure we are all sorry to know has had a promising career cut short, or at least suspended, by reason of ill health: he is an excellent man in many ways) when he fought his election in Cardiff had leasehold enfranchisement as a plank in his election programme. I should be surprised to learn that there are any Conservative Members from South Wales, or any Conservative candidates, who would not support everything which I am saying in this debate to-day. They know that nothing can be said for this system as it has applied in South Wales—and I am speaking as it applies in South Wales. If there were a Welsh Parliament in being the system would go with the wind: it would be abolished immediately. It would not be retained for five minutes.
I think this Parliament of the United Kingdom should have regard to the feeling of its constituent parts. Scotland is more fortunate than Wales. Scotland has its own system of law. Wales has not. The old land law of Wales went in the reign of Henry VIII, and we had to accept English land law, whether we liked it or not. Scotland, as I say, is more fortunate. But I do think that we here, as the United Kingdom Parliament, should have regard to the special conditions and the special requirements of the constituent parts of the United Kingdom. I know that it will be said that the majority of lawyers are against this reform. That may be so; but there is a very responsible minority which is in favour of it. I would remind the House that the Minority Report was signed by Sir Lynn Ungoed-Thomas, Q.C., and by Mr. C. L. Hale, who are both lawyers and both men with great experience of this subject. Sir Lynn Ungoed-Thomas represented Barry, where they are very badly affected by the leasehold system. He is a Q.C. and a Chancery leader, so he knows not only the practical side of the problem but the theoretical effect of it. Mr. Hale, I understand, has had a busy practice as a solicitor in Lancashire, where I am told
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they are also affected by this system. So when one comes to the opinions of the various distinguished lawyers who have considered this topic, one must have regard not only to their legal eminence but to the fact that some of them have been brought more closely into touch with the results of the system than have others.
LORD LLEWELLIN: May I interrupt the noble Lord for a moment? Would the noble Lord's proposal apply with regard to Crown leases, as well as private leases, or would he differentiate between the two?
LORD OGMORE: I would not make any differentiation at all. I would say that wherever there is an owner-occupier of leasehold premises, whether the premises are owned by the Crown or by a private individual, the owner-occupier should be entitled to some form of leasehold enfranchisement. The exact details, would, no doubt, be considered, when the Bill came before the House, by whichever Party brought the Bill in. But I would make no difference whatsoever. I would draw the attention of your Lordships to Sir Lynn Ungoed-Thomas's proposals as set out on page 154 of the Leasehold Committee's Final Report. Your Lordships will see under the heading" Summary of Recommendations" these words:
"Subject to the recommendations made below, occupying ground lessees of dwelling houses should have a right of leasehold enfranchisement by compulsory purchase of the fee simple and any intermediate reversions.
"The right should be exercisable by sub-lessees in the same way as lessees."
I think that quotation shows how fair were these two gentlemen who made these recommendations, because they not only give the right of compulsory purchase of the freehold but also of any intermediate reversion.
The Government's proposals deal only with the occupying lessee. I do not know whether all your Lordships appreciate that under these proposals a person—let us say a widow whose husband has saved some money and has invested it in the purchase of property, in order that she shall in her old age have some little income—is not protected at all if she has let the premises to a tenant. Under the Government proposals the only person protected is the man who happens to be in

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occupation of the premises. Although he has not a penny piece invested in the premises, so long as he is in them he is protected. There is no protection given, and no reference whatever to the person whom we usually regard as the true lessee—the man who, whether it was he himself, or an ancestor, or the person from whom he bought the premises, erected the house or buildings on the land. There is no suggestion from the Government that this person should be protected. Sir Lynn Ungoed-Thomas and Mr. Hale do propose to protect such a person, at all events, before the term has completely expired. They propose that the sub-lessee shall be entitled to purchase the intermediate reversion, as well as the fee simple. That is fairer to many honest and deserving people than are the proposals of the Government. In my view, the proposals of the Government are bad because they affect only a limited number of people. The Government have made no attempt whatsoever to deal with this problem, which has been of great importance in our life and will become of greater importance in the next few years, when so many leases fall in. I hope that the Government will think again. I hope that they will not neglect this opportunity of making a real clean-up of this Augean stable. If they had seen its operation in South Wales and in Lancashire, they would have realised how badly it needs cleaning up and not tinkering with, which is all the present proposals seem to do.
4.42 p.m.
THE LORD CHANCELLOR (LORD SIMONDS): My Lords, it falls to me to reply to this debate on behalf of Her Majesty's Government. Perhaps I may explain my own personal position in this debate. This was a motion which the noble and learned Earl, Lord Jowitt, was going to move and for which the noble Lords opposite called, in order that they might criticise the White Paper. Having called for the Motion, it was convenient that at the same time I should move the Second Reading of the Bill which we propose, because they both cover the same subject matter. As Lord Jowitt's name was on the Order Paper as the mover of this Motion, I had intended to follow him, as I thought that was the proper thing to do. When it appeared that he was not going to speak until
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later, I thought it better that my noble friend Lord Mancroft should speak first and that I should have an opportunity later of replying to the noble and learned Earl. But the noble Earl has not given us the advantage of hearing his views upon this subject, so it falls to me to speak without knowing what they are.
EARL JOWITT: My Lords, I hope the noble and learned Lord has not any sort of grievance against me. I arrived back from abroad only last night and I have not been able to consult other members of my Party. Some of my other noble friends here have, and I therefore thought it better that they, who have had consultations and know what the Party is thinking, should state our views rather than that I should do so.
THE LORD CHANCELLOR: My Lords, I am expressing disappointment, not a sense of grievance—it is far from grievance. The position of this matter is rather curious. During the whole of my lifetime—I do not say political lifetime, because that has been a matter of fifteen months—it has been a burning issue. One would have expected that the Socialist Party would have a view upon it, and that the Socialist Government would have had a view upon it as a matter of policy. Therefore, I venture to think, it was a little surprising that in the year 1948, apparently not having made up their minds on this burning question, the Socialist Government appointed a Committee to consider this matter as a question of policy. They were to consider policy, because this was the first question that was put to the Committee:
"Whether, and in what circumstances, and on what terms an occupying tenant of residential or other premises should be given the right to purchase compulsorily the freehold and any other prior interests in the premises, and to consider any other aspects of the problem of Leasehold Enfranchisement."
The noble and learned Earl appointed a Committee to consider that question, and I think one must assume that at that date, as the Labour Government had appointed a Committee to advise them on a question of policy, they had not made up their minds about it as a Party.
What happened? A Report was issued, after a prolonged consideration of all the relevant law, all the facts and all the arguments that could be adduced.

