HL Deb 06 December 1971 vol 326 cc654-71

6.10 p.m.


My Lords, I beg to move that this Bill be now read a second time. The only interest I have to declare is that I have spent much of my working life in retail distribution, but I should add that the organisations which I served generally owned the properties which they occupied; they seldom took leases, and indeed they let the properties which were surplus to their requirements. They were therefore landlords rather than tenants, and it was when acting for the landlord that I became aware of the problems of the tenant. I would also say that I hold no office in any organisation which would benefit from this Bill, nor have I any financial interest which would be improved by the Bill.

For the benefit of noble Lords who may not have had an opportunity of studying the Bill, I would explain that it refers to business and professional tenancies rather than to residential tenancies. Under the Landlord and Tenant Act 1944, Section 30, there are laid down seven grounds upon which a landlord can oppose the renewal of a tenancy. Section 37 states that in three cases, and in three cases only, there shall be a right to compensation, and it specifies the compensation. I would like to deal with these three cases and with the compensation. The first case is where the property has been let in parts and the landlord has opposed a renewal of any of the tenancies on the grounds that he can let the property as a whole at a substantially increased rent. I would point out that the word "substantially" is not mine; it is the word in the Statute. Therefore we can assume that in that case the landlord will have substantially increased income from the property as a result of the termination of the tenancies.

The second case is where the landlord opposes the renewal of a tenancy because he wishes to redevelop the properties. In that case he is obviously going to make better use of the site with a view to getting an increased income from the property. The third case is where the landlord opposes the renewal of a tenancy because he wishes to occupy the property himself. In that case he must have been the landlord for at least five years. But it will be obvious to everybody that this is a particularly dangerous proposition because it means that a competitor can see that a useful business is being carried on in a certain place; he can, without the knowledge of the tenant, negotiate the purchase of the property and then, after he has been the landlord for five years, when the lease comes up for renewal he can oppose it and he can take over the business for the meagre compensation that is mentioned in the 1954 Act.

I come now to the compensation. Where the landlord has opposed the tenancy on any of those three grounds the compensation is twice the rateable value if the tenancy has existed for 14 years or more. In all other cases it is only the rateable value. To make matters worse, we live in the post-war period in an inflationary economy, and the rateable value is pretty well always out of date. It takes about two years to prepare a valuation list, and that work is commenced on returns which have already been made; so the valuation list is generally two years out of date when it is introduced. If, as at the present time, we have a valuation every 10 years, then the least the valuation list is out of date is two years, the maximum is 12 years, and the average is seven years. If, as I understand is probable, we go back to the quinquennial valuation, then the valuation list is two years out of date when it is introduced, at the end of the five years it is seven years out of date and on the average it is four and a half years out of date. In an inflationary economy that can drastically reduce the compensation which the tenant receives. It has been my experience that on the average the rateable value is equal to about five or six weeks' profit in a business which is—and I would put it no higher than this—satisfactorily managed. If that be so, then the maximum compensation of twice the rateable value is less than three months' profit. The principal purpose of this Bill is to increase that to six months.

Let us look now at the losses which the tenant has to bear if his tenancy is terminated. There three kinds of losses that he has to bear: first the loss occasioned by disturbance. He has to move his stock to a new place, if he can find one; he has to dismantle his fittings, transport them and reinstall them in the new place, and in the meantime he is probably not able to carry on his business. Therefore under this heading alone he could have a loss which could be hundreds of pounds. The second loss which the tenant has to face is the loss of the future benefit of the money that he has had to invest in the property. It has always been the practice to expect the retailer to put in the shop front, but in recent times he has usually been expected to do more. For example, in new developments the trader often rents only a shell. He is expected to put in not only the shop front but also to give the floor, the walls and the ceiling their finishes. Sometimes the electricity, water and gas arc merely brought to the premises and the tenant has to do his own plumbing and his own wiring. Therefore he can have a substantial amount invested in the property. The law takes the view that if he is obliged by the lease to do this he will presumably have a lower rent, and Section 2 of the Landlord and Tenant Act 1927 provides that where he has these obligations as part of the lease he cannot claim that they are improvements. He can get no compensation because they are improvements, but if his tenancy is terminated he loses the future benefit of this expenditure. Furthermore, if he is fortunate in being able to find a suitable place to which he can go he may then have to bear the whole of this expenditure over again to make the premises suitable for his occupation.

