§ Motion for Third Reading read.
The UNDER-SECRETARY for STATE for the HOME DEPARTMENT (Lieut.-Colonel Sir Vivian Henderson)
I beg to move, "That the Bill be now read the Third time."
In doing so, I should like, in the first place to apologise to the House for the absence of my right hon. Friend the Home Secretary. He has asked me to say that he has an important engagement of long standing with the Prison Commissioners, and he did not feel that he really was in a position to break it. I am myself in a position of some difficulty in moving the Third Reading, because I was not a member of the Committee which dealt with this Bill, and I only came to hold my present office when the House was half-way through the Report stage. The Bill has been considerably amended, both in Committee and on Report, and I would like to refer to some of these Amendments. The purpose of the Government when they introduced the Bill was to try and remedy certain specific grievances of tenants without necessarily doing any injustice to landlords. At the same time, when the Bill was introduced, my right hon. Friend stated that if any Members of the House came forward with any suggestions which were of a practical nature, he would be ready to consider them, and if anybody pointed out any provisions in the Bill which were unjust, he would be glad to try and remedy them. I think the Government can say that they have not only successfully steered an even course between the various interests concerned, but that they have produced on Third Reading a very much better and fairer Bill than the one which was introduced to the House on Second Reading.
My hon. and learned Friend the Solicitor-General, who has a better acquaintance with this Bill in detail than I have, and who will wind up the Debate, will be better able to deal with any Committee or other points that Members may mention in the course of the Debate, but I would like to refer to one or two of 1294 those points where changes have taken place during the passage of the Bill through the House. In the first place, we have extended Part I of the Bill in so far it concerns compensation for improvements to premises occupied for professional purposes. The Bill has also been extended to cover all tenancies whatsoever, and I think it is a very much more equitable arrangement, as it was really quite impossible to justify excluding from the Bill tenants on quarterly tenancies, who have been sitting there in many cases for many years. Further, no action for forfeiture for breach of a covenant to repair can be brought unless the service of the notice required to be served in accordance with Section 146 of the Law of Property Act, 1925, was known, in effect, to the lessee responsible for the execution of the repairs. On the other hand, so far as the landlord is concerned, no claim for compensation will lie in respect to improvements within three years before the termination of the tenancy. A landlord may escape liability for payment of compensation for improvements by offering to renew the lease on equitable terms; and no claim for a new lease under Clause 5 can be founded on goodwill created during the term of a lease granted under Clause 5, though a tenant may claim compensation under Clause 4 for any additional goodwill created during that term. There are also a number of provisions which affect equally the landlord and the tenant, but as a good many of those are legal, I think any reference to them had better be left to my hon. and learned Friend.
It may be suggested by some Members that on the whole landlords have rather scored more heavily than have tenants in this Bill, but I do not think that is the case, for this reason: The Bill is primarily one which gives certain rights to tenants as against their landlords, and it therefore follows that any hardships created by the Bill would fall, not on the tenants but on the landlords, and any Amendments to adjust those burdens more evenly can necessarily be made to figure as concessions to the landlords, but they are really nothing of the kind. There is one particular respect in which I greatly value having the opportunity of moving the Third Reading of this Bill, and that is that I was a Member of the Select Committee on Business Premises 1295 which reported in 1920, many of whose recommendations, although they were only of a temporary nature at that time, are actually embodied in the provisions of this Bill. All of us who embark on the sea of political life have many disappointments and some shipwrecks, and therefore it is a source of encouragement to anybody, particularly a younger Member like myself, to find oneself even temporarily in command of a ship in sight of port and bearing a cargo which he believes is going to be of value to the people to whom it will be delivered.
This Measure has figured in the programme of the Conservative party for a great many years. It was implied by one hon. Member during the course of the Debate, that we had suddenly taken up this question and that we had never given it any really serious consideration or had never had any careful enquiry or Royal Commission on it. It is not necessary, before you introduce legislation in this House, always to have a Royal Commission or a Select Committee. There may be some matters which are better dealt with in that way, but if we are going to lay down, as a precedent for legislation in this House, that before any Measure is introduced we must have a Select Committee or a Royal Commission on it, we are not going to make very much progress. In proof of the fact that this question has been in the programme of the Conservative party for many years, I would like to point out that the late Lord Long, when, as Mr. Walter Long, he was one of the leaders of our party, in 1913, made a public announcement on this very subject, in which he said that the principles underlying what was then known as the Town Tenants Bill, which were the same principles that are embodied in this Bill, were principles which had the support, and enthusiastic support, of our party.
