HL Deb 08 July 1954 vol 188 cc552-612

3.44 p.m.

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

Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF DROGHEDA in the Chair]

Clause 1 agreed to.

Clause 2:

Tenancies to which s. 1 applies

(2) At any time before, but not more than twelve months before, the term date application may be made to the court as respects any long tenancy at a low rent, not being at the time of the applicaion a tenancy as respects which the qualifying condition is fulfilled, for an order declaring that the tenancy is not to be treated for the purposes of this Part of this Act as a tenancy to which the foregoing section applies; and where such an application is made— (b) if the court makes the order, then notwithstanding anything in subsection (1) of this section the tenancy shall not thereafter be treated as a tenancy to which the foregoing section applies.

(5) In this Part of this Act the expression "tenancy at a low rent" means a tenancy the rent payable in respect whereof (or where that rent is a progressive rent, the maximum rent payable in respect whereof) is less than two-thirds of the rateable value of the property comprised in the tenancy; and—

  1. (a) if that property is a dwelling-house to which the Act of 1920 applies apart from the Act of 1939, the expression "rateable value" has in relation to it the same meaning in this subsection as it has in the Act of 1920 in relation to such a dwelling-house;
  2. (b) if that property is not such a dwelling-house, the said expression has in relation to it the same meaning in this subsection as it has in the Act of 1920 in relation to a dwelling-house to which that Act applies by virtue of the Act of 1939.

LORD SILKIN moved, in subsection (2), to add to paragraph (b): unless on the application to the court at any time before the term date a person who did not appear when the order was made satisfies the court that his failure or omission to appear was in all the circumstances reasonable and that the qualifying condition is fulfilled on the date of the application. The noble Lord said: Clause 2 of the Bill deals, amongst other things, with the case of a person who may desire to know some time before the expiration of a lease whether an application is likely to be made by his tenant for a continuation of the tenancy. Subsection (2) of that clause provides that application may be made to the court as respects a tenancy of this kind: At any time before, but not more than twelve months before the expiration of the tenancy, for an order declaring that the tenancy is not to be treated for the purposes of this Part of this Act as a tenancy to which the foregoing section applies. … And if the court makes the Order that this Part of this Bill does not apply to such a tenancy, then whoever is interested, any tenant or other person, is for ever deemed to be barred from taking advantage of the Bill.

I would draw the attention of the Committee again to the actual wording of subsection (2), which, presumably, gives the landlord power to go to the court. It says: At any time before, but not more than twelve months before, the term date application may be made to the court … and so on. It does not say by whom. Presumably, the intention is that it should be the landlord. But I wonder why this subsection does not say plainly by whom the application is to be made. Obviously, it is not going to be the tenant; he will not want to know. Furthermore, if it is the landlord, there is no obligation on him to give notice to anybody of the application. He is not obliged to tell the tenant, apparently, that he is making such an application. According to the wording, an application is made to the court by somebody, and the court may thereupon make an order that the provisions of this Bill do not apply; and if such an order is made, then, whatever may happen thereafter, the tenant has no rights under the Bill. It may be that, at the time the application is made, the tenant has not been served with any notice; it may be that he is away; it may be that the order is made on information which the tenant could have rebutted if he had been there; and it may be that he has been unavoidably prevented from being there. Nevertheless, in spite of all these things, the tenant is barred for ever from taking advantage of the Bill.

I cannot believe that the Government are serious in putting forward this proposal in the words in which they have done it. I concede that it may be a good thing for a landlord to know some time before the end of the term where he stands; but if he wants to know there ought to be an obligation upon him to serve notice on the tenant, and to make quite sure that the tenant receives the notice. The tenant ought to have every opportunity of making his case and explaining that the provisions of this Bill do apply to him. All this should be stated in the Bill, and there should be definite provisions covering it. This Amendment provides that the order of the court declaring that the provisions of this Bill do not apply to the tenancy shall stand unless the tenant is able to establish that his failure to appear when the order was made was not due to any omission on his part and was in all the circumstances reasonable, and that the qualifying condition is fulfilled—in other words, that he had no opportunity of making his case against tthe order, and that the provisions of this Bill ought to apply to him.

I hope the Government will appreciate that some provision of this kind is necessary if justice is to be done to the tenant. I may have to say this over and over again in the course of the afternoon. Whether these particular words do all that I want only the noble and learned Lord or the Parliamentary draftsmen can say. I have no doubt that defects can be found in the wording of every single Amendment that has been put down, except where I am moving to leave out a provision. Nevertheless, I hope that I have made the intention of the Amendment perfectly clear, and that whoever is to reply will not taunt us on this side for our failure to draft Amendments in the way in which they would have been drafted if we had had skilled assistance at our disposal. I beg to move.

Amendment moved— Page 2, line 20, after ("applies") insert the said words.—(Lord Silkin.)

THE LORD CHANCELLOR (LORD SIMONDS)

Let me say at once that whether the wording of this Amendment is clear or not, the noble Lord, as he always does, has made his intentions very clear. I am going to say something which I expect I shall say over and over again, too; and that is this. Every provision in this Bill, almost without exception, is a provision which improves the condition of the tenant. We have constantly to guard against the danger lest, in attempting to ameliorate his position, we go too far. By these provisions we are detracting from the bargain which has been made between the parties, and we are doing so because we think that circumstances have arisen, uncontemplated at the time these leases were entered into, which make it equitable that that should be done. But we are anxious to do justice between the parties.

Now the first element of justice in regard to this matter is this. The landlord, who until the provisions of this Bill were known to him was entitled to assume that the bargain that he had made would be carried out, is entitled to know beyond all doubt whether or not at the date of the termination of his lease the provisions of the Bill are to operate in favour of his tenant. In nine cases out of ten, or in ninety-nine cases out of a hundred, I dare say there will be no doubt upon that fact. But if there is a case in which a doubt arises, he is entitled to go to the court to ascertain what his position will be upon the date of termination, because, according to what the position is, so he must make his plans. It may be that he wants to redevelop. It may be that he is content that the tenant should stay on. His plans may be what you like; but he is entitled to know the position. If this Amendment, or any Amendment which carries out the intention of the noble Lord, is inserted into the Bill, the very purpose of this provision will be defeated; for until the last hour the landlord will not know whether the tenant will come forward and say, "I did not know what was happening; I was away," or whatever it may be; and so the landlord's plans are defeated. That cannot be right.

Let me tell the noble Lord what this Bill does provide, which will really give as much relief to the tenant in default as he is entitled to. The landlord goes to the court, and from the court he will get a judgment. I am prepared to say—indeed, it is implicit in the Bill—that exactly the same provisions will apply to the tenant as to any defendant in the county court. It is impossible that he should not have knowledge of the proceedings except by some default of his own—avoiding service or something of that kind. As the noble Lord knows, better probably than I do, the rules of procedure in the county court are strict to ensure service. There must be an affidavit of service; or good reasons must be shown, when the case comes before the court, why judgment should be given against the defendant in default of his appearance. There is no reason why, in proceedings under this Bill, a man should be in any better position than in any other proceedings on which he is brought before the county court. There are ample precautions taken in the county court to see that the defendant has knowledge of the proceedings.

Further, the tenant will get the advantage, as do all other defendants in the law courts, of the provisions of the County Court Rules. Order 37, Rule 1, of the County Court Rules provides that: The judge shall in every case have the power to order a new trial to be had upon terms as he thinks reasonable, and in the meantime to stay the proceedings. An application for a new trial may be made"— and so on. Observe Rule 2. It says: Where a defendant to an action or a defendant to a counter-claim does not appear at the hearing, and a judgment or order is given or made against him in his absence, the judgment or order and any execution thereon may, on application, be set aside and a new trial may be granted. I am prepared to say—because it will be my duty to frame the Rules under this Act—that the tenant who is made a defendant to these proceedings will get exactly that relief under the County Court Rules. I am sure that when the noble Lord considers it he will see that there can be no reason why a defendant in such proceedings as these should be placed in a more favourable position than any other defendant against whom a suit is brought. Indeed, I would venture to say that we are going a very long way, in the special circumstances which exist here, in giving him the same measure of relief as we give to other defendants in county court proceedings. I hope the noble Lord will agree that we go as far as is reasonable to meet him in his suggestion. I hope he will think we have gone as far as we can to meet the case where a defendant, for one reason or other, has failed to appear and has failed to give reasons why he should be brought within the provisions of the Bill.

LORD CHORLEY

Did the noble and learned Lord say that he was framing Rules under this Bill?

THE LORD CHANCELLOR

The Bill provides for Rules to be made, yes.

LORD CHORLEY

Would the noble and learned Lord tell me whether the Rules will, so to speak, link this matter up more clearly with the existing County Court Rules? The noble and learned Lord knows far more about this matter than I do, but I did not feel convinced that the County Court Rules which he read out would necessarily apply to an application of this kind. They were framed to apply to the ordinary litigation in a county court.

THE LORD CHANCELLOR

I have told the Committee that the Rules which I propose to make will so provide.

LORD CHORLEY

I am obliged to the noble and learned Lord.

LORD SILKIN

In a sense, the noble and learned Lord has given me what I want. All I want is that the person who is most affected by this clause—namely, the tenant—should clearly be aware of any application that has been made. If he has not been aware of it, through no misconduct or default on his part, he should have an opportunity of going back to the court. If the noble and learned Lord says that the Rules will be made so as to ensure that that is the case, and that the tenant will have the advantage of the provisions which he read out—with which I am quite familiar, although I did not see how they related to this provision—that is all I want. On his assurance, I gladly withdraw the Amendment.

Amendment, by leave, withdrawn.

4.0 p.m.

LORD SILKIN moved, in subsection (5), after the second "tenancy" to insert "of a dwelling-house." The noble Lord said: I beg to move this Amendment which is linked up with Amendment No. 3. When I referred to bad draftsmanship a moment ago, let me say at once that I had this particular Amendment in mind, among others. The purpose of this Amendment—frankly, I am not sure whether in fact it fulfils it—is to raise the question as to the class of persons to whom the Bill is to apply. As the Bill stands, it applies to persons living in houses which have rateable values within the limits to which the Rent Restrictions Acts apply. Therefore, if a person is living in a house with a long lease and with a rateable value, in London, of more than £100 a year or, in the country, of more than £70 a year, then the provisions of this Bill do not apply. The purpose of my Amendment is to ensure that, by leaving out these limits—and that is what the Amendment does: it cuts out the limits—the provisions of this Part of the Bill will apply to anybody who has a tenancy at a low rent, as defined in the Bill.

I discussed the merits of this matter, to a certain extent, on Second Reading. It seemed to me anomalous that the protection which this Bill provides, not only for persons living in dwelling-houses but also for persons in business, so that at the end of their tenancy they get some kind of security, should stop short at just this section of the community who are living in houses with the higher rateable values. It is all the more curious that these same people are protected in their shops, their offices or their factories. No limits are prescribed at all. Any person who has a business with a rateable value of £10,000 a year is nevertheless protected at the end of his tenancy under Part II of the Bill. Indeed, everybody is protected except this relatively small section of people the leases of whose homes come to an end and in respect of whose houses the rateable value is higher than the prescribed limit.

Who are these people, by and large? It is no good noble Lords opposite talking of very wealthy persons. There are a limited number of those, of course. The noble and learned Lord referred to himself. I put him in the category of wealthy. There are a number of very wealthy people whose leases will come to an end, and this House might say, if it wanted to: "We are not out to protect them. They can look after themselves." Perhaps they can, although, for the sake of uniformity, I should not myself have wanted to exclude them. This Bill protects most people whose tenancy in respect of their homes or their businesses comes to an end. I see no particular reason for leaving out anybody. But we are not really talking about wealthy people; we are talking about the large section of the population whom we generally describe as the middle classes.

In my Second Reading speech the other day I referred to the people in Dulwich. Dulwich seems to me typical of the districts in which the kind of person I have in mind lives, and, as I said then, it happens to be a district in which I have myself lived very happily for a number of years. Many of the people living there are living in houses where the rateable value is somewhat higher than £100 a year. It so happens that a good many of the leases in that district are coming to an end. I make no reflection in this House, nor would I do outside, against the landlords of those houses. I have no doubt that they will perhaps come to reasonable arrangements with the tenants at the end of the lease—I do not know. I am not suggesting that they will not. What I do suggest, however, is that the tenant at the expiration of the lease is entirely at the mercy of the landlord. That is exactly what we are seeking to prevent.