The third kind of loss which the tenant has to bear is the loss of goodwill. If a tenant, by giving satisfactory service, has attracted trade and built up a business he has goodwill as a market value, and if his tenancy is terminated he loses that goodwill, either in whole or in part. The market value of goodwill varies from one to three years of annual profit. A typical amount received for the sale of goodwill on the open market is 18 months' profit, whereas the maximum compensation at present is, I estimate, something less than three months' profit. Generally, one of two things happens. When the tenancy is terminated the trader is forced to retire prematurely, and in that case he loses the whole value of the goodwill that he could get on the open market, because the tenancy has been terminated. Alternatively, if he is fortunate in getting another place which suits him and where he can carry on his business he will lose some of his goodwill because of the relocation. He may keep some of his trade, but to a very large extent he will have to start again to build up his trade in the new location.

There are many cases of hardship as a result of the 1954 Act. I will cite just two quite recent cases. The first concerned a business established in 1948 on a 21 year lease, so that the tenancy expired in 1969. The average profits of the business in the three years up to 1969 were just over£3,000 a year. The landlord opposed a renewal of the lease on the ground that he wanted to redevelop. The rateable value was£322. Tile maximum compensation paid was twice that amount, in other words£641, for a business which on the open market would have been worth£4,000. In that particular case, although the tenant has had to vacate the property for redevelopment, for more than two years the property has been lying undeveloped, much the same as it was when the tenant left it, except that it has been let to a greengrocer, presumably temporarily.

I give as another example the case of a tenant occupying premises used for footwear sales. He has occupied the property for 19 years. His average profit in the last three years is£2,555 per year. His landlord is the outfitter next door. The outfitter has introduced footwear, and he has given notice that he will require the property next door for his own use when the lease expires in March, 1972. Obviously, he intends to carry on his newly created footwear business there. He is therefore able to take over the business next door, which has a profit of£2,555 a year, for compensation of twice the rateable value, which is only£876 in compensation. Those are two of many kinds of cases of hardship that can be quoted, and it is quite clear that something ought to be done if we are to avoid continuing injustice against the professional and business tenant. This Bill proposes that the injustice should be, at least in part, removed.

Clause 1(2)(a) of the Bill provides that where the tenancy has been terminated and the tenant has been in occupation for fourteen years or more he shall get not twice but four times the rateable value. I would estimate that to be equal to about six months' profits as against a market value of goodwill alone of eighteen months' profit. Paragraph (b) of the same subsection provides that where a tenant has been in occupation for seven to fourteen years he shall get three times the rateable value; and paragraph (c) provides that where he has been in occupation for less than seven years he shall get twice the rateable value. Subsection (3) is merely a repetition of the present law. It is necessary because the Bill seeks to reconstruct one of the sections of the 1954 Act which provides that if a tenant succeeds to a business he shall be regarded as having occupied the premises during the whole of the period in which his predecessor has carried on the business on the premises. That is the present law and it is intended that that should continue.

By Clause 2 the provisions of the Bill shall not apply to cases where the landlord has given notice under the present law before this Bill comes into force. Clause 3 is purely formal.

In conclusion, I would thank my own Chief Whip, the noble Lord, Lord Beswick; the Government Chief Whip. the noble Earl, Lord St. Aldwyn, and the noble and learned Lord on the Woolsack for consultations and the facilities which they have given me to introduce this Bill which I commend to the House. I beg to move.

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

6.27 p.m.