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The majority—all the members of the Committee except two—totally rejected leasehold enfranchisement, and the minority of two were in favour of it. Now, one must ask noble Lords opposite whether it was in consequence of this Report that they were able to make up their minds, for ex hypothesi they had not previously clone so. I should say that anybody reading these two Reports with an unbiased mind—and for that I give them credit, for they have not made up their minds—would not come down in favour of leasehold enfranchisement. Yet in 1951, for the first time, leasehold enfranchisement found a place in the electoral programme of the Socialist Party. That is a most extraordinary thing.
Now we bring forward this White Paper and the noble Lord, Lord Ogmore, criticises my noble friend Lord Mancroft for not having dealt with the arguments set out in the White Paper. But the fact is that although, having tabled a Motion upon (his subject, it was the duty of noble Lords opposite to criticise the proposals of the White Paper, the noble Lord, Lord Silkin, in a speech for which I have an admiration for its temper and can dour, did not seek to challenge one of the arguments in the White Paper on the basis of which Her Majesty's Government reject in toto the theory of leasehold enfranchisement. That is why I do not feel a incumbent on me to go at length through the arguments in the White Paper, and I say that with equal temper and candour.
In the White Paper the Government do not go into the theory of the matter at any length. This is a matter, perhaps, of social and political philosophy upon which people have different opinions. It rather concentrates on this: no practical measure of leasehold enfranchisement has been proposed or discussed before the Committee. I would ask noble Lords to observe this. Even now the noble Lord, Lord Silkin, though he has professed himself in favour of leasehold enfranchisement in theory, and the noble Lord, Lord Ogmore, though he has referred to the difficulties in South Wales, with which we are very familiar and with which the members of the Committee were also very familiar, do not commit themselves on the question: should there be compensation when there is compulsory enfranchisement or should there not? And
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for whose benefit is this being done—for the benefit of anybody who has a leasehold interest or for the benefit only of the occupier?
Now it is a point of great importance that the minority, Mr. Hale and Sir Lynn Ungoed-Thomas, although they were in favour of leasehold enfranchisement, were in favour of it only upon the terms of proper compensation. If that is so, what is the value of that? Well, we have the statement, not, indeed, of the minority, but of the majority, in regard to that point, and this is what they say on page 34 of the Report:
"As already noted, the effect of the evidence is that enfranchisement on the basis of the tenant paying the fair market value of the freehold in reversion or relatively imminent reversion would not meet the alleged grievance of building lessees as it is generally presented."
The alleged grievance of building lessees as it is generally presented is just that grievance to which the noble Lord, Lord Ogmore, referred.
I appreciate—we all do—that there is a grievance there which has been nourished for many years, and has been vividly emphasised and brought home to the South Wales miner, because there is no doubt that it has been a slogan of the Liberal Party and the Socialist Party these many years. I do not think that any ground lessee in South Wales is taken by surprise when he learns that his interest will come to an end when his ground lease is over, because that has been a Party cry for so long. May I, in parenthesis, say how delighted I was to hear the noble Lord, Lord Meston, who spoke on behalf of the Liberal Party, say that he, at least, dislikes intensely the idea of leasehold enfranchisement. It is a curious thing that one of the reasons which the Liberal Party always gave in favour of leasehold enfranchisement was this: that it would be a bulwark against Socialism, because they thought there would be nothing which would militate more against the Socialist doctrine than the ownership of houses which leasehold enfranchisement would bring. There are strange revolutions in history, and now we find the Socialist Party, if anybody, an advocate of the scheme of leasehold enfranchisement.
I do not want, any more than my noble friend Lord Mancroft, to be discourteous to the House by not going through all the