In the case of tenants of houses at a lower rateable value than £100 a year, we are trying to give them a reasonable opportunity of bargaining as to what is a fair rent and of having their future rent settled by the court, if they cannot come to an agreement. This considerable and most worthy section of the community, of whom I am speaking, however, will have no such opportunity. They will have to accept what the landlord requires, or get out. They will have no opportunity of getting a fair rent settled by the court. Frankly, I do not understand why they should be left out. What are the reasons that have been given? From time to time, out of the lips of various Ministers and others, it has been suggested that these people are in a position to look after themselves. Are they in a position to look after themselves? They are not; and anyone who knows anything about housing conditions in London knows perfectly well that some of the people of whom I am thinking, people whose incomes are between £1,000 and £1,500 a year, are suffering the greatest possible hardship through being compelled to pay very high rents, more than they can afford, owing to the scarcity of accommodation, or to buy their houses at prices which are considerably inflated—though I am glad to say not quite so inflated as they were a year ago. The noble and learned Lord must not make any Party capital out of that fact. The rents are extremely high and more than the people can afford to pay.

I said in my previous speech that the Party opposite are posing as champions of the middle classes. Then why do they deliberately leave them out of the provisions of this Bill? One reason given is that they can look after themselves. I reject that entirely. I admit that people of the highest incomes may be able to do so, but not the kind of people of whom I am thinking and large numbers of whom I know personally. They are not in a position to look after themselves. They are suffering great hardship. Many of them are educating their children at considerable cost and they are having a hard battle. If, at the end of their term, they are forced to pay whatever rents may be demanded of them, without any redress on their part, the hardship on them is going to be great.

The second argument that has been put forward is that it would not be consistent with the general policy of this Bill; that this Bill provides for protection of dwelling-houses within the rent restricted limits and it would be dangerous, wrong or improper to go outside those limits. I recognise that this is a major Amendment, in the sense that, if it were carried, it would involve major Amendments to the structure of the Bill. Nevertheless, that is not really an argument for not accepting this Amendment. Let there be such drastic Amendments to the Bill to provide for people of that category. I see no reason why that should not be so. Of course there will be consequential Amendments. Another argument raised (and I imagine the noble and learned Lord is going to deal with this point) is why, if we think so much of it, did we not do it ourselves? I have heard the noble and learned Lord ask that before. Well, we did not do so, and I think we ought to have done. But if noble Lords opposite can rest only on the imperfections of their predecessors, and suggest that they are not prepared to do any better than their predecessors, what is the justification for their existence at all? I imagine they are here to put right all the defects, omissions and imperfections of their predecessors, and if their predecessors failed to protect adequately this particular section of the community, why do they not do so and look after them—or is it that this section is comprised of pariahs and outcasts and nobody is going to look after them at all?

I hope that noble Lords opposite will give sympathetic consideration to this question. It is a grave question and I can assure noble Lords that it is worrying a large number of people. Noble Lords opposite may know that a considerable number of leasehold tenants' associations are growing up all over London. Among the strongest of them are the leaseholders in places like Dulwich, Lewisham, and other areas where there are a considerable number of houses that would be affected. These people are very worried indeed about their future, and if noble Lords opposite can do something to reassure them, this Bill will have been worth while. I beg to move.

Amendment moved— Page 2, line 33, after ("tenancy") insert ("of a dwelling-house").—(Lord Silkin.)

LORD OGMORE

I should like to support my noble friend Lord Silkin in this Amendment, which I think is a very reasonable one, for two reasons. First, any line drawn is bound to be an arbitrary line. The line in London is drawn at £100, and it is about £30 less in other parts of the kingdom; but it was a purely arbitrary line when it was drawn; it is an arbitrary line now, and of course any line of that kind means that considerable hardships may be caused to those coming above the line. I think the reasons which impelled the Legislature over a series of years to have a Rent Restrictions Act, and to have amending Acts, apply to a very large extent to those who have houses of a rateable value above £100, as well as to those with houses below, particularly in London, where rateable values are so very high.

The second reason I would give is that money has been falling in value for many years, and certainly has been falling considerably in value since 1914, when the first Rent Restrictions Act was passed; what was a reasonable figure in 1914, and even in 1920, when the second Act was passed, may not be reasonable to-day, when rentals and rateable values are so much higher than they were then. If one takes into account the considerable fall in the value of money, a large number of houses which in those days would have been caught within the net of the Rent Restrictions Act would not be caught to-day.

On Second Reading, my noble friend Lord Silkin mentioned this particular view of his, and of others in our Party, on this particular issue, and we were countered by the extraordinary arguments of Lord Mancroft which I am quite sure the noble and learned Lord the Lord Chancellor will not repeat—at least, I hope he will not. First of all, said Lord Mancroft, he was surprised to hear that we had any regard for people who lived in houses above a rateable value of £100 a year, because for six and a half years we had been engaged in "strangling" them. Of course, that is quite untrue; we have not been "strangling" anybody. But even if we had, surely that is a reason for unstrangling them; it is not a reason for continuing the strangulation, which is what the Government propose to do. The noble Lord's second argument against this proposal which was even more extraordinary, was that for four generations his family has been occupying a house of which the landlord is Lord Portman. Why that sort of argument should be adduced in a House of Peers against a proposal in a Bill, I cannot understand; it seems to have nothing to do with it.

LORD MANCROFT

It was not supposed to have anything to do with it.

LORD OGMORE

If it was not supposed to have anything to do with it, I do not know why it was put up as a sort of argument against this proposition. I think the noble Lord appears to have been trifling with the House. But we were not trifling with the House—we were putting up a very serious proposition, and we expected that the Government spokesman would treat it in the manner in which we had put it before your Lordships. If, as the noble Lord now says, his remark was not supposed to have any relevance, then I will not refer to it any longer. I certainly think that the Committee should most seriously consider this Amendment, which, as I have said, will bring within the scope of this measure, a large number of premises where people are feeling the pinch of modern times. I strongly support the Amendment.

THE LORD CHANCELLOR

The last thing that my noble friend Lord Mancroft intended to do was to trifle with the House. He was, I think, making a declaration of the "self-interest" point, and the last thing he did, or intended to do, was to treat the House with levity on a serious or any other question. I must say that I have been completely surprised by this Amendment. Until the noble Lord, Lord Silkin, was good enough to speak to me on the Woolsack I had no idea whatever—and I do not think I could have had any idea—that by this Amendment he intended to raise the very large question of whether the scope of this Bill should be enlarged so as to embrace a large class of people who are not entitled to the benefit of the Rent Acts.

If the noble Lord will be good enough to look back to Clause 2 (1) of the Bill he will see that it is there implicit that we are dealing with a class of tenants who would be subject to the Rent Acts, but for the fact that their rent is low. Let me read it, and the noble Lord will follow: The foregoing section applies to any long tenancy at a low rent, being a tenancy as respects which for the time being the following condition (hereinafter referred to as 'the qualifying condition') is fulfilled, that is to say that the circumstances (as respects the property comprised in the tenancy, the use of that property, and all other relevant matters) are such that on the coming to an end of the tenancy at that time the tenant would, if the tenancy had not been one at a low rent, be entitled by virtue of the Rent Acts to retain possession of the whole or part of the property comprised in the tenancy. From beginning to end of the first Part of the Bill we are dealing with that sort of case, and with nothing else. Accordingly, when I read the noble Lord's Amendment, I thought that he merely wished to be enlightened as to the meaning of subsection (5) (a) and (b), because I am bound to say they are a little difficult to understand.

Now, however, the noble Lord has raised a question which is indeed far-reaching, because he wishes to include within the scope of this Bill, and therefore pro tanto within the scope of the Rent Acts, a class of person who, rightly or wrongly, from 1915 onwards—for nearly forty years—by the consent of all Parties, has not been brought within the protection of the Rent Acts. With great respect, this is not the way or the time to do that. I would ask, as I have done before, why did not our predecessors do it? I am far from saying that everything done, or omitted to be done, in the past was wrong. But, quite rightly, and by the consent of all Parties, for forty years persons whose premises were rated at above a certain amount have been excluded from the protection of the Rent Acts. Are we now, at this moment, to alter that, when there never has been any sort of discussion or suggestion that that should be so?

As the noble Lord has said, to do so would be a major Amendment: it would involve, so far as I can tell from a cursory glance, a great deal of amendment throughout this Bill. It is wholly alien to its purpose, and for that reason I really cannot advise this House to accept this Amendment. I am not without sympathy—I do not think any of us is without sympathy—for the class of tenant to whom the noble Lord has referred, occupying premises at Dulwich; but that is a matter which will have to be considered on a separate occasion if and when a general amendment of the Rent Acts is considered. Although I am not egalitarian by philosophy, I should regard it as a grave injustice if all people who are now occupying premises at a rateable value above that prescribed by the Rent Acts were not to get relief but under this Bill persons who had held long leases were to get such relief. It would be an anomaly which would be intolerable, and would not be tolerated by the people of this country. Accordingly, although one may feel sympathy for that class of person, I cannot advise your Lordships' House to accept this Amendment.

4.23 p.m.

LORD SILKIN

I cannot feel this reply is as satisfactory as the last one. The noble and learned Lord has quoted the reference to premises comprised within the Rent Acts. That is there in order to define the kind of premises to which protection should be given. There is nothing sacrosanct about those words, and if this Committee were desirous of giving protection to a wider section of the community there is no earthly reason why we should be debarred, because of those words, from so doing. I have admitted that this is not the happiest piece of drafting that I have attempted in my life. I admit that it is exceedingly difficult to redraft this Bill in such a way as to widen it in the way I had hoped, but if it is desired to do so, I do not think the mere difficulties of drafting should stand in the way. Nor do I think the fact that certain classes have been protected for forty years under the Rent Acts should stand in the way. This is not a protection under the Rent Acts, this is merely a reference to the Rent Acts which defines the scope of the protection to be given to people at the end of their long tenancy. There is no reason why that should be defined by reference to the Rent Acts. That can be defined in any other way desired, either by reference to a very much higher rateable value, or (as I would wish) without

LORD SILKIN

I beg to move this Amendment. I do not think I need say anything about it, because it is really part of the Amendment that we have just been discussing. I beg to move.

any reference to rateable value at all. The noble and learned Lord has not really addressed himself to the merits of this Amendment. He has told the Committee that he has great sympathy, but beyond that he has not addressed himself to the merits of his own difficulty, which is one of machinery. Unless we can get a much more satisfactory and reassuring reply to this, I feel that we shall have to divide the Committee as an indication of the seriousness with which we take this Amendment.

On Question, Whether the Amendment shall be agreed to?

Their Lordships divided: Contents, 15; Not-Contents, 66.

CONTENTS
Cork and Orrery, E. Stansgate, V. Macpherson of Drumochter, L.
Jowitt, E. Ogmore, L.
Boyd-Orr, L. Pethick-Lawrence, L.
Alexander of Hillsborough, V. [Teller.] Chorley, L. Shepherd, L. [Teller.]
Henderson, L. Silkin, L.
Hall, V. Hungarton, L. Sinha, L.
NOT-CONTENTS
Simonds, L. (L. Chancellor.) Davidson, V. Fairfax of Cameron, L.
Furness, V. Foley, L.
Salisbury, M. (L. President.) Goschen, V. Gifford, L.
Leathers, V. Hampton, L.
Cholmondeley, M. Monsell, V. Harvey, L.
Reading, M. Stonehaven, V. Hawke, L.
Willingdon, M. Swinton, V. Howard of Glossop, L.
Waverley, V. Jeffreys, L.
Alexander of Tunis, E. Woolton, V. Leconfield, L.
Birkenhead, E. [Teller.] Lloyd, L.
De La Warr, E. Aberdare, L. Mancroft, L.
Dundonald, E. Ailwyn, L. Monk Bretton, L.
Glasgow, E. Balfour of Inchrye, L. Moyne, L.
Haddington, E. Bennett of Edgbaston, L. Rathcavan, L.
Lindsay, E. Brabazon of Tara, L. Remnant, L.
Morley, E. Brassey of Apethorpe, L. Rockley, L.
Munster, E. Broughshane, L. St. Junst, L.
Onslow, E. [Teller.] Carrington, L. Salter, L.
Rothes, E. Chesham, L. Saltoun, L.
Selborne, E. De L'Isle and Dudley, L. Savile, L.
Stair, E. Derwent, L. Strathcona and Mount Royal, L.
Dovercourt, L. Stratheden and Campbell, L.
Allenby, V. Dunleath, L. Teviot, L.
Bridgeman, V. Ebbisham, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Amendment moved— Page 2, line 36, leave out all words after ("tenancy") to end of line 46.—(Lord Silkin.)

On Question, Amendment negatived.

Clause 2 agreed to.

Clauses 3 to 5 agreed to.

Clause 6 [Application of Rent Acts where tenant retains possession]:

4.36 p.m.

LORD MANCROFT

This Government Amendment is designed to secure that the standard rent fixed under Part I of the Bill cannot be increased by a "repairs increase" under the Housing Repairs and Rents Bill, which has recently been through your Lordships' House and your Lordships' Amendments to which, I believe, are being discussed in another place this very day. The standard rent will be an up-to-date rent fixed in the light of the landlord's repairing obligations under the statutory tenancy, and there is therefore no need for a repairs increase. I think your Lordships will appreciate that this Amendment is in the tenant's interest and is wholly equitable. I beg to move.