My Lords, I should like to commend the noble Lord who has introduced this Bill for having brought forward a matter of very serious complaint from the point of view of the tenants of business and professional premises. This kind of difficulty is very well known to those of us who practise in the law, and the particularly serious results that flow from the law as it stands at present to the tenant who is occupying premises of this nature can in very many instances bring great distress to him and to his family. The position is absurd. A man has built up a business over a number of years, and he is then placed in a situation where he can be turned out; and when he is turned out of his premises the amount paid to him by way of compensation is quite risible. To imagine that twice the rateable value on premises can possibly compensate a man who has been carrying on business and building up goodwill for forty years is just out of the question; if anybody examines the situation objectively he can come to only one conclusion—that it is just a pittance handed out to someone who has spent a fair portion of his life in developing his business or his profession.

Of course this applies to professional people as well, because if they are turned out of the place in which they are actually in practice there is considerable difficulty, particularly to-day, in getting alternative premises at anything like the rentals they had before. But, apart altogether from that, in most cases the actual office which the professional man is using has to move to another area. Obviously the removal itself creates a considerable amount of expense, and there is also involved the difficulty of clients and others knowing where the new practice is to be. In the circumstances, I would go rather further in the provisions of this Bill. Certainly I think they are very reasonable indeed as they stand.

Your Lordships will know that there is a tendency to-day (and there has been for some years) to regard dispossession of tenants of dwelling houses, for example, as something which causes grave distress, and therefore to contemplate the removal of the possibility of people being turned out. I do not think that anything like the same attention has been drawn to business premises, and nothing like the same consideration has been given to a man in respect of his loss of livelihood.

I do not wish to detain your Lordships any longer. I think that we should give a Second Reading to this Bill, but perhaps the noble Lord who introduced the Bill will reconsider the amounts that he is suggesting and will increase them. I hope that we shall not have anyone opposing the Bill. I have very much pleasure indeed in supporting this Bill.

6.32 p.m.


My Lords, this being a Private Member's Bill my duty is to advise the House rather than to put the Government Whips on, and that I shall try to do as dispassionately as I can. I am afraid that I have to make a slightly dull speech, because it is a highly technical and difficult subject. Indeed, the purport of what I want to say is that it is far more technical and far more difficult than either of the two speakers who have so far spoken have given your Lordships to understand. Therefore, it must be for me to provide a little more background information than the noble Lord, Lord Jacques, has given in his admirably concise speech.

I should like to assure the House that in my office we have been particularly anxious to understand the implications of the Bill, and we have studied it in some depth with other Government Departments. Since I have been Lord Chancellor I have been approached by several bodies concerned with business compensation, and I can assure the House that I have not reached the conclusions that I have either lightly or frivolously. None the less, I must put it before the House that there is certainly one problem to be seriously considered, and it may be that there are two. Therefore I can wholeheartedly congratulate the noble Lord, Lord Jacques, on having raised a debate on the subject, although I must point out that the Bill will not solve either of these real difficulties, and cannot be made to solve them. So I shall have to advise the House against the Bill.

I begin by making clear the area which we are talking about. The noble Lord, Lord Jacques, began by saying, as is correct, that we are not talking about residential accommodation at all. We are not talking about people's homes; we are talking about business premises. That means of course that we are talking about a very wide range of properties indeed. We are talking about factories, however large; about commercial offices, headquarters of companies; professional chambers; surgeries and consulting rooms; solicitors' offices; club premises, and a whole lot of other widely differing things. I cannot but point out—because I think it has coloured his whole approach to the matter—that the noble Lord, Lord Jacques, has virtually confined his examples and his arguments to retail distribution points, which is only one of the very large number and range of premises concerned. Although the noble Lord, Lord Janner, spoke about professional offices in relation to his profession as a solicitor—I will say a word or two about that in a moment—I do not agree that the same considerations apply to them. I must point out to the House that the only profession whose technical press has commented on this Bill, that I am aware of, is the Solicitors Journal, which has come out strongly against the view propounded by the noble Lord, Lord Janner, and I shall explain why in a moment.