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arguments in favour of rejecting the principle of leasehold enfranchisement, but if noble Lords will read the White Paper I am sure they will agree how cogent are the arguments against it. It is easy to disregard all exceptions and say: "Whatever the injustice may be, we think it right that there should be universal leasehold enfranchisement." I do not think that anybody would embark upon that proposition. If not, he will find, as we found when we began to consider the matter, that there are so many exceptions, and so many exceptions upon exceptions, that the thing is whittled down to nothing at all. For my part, I think that if we attempted to base any general principle or policy of the law upon the hard cases which we hear of in South Wales, it would be the supreme example of hard cases making bad law. I cannot think that the Socialist Opposition to-day can say as a general principle that the long lease system is a bad one. The noble Lord, Lord Silkin, and his colleagues, as has been pointed out, were responsible in the last few years for introducing just that system in a new sphere. It is therefore clear that the long lease system, which involves a freehold reversion which in good time will revert to the landlord, is one that is acceptable to the Socialist Party. How, then, can they put in their programme lease hold enfranchisement as an item on which they are going to fight?
In this matter, in which, as I think, the good will of all Parties is very important, not only in the comparatively small area that we are covering to-day, but in the whole sphere of the relation of landlord and tenant, it is most important that we should meet as far as we can. For that purpose, it is surely essential to get out of the way this leaning back towards the idea of leasehold enfranchisement. If there is anything that can be done—and nothing occurs to me—which can mitigate particularly hard cases, let us consider it at a later stage. But let us embark upon the legislation which faces us in the next few years—not only, of course, in relation to the subject matter of the White Paper, but to the far larger sphere of the whole relationship of landlord and tenant, and particularly in regard to the Rent Restrictions Acts—with this problem of leasehold
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enfranchisement thrust so far into the background that no Party will bring it up again.
LORD OGMORE: May I interrupt? Does that also include the Conservative candidates in South Wales at the next Election? They brought it up prominently at the last Election, and possibly won a seat or two on it.
THE LORD CHANCELLOR: It may seem to the noble Lord that that is an apposite intervention.
LORD OGMORE: Yes, it does.
THE LORD CHANCELLOR: I do not propose to say anything about it. I do not think it is necessary for me to say anything about the negative part of the White Paper, if I may so describe it. We have given our reasons, which I commend to all in this House—and I include, if necessary, the prospective candidates in South Wales—as to why leasehold enfranchisement is not on the map at all.
That brings me to what I may call the positive part of the White Paper. Here there has been a measure of agreement which is most encouraging. I think it would be proper for me to pay a tribute to the generous attitude adopted in this matter by noble Lords who are accustomed to sitting on the Government side of the House, to many of whom it seems a great hardship that for a further period of eighteen months an uncovenanted benefit should accrue to the lessees. For, in fact, it means that landlords are for a further eighteen months beyond the former two years kept out of the reversion to which they might reasonably have hoped to come. Not a voice has been raised against that, and I venture to think that it does great credit to the generosity and public spirit of noble Lords on that side of the House.
The noble Lord, Lord Silkin, raised a number of points which he rightly said were important, but which perhaps were in the nature of Committee points—and, of course, they are Committee points upon a Bill which is not yet in existence; but since they are adumbrated in the White Paper, it was no doubt quite proper for the noble Lord to raise them. I may say, as my noble friend Lord Mancroft said, that we welcome at this stage all those criticisms. Let me assure the noble Lord, Lord Silkin, that they