Amendment moved—

Page 6, line 8, at end insert— ("(5) Subsections (1) and (2) of section twenty-three of the Housing Repairs and Rents Act, 1954, shall not apply where the standard rent of the dwelling-house (within the meaning of that section) is a rent agreed or determined in accordance with the next following section.")—(Lord Mancroft.)

On Question, Amendment agreed to.

Clause 6, as amended, agreed to.

Clause 7 [Settlement of terms of statutory tenancy]:

LORD MANCROFT

This Amendment and the Amendment which follows are purely drafting. They are quite uncontentious, and there is no point to which I think I need to draw your Lordships' attention. So, in order to save time, I will, with the permission of the Committee, move them formally, unless, of course, any of your Lordships desires further information on them. I beg to move.

Amendment moved— Page 7, line 21, leave out from ("shall") to ("so") in line 23 and insert ("be made during the currency of the landlord's notice proposing a statutory tenancy and not earlier than two months after the giving thereof.").—(Lord Mancroft.)

On Question, Amendment agreed to.

LORD MANCROFT

As I have indicated, this next Amendment is consequential. I beg to move.

Amendment moved— Page 7, line 26, leave out paragraph (b).—(Lord Mancroft.)

On Question, Amendment agreed to.

Clause 7, as amended, agreed to.

Clause 8:

Provisions as to repairs during period of statutory tenancy

(3) Nothing in subsection (1) of this section shall be construed as preventing the making of an agreement between the landlord and the tenant for the carrying out by the tenant at his own expense of repairs (hereinafter referred to as "tenant's initial repairs") specified in the agreement.

(5) The matters referred to in paragraph (d) of subsection (2) of the last foregoing section are: (c) whether any payment for accrued tenant's repairs is to be payable by instalments or otherwise, and if by instalments the number of instalments and the time at which each instalment is to be payable:

4.38 p.m.

LORD SILKIN moved, in subsection (3), at the beginning to insert: Where the tenant is willing to carry out at his own expense repairs (hereinafter referred to as 'tenant's initial repairs')

The noble Lord said: This Amendment and the one which follows it should be read together, and with the permission of the Committee I will discuss them together. The purpose of the first Amendment is to permit the tenant to carry out the repairs himself if he so desires. Admittedly, the tenant has, presumably, made default in his obligations under the lease. The Bill, as it stands, however, provides that if the tenant desires to continue his tenancy it is for the landlord to decide what repairs shall be carried out, and for the tenant to pay the cost of those repairs. In default of agreement, the matter goes to the court. The purpose of the Amendment is that in such cases it should be open to the tenant to say that he will do the repairs, and if the landlord agrees and they come to terms as to the basis upon which the repairs shall be carried out, well and good. If, however, they fail to agree, the matter should be settled by the court in the same way as if the landlord were carrying out the repairs. In other words, the purpose of the Amendment is to give the tenant the first option to carry out the necessary repairs to the premises at the expiration of his lease. I do not think it requires much advocacy on my part to justify that. They are tenant's repairs, and if the tenant is willing to do them there is no reason that I can see why he should be prevented from doing them, so long as he carries out such repairs as are necessary in order to bring the premises within the definition of good repair as laid down in this Bill. With those few words—and I hope it will not be necessary to amplify them—I beg to move.

Amendment moved— Page 8, line 11, at beginning insert the said words.—(Lord Silkin.)

THE LORD CHANCELLOR

I think the idea behind this Amendment is a very fair one and it has been supported by cogent arguments. The language which the noble Lord proposes to insert is not exactly apt, but I am willing to accept the idea and I am prepared to move an Amendment on Report stage which will give full effect to his proposal. I hope the noble Lord will find it possible to withdraw his Amendment upon my assurance.

LORD SILKIN

In those circumstances, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD MANCROFT

This Amendment is largely drafting, in consequence of a small error of logic in subsection (5) of this clause. I beg to move.

Amendment moved— Page 8, line 33, leave out from the first ("the") to end of line 34, and insert ("amount of each instalment (subject to any necessary reduction of the last), the time at which the first is to be payable and the frequency of the instalments;").—(Lord Mancroft.)

On Question, Amendment agreed to.

Clause 8, as amended, agreed to.

Clause 9:

Principles to be observed in determining terms of statutory tenancy as to repairs and rent

(4) Where it falls to the court to determine the rent which should be the standard rent of the dwelling-house during the period of the statutory tenancy, the court shall have regard in particular—

  1. (a) to the state of repair of the dwelling-house which may be expected to subsist after the completion of the initial repairs (if any) to be carried out by the landlord or, in the 570 absence of any agreement or determination requiring the carrying out of initial repairs, to the state of repair at the time of the court's determination, and
  2. (b) to the terms (other than terms as to rent, as to initial repairs and as to any payment for accrued tenant's repairs) which will have effect as respects the dwelling-house during the period of the statutory tenancy.
and the rent determined by the court shall be the rent which, irrespective of the personal circumstances of the parties, in its opinion would be a reasonable rent for the dwelling-house on a letting in that state of repair and on those terms.

LORD SILKIN moved to add to subsection (4): there being disregarded any effect on rent of—

  1. (i) the scarcity of similar dwellings in the locality of the dwelling-house,
  2. (ii) any improvement carried out by the tenant or a predecessor in title of his otherwise than in pursuance of an obligation to his immediate landlord."

The noble Lord said: We now come to what is probably the most controversial clause in the Bill. It deals with the rent which will become payable in respect of a dwelling-house to which this Part of the Bill applies at the expiration of tenancy. Broadly speaking, it provides that where no agreement is possible between landlord and tenant, the rent is to be the market rent. In another place there were strong feelings about this matter. It was felt by members of my Party that the market rent was much too high, and that a proper rent would be the rent which would have been payable if the premises had been rent-controlled, as it was suggested they should have been and would have been but for an oversight, and that to put upon the tenant the burden of paying the market rent, when for so many years he had been paying a ground rent, would be an intolerable burden.

I would ask the Committee to appreciate what will be the case under the Bill as it stands. Many tenants are paying at the present time ground rent of £5. £6 or £7 a year. Few of those within the range of this Bill will be paying more than £10 a year. Then, suddenly, this Bill will impose upon them the burden of paying, ten, fifteen or twenty times the rent they have been accustomed to paying. That would be a great hardship on them. This matter has been discussed in another place in Committee, on Report and on Third Reading, and the Government have not seen fit to give way. I do not imagine that they will give way to-day on the principle which my colleagues in another place have put forward, and I do not propose to ask them to do so. My own Amendment is one which, in my view, they could more easily accept. It is a compromise, and I believe it is one which most Members of this Committee will agree with in principle.

The first part of the Amendment deals with the scarcity element in the market value of rents. We all know that there is a scarcity element in fixing market rents. That is an element which time may gradually cause to disappear, but at the moment anybody who has premises with vacant possession can get considerably more than the intrinsic value of the rent of those premises. By "intrinsic" I have in mind what the cost would be to build similar premises, a reasonable rent having some kind of relationship between pre-war rent and present rent, having regard to changes in the value of money, and so on. But we all know that in many cases rents have quadrupled since the war and there is a considerable element of scarcity value in any dwelling-house which is available to rent at the present time. The purpose of paragraph (i) is that if the matter goes to the court and the court has to decide on the rent, the court should disregard any effect on rent of "the scarcity of similar dwellings in the locality of the dwelling-house."

In the framework of the Amendment there is a precedent—perhaps "precedent" is the wrong word, because it is contained in Clause 34 of the Bill, where similarly the court is asked to determine the rent in a case where parties fail to agree and the court is enjoined to disregard certain factors. One factor is: Any effect on rent of the fact that the tenant has or his predecessor in title have been in occupation of the holding, and there are a number of provisions which the court is enjoined to disregard in settling the rent. Therefore, I hope the noble and learned Lord the Lord Chancellor will not gibe me in respect to the form of my Amendment, as he did on a previous occasion.

THE LORD CHANCELLOR

I am sorry if I gibed.

LORD SILKIN

Criticised in a friendly way, then. I have a precedent for the form of this Amendment. There should be no difficulty in the disregarding of certain factors by the court. The other thing the court has to disregard under this Amendment is the effect on the rent of any improvements carried out by the tenant without his being required to do so under the terms of his lease. The Committee will know that many tenants with long leases have considerably improved their premises. Possibly they have put in an extra bathroom, or a garage, and have done all sorts of things by way of improvement and modernisation to their premises which they were under no obligation to do under the terms of their lease. We know perfectly well that they have done it with the knowledge that under the terms of their lease they were obliged to surrender the premises in good condition and even, presumably, to put those parts of the premises they have added equally in good condition.

The Committee on Leaseholds gave consideration to this question of whether the tenant should be compensated for the value of these improvements, and they recommended that he should; but for the reasons which appear in the Government White Paper on the subject, the Government have not been prepared to accept this recommendation. They have said: "The tenant did this with his eyes open; he knew he was going to have to give up the premises. These improvements may not be of any particular value to the landlord; he may not even have wanted them; they may not suit his particular idiosyncracies; he may not want an extra bathroom, garage and so on, even though it may have increased the rental value." Now the purpose of my Amendment is not to argue this point again. For the purpose of this Amendment I am accepting the decision of the Government that the tenant should not be compensated in respect of these improvements, although, curiously enough, in another part of the Bill where it applies to business premises, the tenant is compensated for improvements he has carried out; but I am not suggesting that that should be the case here. What I am asking is that rents should not be increased to the tenant while he is a statutory tenant simply because he has improved the premises in such a way as to increase the rental value.

Of course, if the improvements that he has carried out are of such a nature that they do not really improve the premises at all, and certainly do not increase the rental value, then this provision will not apply. The court will disregard any such improvements because there is no increase in rental value. But I am supposing that there is an increase in rental value brought about entirely as a result of the improvements which the tenant has carried out. Is it really fair that he should be called upon to pay an increased rent because he has carried out these improvements. I submit that the landlord will get the benefit of the improvements without paying compensation. That is in the Bill. But it is really going too far to say that in addition to the landlord's getting the benefit of the improvements, and in spite of the recommendation of the Leaseholds Committee, the tenant should also pay an increased rent because of these improvements.

I come back to the scarcity point. What is the case against it? Why should the tenant be called upon to pay over and above a fair rental—I hope we are really trying to get at what is a fair rent—if he holds over? Is not a fair rent a rent which will give the landlord a reasonable return, not an unreasonable one? Surely noble Lords opposite are not justifying any landlord in charging an extortionate rent, a rent he could get, simply because there is a scarcity of similar dwelling-houses in the neighbourhood? If we accept the principle that it should be a fair rent, I ask the Government to lay down that the court should be able to decide what is a fair rent and to eliminate any factor of scarcity. Is it really difficult for a court to do this? While we are imposing so many decisions upon the court, so many things they are called upon to decide—and if noble Lords will look at Clause 34 they will see some of the things the court are asked to determine—I should have thought it would not be at all difficult for the court to form a judgment what is a fair rent, disregarding the element of scarcity.

I hope the noble and learned Lord, who has at last broken the ice in accepting the principle of an earlier Amend- ment, will see that this is really a reasonable one. We on this side have gone a long way to accepting the basis on which rents have been settled. We have gone a long way, and we are not moving an Amendment that the rent should be equivalent to a rent-controlled rent. We accept the principle of a market rent, but we ask that the scarcity factor should be eliminated.

Amendment moved— Page 9, line 39, at end, insert the said words.—(Lord Silkin.)

4.55 p.m.

LORD OGMORE

I think this is another case in which the Government, having started so well, should acquiesce in our desire to see this Amendment, or something like it, embodied in the Bill, because the question of what is a reasonable rent or a market rent is a very difficult matter to define. We are already told in subsection (4) that the court is to disregard the personal circumstances of the tenant and is to have regard to certain other things, such as the state of repair and the terms upon which the premises are held. We ask that the court should also disregard two other matters, not only the personal circumstances but the scarcity value of the premises and ally improvements over and above those which the tenant is obliged to make, and has made, to the premises. I entirely agree with the noble Lord, Lord Silkin on this matter. These are circumstances which the court ought not to take into account.