In order to enable me to do this, I must give the House a short history of the subject. Until 1927, as between landlord and tenant, the tenant's rights were governed largely by contract. That is to say, he got what the lease gave him, and nothing more. In some ways this was a hardship, as I shall go on to point out; sometimes, however, especially on a long lease, a business tenant ought to be expected to write off the value of the lease as time went on in the course of the ordinary processes of accountancy, which is what he did. It was in fact my father, when he was Attorney General in 1927, who first gave the tenant the right to a new lease or compensation. This is a fact of which, I may say in passing, my father was always—and I think quite justly—proud for the rest of his life. Until 1954—not 1934, as the noble Lord, Lord Jacques, said by a slip of the tongue—the actual basis of the compensation under my father's Bill was based upon what was called "adherent goodwill". This was a highly technical conception that, if the landlord took over premises of which the tenant had increased the value by virtue of the goodwill which adhered to the premises, he ought to pay for that element. The profession of the law in those days, and right up to 1954, had great sport in dividing goodwill of business premises into what they called "dog goodwill", which attached to the owner of the business wherever he went—as for instance when a barrister might move his chambers from Lincoln's Inn to Middle Temple—the "cat goodwill", which attached to the premises, and the "rat goodwill" which just disappeared anyway. However, those refinements were not in the Act, which spoke of "adherent goodwill".

In those days the tenant was entitled either to compensation for adherent goodwill or to a new lease on new terms. May I say to the noble Lord, Lord Janner, that there was no inherent right—as one phrase in his noble friend's speech would tend to indicate—in relation to business premises that the new lease would be at the same rental, or anything like it; it would take account of current market values. This system was found to be unworkable in practice. The result was that in 1950 the Jenkins Committee reported. It reported in substance on two matters which are relevant to this discussion. In the first place over the great range of tenancies, in almost every case where there was a reasonably good tenant —and of course the great majority of tenants are reasonably good—the tenant should get a new lease and could demand a new lease from his landlord without the landlord having an option to give him compensation, unless there was of course equivalent alternative accommodation available. But in one class of case the Jenkins Committee recommended that the landlord should have the opportunity of forcing compensation on his tenant instead of a new lease. The Jenkins Committee then split and said, as to one part, that the tenant should get, as hitherto, roughly speaking, what the landlord gained by way of adherent goodwill in taking the premises over; and, as to another part—the minority—that the landlord should have to pay what the tenant had lost under the various heads by way of disturbance.

When the Government of that day and Parliament came to consider the Jenkins Committee's Report, although in the main they accepted its conclusions, they came to the conclusion that both the suggestions of the minority and of the majority were, in practice, wholly unworkable. Instead of that, the Government of the day, by that time represented by Sir David Maxwell-Fyfe (as he then was), as Home Secretary and Lord Simonds as Lord Chancellor, proposed what might be called a bed of Procrustes—a purely arbitrary system of compensation. The compensation which they provided for that class of case, to which I shall come in a moment and which the noble Lord, Lord Jacques has adequately summarised, was based on one year's rateable value for under 14 years' continuous occupation, and twice the rateable value for over 14 years' occupation. It did not pretend to be compensation, in the full sense of the word, for what the tenant was losing; it did not have anything to do with what the landlord was gaining. It was put, I think, by Sir David Maxwell-Fyfe; but the Ministers in both Houses respectively expressed, in different language, what was intended: that the tenant should have something towards what he lost by disturbance, not necessarily the whole amount: it might be more; it might he exactly the same amount, or it might be less. He was given an arbitrary sum, because Parliament and the Government of the day found the problems of working out what he ought to get in these circumstances absolutely insoluble. It is fair to say that every Minister in both Houses at that time challenged anybody to think of a better plan, but in fact nobody did. Nobody even suggested one.