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will be fully considered before we come to put on paper the Bill which is outlined in our White Paper.
I should like to deal with some of the particular points which the noble Lord made. The first point, of course, is on the question of security. It seems to me that in the security which we now propose to establish for the ground lessee, to a very large extent we give that advantage which leasehold enfranchisement was intended to secure, because, apart altogether from the joy of ownership—a man likes to have a little property of his own—one reason why he wants it is that he may feel secure; and that security is what we shall give to him by the intended legislation.
The noble Lord asked me what was the nature of the statutory tenancy, and said that we are vague about the rent. It is quite true that in the White Paper we do not go into any details as to the factors which should weigh with the tribunal to whom it will fall to prescribe the terms of the statutory tenancy. I do not think I could say more than this: that the county court judge—for it is to that tribunal we intend the matter shall go—will, of course, have to consider that he is now creating an entirely new relation between the ground lessee and the ground lessor. The old covenants will have gone and, of course, the old rent will be inadequate. It will be the duty, as we see it, of the county court judge to prescribe all the terms of the new relation, and they will be interdependent—that is to say, the quantum of the rent must depend, to a large extent, upon the nature of the new obligations in regard to repair which will be thrown upon the tenant. As we see it, the county court judge, who is skilled to do this sort of thing, will have no difficulty in prescribing fair terms for the tenancy, including what is a fair rent having regard to the other terms. He will, no doubt, take into account what are the rents payable in respect of similar property, whether such property be what is called new controlled, old controlled or subject to no control at all. He will have to take at those things into account, and I do not think he will have any difficulty, not in coming to a scientific result, but in coming to a result which is fair in all the circumstances.
Then the noble Lord asked about the effect of the repairing covenant. In
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regard to that, I would ask him to consider the terms of the Leasehold Property (Repairs) Act, 1938, and the earlier Act of 1927. That is a matter which must be taken carefully into consideration. Then the noble Lord asked me about the question of improvements. Upon that matter it is possible to come to different conclusions. The conclusion to which Her Majesty's Government have come is this. So far as residential property is concerned, it is not right to put upon the landlord the burden of paying for improvements which he does not want. It is so much a matter of taste and personal preference that it would be likely to result in grave hardship and injustice if a landlord were compelled to pay for improvements for which he would have to bear the burden, which he did not want and for which he had not asked. It is much better that that should be left as a matter of bargaining between the landlord and tenant. As at present advised, we cannot commit ourselves to the conclusion to which the noble Lord would come—that improvements ought to be paid for by the landlord at the end of the lease.
I do not know whether I shall be able to cover all the points raised by the noble Lord. Dealing with compensation, I am very glad indeed that he found himself able to agree with the proposals in the White Paper in regard to compensation for so-called adherent goodwill. I think I give away no secrets when I say that nothing caused us so much difficulty as arriving at a fair conclusion in regard to that. The noble Lord asked one question on that point. One of the cases in which compensation will arise will be where the landlord will be entitled to recover his property because he wants it "for his own business." I read that quite literally and generally as meaning that he wants it for his own business, whether it is the same business as that of his tenant or a different business of his own. That is how we intended it; and again, subject to any second thoughts, that seems to me to be absolutely fair, for it ought not to make any difference whether the business he carries on is a similar one to that carried on by his tenant or a different one of his own. The noble Lord also asked a question about re-development. I should concur in the view which he expressed, that in order that the landlord may be in a position to refuse a renewal

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to his tenant upon the ground of re-development, it must be in respect of some scheme of re-development which has been approved by the appropriate authority.
The noble Lord, Lord Meston, asked some questions, one or two of which I should like to answer. He referred in particular to the proposal in the White Paper in regard to restrictive covenants, and objected altogether to the suggestion that where assignment could not take place without the landlord's consent, that should always be read as subject to the word "reasonable." It is rather late in the day for the noble Lord to take that objection, because it has become a regular part now of the law of landlord and tenant in, I think, every sphere. But I was glad that the noble Lord, Lord Meston, speaking for his Party, agreed that no compensation for improvements to residential premises should be allowed. Then he said—and I felt the force of it—that he saw no reason why the compensation for goodwill should be related to rateable value. My only answer to that is that some test has to be found. It is arbitrary and, if you like, capricious, but we had to find something. Unless we are going to indulge in what might be a field day for lawyers and other professional men, it would not redound to the advantage either of the landlord or the tenant. There would, I fear, be a good deal of litigation in this matter unless we adopted some arbitrary standard.
The noble Lord, Lord Llewellin, whose speech I welcomed, said much that I should have liked to say myself, and he said it better. I shall not repeat it. As the noble Lord has said, the prime object of the measures which we propose to introduce will be to get security of tenure where the tenant is a reasonable tenant and there are not overwhelming considerations the other way, as in the case, for instance, of re-development. I was very glad that the noble Lord was able, even somewhat late, to come down and support the Government in this measure.
I have dealt, I hope in a quite friendly way, with a few of the observations the noble Lord, Lord Ogmore, made. I agree with him that more radical measures will have to be made, but we really cannot
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do everything at once; and I can assure him and other noble Lords that there is no aspect—I use that word advisedly—of the law of landlord and tenant which is not under our urgent and earnest consideration. Those are words commonly used by Her Majesty's Ministers, but in my mouth on this occasion they are no idle words. These are indeed matters which are exercising our minds.
I have not been able to deal with all the points made in the debate, but I have endeavoured to cover the principal matters raised by noble Lords. It only remains for me (I think I am in order), formally to move the Second Reading of the Bill which has been expounded by the noble Lord, Lord Mancroft. No criticism has been made of it, and I think it is unnecessary for me to add anything more except that it has been discovered that, so far as the time for making application to the court is concerned, there is a certain gap. I assure noble Lords that that matter will be put right—and I must say that I do not think any noble Lord found it out.
LORD SILKIN: May I suggest that it will be necessary to take the Motion?
THE LORD CHANCELLOR: I am informed that before I move the Second Reading the noble Lord, Lord Silkin, should first have an opportunity to reply on his Motion. I apologise to the House.
5.12 p.m.
LORD SILKIN: My Lords, I think it is desirable that I should do so, otherwise I may be putting Her Majesty's Government to the trouble of submitting Papers on this subject; and they have already submitted at any rate one Paper. There is not a great deal that I find it necessary to say. I am sorry that the noble and learned Lord thought it necessary to imply a criticism of the Labour Government in setting up a Committee to consider this question. According to him they ought to have made up their minds long ago about the right solution, and the Committee was unnecessary. He will not be surprised to hear that, although one may be in complete agreement about the problem, there may be differences of opinion as to the solution. Inside the Socialist Party we are still allowed to think, and even to have views. It was thought that as there had been no inquiry on this subject since

