TENANCY OF SHOPS (SCOTLAND) BILL (Hansard, 30 April 1964)

§ THE MINISTER OF STATE, SCOTTISH OFFICE (LORD CRAIGTON)
My Lords, this Bill—for the benefit of the noble Lord, Lord Hughes, this useful little Bill—proposes to make permanent the Tenancy of Shops (Scotland) Act, 1949, a temporary Act, which has been continued yearly until now by the Expiring Laws Continuance procedure. I must first deal briefly with the 1949 Act and the reason for it. In the years following the last war there was a scarcity of shop premises, and it was alleged that shop tenants were being asked to pay exorbitant increases in 1061 rent or were being evicted without the option of buying premises. A Committee under the chairmanship of Mr. T. M. Taylor, which sat in 1947, thought that the situation did not require legislation. However, in 1948, the complaints multiplied and the Committee was reconstituted under the chairmanship of Mr. W. H. Guthrie, now Lord Guthrie. The Tenancy of Shops (Scotland) Act, 1949, was based on their Interim Report.
The Act provides that where a landlord of a shop has given notice of termination of a tenancy, and the tenant cannot obtain a renewal of the tenancy on terms satisfactory to him, he may apply to the sheriff. The sheriff is empowered to determine that the tenancy shall be renewed for a period not exceeding one year at a time, at such rent and on such terms and conditions as in all the circumstances he thinks reasonable. The parties are thereafter deemed to have entered into a new lease on the period, terms and conditions fixed by the sheriff. The sheriff may dismiss an application if he thinks it reasonable to do so. He is required to dismiss an application if he is satisfied on one or other of the points in Section 3 of the 1949 Act.
The other provisions are that the sheriff may grant repeated renewals of a tenancy, each for a period not exceeding one year, and that the proceedings before the sheriff are dealt with under the simple procedure appropriate to the small debt court. The 1949 Act was enacted to expire on December 31, 1951. In their final Report the Guthrie Committee recommended that it should be continued until 1955. It was in fact continued until 1958, when another review took place. In that year a Committee under the chairmanship of Mr. I. H. Shearer (now the Lord Advocate) considered whether there was need to continue the Act after 1958. They found that the Act still served a useful purpose, and recommended that it should be continued for a period not exceeding five years.
Both these Committees thought the Act should be temporary, yet we are making it permanent. Let me explain how we reached that decision. During 1963 we carried out a review in which we consulted the interests who had given 1062 evidence to the Shearer Committee. We obtained the views of 33 federations, associations or societies of whom 26 favoured the continuance of the Act. We had also to bear in mind that the Act was still being made use of. The number of applications to the sheriff, which varied between 300 and 350 a year until 1957, has been declining since then. In 1960 it was 133; the next year 118; then 136; and last year it was 102. But use apart, there is the important consideration that the very existence of the Act must lead to fair bargains being struck without recourse to the sheriff—which is a protection for all concerned not to be lightly discarded.
After careful consideration, we decided that the weight of evidence and advantage is in favour of continuing the 1949 Act. There is still a sellers' market in shops and this may place the tenant at a disadvantage. Nor does it seem likely that this situation will change greatly in the foreseeable future. Furthermore, most Scottish tenancies are still on a year-to-year basis and the notice of termination, which may under Statute be as little as 40 days, can create hardship for the tenant and the successful application to the sheriff can give him a breathing space. So much for the 1949 Act.
I now turn to the pesent Bill. Subsection (1) of Clause 1 provides that the Act shall now continue in force until Parliament otherwise determines. That is the only provision of substance. Subsection (2) of Clause 1 repeals transitional provisions in the 1949 Act which became spent in 1949. I can recommend this Bill to your Lordships. The 1949 Act has been in operation for over fourteen years, and there is ample evidence that it has worked well. In particular, there is general confidence—and we thank them for it—in the way that the sheriffs have used their powers under the Act. I ask your Lordships to give this Bill a Second Reading. I beg to move.

§ LORD HUGHES
My Lords, I wish to thank the noble Lord, Lord Craigton, for the very clear statement he gave of the purpose of the original Act of 1949, 1063 and for the quite unsolicited, and rather unusual, compliment he paid to the wisdom of the Government of that date in passing the measure. However, I would remind your Lordships that the Minister stated that, when the first Act came in in 1949, it was intended to deal with a temporary situation arising largely from the shortage of shops following wartime conditions. It is perhaps a reflection upon the present Government that during the past twelve years their rent policies, in particular, have succeeded in making permanent the situation which in 1949 was hoped to be only temporary. I cannot therefore return the compliment by congratulating the Government upon succeeding in making a permanent necessity of this Act.
However, one must deal with facts as they are, and the Minister has clearly outlined, in relation to a number of cases which have been put forward, the need for this Act at the present time. On a further point which he made, the effect of the Act in perhaps encouraging negotiated agreements between owners and shopkeepers is very much more important than the number of cases which actually go to court. Therefore, I cannot do other than support the Second Reading.
However, in the discussion of the Bill in another place another aspect emerged. An Amendment was moved on the subject of compensation which might be payable to shopkeepers for fixtures which they have installed in a shop and for good will they might have built up, provided they had a tenancy. I believe that the period in the Amendment was not less than five years. Having regard to the uncertainties aroused among shopkeepers by another measure which your Lordships will be considering in due course, it might be wise to consider the possibility of extending the right of compensation to shopkeepers who are deprived of their tenancy in these circumstances. I shall probably submit an Amendment to this effect in due course. At present, however, the Bill as it stands is good. It may be that it can be made a little better.

§ LORD CRAIGTON
My Lords, I am grateful to the noble Lord, and I am glad he is not suggesting that there should be compensation provisions in 1064 this Bill. It is a wide question and should be examined in its right context.

§ LORD HUGHES
My Lords, I am afraid the noble Lord has misunderstood me. I suggested that I shall be moving that at the appropriate stage of this Bill.

§ LORD CRAIGTON
I am quite sure that I have an appropriate answer for the noble Lord. I am never afraid to say that a Bill is a good one when it is good, and I say that this is a good Bill. It is not a reflection on the present Government that, with the redevelopment of some large-scale areas, there must be some protection for the tenant, and this is a very good protection. I would congratulate Dundee and Glasgow on the way they have handled this matter.