On the question of scarcity, the court would be acting in line with the general principles which assessment committees, rating committees, and so on, have followed in this country for many years. So far as dwelling-houses are concerned, it has always been the practice to disregard scarcity value in assessing the gross and rateable values. There are eleven million dwelling-houses in this country, not one of which is rated on scarcity value. They are rated on the basis that there is an open market; that there are plenty of houses in the market, and that there are willing landlords and equally willing tenants—a state of affairs that has not existed for many years in this country. So scarcity already applies—or, shall I rather say, the ignoring of scarcity values already applies—through-out the whole of the rating system as it applies to dwelling-houses. We ask the Government now to apply it also in this particular case. The other point your Lordships will know better than I do. As regards agricultural holdings, special circumstances are often included as a statutory provision where tenants have made substantial improvements. It seems very hard that where a tenant has made substantial improvements to premises which he need not have made—and the landlord will get the benefit of them in the long run—he should be prejudiced by having to pay more rent than he otherwise would. It seems that unless this particular provision is amended, it will penalise the good tenant and will operate to the benefit of the bad tenant, and I am sure that all your Lordships, in whatever part of the House you sit, would not wish that.

THE LORD CHANCELLOR

The noble Lord said that I have broken the ice—that may be. But I do not think it is quite right that he should then ask me to fall through; and I should fall right through if I conceded this Amendment. I said that I should have to repeat my opening words more than once, and I am afraid that I must do so now. Let us consider where we start. The noble Lord, Lord Silkin, and the noble Lord, Lord Ogmore, have both referred to the unfortunate tenant. This Bill is a marvellous charter for the tenant. Just consider what the position of the so-called unfortunate tenant would be but for this Bill: he would have to go out when the lease terminated; that is what he expected, and it was upon that footing that he got his lease. Your Lordships all know that leases have changed hands in the market over and over again upon a value fixed by reference to the fact that at the term date the tenant would have to go, and would have to meet the obligations of the lessee under the lease. That is the position of the lessee; and anything which departs from that is a concession to him and is his good fortune. It is really a misuse of language to speak of the "unfortunate tenant," when all that is happening to the tenant here is that he is getting substantial benefits and relief from his obligation.

Under the provisions of this Bill, the tenant will be enabled, if he wishes, to stay on. That gives him a security of tenure which, above all things, he desires. If he is to stay on, is it not right that he should stay on upon terms which are fair to the landlord, who, but for the provisions of this Bill, would obtain possession of the premises—and, I may say, possession of premises which have been repaired in accordance with the repairing covenants in the lease? Everything that departs from that is a concession. Upon what terms ought the lessee to stay on, so far as rent is concerned. This question of scarcity is no doubt one of great difficulty. But, in spite of what the noble Lord, Lord Ogmore, says, we are advised—and I believe it to be absolutely right to say this—that it would be impossible to tell the court to disregard scarcity as a single factor in the element of market value of the premises.

I think I have warranty for that statement in this: that when, in 1949, the Government of which the noble Lords were members set up tribunals under the Landlord and Tenant (Rent Control) Act, 1949, when the question of scarcity must have been very much in their minds, what they directed the tribunals to do was to assess a "reasonable rent." Those are the very words which we have adopted in this Bill, because we think that what the tenant ought to pay, and what the landlord is entitled to, is a reasonable rent in all the circumstances. We are happy to find ourselves so completely in union with noble Lords opposite upon that point. We think, as I expect they thought (for I cannot believe that the point was absent from their minds) that it is sufficient for the tenant to tell the court—it does not matter whether it is a court or a rent tribunal—to fix a rent which is reasonable in all the circumstances. That is what we invite the court to do here, just as that is what noble Lords opposite required the rent tribunals to do under the Act of 1949.

With regard to the second point, I make much the same observations. A tenant who has effected improvements, so-called—it is often difficult to determine whether or not they are, in fact, improvements—has done so with the full knowledge that when the term date arrives he will have to give up his premises; and he has thought it worth while to make those improvements upon that footing. But apart from the general equity of this, there is a further point. We believe that it would be quite impracticable to give effect to this Amendment, even if we wished to do so. These leases have, ex hvpothesi, been in existence for nearly 100 years—99 years is the usual term for a building lease. How in the world are you to find out what improvements have been effected in buildings over the course of 99 years? Not only must you find out what has been done, but you must find out what was the condition of the premises before it was done; and to ascertain the difference between the market value and the letting value of the premises before events which have happened over the best part of 100 years is well nigh impossible. This proposal is quite impracticable, even if it is theoretically just, and in spite of the plea which noble Lords make, I cannot accept this Amendment. The noble Lord, Lord Silkin, referred to certain examples in the later part of the Bill where we do lay down that certain elements are to be taken into consideration in fixing the rent. We are again advised that that is something which can fairly be done, and we are prepared to do it. This falls into a different category altogether, and I am bound to resist the Amendment.

LORD SILKIN

I can assure the noble and learned Lord that if he accepted this Amendment he would not fall right through at all; and the more I heard him speak, the more I was confirmed in that view, because we are not really very far apart. Let me take the easiest part of the answer of the noble and learned Lord first—namely, the difficulty in which the court would be placed in assessing these factors. After all, the court has to go on evidence—nobody knows that better than the noble and learned Lord. It would be for the tenant to establish, for instance, what improvements had taken place. If they took place a long time ago, then the tenant would have to give evidence of them; he would have to satisfy the court that they were improvements which he had not been required to make, and which had increased the value of the premises. If he could not establish that, then no case would arise. If the noble and learned Lord were otherwise willing to accept this Amendment, I should not have thought the difficulties which he envisages here would be a reason for rejecting it. So with the scarcity value, these things would have to be dealt with on evidence. If the tenant alleged that the rent he was being asked to pay included an element of scarcity value, he would have to call people who were well versed in these matters to say what would be a reasonable rent, and how much of the rent he was being asked to pay represented scarcity value. The courts are called upon to deal with far more difficult matters than that, and, on the whole, do so with great success. Therefore, I cannot accept the argument that it is the difficulties of machinery which stand in the way.

The noble and learned Lord has really taken his stand on the equity of this matter, and here I do join issue with him. The whole basis of this Bill, of the Landlord and Tenant Act, 1927, and of many other Statutes that we have passed—as I said on Second Reading, to the credit of the Conservative Party—is that there is a need, in the interests of equity, for interference in contracts which have been entered into by two parties. Every argument that the noble and learned Lord put forward against this Amendment could have been put forward, and no doubt was put forward (it would be an interesting piece of research to see the arguments that were put forward) against the Landlord and Tenant Act, 1926. I have no doubt that the argument about sanctity of contract, about two people having entered into the contract with their eyes open, and knowing what they were to expect at the end of it, was brought out at the time. Nevertheless, the Government of the day decided to pass the Landlord and Tenant Act, to give protection to tenants at the expiration of their tenancies—and, indeed, to compel the landlord to charge a fair rent, and, failing that, to give the tenant reasorable compensation in respect of his goodwill. All that was passed, in spite of the fact that people had entered into these contracts with their eyes open and knew What they wore doing.

As the noble and learned Lord knows better than anybody in this House, other similar Acts have been passed—the Law of Property Act, 1925, and the Leasehold Property (Repairs) Act, 1938—all interfering with this sanctity of contract. Indeed, we are engaged at the present moment in a variety of other measures, for instance, the Hire-Purchase Bill, which was before your Lordships' House recently. That Bill, which commands Government support, interferes with the relationship between the person who hires and the person who rents. The Moneylenders Act is another example. The Statute Book is full of legislation designed to regulate the relationships of two parties who are deemed to have entered into contracts freely. But, of course, the Legislature has always recognised that parties do not necessarily enter into it upon equal terms. A person who is seeking premises may be handicapped in dealing with a landlord, and other persons may be similarly handicapped. Because of the greater power that is deemed to lie in the hands of one of the parties, the Legislature steps in in order to equalise the balance. This Bill does the same thing.

In my judgment it is wrong to describe what is being provided for tenants as a concession. It is not a concession: we regard it as a simple piece of justice. Many of my noble friends have gone further than we are doing on this Bill this afternoon, but we regard the giving of security of tenure as a simple piece of justice. If the landlord is in a position to extort the maximum rent that he could get from anybody if he put the premises on the market, what is the concession that the noble and learned Lord is talking about? Where does the concession come in? It is true that the landlord might have sold the premises, but he would still have sold them on the basis of scarcity value. It seems to me that he is getting the rent on the basis of scarcity value. The concession is not very great, and a great many tenants will not be able to take advantage of it. As regards the question of improvements, I feel that the case there is even weaker. I cannot see why a tenant who has carried out improvements which are of value, and which are ascertained to be of value, should, nevertheless, have to pay an increased rent because of the improvements. I feel that we have not had satisfactory consideration of this Amendment. My noble friend Lord Ogmore also wants to say a word, but unless he can move noble Lords opposite more than I have succeeded in doing, I feel that we shall have to test the opinion of the House on this matter.

LORD OGMORE

I do not expect for one moment that I shall be able to do better than my noble friend Lord Silkin, because it seems to me that he has made an absolutely unanswerable case. But there are one or two observations that I should like to put to the Committee. The first is that I, too, must join issue with the Government, because I do not regard their thesis as being a reasonable one. They say, in effect, that because they are giving the tenant something, he has no right to complain about anything. The mere fact (they say) that one tenant may be in a different position from another—for instance, he may have spent a great deal more money on his premises than his neighbour has done—is no concern of theirs at all; it does not come into the matter. It is a question that they cannot go into. They cannot exclude either improvements or scarcity value. Yet the court is entitled to regard both the scarcity value and the improvements that the tenant has made.

I am quite certain that all your Lordships who have served in the Armed Forces—and I imagine that nearly everybody has done that—know that that would not go down at all well in any regiment, battery, ship, squadron or any other unit. If you say to two Service men, soldiers, airmen, or sailors, under different conditions, "We are going to give you a certain consideration, irrespective of what your rank may be, whether you are sergeant or private; irrespective of what your conduct might have been, you are going to be treated exactly alike," they would soon object. In fact, as we know, the tenants are going to object strongly to the provisions of this Bill. I ask your Lordships to put yourselves in the position of a householder who has spent a large amount on the premises. Let us take the case of a doctor who has erected a surgery and a dispensing room, and perhaps a small operating theatre on his premises, at great expense to himself. He need not have done it, but he has done, and has made a very desirable house. Then suppose that his neighbour next door has done nothing—the only things that have grown in his garden have been weeds. The premises are not in a good condition, and nothing has been spent on them at all. He has just paddled along and done next to nothing ever since he has been in possession of the premises.

What are those two people going to say about this Bill? Let us assume that they are both members of the Primrose League—if that is open to men, as I think it is. They are both staunch Conservatives; they pay their subscriptions; they have the greatest admiration for Lord Woolton; they vote for their Conservative Member, and they are among the many who applaud Lord Mancroft when he goes down, as he tells us, to speak in the constituencies of Members of another place. What will the doctor say when he finds that, because throughout the years he has spent large sums on his house, his rent may be two or three times as much as that of the man who grows nettles and weeds next door? All I can say is that the Conservative Party will lose a lot of adherents. I do not mind that at all, but I do not see why even Conservatives should not have justice, and I submit here that the Conservatives, as well as the members of the

Clause 9 agreed to.

other Party, are going to be lamentably treated under this Bill unless my noble friend's Amendment is carried.

THE LORD CHANCELLOR

The noble Lord invited me to say whether he has persuaded me. I am afraid he has not. I shall not retaliate, as he did upon the noble Lord, Lord Mancroft, by suggesting that it was in any spirit of levity that he referred to Lord Woolton and the Primrose League. I am sorry, but I cannot possibly accept this Amendment. Nothing could be fairer than that a tenant who, but for this Bill would have to go, should be given security of tenure at a rent which is reasonable in all the circumstances. Those are the precise words adopted by noble Lords opposite in directing the tribunal set up under the 1949 Act what rent they were to impose. In this respect we follow their admirable example.

On Question, Whether the Amendment shall be agreed to?

Their Lordships divided: Contents, 18 Not-Contents, 64.