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the 1880's it would be a good idea to set up an influential Committee to investigate the facts, particularly in view of what was regarded as the urgency of the problem at that time, and of the leases that were falling in. We therefore set up this Committee; and I am glad we did so, because we secured a most valuable Report.
I should like to say to the noble Lord, Lord Mancroft, that in my speech I did not think it necessary to put the case for leasehold enfranchisement. I do not know whether I am being criticised for that or not. But if I had dealt with that matter in detaill might still have been speaking—and that would have been deplorable. But I did indicate that I thought the case on both sides had been admirably put: the case for Her Majesty's Government in the Majority Report and in the White Paper, and the case for leasehold enfranchisement in the Minority Report. I felt that no discussion here today would be likely to change the view of any noble Lord, and that it was best to reserve one's position until legislation was introduced. I believe that that was the right course, and I hope that the noble Lord approves. That does not in any sense mean that we accept the position; but, of course, when the Bill comes along we shall have the opportunity of saying what we want to say on this very difficult subject.
I recognise that it is a difficult subject and not one on which one wishes to score debating points. This is one of those subjects where, if one reads the Report of the Majority Committee, it appears to be conclusive—the noble and learned Lord said that there seems to be no answer—but when one comes to read the Minority Report, that seems equally convincing. The noble Lore shakes his head but he conceded the one point, and I hope he will concede the other. It is possible to be thoroughly convinced so long as one sees only one's own point of view. But here we have to make up our minds between two conflicting points of view; and noble Lords on this side have made up their minds.
Assuming for the moment that the noble and learned Lord will be introducing measures of reform, I shall devote the rest of my speech to examining the particular proposals that have been put
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forward. I have no complaint about the way in which the noble and learned Lord dealt with my suggestions, but I hope the last word has not been said on them and that they will be carefully considered. I did not, for instance, wholeheartedly approve of the compensation proposals in respect of goodwill I thought, however, the method proposed was a convenient one and that it might avoid a good deal of litigation. I think there will have to be a good deal of discussion before we arrive at a right solution, even on the matter of the principles. There are some things which the noble and learned Lord rejected but which I believe perhaps, on further consideration, he may accept. This applies particularly to the question of tenant's improvements. I believe that it is right that where there is a definite increase to the landlord in the value of his property, he should not expect that for nothing. But I will not argue that point this evening.
I should like to say one word to the noble Lords, Lord Meston and Lord Llewellin. I was disappointed with Lord Meston's speech. I expected from the Liberal Benches a rather more radical and liberal approach than we have had; but in fact we heard speech which gave me, at least, the impression that Lord Meston is very much to the Right of Her Majesty's Government. I hope that he will not make many more speeches of a kind which might well influence Her Majesty's Government to go to the Right of him. That would indeed be a tragedy. I thought that the noble Lord, Lord Llewellin, made a rather unfortunate remark in comparing the plight of the person who is at the end of a long lease, and has to leave his home, with the position of those who leave their ancestral homes. We are all of us sorry for both, but to put them in the same category seems rather a flight of fancy. The one is very much in danger of being homeless. The problem we have to face is that so many people who come to the end of their lease will be rendered homeless. For them it is a question of real urgency, whereas in the case of the others, the class of person to which the noble Lord referred, although, undoubtedly, a great many of them can no longer afford to live in their ancestral homes, they do in the vast majority of cases adjust themselves to living in somewhat more modest conditions. Although one is sorry for

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both classes, the hardship to one is not in the same category or of the same order as that to the other.
LORD LLEWELLIN: I understood that the hardship on the former class—those who were coming to the end, say, of their ninety-nine years lease—was met, if they were still the sitting tenants, using the home as a home, by their being covered by the Rent Restriction Acts. I believe that to be the case.
LORD SILKIN: Yes, I agree. It was only that I thought the comparison was perhaps somewhat unfortunate. However, I do not want to carry that point any further. I think this has been a useful debate, and I now beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