Pausing there for a moment to view the law as it is now, I would point out that there are, broadly speaking, three cases. First of all, when a business tenancy comes to an end, if the tenant has been a bad tenant—that is to say, if he does not pay his rent or breaks his covenant—he gets nothing by way of compensation and he is not entitled to a new lease; secondly, if he has been a reasonably good tenant—and, as I said, most tenants are—then in the ordinary case he is entitled to a new lease but not to compensation, and he has to pay the rent in the new market conditions based on what the premises are worth. In the three cases to which this Bill applies—Section 37 cases—the landlord may pay compensation and the tenant is not entitled to a new lease. As the noble Lord, Lord Jacques, reminded us, those three cases are: first, where the premises are let in parts, and the landlord could recover a better rent if they were let as a whole; secondly, where the landlord wants the premises for his own occupation; and, thirdly, where he wants them for redevelopment. Successive Governments have justified this range of compensation in the last case, because they have said that it is just that, as a matter of public economic policy, redevelopment should be encouraged. Those are the three situations at the moment.

At this stage, one has to concede that a new factor has entered into the case. In principle, the rateable value represents one year's rack rent of the premises: that is the way it is ascertained. Some people complain of the accuracy, or want of it, with which the rate system ascertains it, but in principle it is the rack rent of the premises for a year. It is on that basis that the actual poundage of the rate for which the assessment is primarily made is calculated in the first place. Unfortunately, in 1968, for reasons that I need not go into, the then Labour Government postponed the rateable reassessment to 1973. It was a decision which may or may not have been justified at the time. It had nothing whatever to do with the compensation recoverable under the Landlord and Tenant Act. It was a decision which was bitterly attacked by the Conservative Opposition at the time—but we need not resurrect old spectres of past controversies. These are historical facts which we can record without passion.

A side effect, though doubtless an undesired, unplanned and uncovenanted side effect, of postponing the revaluation from 1968 to 1973—the January after this coming one—was of course that the compensation payable under Section 37 of the Landlord and Tenant Act 1954 became manifestly smaller than the framers of the Act had intended. All one can say about that is that in 1973 the balance will be readjusted. Presumably, it will then be exactly what the framers of the 1954 Act intended it to be, because at that time, from a year onwards, the rateable values will come back to what they were designed to be, instead of being ten years out of date. Of course this Bill is rather optimistically phrased, as you see if you look at its terms, to start on August 1, 1972. Therefore, it will not be much good, even if it keeps up to date, to remedy what is admittedly a defect of the present situation. It is therefore virtually useless for that purpose. If the Bill had been introduced in 1968, and had been expressed to be temporary until a new and up-to-date rateable revaluation could be introduced, I think I might very well have supported the principle behind it, because it would have done another kind of rough justice to remedy that admitted defect of the status quo. But for that purpose now, almost at the beginning of 1972, I should have said it was virtually useless.

On the other hand, it is impossible to deal with the radical difficulties of an arbitrary sum by way of compensation unless you go back to the Jenkins Committee and assess compensation on some other basis that bears some genuine relationship either to the landlord's alleged gain or to the tenant's loss; and that the noble Lord, Lord Jacques, does not propose to do. In fact nobody, I think, would seriously wish to do it because the difficulties are insuperable. Instead of that, his broad principle is to take the number you first thought of and double it, which is just as arbitrary and as wholly devoid of any scientific justification as the original arbitrary sum; indeed, it would lead to a very great number of anomalies the other way. The trouble is that the noble Lord, Lord Jacques, has, I think, allowed his interest and experience in retail distribution to colour his whole view of the problem, which really has to do with a much wider range of premises than can be explained.