Therefore, it is not a new question with us. It is a question which has been in the programme of our party for 15 years, and I am very glad that we have at last been able to bring it to fruition. I do not think that it. is likely to cause injustice to anyone, but I think we all agree that it is a Measure which is an experiment, and we shall all of us, who are interested in it, watch it with interest and with the hope that it will confer benefits on many thousands of tenants, 1296 without doing injustice to anyone. 1 think, not only the Government, but many Members on both sides of the House are to be congratulated on the practical interest they have taken in the Measure and the help they have given in suggestions during the course of its passage through the House.
§ Mr. DALTON
May I begin by offering our congratulations to the hon. and gallant Member who has made his maiden speech from the Treasury Bench with such a delightful charm of manner and in such a way as to give pleasure in all quarters of the House l May I go on to say that it seems to me a little significant that he should, as the representative of Bootle, be speaking in favour of this Bill and moving its Third Reading, in the same way as it seems to be a little significant that the hon. and gallant Member who represents Southport (Sir G. Dalrymple-White), on the other side, has also been exceedingly active in support of it. Bootle and Southport both fall within an area in which very large scoops of unearned increment have been made under the present law, the area of what may be called the clutching hand of the Derbys, and I have no doubt that in the neighbourhood of Liverpool, extending even to Bootle and Southport, even the stones cry out, even the most Conservative shopkeepers demand justice, and at last they are to get, in this Bill, a small instalment.
We on this side of the House regard this Bill as a very small and a very in-adequate instalment of justice to shop tenants. We know that the Bill has met with most violent opposition, not from our side at all, but from a certain section of the Conservative party, and the Home Secretary himself wrote to an hon. Member of this House, in reply to the fear which had been expressed in the course of the summer, when the Bill was in Committee and shopkeepers were growing alarmed at its slow progress:I think you may take it that the Bill is not really in jeopardy. … I have every reason to hope and believe that it will pass into law in spite of the factious opposition of two or three members who do not represent the Conservative party as a whole.Sometimes, we are told, we have divisions in our party. If we have, we are not singular. I do not know whether 1297 any of the hon. Members who took such a keen line of opposition to the Bill upstairs are going to have the courage to speak on the Third Reading, still more to have the courage to divide against the Third Reading. I hope they are. I would respect their attitude of mind more if I believed they were going to do so. I trust that the debates in Committee on this Bill will be widely read up and down the country. It is one thing to speak in Committee in the comparative obscurity of that place, in the comparative absence of reporters and Press reports, and quite another thing to come down to the Floor of this House and say the same thing again. Very few Conservative Members are here this morning. I do not notice the hon. Member for Loughborough (Mr. Rye), Who is distinguished as the most passionate opponent of the Bill whom we had upstairs; I do not notice the right hon. Baronet the Member for South Hammersmith (Sir W. Bull), who tried to kill it by kindness on more than one occasion, and I do not notice the hon. and learned Member for Gillingham (Sir G. Hohler), who produced every kind of legal expertise in order that it should be fully, and over-fully, debated and considered. Those hon. Members of the party opposite were very active in Committee, and have been described by the Home Secretary as putting up a fractious opposition. We are anxious, therefore, to see whether they are inclined to carry that opposition to its final, logical, and honest conclusion in this debate.
It may be wondered why hon. Members on this side of the House have given support to a Bill which, as I have said, we regard as so small and inadequate, and I will endeavour very shortly to put the reasons why. Let me begin by emphasising that this is a Bill which contains no reference whatever to the interests of the community as a whole—none. It makes no attempt to safeguard the interests of the community as a whole against the landlords taking away a large quantity of the wealth produced by others and putting it into their own pockets. Further, this Bill, although there is much in it about compensation for improvement, provides no compensation for any improvement made before the coming into operation of this Bill. Nothing that has been done hitherto by any tenant for the improvement .of his premises is 1298 going to count for compensation. We say, as we said upstairs—and we divided the Committee on this point, and were beaten—that this is a grave blot on the Bill. We say that the present generation of shopkeepers, unless they are young men starting in business, are not going to get any credit for their improvements. It may be that they will be able to think that when their sons succeed to the business, they will get compensation, but the majority get nothing out of it, because it has no retrospective effect.