CONTENTS
Glasgow, E. Boyd-Orr, L. Ogmore, L.
Jowitt, E. Chorley, L. Pethick-Lawrence, L.
Listowel, E. Henderson, L. [Teller.] Rea, L.
Lucan, E. [Teller.] Hungarton, L. Shepherd, L.
Macpherson of Drumochter, L. Silkin, L.
Hall, V. Milner of Leeds, L. Sinha, L.
Stansgate, V.
NOT-CONTENTS
Simonds, L. (L. Chancellor.) Leathers, V. Hawke, L.
Margesson, V. Howard of Glossop, L.
Buccleuch and Queensberry, D. Monsell, V. Jeffreys, L.
Stonehaven, V. Killearn, L.
Cholmondeley, M. Swinton, V. Leconfield, L.
Waverley, V. Lloyd, L.
Birkenhead, E. [Teller.] Woolton, V. Mancroft, L.
De La Warr, E. Merthyr, L.
Dundonald, E. Ailwyn, L. Monk Bretton, L.
Haddington, E. Balfour of Inchrye, L. Moyne, L.
Lindsay, E. Brassey of Apethorpe, L. Rathcavan, L.
Morley, E. Broughshane, L. Remnant, L.
Munster, E. Carrington, L. Rennell, L.
Onslow, E. [Teller.] Chesham, L. Roborough, L.
Rothes, E. Coleraine, L. Rockley, L.
Selborne, E. De L'Isle and Dudley, L. St. Just, L.
Stair, E. Derwent, L. Salter, L.
Dunleath, L. Saltoun, L.
Bridgeman, V. Ebbisham, L. Savile, L,
Buckmaster, V. Fairfax of Cameron, L. Strathcona and Mount Royal, L.
Davidson, V. Gifford, L. Stratheden and Campbell, L.
Furness, V. Hamilton of Dalzell, L. Teviot, L.
Goschen, V. Hampton, L. Webb-Johnson, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 10 [Provisions as to liabilities under tenant's covenants in former lease]:

LORD SILKIN moved to add to the clause: (3) If on the termination of the former tenancy a tenant does not retain possession of the dwelling-house under this Act the tenant shall not be required to carry out any repairs in excess of what is required to bring the dwelling-house into good repair as defined by section 9, subsection (2) hereof and any liability whether of the tenant or of any predecessor in title of his arising under the terms of the former tenancy shall be extinguished. The proviso to subsection (1) of this section shall apply to this subsection. The noble Lord said: I beg to move the Amendment standing in my name. Clause 10 is the clause which deals with the liability of a continuing tenant for the repairs of the premises. His liability under the lease is normally the onerous one of putting the premises into substantially as good condition as they were in when the premises were first built. Everyone has recognised that, to enforce this contract, into which both parties are deemed to have freely entered with their eyes open, knowing exactly what was going to come at the end of it, would be a hardship on the tenant. There has been imported into the Bill a lesser liability of the tenant to put the premises into good repair. "Good repair" is defined as making the premises merely structurally sound and in reasonable repair having regard to the age, the locality, and so on. Indeed, it is a definition about which we had some discussion in connection with another Bill. But, admittedly, it effects a considerable improvement in the tenant's liability; it is a much lesser obligation than the normal obligation that he would be required to fulfil. I have no complaint about that at all.

But exactly the same considerations which have induced the Government to give relief to a tenant who continues in occupation ought, in my view, to apply to a tenant who does not continue in occupation. For one thing, a great many tenants will not continue in occupation because this so-called reasonable rent which they will be required to pay, which includes an element of rent in respect of which they have themselves contributed by improving the premises, will be more than they can afford. In such a case they will lose the benefit of the provision that they will be called upon to be responsible only for good repairs. I really fail to understand why there should be this discrimination in respect of repairs as between the tenant who remains and takes advantage of this Bill and the tenant who does not. One gets a very considerable concession; the other not only finds himself unable to afford to continue as a tenant, and loses the security, but also finds himself burdened with the higher obligation to carry out the full repairing covenants.

Of course, if anyone is shrewd and is so advised, he will take advantage of this Bill, pay the rent, get the repairs settled on the lower basis, and then give a month's notice and get out; by that means he will escape the higher liability. But do we want to encourage that sort of way out? If a tenant has that way out, surely he should be given a much more honourable way out, by being relieved of this extra burden and being asked to put the house into good repair, and that is all. Normally, I think I can see the case that can be put against an Amendment. In this instance, however, I frankly fail to see what is the argument against it. Therefore, I will content myself with saying what I have said and moving the Amendment, and I hope that the noble and learned Lord will admit that in this case there really is no answer to the Amendment. I beg to move.

Amendment moved— Page 10, line 20, at end insert the said subsection.—(Lord Silkin.)

THE LORD CHANCELLOR

I will do my best to give an answer. This is, of course, a large question—how far a tenant should be relieved of his obligations to repair which are contained in his lease or tenancy agreement. That is a matter which was expressly referred, with other questions, to the Committee to which so much reference has been made. The question was in this form: Whether the rights of a landlord to impose and enforce covenants to repair should be further restricted, and in what manner. I emphasise the words "further restricted," because already by the Landlord and Tenant Act, 1927, and the Leasehold Property (Repairs) Act. 1938, the position of the tenant had been substantially alleviated. That was the question that was asked, and the Committee reported unanimously that there should be no change in the law. As your Lordships know, amongst those who were members of the Committee and subscribed to that part of the Report were two members of the Party opposite—namely, the former Solicitor General and Mr. Leslie Hale; they were party to that recommendation that there should be no change in the law. They said: It does not seem to us that any further restriction on the extent of the damages recoverable by the landlord for breach of"— repairing— covenants could reasonably be imposed. It is a little difficult for noble Lords opposite to say that there is no answer to the case for granting further relief to tenants, and that if relief is granted to such tenants as we are dealing with in this Bill, there is no reason why relief should not be granted to all tenants under all leases. There are leases of 99 years and 66 years that we are dealing with to-day—long leases. Equally, there are leases of 21 years or less, which do not otherwise fall within the scope of this Bill, but in respect of which the tenants could ask precisely the same relief.

I agree with the noble Lord that in a case of this complexity there are bound to be anomalies, and I see the force of what he has said. But I do not think we should be right, in view of the unanimous expert opinion of the Committee which was appointed, representing all shades of Party opinion—and, morèover, the opinion of men learned in the law, and experienced in this particular branch of the law—in departing from their unanimous opinion. It is the fact, not to be forgotten, that under those Acts to which I have referred the position of the tenant is substantially relieved. I need not go into details about it—they are as well known to many of your Lordships as they are to myself, probably better; but I do not think that the time has come to grant to this particular class of tenants, as distinct from other tenants, further relief in this matter. I have dealt with the matter shortly, but your Lordships who are interested will see the whole matter set out in the Committee's Report, the arguments for and against, and their conclusion. It would not be right, I think, to occupy the Committee at considerable length this evening in saying anything further about the matter. I am sorry not to be able to accept the Amendment which is proposed, but I am quite unable to do so.

LORD SILKIN

Now that we know the reasons which have prompted the noble and learned Lord to reject this Amendment, I should like to say another word or two. He rests his case almost entirely on the fact that there has been this recommendation of the Leasehold Committee—

THE LORD CHANCELLOR

I am sorry if that has appeared to be so. I ought not to put it in that way. It was a unanimous Report of the Committee, and I agree with their reasons and with their conclusion. But I do not base my case simply on the fact that they have so reported, cogent as that is, but on the fact that I agree with their reasons and with their conclusion.

LORD SILKIN

Certainly the noble and learned Lord devoted the greater part of his answer to the fact that this was the unanimous recommendation of the Committee. But the noble and learned Lord has not always taken the view that a unanimous recommendation of a Committee, or even a substantial majority view, should necessarily be accepted. I think that your Lordships are entitled to have a more reasoned case than merely to have offered to them the views of this Committee. Moreover, in this particular matter the Government have departed from the recommendations of the Leasehold Committee. The Committee saw no reason at all for interfering with the repairing covenants in leases, but in Clause 10 the Government are interfering with those covenants, by replacing the normal covenant with an obligation to put the premises into good repair. That is a much lesser obligation, as I endeavoured to explain earlier, and that is a substantial interference with the ordinary agreement between the landlord and tenant. Therefore, with great respect to the noble and learned Lord, the Government are themselves departing from the Committee's unanimous recommendations. Since they are so departing, I am not asking them to go any further than they have gone in connection with the obligation to put premises in good repair. All I am asking is: why have they discriminated in favour of the tenant who continues? Why do they give him the opportunity of a lesser obligation, while the tenant who does not continue (very likely because he cannot afford to do so) must, they insist, carry out the full obligation?

I could have understood it, although I might not have agreed, if the Government had said to all tenants, "Here is your obligation; you are responsible for the full repairs, and you have got to carry them out." But the Government do not say that; they do not accept the unanimous recommendation of the Committee. They do give relief to tenants who stay on, but they fail to give relief to tenants who are not able to take advantage of the provisions of this Bill. That is what I still fail to understand. It is not a question of the merits of the matter at all, for the merits have long gone. The Government themselves have departed from the merits; but they do discriminate in this quite inexplicable manner, and I should be very grateful if the noble and learned Lord can explain why they differentiate between a tenant who remains on and a tenant who does not remain.

5.43 p.m.

LORD MILNER OF LEEDS

I have not had the opportunity of hearing the whole of this debate, but where a tenant decides to go out for some reason—probably for the reasons advanced by my noble friend: because he cannot afford to pay the rent and to carry out the various obligations which may be imposed upon him by the tribunal—one would have thought he was entitled to greater consideration than the tenant who is able to continue. The tenant who has to go out and has, presumably, to find other premises is to be burdened with these obligations in respect of repairs. One would have thought that, if any relief was to be given, it ought to be given to the outgoing tenant. The noble and learned Lord has not advanced any reasons, either those given by members of the Committee or those held by the Government, and I should certainly have thought, on the grounds of natural justice alone, that the outgoing tenant, who is bound to be in a difficulty and who is going to be saddled with considerable expense, in addition to the burden which will obviously rest upon him to obtain other premises, should be entitled to the same benefit as is given by the Bill to the continuing tenant.

THE LORD CHANCELLOR

If noble Lords opposite will bear with me I will add a very few words in answer to what has been said. The tenant who stays on under a statutory tenancy is in a totally different position from the tenant who gives up. The tenant who stays on under a statutory tenancy is under an obligation to do certain repairs, repairs sufficient to put the house into a state of good repair. The tenant who goes out has the protection of the law as it at present stands which is very substantial; for instance, the tenant may be the tenant of premises which the landlord re-occupies in order to develop. If that is so, under the Act of 1927 he is under no obligation to do any repairs at all, and his liability is limited, not by what is necessary to put the house into good repair—which is substantial—but to the damage which can be proved to have been suffered in respect of the reversion. Those are advantages which the tenant who does not remain in possession gets, and which the tenant who takes such a statutory tenancy does not get. With great respect to the example given by the noble Lord, Lord Silkin, a man who is shrewd or well advised and who, in order to avoid his obligations, takes a statutory tenancy and then goes out, may find himself let in for a sum in respect of initial repairs necessary to put the property in a state of good repair which would be far greater than that which would fall upon him if he rested upon the relief given by the Act of 1927. So the two things are not strictly comparable at all. The tenant who stays on gets the benefit of this Act. The tenant who goes out gets the substantial benefits of the Acts to which I have referred and in respect of which the Leasehold Committee have noted (and I do not want to put too much upon that) that there is no reason why he should get further relief. I am sorry that I cannot add anything further. It seems to me that common justice is done here both to the tenant who stays on and to the tenant who goes.

LORD SILKIN

Greatly daring, I would venture to disagree with the noble and learned Lord in his interpretation of the law. Obviously, the Committee do not wish to hear a legal discussion on this matter, and if the noble and learned Lord is willing to look at the matter, again in the light of anything that I may be able to put before him. I shall be quite prepared not to press this Amendment. I do respectfully remain unconvinced by his suggestion that the tenant who leaves and does not take advantage of this Bill is better off.

THE LORD CHANCELLOR

One cannot generalise. He may be better off—in many cases he may be much better off; but he will not always be better off. If I am not interrupting the noble Lord I would say that this is a matter which we have considered most carefully and we cannot give him any hope that upon

Clause 10 agreed to.

Clauses 11 and 12 agreed to.

Clause 13:

Landlord's application for possession

(2) Where the ground or one of the grounds for claiming possession specified in the landlord's notice was that mentioned in paragraph (a) of subsection (1) of the last foregoing section, then if on such an application the court is satisfied that the landlord has established that ground as respects premises specified in the application, and is further satisfied,—

the court shall order that the tenant shall, on the termination of the tenancy, give up possession

further reflection we shall be able to accept any other view. If the noble Lord wants to divide the House he must do so now.

LORD SILKIN

I was going to make an offer to reconsider this. I think the noble and learned Lord is basing his decision upon mistaken grounds, but if the Government have made up their mind there is nothing more to say.

On Question, Whether the Amendment shall be agreed to?

Their Lordships divided: Contents, 14; Not-Contents, 57.