Take, for instance, my Lords, the case of a large factory with the whole value of the lease written off over, let us say, occupation for fifty years, with the tenant proceeding to acquire other premises, perhaps in a development area outside the original place. The goodwill is not attached to the factory. No doubt the tenant has costs of disturbance when his lease comes to an end, but he has already written them off in his accounts. He has not suffered any injustice, nor does the landlord gain anything, except the site value of the land if he wishes to redevelop it, as he very likely would be well advised to do; and he does not gain anything from the manufacture of whatever it may have been in the previous fifty years. If you take club premises, the same kind of argument can be applied. Or, if you take my professional chambers in the Temple, if I had had to move from Inner Temple and had found myself chambers in Lincoln's Inn I do not suppose I should have lost anything by way of goodwill; nor, so far as I know, would my landlord have gained anything. The fact is that the problem is a great deal more complicated than the noble Lord, Lord Jacques, has appreciated; and to meet the factual loss by simply doubling the existing compensation or, for the intermediate class which the noble Lord, Lord Jacques, has created, trebling it, is not really a scientific way to approach this subject at all. Over a wide range of the premises to which the principal Act applies it would hopelessly over-compensate a number of otherwise undeserving tenants.

In support of his contention that the present Bill was required, the noble Lord introduced a certain number of specific arguments which have nothing to do with the revaluation in 1973. The first of these was the contention that valuation lists are intrinsically out of date because they take two years to prepare. There is an element of truth in that, of course, but the fact is that in 1954, when the Act was passed, the rating and valuation list was much more out of date than that. My recollection is that it was twenty years out of date. Therefore that was something which everybody had in mind in 1954, when the Act was passed. As a matter of fact, for a large number of years until the postponement of 1968 I personally agree with the Solicitors Journal that there had been remarkably little complaint about the working of the Act. It was an arbitrary figure.

No doubt some people were overcompensated and other people under-compensated, but it was rough justice of a kind which seemed to meet with a wide range of genuine public support; and nobody had suggested anything different until quite recently. So far as we in my office have been able to consult various interests, which I do not think has been done by the sponsors of this Bill, obviously the retail outlets would welcome the principle; equally, I suppose that, on the whole, those whose business it is to let business premises would not. Some surveyors, I know, are opposed to the Bill; and as to the solicitors, who have not yet been consulted, I do not know, although I do know that the Solicitors Journal condemns it. It is difficult to see, therefore, that one can speak with confidence in its favour if one looks at the whole range of premises affected.

One must remember that even the cases to which the noble Lord has referred—and I accept that these were based on obsolete rateable values which will be put right in 1973, one hopes and believes—do not really carry him the whole way, even on the assumption that one confines one's attention to the shops. The fact is that if the landlord genuinely wants to redevelop he does not gain anything whatever by the goodwill which the tenant may claim to have put into the premises; and the tenant, if he continues his business somewhere in the near locality, will not lose anything like the goodwill of his practice, if he be a professional man, or, if he be a shopkeeper, of his customers, because they will, at any rate largely, go to the new place. As regards the investment over a long lease, this ought to have been written off in the ordinary course of accountancy; and I do not think that that is an adequate example to justify the Bill. So far as one can judge, the future benefit of the investment is lost only if it has not been written off, and the goodwill, as I say, may vary infinitely from nothing to something which may be quite substantial. It will depend upon whether the tenant is able to get premises elsewhere and how close they are to the original location.

The theory that the trader may have to retire prematurely is something for which, I think, no legislation can reasonably be expected to cater. Certainly the Act of 1954 does not cater for it, and certainly the proposals of the noble Lord, Lord Jacques, will not cater for it. It is of course the case—and I think it is fair to say this—that if the landlord wants the premises for his own occupation and then proceeds to carry on a business of identically the same kind, he will get something which in ordinary morals one would probably call unjust enrichment; but you will not cater for that case effectively by simply taking an arbitrary figure and multiplying it by two and getting a result. There may be a case, in such instances, either for a new lease or for compensation based upon actual loss or actual gain. But that is a very unusual case. The usual case when a landlord redevelops premises is that he redevelops them into something quite different. It he re-lets as a whole, he always does; and if he occupies them himself lie usually wants the premises for something else and not for the original business.