Further, professional men are wholly excluded from the benefits of compensation for goodwill, and they are only, brought in as an after-thought, and largely as a result of pressure of hon. Members on our side of the House in Committee upstairs. They are brought in, to some extent, in respect of compensation for improvements, but, as I ventured to suggest to the House the other day, on the Report stage, that gives them a great deal less than one-half of that to which they are entitled, because the professional man, the doctor, the dentist, the solicitor and so on, stands to gain very much more from a recognition of his right to compensation for goodwill than from a recognition of his right to compensation for structural improvement, which, comparatively speaking, he seldom crakes, and, therefore, the professional man gets next to nothing out of the Bill. As originally drafted he got nothing, but as the result of pressure on the part of my hon. Friends, he now gets something, but very much less than he should get. The house-holder gets nothing. We were told that the Rent Restrictions Act gives that, but the private householder under this Bill gets nothing. Further, my hon. Friends and I upstairs endeavoured to improve the Bill here and there, and we succeeded to a very small degree. More important, perhaps, we had often to come to the aid of the Government, and helped them to sustain their Bill against revolt and breaks-away, led by the hon. Member for Loughborough and others whom I have already mentioned. The Home Secretary the other day was kind enough to give us a testimonial as to our assistance in that direction, which will be valued by us.
1299 Having now indicated the many deficiencies of the Bill, I am clearly called upon to give some explanation as to why so small, so miserable, and so paltry a Measure should command even the conditional support of our party. The reason is that, to put it shortly, we regard this Bill as the very thin end of a sound wedge. This thin end of the wedge having been inserted into the law, we hope in future to drive it in a great deal further. We find in this Bill certain valuable principles, even although they be not carried very far, and, for that reason, we give it our support, subject to what I have already said. If the hon. Member for Loughborough and his friends had the pluck to divide against the Third Reading, we should feel it our duty to support the Government against their own diehards in getting the Third Reading, even of this inadequate Bill. It lays down certain new and very valuable principles. I am not going to attempt to enter into the intricacies of the law, which I will leave to my hon. and learned Friend on this bench and the Solicitor-General. But I think I shall be within the truth in saying that certain new principles are introduced as far as town tenants are concerned, and that, for the first time, we have the setting up of what in other connections has been called a fair rent court.
This Tribunal is entitled to interfere with the landlord's previous ruthless exercise of the right to do what he pleases with his own. The dictatorship of the private landlord is, to a minor extent, limited under this Bill, and his present powers of legalised robbery are, to a slight extent, mitigated. His right, which has hitherto existed in almost absolute form, to confiscate the improvements of tenants, is, to a slight extent, curbed. He is made to compensate tenants in certain circumstances for the fruits of their labour which, under the present state of the law, the landlord is entitled to steal and put in his own pocket. Consequently, this Bill does little, if only very little, in the direction of justice on behalf of certain classes of tenants, and, if I might offer a word of advice to those tenants, I would advise them to take this Bill, without great enthusiasm, and, having taken it, to ask for more. I hope the party to which 1300 I belong, in the days to come, will give them more, and I believe that when we have to handle this problem we shall not content ourselves with such small and partial measures of justice as between the private landlord and the shop tenant, but shall aim at much wider measures of justice and adjust also the relations between private landlords and the community as a whole and put an end to the growing unearned increment from the labour of others which now finds its way into pockets utterly undeserving of its receipt.