CONTENTS
Jowitt, E. Boyd-Orr, L. Ogmore, L.
Listowel, E. Henderson, L. Pethick-Lawrence, L.
Lucan, E. [Teller.] Hungarton, L. Shepherd, L. [Teller.]
Macpherson of Drumochter, L. Silkin, L.
Hail, V. Milner of Leeds, L.
Stansgate, V.
NOT-CONTENTS
Simonds, L. (L. Chancellor.) Furness, V. Hawke, L.
Goschen, V. Howard of Glossop, L.
Salisbury, M. (L. President.) Leathers, V. Jeffreys, L.
Margesson, V. Killearn, L.
Cholmondeley, M. Monsell, V. Leconfield, L.
Swinton, V. Lloyd, L.
Birkenhead, E. [Teller.] Mancroft, L.
De La Warr, E. Ailwyn, L. Merthyr, L.
Dundonald, E. Balfour of Inchrye, L. Monk Bretton, L.
Glasgow, E. Brassey of Apethorpe, L. Rathcavan, L.
Lindsay, E. Broughshane, L. Remnant, L.
Morley, E. Chesham, L. Rennell, L.
Munster, E. Coleraine, L Rockley, L.
Onslow, E. [Teller.] De L'Isle and Dudley, L. Salter, L.
Rothes, E. Derwent, L. Saltoun, L.
Selborne, E. Dunleath, L. Savile, L.
Stair, E. Ebbisham, L. Strathcona and Mount Royal, L.
Fairfax of Cameron, L.
Bridgeman, V. Gifford, L. Stratheden and Campbell, L.
Buckmaster, V. Hamilton of Dalzell, L. Teviot, L.
Davidson, V. Hampton, L. Webb-Johnson, L.

Resolved in the negative, and Amendment disagreed to accordingly.

of all the property then comprised in the tenancy.

6.0 p.m.

LORD SILKIN moved in subsection (2), at the end of paragraph (b) to insert: and (c) that suitable alternative accommodation will be available for the tenant at the date of termination of the tenancy.

The noble Lord said: Clause 13 deals with the case where a landlord seeks to resume possession of a dwelling-house on the ground that he wants to carry out redevelopment and that it is necessary, in order to carry out the redevelopment, that he should have possession of the house. In moving this Amendment, I am not objecting to a landlord obtaining possession on that ground, but I think that the safeguards to protect a tenant against a landlord who acts not in good faith, or who makes this a pretext for getting possession, are not so strong as they might be. There is an Amendment later on which seeks to tighten up the safeguards, particularly where the tenant has been induced to give up possession on the ground that the landlord seeks to redevelop and subsequently does not do so. I think that in such a case the landlord should be required to compensate the tenant. But I am not arguing that on this Amendment. I merely put forward the proposal that where the landlord genuinely requires possession for the purpose of carrying out redevelopment he should provide the tenant with suitable alternative accommodation. It seems to me that that is a reasonable requirement.

Presumably, the landlord is carrying out this redevelopment because it is going to be a profitable undertaking for him. He is relieved of his obligation to keep on the tenant, he obtains vacant possession, and it seems to me that if it is merely a case that the landlord wants to carry out a profitable undertaking, the tenant ought not to be deprived of the protection which he would otherwise have under the Bill. The ability to obtain possession is entirely for the benefit of the landlord—I am quite prepared to sit down until the noble Marquess has finished his conversation. We are dealing with a highly technical subject, and I hope the noble Marquess will not mind my saying that it is very distracting to have a conversation audibly going on. The provision in this clause is entirely for the benefit of the landlord, enabling him to make a greater profit than he otherwise would. It enables him to escape from the obligation to provide the tenant with the continuation of his tenancy. Therefore, it seems to us reasonable that he should provide the tenant with alternative accommodation. This is by no means a unique obligation. The noble and learned Lord will know that in a later provision of the Bill a similar obligation is placed on the landlord in the case of business premises. In certain circumstances, if he wants the premises, he can get them by offering alternative accommodation. And, of course, there are similar provisions in the Rent Restrictions Acts. If it is the intention to make this Bill in any way analogous to the Rent Restrictions Acts and give the tenant the same sort of protection, I submit that in a case like this it is not unreasonable that the landlord should be required to give the tenant suitable alternative accommodation. I beg to move.

Amendment moved—

Page 11, line 44, after ("circumstances") insert ("and (c) that suitable alternative accommodation will be available for the tenant at the date of termination of the tenancy.").—(Lord Silkin.)

EARL JOWITT

In this battle of giants between my noble friend Lord Silkin and the noble and learned Lord, the Lord Chancellor, both giants in the knowledge of this branch of the law, anyone else hesitates to rush in, but I should like to make my little plea here. My belief is that the vast majority of landlords are extraordinarily decent people, but there are a small number who are not in that category and bring disrepute upon the whole body. I believe we may fairly take what the good landlord would do as a test of what we might reasonably enact. If the good landlord had a chance of developing his property and had a sitting tenant, I do not believe he would be content to turn that sitting tenant out unless and until he could offer him some sort of alternative accommodation. I think he would say that unless he could look after his tenant, who may have been with him for years, he must hold up his redevelopment. That is all we are asking here. If the ground on which the landlord is asking for possession is that he wants the property for redevelopment and he is going either to demolish or reconstruct the whole or part of the premises, then he ought to be able to say to the tenant that he had some alternative accommodation. That ought to be a requirement of the law. Without any great technical knowledge of this matter, I submit to your Lordships that that is what a good landlord would desire to do and would do. Therefore it does not seem to me to be wrong to put it into the requirements of this Bill.

LORD MANCROFT

After the observations of the noble and learned Earl, Lord Jowitt, about giants, obviously under the impression that my noble and learned friend would reply, he will observe that a certain justifiable nervousness has crept into my voice. This Amendment, which superficially is an attractive one, has the effect of putting upon the landlord the obligation of providing alternative accommodation when he wants property for redevelopment. But there are two objections, so far as I can see. For the first I will apologise to the noble Lord, Lord Silkin, because in his opening remarks he said he hoped he would not be taken to task for faulty draftsmanship which more expert pens could put right, but I think this objection is so fundamental that it may not be even faulty draftsmanship—if it is. I apologise in advance. The noble Lord has not put down any Amendment to leave out Clause 12 (1) (a). If noble Lords would be good enough to look at that paragraph, they will see that a landlord may apply to the court for possession on the ground: (a) that for purposes of redevelopment after the termination of the tenancy the landlord proposes to demolish or reconstruct the whole or a substantial part of the relevant premises;". I should have thought, frankly, that Lord Silkin's Amendment makes nonsense of Clause 12 (1) (a). The availability of alternative accommodation is already a ground for obtaining possession under the Rent Acts after a statutory tenancy has begun and, under the Third Schedule of this Bill, before it has begun. If, therefore, a landlord can provide such accommodation, he has no need to make use of Clause 12 (1) (a). Only when the landlord who proposes to redevelop is not able to provide alternative accommodation does he need this provision.

That takes me to the second objection, which is a fundamental one. I agree with the noble and learned Earl, Lord Jowitt, that our objective is the standard of the good landlord. We must during this debate emphasise that point on both sides of the Committee. No doubt on many occasions a good landlord who desires to develop, and wishes to pull down a whole street or block, will do his best to provide alternative accommodation for those tenants with whom he wishes to remain in contractual obligation. But this is too heavy a burden on even a good landlord who genuinely seeks to redevelop. We say this because we place so much importance on the facilities for redevelopment of residential premises, most of which, of necessity, must now be a century old. We feel that the landlord who genuinely requires premises for that purpose should not have to provide alternative accommodation, although, of course, it is seriously hoped that he will do what is possible. We do not think that is a fair burden to put ort the landlord. It is a question of two opposing interests, as so often it is in this Bill. It is to emphasise this need for redevelopment that we desire to relieve the landlord of this burden. For these two reasons—one a technical reason and the other a practical policy reason—we cannot accept this, on the face of it, attractive Amendment.

LORD SILKIN

I cannot understand the second reason, where there might be a hardship on the tenant and a burden on the landlord and the Government choose to sacrifice the tenant to the interests of the landlord.

THE LORD CHANCELLOR

To the public interest—for redevelopment.

LORD SILKIN

It does not follow. The landlord is not developing in the public interest: he is developing in his own interest. I ask noble Lords opposite to bear in mind that it is not necessary to establish public interest. Under Clause 13, a person who wants to redevelop does not have to prove that it is in the public interest that he should redevelop—that is not one of the burdens put on the planning authority. So long as there is no particular reason why he should not redevelop, he would be allowed to do it from a planning point of view. If it does riot conflict with the plan he will get his permission.

As for the noble and learned Lord's assumption that every piece of redevelopment is in the public interest, I would profoundly disagree with him. This redevelopment is primarily in the interests of the landlord. It may be that the landlord's interest coincides with the public interest, and it may be that it does not. I admit that if it conflicts with the public interest he probably will not get planning permission, but in the majority of cases pubic interest is not involved. It is the landlord's interest. And I understand that in this case, where there is hardship on the tenant and burden on the landlord, the Government choose to leave the hardship on the tenant and to sacrifice the tenant in favour of the landlord.

THE LORD CHANCELLOR

No; that is not how I see it.

LORD SILKIN

On the first point, a technical point, the noble Lord, Lord Mancroft, has not convinced me. I am prepared to admit that the Amendment may be in the wrong place; that it would come better in Clause 12 than in Clause 13, but I do not think that matters. In Clause 13 we are dealing with the conditions that have to be satisfied by the landlord in order that he may be able to resume possession, and it seems to me quite logical that one of those conditions should be that he has made certain plans and has taken steps to make it quite clear that he is serious in his plans. He must be wanting to redevelop, and it seems to me quite logical to say that he must also be able to provide suitable accommodation. If this Amendment is in the wrong place I am prepared to put it in the right place, and to be guided as to where it should go and the form it should take. Undoubtedly there is a right place for it if the Government want to accept it. I am sure that the true reason is that there is a balance or conflict between the interests of one party and the interests of the other, and the Government prefer the interests of the landlord as against the interests of the tenant.

LORD MANCROFT

I cannot let the noble Lord sit down with that remark unchallenged. It is not a very fair remark, and well he knows it. There is no question in this Amendment of a clash between the landlord and the tenant, and of the Government's choosing the side of the landlord. This Bill merely accentuates and facilitates the Government's desire to improve and develop residential property—there is no clash; and that is the overriding interest. As regards the technical point between him and myself as to where the Amendment should come, that is purely academic and we need not pursue it.

On Question, Amendment negatived.

Clause 13 agreed to.

Clause 14 [Provisions where tenant not ordered to give up possession]:

LORD MANCROFT

This Government Amendment makes a slight change in the machinery of Part I. It is consequential on a series of Amendments made on Report in another place which substantially recast the timetable for negotiation and application to the court. Broadly speaking, the effect is that where less than six months' notice has been given, negotiations can continue until the end of three months from the giving of the notice. It merely allows a little more time for negotiations and it is for the advantage of all concerned. It is quite uncontentious I beg to move.

Amendment moved—

Page 13, line 30, at end add— ((6) Where by virtue of subsection (3) or (5) of this section the landlord gives a landlord's notice proposing a statutory tenancy which specifies as the date of termination a date earlier than six months after the giving of the notice, subsection (2) of section seven of this Act shall apply in relation to the notice with the substitution, for references to the period of two months ending with the date of termination specified in the notice and the beginning of that period, of references to the period of three months beginning with the giving of the notice and the end of that period.")—(Lord Mancroft.)

On Question, Amendment agreed to.

Clause 14, as amended, agreed to.

Clause 15 [Protection of Rent Acts not to be lost on coming to an end of superior long tenancy at a low rent]:

LORD OGMORE had given notice of an Amendment to leave out Clause 15 and to insert the following new clause: 15. Where a sub-tenant of premises to which this Part of this Act applies is in occupation of them at the date when the term granted by the superior tenancy expires and where the sub-tenant takes advantage of his rights under this Act and continues in occupation of the premises then so far as the tenant is concerned provided he does not occupy any part of the said premises the covenants on the part of the lessee contained in the superior tenancy shall be deemed not to apply to the tenant or to anyone claiming through or under him.

THE CHAIRMAN OF COMMITTEES

I understand that Amendment No. 14 should read in these terms: "After Clause 14 insert the following new clause."

THE LORD CHANCELLOR

The noble Lord will forgive me if I intervene. I have been very much puzzled about this Amendment. To leave out Clause 15, as is proposed by the Amendment on the Marshalled List, seems to me quite impossible. I have been studying this clause at length with a view to finding out what was in the minds of the noble Lords opposite, and I have been trying to read the new Clause 15 as a substitute for the old Clause 15. I really do not know quite where I am, and I cannot promise that I have given proper consideration to this in its new aspect. If the noble Lord will enlighten us I shall be only too glad, but I think, with great respect, that I shall have to tell him that I am not in a position to accept it. I will consider it if he will move it again on Report, but without undertaking that I will consider it favourably. He has put me in great difficulty.

LORD OGMORE

As I drafted this Amendment it was headed "New Clause." I do not myself propose to leave out Clause 15, but somehow or another "New Clause" has been omitted and new words "leave out Clause 15" have been inserted. I appreciate the noble and learned Lord's difficulty, and perhaps it would be for the convenience of the noble and learned Lord if I explained it.

THE LORD CHANCELLOR

I was very puzzled.