LEASEHOLD PROPERTY ACT AND LONG LEASES (SCOTLAND) ACT EXTENSION BILL [H.L.]
5.22 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time.
Moved, that the Bill be now read 2a.—(The Lord Chancellor.)
EARL JOWITT: My Lords, I think the arrangement we have had to-day has been a most convenient one. We have had a general discussion on the White Paper which has really covered the subject matter of this Bill, and I am quite sure that your Lordships do not want to hear any more about this Bill from me now. I have a kind of satisfaction. I have just been looking through the incidents that took place when I introduced the Bill which is now being extended. I see cheery faces opposite me at the present moment, though the same faces were then very hostile to me. There sits the noble Viscount, Lord Buck master, in peace and contentment, but when I introduced my Bill, which is now being extended with his obvious approval and delight, it was described as a measure which utterly violated the sanctity of existing contracts. Very harsh things were said about it. I am glad to think that, notwithstanding all the energy and
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skill which have been employed on this matter, the Government have decided that they can do no better, as a temporary measure, than I did as a temporary measure some year or so ago.
I should like just to add this. I was very surprised to hear the Lord Chancellor say—though I may have misunderstood him—that he thought the system of long leases which had been developed over the centuries was a good and satisfactory system. I think it was an absolutely disastrous system. The whole difficulty of the problem, however, is in knowing what to do now, in view of the fact that that system has lasted so long, that interests have arisen, that money has been invested and things of that sort. That, to my mind, is the real difficulty, and if any of us to-day could start with a clean slate, I venture to say, with great respect to the Lord Chancellor, that I think all of us would say, "Well, this system whereby you had long leases for ninety-nine years—the men who were building the houses and all that sort of thing—has turned out, in the events which have happened, to be a most unhappy system."
It is sometimes (said that the real grievance of these tenants is that they thought the property was theirs. I do not doubt that in some cases that is true. The real trouble is that the situation which exists now, when the lease is coming to an end, is so totally different from the situation that existed when the lease was granted. When the lease started there may, for aught I know, have been plentiful accommodation. Now, unhappily, when the lease has come to an end, there is practically none. The problem which confronts us all is, "What are we to do about it?" I concede at once that it is a very difficult question. I also concede at once that merely repeating the phrase "leasehold enfranchisement," as if it were a kind of incantation, is not to the point. Anybody who has studied this matter knows that the whole problem is: on what terms do you enfranchise your lease? Unless and until you enumerate what those terms are, you cannot do much about it.
I confess that I am sorry that the Government have bolted and barred the door on leasehold enfranchisement. I believe that it would have been useful to have more thought given to this matter. No doubt when we come to

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consider the Bill which is envisaged for the future we shall have an opportunity of considering the matter. That is all I rise to say. I take it as a sincere compliment that the noble and learned Lord is extending for a still further period of time this wholly admirable temporary Bill which I introduced. I call it "wholly admirable," because, although I never liked it, and nobody else liked it very much, we all came to the conclusion that in the circumstances it was the best thing we could do. Her Majesty's Government have obviously come to the same conclusion. Therefore, we shall certainly not oppose the Second Reading of this Bill.
5.28 p.m.
LORD LLEWELLIN: My Lords, I believe that I am in order in speaking again because we are now on another item. As the noble and learned Earl has referred to some smiling and cheerful faces on this side, and said that surely, if we went back to the past, if we could start with a clean slate, we should not have these long leasehold terms at all, I cannot help reminding the noble and learned Earl that he was a member of the Government which started new towns with a clean slate. And the only thing that the development corporation is allowed to do is to let its land on leases not exceeding ninety-nine years. The problems which that situation may create in ninety-nine years none of us can envisage now. After Lord Jowitt's speech, in which he twitted us very pleasantly, if I may say so, I thought I might just rise and twit back on that, because both in the Town and Country Planning Act and in the New Towns Act there is being started exactly the same thing, under, it is true, the development, corporation or the planning authority. But the tenant would be no more happy to know that his reversion goes back to them than he would be to know that it goes back to a private individual.
5.29 p.m.
THE LORD CHANCELLOR: The noble and learned Earl, Lord Jowitt, did not speak on the White Paper which dealt with leasehold enfranchisement, in which case I should have had an opportunity of replying to him, but chose to make his speech upon leasehold enfranchisement in regard to this Bill which does not deal
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with that matter at all. It was rather a strange proceeding, I thought. The noble Earl commented upon the fact that I had said that the leasehold system, and particularly the long leasehold system, worked well. I do not know whether I used those exact words, but the noble Lord, Lord Llewellin, has pointed out that, if I did so, I did so following the example of the Government of which the noble and learned Earl was a member. The leasehold system is a good one, but, like other systems, it is capable of being worked badly by bad men. It is a good system and, on the whole, it has worked very well in this country. Unfortunately, it has given opportunity for had landlords to act badly and, I think, for unreasonable tenants to act badly, too. That is all I want to say.
EARL JOWITT: Is that not the test, after all, of a good or a bad system? If a system enables bad landlords to exploit the situation, is that not, by virtue of that very fact, a bad system? Whilst not attacking the leasehold system as such, I venture to think that the vice of the long lease was that it gave men the chance to exploit, and they did exploit.
THE LORD CHANCELLOR: The noble and learned Earl has made his point, which might better have been made, I think, before the Motion was withdrawn, and the noble Lord, Lord Llewellin, has dealt with it.
With regard to this particular Bill, providing for an extension of the Act which the noble and learned Earl introduced in 1951, there is, of course, this vital difference: that that measure, which provided for a two years' extension period, was not accompanied by any statement as to what was the policy of His Majesty's Government in regard to the future. Our proposed extension by this Bill is mitigated by this: that it does not leave either tenant or landlord in darkness as to what is the future policy of Her Majesty's Government. One cannot tell what may happen before Christmas, 1954; no doubt noble Lords on one side or the other have hopes. But at any rate, the policy of Her Majesty's Government is there laid down, and that, I think, is why the Bill, even though it does inflict a great hardship, as I realise, upon ground landlords, is accepted by them will good will, which the Bill of 1951 was not, because then

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they did not know what legislation was coming in the future.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