§ Sir PHILIP PILDITCH
I do not think I need detain the House at great length, but as one of those who voted for the Bill on Second Reading on the understanding that it would undergo, and would necessarily undergo, very careful examination in Committee, it might be useful if I said a few words. May I compliment my hon. and gallant Friend the Under-Secretary to the Home Office on his successful debut at the Bar to-day? I remember quite well what he mentioned about our labours of the Business Premises Committee of 1920, and I rose from those proceedings with the sense that there were certain grievances which were felt very strongly. Sometimes they were exaggerated. I think they were not so many as were thought to exist and perhaps not so serious, but undoubtedly there was a sense of grievance in the minds of business men which it was thought desirable should be removed. On that occasion, and on subsequent occasions, I have undoubtedly felt it would be desirable, if possible, if something of the kind that this Bill attempts should be attempted. I can well remember the occasion to which my hon. Friend refers when the attitude of the Conservative party toward this matter was laid down. It was laid down in 1914 as a policy of the Conservative party by Mr. Walter Long, as he then was, in my constituency, and I think the party generally was agreed that the time would come, had in fact come, when something of this sort should be attempted. Therefore, notwithstanding the fact that the hon. Gentleman who last spoke takes great credit to himself for having supported the Home Secretary against certain opposition to the Bill, he must not run away with the idea that this is a matter in which the Government alone have been 1301 interested, for most people have recognised that there was something that needed' to be done in this matter.
I ventured to say on Second Reading that I thought the Bill would need most careful examination, and that that would be necessary because it involves something much more deep-seated than the reversal of an Act of Parliament. What it meant was a change in many ways in a full body of law resting on many Acts and interwoven with the whole system of real property law. It meant also a very serious change in the leasehold system of this country, a system which, whatever its defects may be—and I am admitting that there are some—has as a whole been beneficial, promoting as it does the co-operation of two classes of capitalists: one, the landlord who provides the land at a very low rate of interest, and the other, the business man who is enabled by this system to use his capital in a much more profitable way; and also, incidentally, it has been responsible for the creation and existence of the whole of the London squares and many other open spaces of that kind. My hon. and gallant Friend the Under-Secretary to the Home Office admitted in his speech that the effect of these changes would be exceedingly difficult to forecast. The hon. Gentleman who last addressed the House said he accepted this as the thin end of the wedge and asked for more. I, personally, have greater hopes for this Bill than he has. Within its range, that is to say, so far as business premises and the business of the country is concerned, I am inclined to hope that it will provide something in the nature of a settlement which will last a very long time. It gives point to some of the principles that were laid down by the leaders of the Conservative party in 1914 and carries them our, I think, to the fullest necessary extent at the present moment. I hope that instead of acting as a lever for a fresh agitation in this matter, which will not be beneficial to either of the parties concerned it will be looked upon as a solution of the difficulty which may last for a considerable length of time.
The Under-Secretary to the Home Office, in making his opening remarks, pointed out that the appearance of hostile action in the Committee made it look as though the whole of those Members who were putting forward Amendments in Committee were definitely hostile to the 1302 tenant and unduly favourable to the landlord. He rightly pointed out that this is a Bill which, from the beginning to the end and in the nature of things, must have been in favour of the tenant. It changed the law from the first Clause to the last in favour of the tenant. It is, therefore, fairly clear that the great majority of Amendments which were brought forward in Committee must bear the aspect of being favourable to the landlord. They were not really designed to be unfair to either party, but they were designed, so far as those I was responsible for are concerned, to see that in this change of the law fair play should be given to both parties, and that the necessary changes in the law should be thoroughly well understood; because, of course, the great fear everyone has in connection with a Bill of this kind is the uncertainty that it must cause in the minds of those owning property or of that class of person who builds and provides this class of property. The principal change undoubtedly which this Bill brings about, and which the hon. Member for Peckham (Mr. Dalton) referred to, is that in respect of all business premises and also of a large number of premises of a residential character which are occupied by professional men, the whole of the settlement of the questions arising between the two parties occupying the position of landlord and tenant will be taken out of the region of arrangements between landlord and tenant, and taken out of the play of supply and demand and of free contract, and placed in the hands of the tribunal. My own opinion is that if the tribunal were used, and if the provisions of the Bill itself were very largely used by landlord and tenant, it would not produce the, desired effects. I think that if it becomes a custom of landlords or tenants to appeal to the tribunal, you will have the uncertainty in regard to property which has been apprehended by most of those who had suspicions about the Bill, and you will have that accentuated. The general result will be that instead of its doing any good to either landlord or tenant there will be a general rise of rents, thus doing away with much of the good which the Bill might otherwise accomplish.