LORD OGMORE

I do not expect to have the new clause inserted to-day if the noble and learned Lord wishes to consider it at more length. The purpose of the new clause, which has nothing whatever to do with Clause 15, is to take care, if I might use the expression, of those people who are neither occupying tenants nor sub-tenants; they are tenants who will, so to speak, be excluded by the Bill from all consideration. They are not occupying tenants and they are not subtenants in possession of premises, and at the end of the lease naturally the tenant will have no further beneficial interest in the premises. This class of tenant is not dealt with by the Bill, but he is obviously going to be much affected by it. He cannot negotiate with his superior landlord, as he undoubtedly would be able to do if this Bill had not been passed. In other words, we must imagine three people: there is the superior lessor, or his successor in title, there is the intermediate lessee and there is the occupying sub-lessee. One of them is the ground landlord, one of them occupies the tenancy, and the fellow in the middle is the person I am trying to protect in this Amendment—the middleman, if I may so describe him; the only man who, as I said on Second Reading, probably has any capital in the premises at all, other than the capital of the ground landlord in the actual land upon which the buildings are erected.

This man, the tenant, in these circumstances is put in a serious dilemma, because the sub-tenant is given a relationship with the lessor which he never had before; he is given rights under the Bill which he never had before; and any possibility of negotiation which the tenant would have had in the normal case with the sub-tenant, on the one hand, and the superior lessor, on the other, is gone. He is completely handcuffed. He is not even like the old soldier, who "silently fades away"; he will fade away, but not silently, because all the obligations in the lease, as I understand it, will still be imposed upon him. He will still have to carry out the serious burdens of the building covenants, the covenants to repair and to leave in a good state of repair at the end of his lease. Those are serious obligations upon him. I remember a case in Cardiff some years ago where a large mansion came to the end of its lease, and the unfortunate woman who owned it had to spend many hundreds, if not thousands, of pounds on repairing it, to hand it over to the ground landlord, who immediately pulled it down.

THE LORD CHANCELLOR

That was before 1927.

LORD OGMORE

It does not matter whether it was before or after 1927; it does not really affect a case like that. I should have thought that the Landlord and Tenant Act, 1927, had no effect upon it. We are dealing with dwelling-houses. As a matter of fact, I do not think it was before 1927. I am searching my memory, and I cannot swear whether it was before or after 1927. I can see what the noble and learned Lard means. He means that such a tenant could apply to the court and get relief from the obligations. But in these conditions the court may say: "We are not going to give you any relief. We cannot give you relief, because there are no circumstances which justify relief being given to you in this particular case." The only case of which I am aware where the court can give relief from covenants is where the circumstances of the district have so altered that the covenants are no longer applicable. I am not asking for any radical change in the Bill, but only that this one particular class of person, the only class of person dealt with under the Landlord and Tenant Act who is not beneficially affected in any way at all, should not be seriously prejudiced, as I believe he will be if this Bill goes through without some sort of provision—again, it may be that better words could be used than I have used—being inserted which will take care of his case. I hope I have been able to explain to the noble and learned Lord, the Lord Chancellor, the object of this Amendment, which I am sure he will agree is quite a reasonable one, and that on the Report stage he will be able to give us the satisfaction that we feel we should have. I beg to move.

Amendment moved— Leave out Cause 15 and insert the said new clause.—(Lord Ogmore.)

THE LORD CHANCELLOR

I am obliged to the noble Lord. I will examine this new Clause in the light of the old Clause 15 being allowed to stand and not being eliminated. The noble Lord will see that it becomes a very different picture. I do not propose to answer what he said any further, but I should like him to consider one point. The last part of the proposed new clause is in these terms: The covenants on the part of the lessee contained in the superior tenancy shall be deemed not to apply to the tenant or to anyone claiming through or under him. That would, I believe, include the subtenant. I do not think that can be meant; but if it is meant, there would be nobody left who was under any obligation in respect of the contractual obligations in the lease. Perhaps the noble Lord will consider that point. I suggest that he should withdraw this Amendment, and put down a new clause on Report stage, which I will consider.

LORD OGMORE

I am obliged to the noble and learned Lord for pointing out that particular aspect of the wording. It was intended to apply to the tenant or, in the case of the tenant dying, to his personal representatives. I will see if we can avoid the pitfall that the Lord Chancellor has pointed out. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 15 agreed to.

Clauses 16 to 21 agreed to.

Clause 22 [Interpretation of Part I]:

LORD SILKIN moved, in the definition of "dwelling-house" to leave out (2) and insert (3). The noble Lord said: It looks to me as if even Homer sometimes nods, and I have put down this Amendment in order to make quite certain whether that is so or not. If the noble and learned Lord accepts the Amendment, as I imagine he may, I hope that he will not chalk this one up as a concession. I beg to move.

Amendment moved— Page 18, line 35, leave out ("(2)") and insert ("(3)").—(Lord Silkin.)

LORD MANCROFT

The noble Lord is perfectly right, and I am happy that he has given me the opportunity of joining the ice-breaking gang. I do not wish to make any comment on the second part of his observations, and I have pleasure in accepting the Amendment.

On Question, Amendment agreed to.

LORD MANCROFT moved, in subsection (2), to leave out "as being a member of his family." The noble Lord said: This is purely a drafting Amendment. Clause 22 (2) defines "the tenant" for purposes of Part I of the Bill. The words proposed to be left out have caused some misunderstanding, and as they are not essential it seems better to omit them. I beg to move.

Amendment moved— Page 19, line 34, leave out from ("Acts") to end of line 35.—(Lord Mancroft.)

On Question, Amendment agreed to.

Clause 22, as amended, agreed to.

Clause 23:

Tenancies to which Part II applies

(3) In the following provisions of this Part of this Act the expression "the holding," in relation to a tenancy to which this Part of this Act applies, means the property comprised in the tenancy, there being excluded any part thereof which is occupied neither by the tenant nor by a person employed by the tenant for the purposes of a business by reason of which the tenancy is one to which this Part of this Act applies

LORD SILKIN moved, in subsection (3), to leave out all words beginning "there being excluded" down to the end of the subsection. The noble Lord said: We have now finished with dwelling-houses and are on business, professional and other tenancies. Clause 23 is the clause which defines the application of Part II. It deals with people who are in possession of premises, but it excludes any part of the premises which is occupied neither by the tenant nor by a person employed by the tenant for the purposes of a business by reason of which the tenancy is one to which this Part of this Act applies. I put down this Amendment to inquire what is the purpose of this exclusion. On the face of it, it would look as if the Bill could not possibly apply to a person not in the employ of the tenant, who was not the tenant himself, and who was not concerned with the purposes of the business. Why was this put in at all?—because obviously it could not possibly concern such a tenancy. If there is some purpose behind it which I have not been able to fathom by reading the provision, then I should like to reserve my position, and, if I do not approve of what is intended, put down an Amendment at another stage. At the present moment my main purpose is to find out what is behind this provision. I beg to move.

Amendment moved— Page 20, line 17, leave out all words after ("tenancy") to end of line 20.—(Lord Silkin.)

LORD MANCROFT

I do not think we need waste much time over this Amendment. I believe it is some slight doubt about the wording which has really caused the trouble here. Perhaps the noble Lord, Lord Silkin, is interpreting Clause 23, as it now stands drafted, to mean that the occupier does not get security of tenure for premises which he occupies for purposes other than business purposes. If the noble Lord is in doubt about that, I can assure him that that is not the intention. But since it has caused doubt in his mind, I will certainly look at the wording again and see whether the point he has made can be cleared up. I hope that that will be satisfactory to the noble Lord.

LORD SILKIN

I wish the noble Lord would explain to me what he intends, and then I can form some idea as to whether what he intends is something of which I approve and whether these words really carry out the intention. At the moment, I am somewhat mystified.

THE LORD CHANCELLOR

I myself to some extent misread this provision of subsection (3), which says: … there being excluded any part thereof which is occupied neither by the tenant nor by a person employed by the tenant for the purposes of a business by reason of which the tenancy is one to which this part of this Act applies. The qualification of "for the purposes of a business" refers to "by a person employed by the tenant for the purposes of a business." Those words do not qualify the tenant, but only a person employed by the tenant for the purposes of the business. I think if words are put in to make that clear—and I have myself misread it—the noble Lord's difficulty will be solved. If there is any doubt about it, perhaps he and I may discuss it together before the Report stage. I think there is, in principle, nothing between us at all.

LORD SILKIN

I do not know whether there is or is not until I understand it. But there is a genuine doubt as to what this means. In those circumstances, I beg leave to withdraw the Amendment, on the understanding that we will look at it again.

Amendment, by leave, withdrawn.

Clause 23 agreed to.

Clauses 24 to 29 agreed to.

Clause 30:

Opposition by landlord to application for new tenancy

30.—(1) The grounds on which a landlord may oppose an application under subsection (1) of section twenty-four of this Act are such of the following grounds as may be stated in the landlord's notice under section twenty-five of this Act or, as the case may be, under subsection (6) of section twenty-six thereof, that is to say:— (d) that the tenant could have obtained a new tenancy, or a renewal of the current tenancy, by the exercise of an option available to him within a reasonable time before the termination of the current tenancy, that the terms on which the tenant could have obtained the new tenancy or renewal were reasonable at the time when the option was granted, having regard to the terms of the current tenancy and to all other relevant circumstances, and that the tenant has failed to exercise the option; (f) where the current tenancy was created by the sub-letting of part only of the property comprised in a superior tenancy and the landlord is the owner of an interest in reversion expectant on the termination of that superior tenancy, that the aggregate of the rents reasonably obtainable on separate lettings of the holding and the remainder of that property would be substantially less than the rent reasonably obtainable on a letting of that property as a whole, that on the termination of the current tenancy the landlord requires possession of the holding for the purpose of letting or otherwise disposing of the said property as a whole, and that in view thereof the tenant ought not to be granted a new tenancy; (h) subject as hereinafter provided, that on the termination of the current tenancy the landlord intends to occupy the holding for the purposes, or partly for the purposes, of a business to be carried on by him therein, or as his residence.

6.34 p.m.

LORD SILKIN moved, in subsection (1), to omit paragraph (d). The noble Lord said: There are three Amendments to Clause 30 seeking to delete three separate paragraphs. I wish we could have had one discussion on all three, but it seems to me that it would be more convenient to discuss each deletion separately, and that is what I have done in the Amendments. Paragraph (d), which I seek to delete, provides one of the grounds upon which a landlord may oppose an application by a tenant for a new tenancy. This ground is that the tenant could have obtained a new tenancy or a renewal in the exercise of an option at some earlier time which he failed to exercise, and that the option was a reasonable one, having regard to the terms of the tenancy, and so on. Because he has failed to exercise this reasonable option when he had the opportunity, he now loses his chance of a new tenancy.

It seems to me that that is rather unfair unless some words are included which would make it clear that if there were good reasons at the time for the tenant's non-exercise of the option, he should not be barred from getting a new tenancy at the time when the lease expires. I can think of a number of grounds upon which a tenant might have hesitated to exercise an option. So far as I can see, a tenant with, say, seven years to run, might have an option to extend his tenancy beyond the next seven years on perfectly reasonable terms. He may find at the time when he is required to exercise the option that business is not very good, or he is uncertain about his movements and is not in a position to commit himself for a longer period than this seven years. He may be contemplating going abroad, or for a hundred-and-one perfectly good reasons he may have decided that he is unable to exercise the option. He may even have overlooked the fact that there is this option. The option is sometimes required to be exercised a considerable period in advance, and people do tend to overlook these things. Everybody is not a lawyer, and people are not constantly referring to their leases to see what are their legal rights—fortunately, I suppose, for the lawyers. The fact remains that there may have been perfectly good, intelligible reasons for the tenant not to have exercised the option.

It seems to me quite an unnecessary restriction on a tenant's privilege—if you like to call it so—of getting a new tenancy. What is the purpose of it? Why should a tenant be prevented from getting a new tenancy because he has not exercised an earlier option? In what way is the landlord damaged by the fact that the tenant has not exercised this option? If the Government want to insist upon this provision, ought they not to have a proviso of some kind, that where the failure to exercise the option is for perfectly good reasons, then the tenant should have the benefit of a new tenancy? Except on the basis that it is intended to put obstacles in the way of a tenant, to prevent him from getting a new tenancy, I cannot understand the purpose of this restriction. Therefore I beg to move that paragraph (d) be deleted.

Amendment moved— Page 24, line 21, leave out paragraph (d).—(Lord Silkin.)

LORD MANCROFT

I think this was a point upon which the noble Lord, Lord Silkin, touched in his Second Reading speech, and I hope we shall be able to set his mind at rest upon it. This is the position as I see it. If, when a tenancy is first granted, the parties concerned freely agree that the tenant shall have an option at or near the end of the lease, to renew on terms which, at that time, are reasonable, then the aim of Part II of this Bill—which, of course, is to give the tenant a reasonable degree of security of tenure—is achieved. If the tenant fails to exercise his option, I do not think there is much reason to give him a further chance under this Bill. The landlord is surely justified in assuming, if the tenant does not exercise his option, that he does not want renewal, and the landlord may have made his plans for the property on this assumption. That is the answer to one of the noble Lord's points. It is because justice must be done on both sides, and it would be unreasonable to allow the tenant to upset these plans by a last minute change of mind.