HOSPITAL ENDOWMENTS (SCOTLAND) BILL [H.L.]
5.31 p.m.
Order of the Day for the Second Reading read.
THE EARL OF SELKIRK: My Lords, on behalf of my noble friend Lord Home I beg to move the Second Reading of this Bill. Perhaps I should explain its origin. The Hospital Endowments Commission made certain recommendations to the Secretary of State, and it is on those recommendations that the Secretary of State has brought forward this Bill. I should perhaps explain that, under the National Health Service (Scotland) Act, all endowments were transferred on the appointed day to the hospital boards of management. At the same time the Hospital Endowments Commission was set up to prepare schemes which would eventually regulate the management of these endowments. This is different from the system in England where, as I understand it, endowments were transferred to the Endowments Fund and then distributed by the Minister of Health.
The Endowments Commission is under the chairmanship of Sir Sydney Smith. Sir Sydney Smith is very well known in Scotland. He was acting Principal of Edinburgh University, and I had the great pleasure of learning at his feet the subject of forensic medicine, on which he lectures with such great authority. He has recommended that part of these funds should be devoted to research, but although the individual hospital boards can, in fact, use their funds for research, he has felt that this can be more usefully done by an independent body of trustees acting for the whole country. He thinks that adequate funds are available—he estimates them at somewhere in the order of about£120,000 a year. So there is a fairly substantial sum which he considers can be made available for a research trust of this character. It is proper to say that this scheme has been fairly widely canvassed in Scotland, and it is understood that there is a wide
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measure of support for it, both from the hospitals and from the universities. In proposing this arrangement Sir Sydney has, of course, borne in mind the fact that adequate funds must be available to provide reasonable amenities at individual hospitals, and he has said that even when a fund of this character has been provided, the hospitals will be reasonably catered for.
I should perhaps explain the procedure under which the Endowment Commissioners have to operate. It is laid down in the National Health Service (Scotland) Act, and is as follows. They have, first of all, to consult all those whom they consider to be interested in the endowment, including, of course, the endowment trustees. They then draft a scheme; they hear objections, and, if necessary, they hold an inquiry. That is the first step in the formation of the scheme. The next step is to submit the scheme to the Secretary of State, who may approve it with or without modification. The third step is that the scheme is submitted to Parliament, which may annul the scheme if it disapproves of it. I want to emphasise this point, because it is obviously of great interest to people that endowment funds should not be entirely used for what the Endowment Commissioners may think fit, until there has been proper consultation. I have therefore elaborated the procedure, so that it may be clear that there is a very careful system, and that there are regular steps whereby objection can be taken. But over and above all that, it is laid down in the Act that in the working of the Endowment Commissioners regard must be had to the spirit of the intention of the original founders of an endowment. In many cases it is known that the purpose of the founder was to run the hospital. That work is now being carried on by the Exchequer, so that the purpose of the original founder is now defeated and some other purpose has to be found. In this case, it is proper to divert the trust.
The Bill itself is a simple one. It does two things. On the one hand, it sets up a Trust, and then it empowers the Endowment Commissioners to transfer funds to the Trust, which they had not previously the power to do. So far as the Trust itself is concerned, the chairman and members will be appointed by

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the Secretary of State, and it is considered that a small body will be adequate for this purpose—probably about seven people. Not only can they receive funds transferred to them, but they can also receive legacies or gifts, should they become available. They have the task of consulting an advisory committee, as designated by the Secretary of State. The Bill does not say which advisory committee will be consulted, but the Committee to be designated in the first place will be the Advisory Committee on Medical Research, under the distinguished chairmanship of Sir Edward Appleton who is now Principal of Edinburgh University. I should add that this body has links with the Medical Research Council, so that, as far as possible, there will be no overlapping or difficulty. Information gained will be circulated as widely as possible.
The Schedule lays down that accounts shall be kept. There will be submitted an annual report, which will be laid before Parliament. Clause 2 simply gives power to the Endowments Commission to transfer to the central fund. Clause 3 is procedural. I do not think that I need add anything more, except to say that this will be an independent body of Trustees—men of standing. They will have the funds at their disposal, and though they will be authorised to borrow or use capital if they should think fit, in each case the capital will have to be repaid over thirty years. If they wish to extend that period they must obtain the approval of the Secretary of State. May I end, on behalf of Her Majesty's Government, by thanking the Endowment Commissioners for the valuable Memorandum which they have submitted? They have said that to set up a Research Trust for Scotland would be an act of imagination and a constructive step at the present time. I believe that to be the view which your Lordships will take. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2a.—(The Earl of Selkirk.)
5.38 p.m.
LORD INMAN: My Lords, after the reference in the debate earlier this afternoon to the intrusion of Englishmen into Scottish affairs, I feel a little diffident about dealing with this particular matter. As the noble Earl has pointed out, this is the Hospital Endowments (Scotland)
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Bill, and he has given a clear exposition of its provisions. We shall certainly not oppose the Second Reading, though it is quite likely that there will be certain points that we shall wish to deal with on the Committee stage, I was particularly glad to hear the noble Earl give certain safeguards. I have made a note of some of the questions I should have liked to ask; in some cases, he has already answered them. I lay particular stress on money donated for definite purposes being used, if at all possible, for that purpose. This afternoon I looked up the Industrial Health Service (Scotland) Act, 1947, and there it refers to:
"the spirit of the intention of the founder or donor of the endowment to which the scheme relates and in particular to conditions intended to preserve the memory of any person or class of persons…."
I am not an anti-vivisectionist; I can well understand there are those who believe in vivisection, and it would be a gross betrayal of any trust if money which had been left for that particular purpose were used for some other purpose of an entirely opposite character. So I am grateful to learn that a strong committee is to be formed to investigate and listen to complaints of that character.
The second thing I was particularly pleased to hear was that consultations were being held with the other research bodies. I find that there is a danger of overlapping, and this ought to be provided against as far as possible. With regard to these surplus funds which would be taken over, I assume that adequate funds will be left in the hands of the particular committees now existing for maintaining hospitals in Scotland. These are some of the points that have occurred to me in reading through the Bill. We can, of course, deal with matters of detail when we come to the Committee stage. In the meantime, we on these Benches shall not oppose the Second Reading of this Bill.
5.41 p.m.
LORD KINNAIRD: My Lords, I should like to add my voice to those which have been used to congratulate the Department of Health for Scotland—I think it was that Department which conceived this notion. I also wish to congratulate Sir Sydney Smith and the Hospital Endowments Commission whose labours have resulted in this Bill being brought before us. It is of fundamental