My hope of what will result from this Bill is that it will not operate in detail at all. I hope that what it will do will 1303 be to induce landlords and tenants to come together and to appeal neither to the courts, to which the late Solicitor-General would have them go at every conceivable opportunity, nor to the tribunal. I hope they will come together and settle matters, thus avoiding the apprehensions which must arise from the uncertainty which is created when the interests of two men in a certain piece of property are placed in the hands of a third person, without, possibly, either of the two having consented. We know that both landlords and tenants are now very largely advised by their own organisations, and if through those organisations they are advised not to take advantage of the provisions of the Bill, but to make every effort to settle differences which may arise between them outside the terms of the Bill, I think no harm will be done. What will follow from the Bill will be that a really grasping landlord—of whom, no doubt, there have been some—who desired to take advantage of opportunities he may have of taking away from a tenant the goodwill belonging to him, will be checked in his operations. He will be checked automatically, no doubt, by the fact that this Bill exists.
The decent landlord and the decent tenant will be well advised to have nothing to do with the Bill, but to come to terms outside the Bill itself. That affords the best means by which the interests of both landlord and tenant may be safeguarded. So far as I have been able to judge the situation, I think that is what will happen; and to my mind one of the principal safeguards of the Bill is that it presents no obstacle towards this being done. There are, indeed, a number of provisions in the Bill which make it perfectly clear that the landlord and the tenant may come together and settle things without involving themselves in the detailed and difficult intricacies of the Measure. If they do so I think the end the Government had in mind will be achieved, and the serious dangers arising from a sense of insecurity in property, and any tendency there might be amongst those who have been in the habit of supplying this class of property to discontinue doing so, will be avoided.
1304 It is not necessary for me at this moment to review the general provisions of the Bill, as that was done at considerable length in Committee over a period of some months, but I would like to say one or two words which may be regarded, perhaps, as supplementary to what the Under-Secretary said just now regarding what was done in Committee and the methods by which the operation of the Bill has been facilitated. There is no doubt that what was done in Committee justified the long time spent over the Committee stage. In the first place we removed a certain number of ambiguities which existed in the Bill. In the second place, certain limits were imposed to prevent frivolous claims for compensation being brought forward: there is a provision that the tenant must have been a reasonable number of years in occupation of his premises before such a claim can be made, a vote of this House finally settling the period as five years. In the third place, Amendments made in Committee protected the landlord against being required to compensate the tenant twice over, which the Bill, as originally drafted seemed to admit, i.e., compensation in money and by the renewal of the lease. Further, there was the effort made to minimise the uncertainty of which I have spoken by limiting the extension of the lease to fourteen years, a very reasonable proposition.
The line I took on Second Reading and in Committee was that there was justification for the Bill, but that it needed the most careful consideration in order that the objects of the Government should be achieved, and I have arrived at the conclusion that what was done in Committee did assist towards attaining those objects. I think it is now a reasonable Bill, which will afford a sufficient amount of protection to the tenants of business premises, with, I hope, a minimum of disturbance of the business of the country and the interests of landlords, and on those grounds I shall vote for the Bill.
§ Mr. MacLAREN
The Government and the hon. Member for Spelthorne (Sir P. Pilditch) are extremely anxious that the public outside should fully understand how extremely eager they have been for many years past to bring about a just 1305 arrangement between landlords and tenants. We have been told that the late Viscount Long pronounced this to be the Conservative policy a very long time ago. If Lord Long had been present during the Committee stage of this Bill he would not have been happy about the support it was receiving from his lineal descendants in this House. Not unfrequently the Members on this side of the House had to save the Home Secretary from the disastrous consequences which might have visited him if the men behind him had had their own way. It is not too much to say—I want to make this quite public—that this Bill is in existence to-day simply by reason of the support which it received from the Labour party when in Committee. I must pay my due meed of respect to three courageous Members on the opposite benches—the hon. Member for Cambridge University (Mr. Withers), who was a pillar of strength and a tower of wisdom, the hon. Member for North Paddington (Sir W. Perring) and his colleague, well-known on the Committee stages, who certainly upheld what is now claimed to have been laid down as a line of action by Lord Long. We found the Home Secretary standing there timorously asking us to carry the Bill through, but we were never sure whether the shots against the Bill were coming from the hon. Member for Spelthorne, the hon. Member for Loughborough (Mr. Rye), or the eloquent and pungent Member for Gillingham (Sir G. Hohler). All this certainly added to the length of the Committee stage, because those hon. Members delivered elongated speeches which meant nothing. The hon. Member for Spelthorne has told us that this Bill will take away the free operation of the relations between landlord and tenant, and that it will interfere with the free operation of the law of supply and demand. I think anything that would take away the tenant from the landlord would be a good thing, and I do not know of any tenant in Great Britain who would object.