There is also a precedent for what we propose here, because under the Landlord and Tenant Act, 1927, the tenant, as the noble Lord, Lord Silkin, will remember, was debarred from claiming compensation for loss of goodwill (and therefore from claiming a new lease) if he had failed to exercise a reasonable option to renew. The Leasehold Committee recommended the retention of this provision, but thought that the court should have power to extend the period of availability of the option where it saw fit. The Committee's suggestion has not been accepted, because it is not thought to be necessary in view of the way in which paragraph (d) (which is the paragraph we are now talking about) is drafted. The failure to exercise the option will be held against the tenant only if it was available a reasonable time before the termination of the current tenancy. That means, not too long before. I think that meets the point about which the noble Lord, Lord Silkin, is worried.

In these circumstances, therefore, there is no reason that I can see why the court should extend the period of the option's availability, which might do considerable injustice. After all, it might be extended in the case, presumably, of business men negotiating perfectly freely with their obligations well in mind. So I suggest to the noble Lord, Lord Silkin, that the procedure that we propose now has the precedent of the 1927 Act to support it. It also has the recommendation of the Leasehold Committee—a Majority recommendation. I would also suggest to the noble Lord that, taken by and large and looking at both sides, the tenant's side and the landlord's side, justice is being done by this clause as it stands, which is in itself really a reasonable and businesslike provision. I hope that that sets the noble Lord's mind at rest, particularly on the point of reasonability.

6.42 p.m.

LORD SILKIN

My mind is not really set at rest because I do not accept the reasons that have been given. The Landlord and Tenant Act, 1927, is hardly a good precedent for anything. It is an Act which is admitted on all sides of the House to have failed. Nobody would suggest that that is a good Act to follow. It is because it is such an unsatisfactory Act that we are dealing at this moment with this Part of this Bill. As to the Report of the Committee, of course it did recommend that in certain circumstances there should be access to the court. That is what I should be satisfied with. I should be quite content if there were some opportunity for a person to go to the court. At the moment, all that he can go to the court on is to ask for a decision on whether an option was available to him within a reasonable time before the termination of the current tenancy. If the noble Lord can tell me what "a reasonable time before the termination of a current tenancy" is, I shall be grateful to him. I wonder what guide a person is to have as to what is "a reasonable time before"? It is not an easy question upon which to make up one's own mind and it is a very difficult question to ask a judge to decide upon. Nevertheless, one could go to court on that, and I would suggest that this is a provision which might be looked at again, to see whether a tenant who on perfectly good grounds has not exercised his option could not nevertheless have the opportunity of getting a new tenancy. Obviously, it would have to be settled by the court, if the landlord did not agree; but why not give such a tenant the right to go to court? He could go at his own risk and let the court decide.

THE LORD CHANCELLOR

Is not this rather difficult? It seems to me it is most difficult. Here we are not dealing with people who are helpless, or anything of that kind; they are business people with whom we are dealing. This is a case where the parties have entered into a bargain which contains, amongst other things, a provision or an option for renewal, and not only an option for renewal but an option for renewal upon terms which are agreed between the parties. It occurs to us that it is not right that, when the parties have come to their own agreement, it should be supplemented by statutory provisions which are intended to provide, by and large, for people who have not made their own bargains. The only reason why we have a provision of this kind and why the Bill contains what it does, which is relief for the tenant, is because he has not made provision for himself. Where he has, is there really any reason why he should have a double chance? It is not as if the terms were inevitable. If they are unreasonable, then the landlord cannot take advantage of this. It is only where there is a reasonable provision in the contract which the parties have made providing for renewal that the Act will step in. I think that is fair. It may be unfair to place the landlord in the position, when he has made his bargain, of not knowing whether the tenant is going to exercise his option under the lease or is going to wait until the last moment that he can in order to exercise his right. I suggest to the noble Lord that this is really a fair enough arrangement between the parties.

LORD SILKIN

The noble and learned Lord and I are in disagreement upon this fundamental point as to what are the rights of a landlord and a tenant to reopen a bargain which has been made. The noble and learned Lord is assuming that business people are negotiating on equal terms, but, if they are, what is the point of the Landlord and Tenant Act, 1927, or of these other Statutes? What is the point of this Bill? Surely, the underlying assumption is that the landlord is at some advantage and that the tenant does need some protection. Even as regards the option, I do not go so far as to press for the deletion of this provision, although that is my Amendment. I did think that the Government might be prepared to consider some alternative to entire deletion which would enable the tenant who, for reasons which are possibly beyond his control, did not exercise the option but who nevertheless later on desires to continue the tenancy. I should hope that, even now, the Government would be prepared to give further consideration to this point.

THE LORD CHANCELLOR

We are not dealing with Part I; we are dealing with Part II. Whatever presumption you may have in regard to long leases in Part I, and of some advantage of position in the landlord, that really is not the case with premises under Part II. And where you get parties bargaining and actually making a provision in the lease that there shall be a right to renew or an option to renew, that is not the sort of case in which it is fair to presume that the parties are not dealing with each other fairly at arm's length. It is almost certain that they would both have skilled advice and there is no question of advantage in the position of the one as compared with the other. That is a bargain that they have made, and one would think that they ought to stick to it and not take advantage of a statutory provision which is for people who have not made any such bargain.

On Question, Amendment negatived.

6.50 p.m.

LORD SILKIN moved, in subsection (1), to omit paragraph (f). The noble Lord said: I beg to move Amendment No. 19. Under paragraph (f) the landlord can refuse the tenant a new tenancy, or can refuse the grant of renewal, on the ground that this is a part-letting of the whole of the premises, and that by a rearrangement of the tenancies he can get a higher rent. It seems to me that that is rather hard on the individual tenant who is occupying a part of the premises. Surely that is a matter which will be taken into account by a court if they have to fix the new rent of the tenant. I am prepared to concede that the landlord should not be deprived of the opportunity of making the best use of his premises and to get the best possible rent, provided that he does not force existing tenants to go out and lose the benefit of the provision in the Bill. It seems to me that everything that is desired can be met in those circumstances by requiring the sitting tenant to pay a higher rent; and if the rent is too high to justify his staying on, of course he will not pay it. It seems a drastic remedy to deprive people of the benefit of this Bill simply because the landlord can get a higher rent by making some other arrangement. No doubt he could do that every time if only he could get possession. The Bill does not give him possession on that ground; yet it seems to do so under this paragraph. It is for that reason that I move this Amendment.

Amendment moved— Page 24, line 43, leave out paragraph (f).—(Lord Silkin.)

LORD MANCROFT

This is rather an unusual case. The circumstances which the noble Lord, Lord Silkin has in mind, and about which we are talking, I should think will occur fairly rarely. Perhaps I can help the Committee to come to a decision on this matter if I give an example of what the noble Lord, Lord Silkin, has in mind in his Amendment. A is a freeholder; B is the tenant of business premises—a shop with a basement; C is the sub-tenant of the basement only. B may not have had any use for the basement, and he sub-let it to C. B's lease expires and he does not want renewal, and he disappears from the scene; but C wants a new tenancy of his basement. If A is required to grant it he is left with the area occupied previously by B, and he may find that, by itself, it is not a convenient letting, because most of the tenants want the basement as well as the shop. The result is that the best rent he can get for the shop alone plus the rent for the basement would be substantially less than he would get if he were able to let the basement and the shop together. That is the example I think we all have in mind. It is likely to be rather rare, although it may well happen. Quite frankly, the trouble is that in this situation perfect justice between all parties is not possible—I cannot see how it can be achieved. Someone must suffer for the legacy, perhaps I may call it, left by B's subletting.

I suppose the noble Lord, Lord Silkin, will repeat to me that, because Part II of the Bill is intended to protect tenants, it is the landlord here who should suffer, and that he must simply put up with the loss caused by letting in two separate parts. I suppose he may alternatively argue that some sanction should be applied to the mesne tenant, though the Amendment would not do that—and, indeed, it is difficult to see how it could be done when he has ceased to have an interest in the premises. At this stage, let me quote from the White Paper. It is not really the object of Part II of the Bill to protect the tenant, no matter at what cost to the landlord. The White Paper, in paragraph 43, states that in the Government's opinion the landlord: is entitled … to a fair contemporary market rent for the premises. The only practicable way of giving him this, in the case I have just been trying to explain to the Committee, is to enable him to let shop and basement together; and, quite frankly, this means giving him possession against C, the sub-tenant of the basement.

I should like to point out to the Committee that the paragraph we are discussing applies only where the landlord originally let the premises as a whole and the tenant sub-divided them by subletting a part. I must emphasise that the paragraph does not apply where the landlord originally let the premises to the separate tenants and now wants to let them as a single unit because he finds it more profitable. I hope the noble Lord is not going to come back at me and say, "You are supporting the landlord against the tenant." This is a case where a balance has to be struck, and I hope that I have convinced him that in this particular case someone has got to come out on the worse side of this rather unusual bargain. We think that we have struck what is admittedly a very difficult balance as fairly as we can. I hope the noble Lord will appreciate the difficulty of this matter, and will realise that if we took the course which I think he wants us to take a far greater injustice would be done than the slight disadvantage which must admittedly devolve upon the sub-tenant in the case we have been discussing. I hope the noble Lord will realise that this is the best solution in a difficult case, and that he will agree to withdraw his Amendment.

LORD SILKIN

The noble Lord has sought to make the best of his case by quoting the case of shop and basement. But suppose we take the case of basement and shop. Suppose that the landlord is by this means enabled to get possession of the shop and not of the basement. Suppose that a person has taken the shop and the basement, keeps the basement and lets off the shop. Both these cases are rare—the noble Lord says his case is rare, and mine would perhaps be rarer than rare. But in such a case the landlord would get possession of the shop, which seems to me to be defeating the whole purpose of the Bill. The noble Lord did not deal with my suggestion that this difficulty could be met in fixing the rent. Why not? It would be a perfectly appropriate matter for the court to settle. Incidentally, the landlord must be presumed to have agreed to this severance. Most leases provide that a tenant must not sub-let part of the property without the consent of the landlord, and the landlord must be deemed to have consented; or, if he did not, and the lease enables such subletting to take place, the landlord must be deemed to know what he is doing. But whether that be so or not—and it is not necessarily part of my case—if the tenant of the shop or the tenant of the basement wanted a renewal of the lease, surely the court would take into account the effect of the severance.

The court is required to take into consideration what rent could be obtained for the premises and, if it is not inherent in the existing provision, it could be made quite clear that the tenant must pay the rent which the landlord could have got if the premises had been in their original condition. I think that is perfectly feasible. It seems to me that this tenant should have the option of going on with the tenancy or of giving it up because he finds the rent too high. It seems that the tenant should not, through the action to which the landlord has acceded in the past—he has agreed to the sub-letting—lose his right under this Bill. That seems to me to be unfair. And, although the noble Lord may not like my saying so, where there is a conflict between the landlord and the tenant, it seems to me that this Bill comes down in favour of the landlord, and that this is just one more example of that.

THE LORD CHANCELLOR

May I say a word? As to the last observation, I think the noble Lord ignores the position in saying that the Bill comes down in favour of the landlord rather than the tenant; he ignores the fact that the whole of the Bill is introduced in favour of the tenant. It is not a question of starting level and coming down in favour of the landlord or the tenant. We are not starting, as in this hypothesis, with the landlord having everything and the tenant nothing. The whole Bill is aimed at giving the tenant something, but the noble Lord opposite is always asking for something more. I think the point which the noble Lord has made is rather far-reaching—for this reason: that if this is not to be a ground upon which a landlord can recover, I conceive that in the future (and this Part of this Bill may last for a long time, for it is part of our permanent legislation) a landlord will not allow any sub-letting; there will be an absolute covenant against any sub-letting, because the result of it might be just what we are providing against in this case. I do not know whether the noble Lord has considered that possibility. I would add this. He has put forward, in his usual way, a very cogent argument and one aspect which he has presented had not occurred to me before. Whether it has occurred to my right honourable friend the Home Secretary I do not know. I should like to consider this point, without making any promise, and perhaps the noble Lord would put down an Amendment on Report. I hope that that will not be regarded as a promise, but I should like to reconsider the matter, and if the noble Lord will withdraw his Amendment upon that footing, I will reconsider it.

LORD SILKIN

Of course, I will withdraw the Amendment, in view of what the noble and learned Lord has said.

Amendment, by leave, withdrawn.

House resumed.