What, then, should we do? I do not myself think that there is a sufficient case for setting up a new Commission to see whether they can succeed where the Jenkins Committee failed, in substituting something other than an arbitrary figure for compensation. I do not think the noble Lord has made out his case in full for doubling the present rate of computation if you keep the arbitrary figure. What I suggest would be the sensible thing to do is to wait until 1973 and then see how the arbitrary figure works under the new valuation. To do it now, before we have any experience of the 1973 valuation, is, I think, almost certainly to court disaster. I would just make this comment by way of general criticism. If you are going to reform anything so complicated as the law of landlord and tenant you will have to undertake some wider series of consultations and investigations and consider them over the whole range of businesses affected rather more deeply and rather more widely than has been done by the sponsors of the Bill.

Having said that, I am exceedingly grateful to the noble Lord, Lord Jacques, for having raised this subject. It has been to some extent a matter of concern to me since I became Lord Chancellor to find a number of instances where, owing to the obsolete nature of the valuation lists, compensation has been manifestly much less than Parliament intended, and but for the fact of the impending revaluation I would suggest an interim measure to deal with it. I think the House ought therefore to be grateful to the noble Lord, Lord Jacques, for having raised the subject. But having said what I have, I cannot advise the House to give the Bill a passage—and I am quite sure that if it should go to the other place it has in fact no chance of reaching the Statute Book this Session. Having said that, I have given the House the best and the most objective advice that I can.


My Lords, I was interested in the reference to the Solicitors Journal. Before the Bill was drafted I consulted a number of solicitors who act for both landlord and tenant. They all said two things. They said that this compensation is totally inadequate and ought to be increased; and they said, "For Heaven's sake!, keep to some kind of formula similar to the present; otherwise it will be unworkable." I think that the difference between the practising solicitors and the Solicitors Journal is clear. It is very likely that the Solicitors Journal is written by somebody who is mostly a journalist and is not in touch with practising solicitors. I think that consulting with practising solicitors is more important than reading the Solicitors Journal.


My Lords, would the noble Lord not agree that on principle if one was going to consult with the solicitors' profession one should consult the Law Society and the British Legal Association?


My Lords, I must agree with that. I accept that the choice is between the rough justice of the kind we get now or something which according to past experience has appeared to be unworkable. I accept the rough justice; but what I am saying is that we have had the formula since 1954; we have had it not only when the valuation list has been out of date but when a new valuation list has been introduced and we have found it to be inadequate. I think that the present compensation is inadequate—not temporarily so until 1973, but that it has been shown to be inadequate since 1954, regardless of the valuation list being out of date. I therefore think that there should be some improvement. What I am asking the House to do is to approve the Bill in principle, for that is all that a Second Reading does. If, after that, your Lordships want to restrict the provisions of the Bill to retailers or to retailers plus somebody else, then all right; but let us at least approve it in principle, so that it can be further examined.

Furthermore, after it is approved in principle, if at a later stage it is thought that by doubling the compensation I have gone too far, then there is a step in between that could be taken. I would point out that it was not I who thought of a number; it was the people who prepared the 1954 Act who thought of a number when they put the compensation at twice the rateable value. I have merely accepted the kind of thing which was accepted by Parliament, and all that I have done is to increase the multiplier. But there is something between two and three that can be considered if necessary. I hope that sufficient has been said to show that the compensation since 1954 (especially as far as the retailers are concerned) has been proved to be inadequate and that the matter requires further consideration. I hope that the House will give the Bill a Second Reading, which is merely an approval in principle.


My Lords, on a Motion for advancing a Bill by a stage or going into Committee, there being an equality of votes, in accordance with Standing Order No. 51, which provides that no proposal to reject a Bill shall be agreed to unless there is a majority in favour of such objection, I declare the Motion agreed to.

Resolved in the affirmative Bill read 2a accordingly, and committed to a Committee of the Whole House.