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importance. We are glad to hear that it is acceptable to hospital boards, and I am certain that it will be given a tremendous welcome by all the people of Scotland. As the noble Earl, Lord Selkirk, has said, a great deal of this money which is always given for specific purposes in connection with maintaining and running hospitals, cannot now be used for that purpose. I think the idea of giving a large part of that money to research is of immense value to every single member of the community of the country. Everyone stands to gain by it.
I should like to refer for a moment to Clause 1 of the Bill and to ask the noble Earl this question: is it clear that the trustees will be able to take into consideration applications for grants for research work carried on in hospitals outside the National Health Scheme? As the noble Earl knows, there are still voluntary hospitals in Scotland, and as I read the Commission's memorandum most of the references seem to be to regional hospital boards and to hospitals that would be within the National Health Scheme. I would mention hospitals such as those run by the Scottish Branch of the British Red Cross in Scotland. They have two hospitals in the neighbourhood of Aberdeen, at Tor-na-dee and Glen-o'-dee, and research work is done there in connection with tuberculosis. Research work is definitely being carried out, and I think I could say without any fear of being contradicted by the Department that it is research work of great value in the fight against tuberculosis. To run these hospitals at the present time means finding some£30,000 a year in addition to the grants we get. It is a considerable sum, and it is not becoming any easier to get it in these days. So I should like to ask the noble Earl whether he can give me an assurance that voluntary hospitals not in the National Health Scheme may make applications, which will be considered, for grants. There is a further point one might make. In the Explanatory Memorandum, I notice it is stated that the trustees are empowered to accept new gifts and legacies. I would suggest to the noble Earl that if he can give us the assurance that money given by donors will be available for voluntary hospitals, as well as for State hospitals, then I think people
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will be still more willing to give and to leave money to the Trust. I should like, in conclusion, to congratulate the noble Earl on the exposition which he has given of this Bill.
5.45 p.m.
THE EARL OF SELKIRK: My Lords, I should like to thank noble Lords for the warm welcome they have given to this little Bill. I should also like to take this opportunity of welcoming Lord Inman—whom we have not seen here for quite a long time—back to this Chamber. I hope we shall see him frequently in the future. He asked me some specific questions. First, he emphasised—and quite properly—the question of purposes. There is nothing more discouraging to any donor than to see funds diverted to purposes directly antagonistic to the purposes for which they were originally intended. It is implicit in the Bill that this should not be done. I take it that, in some sense, the idea is to find the next best object when the one for which funds were originally intended has, for some reason or other, been superseded. The noble Lord mentioned the question of overlapping. It will obviously be the purpose, not only of the Research Council in Scotland but of the Trustees, to avoid that type of difficulty. Looking at the Report, which the Endowment Commissioners who, after all, are in the best position to judge, have made, I think it is clear that there will in each case be adequate funds available for the hospital management boards. The total capital of the funds amounts to about£13 million, which is a fairly considerable sum, and it was thought that some substantial part, at least, of that should be made available for research.
May I say to the noble Lord, Lord Kinnaird, that I am sure the Scottish Office will appreciate very much what he said about the imaginative understanding with which this Bill has been put forward? I can assure him that the purpose of the Bill is to enable the Trustees to assist any medical purpose that may be brought to their attention if they think it worthy of assistance. It matters not whether the establishment concerned is connected with the National Health Service, or is a private hospital, a university, or any other organisation, if they consider it most useful to promote a

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particular type of research. I have nothing further to add. I hope that your Lordships will agree to give this Bill a Second Reading.
On Question, Bill read 2a; and committed to a Committee of the Whole House.

BIRTHS AND DEATHS REGISTRATION BILL [H.L.]
5.48 p.m.
Amendments reported (according to Order).
House adjourned at eleven minutes before six o'clock.