We have been told that this Bill will lead to a general rise in rents, and give rise to suspicion in regard to the security of property. The hon. Member for Spelthorne, in language which I cannot understand and which seems to be common on the other side of the House, said that this Bill is going to interfere with 1306 the equitable arrangements between two capitalists, and one of them is the landlord who provides the land. [An HON. MEMBER: "Where did he find it?"] The Conservative party still hold the modern idea that the landlord provides the land. The general argument of the hon. Member for Spelthorne does not make it quite clear that he is enthusiastic in his desire to follow out the policy of the late Lord Long. I do not think there is a Member of the party opposite who dare vote against this Bill.
§ Mr. MacLAREN
I admire the course taken by the hon. Member for Loughborough, who has been honest and frank in his opposition, and if he carries that opposition to a Division it will show how far his loyal colleagues upstairs are prepared to support him in the Division Lobby. When this Bill was passing through its Second Reading I stated that the crux of the Measure would be round about the question of goodwill. I remember the Solicitor-General endeavouring to give us a definition of goodwill. I fail to see even in this Bill, or in anything that has happened during the Committee stage, any attempt to give a clear definition of goodwill. I am still bold enough to defy the Attorney-General to attempt anything in the nature of a definition of the thing which has been called goodwill. I know that many tenants were looking forward to the development of this Bill and its final passing into law. They have been depending a good deal upon getting something to their advantage under the heading of goodwill. I quite appreciate all that, and this makes it incumbent on the Government to make it clear what they mean by goodwill which has not been clearly defined upstairs. I think the House will appreciate, when setting up a tribunal which under this Measure will be burdened with a great number of instructions, that it should be incumbent upon the Government to give a clear definition of what goodwill really means so that the tribunal would know exactly what to do when making this valuation under the Act. That has not been done.
Upstairs we felt that it would be a good thing to move an Amendment to 1307 the effect that the County Court Judges should be allowed to act in this matter, and we put down an Amendment to that effect. Our proposal was defeated, and I think it was a pity because there is scarcely any points which will arise under this Bill which will not involve a point of law. Considering the number of instructions provided for in the Bill, and the fact that the tribunal set up will consist mostly of laymen, I should have thought that the Government might have considered that the best practice to adopt would have been to allow us to have had our way by giving power to the County Court Judges to act as a tribunal in these matters.
There are a great many instructions which will tend to overburden the tribunal. The Bill as drawn has for its object the payment of compensation to the tenant for improvements effected by the tenant, and compensation is to be paid according to the value, that is the .added value, which these improvements have given to the property. As a matter of fact that is a myth, and it raises the false hope that the tenant is to receive compensation in respect of improvements which have added to the letting value of the property. I think the tenant when he is disturbed from his place of business, or has his tenancy terminated, should be compensated for his improvements, quite irrespective of whether they add to the letting value of the premises or not. The hon. Member for Cambridge (Sir D. Newton) has asked us to consider the case where the improvements are detrimental to the property. In reply to that argument I would like to say that a matter of that kind could be adjusted on the basis of valuation. In most cases where the lease is ending and the landlord is taking possession, the landlord should be the last person to complain if called up to pay compensation for the improvements made by the tenant, quite apart from the consideration as to whether those improvements add to the letting value or not. The very fact that in the Bill it is stated that compensation will only be paid for the added value is bound to cut out a great number of people whose improvements would be quite easily proved not to add to the letting value of the 1308 property. The difficulty becomes clearer, if I may put it in that way, in such a passage as one finds in Clause 3, where it is laid down that, if the tenant of a holding proposes to make an improvement, he must indicate to the landlord that he is going to make the improvement. Furthermore, supposing that there is some difference between him and the landlord as to the effect of the improvement, he must go before the tribunal, and here is an instruction which, in my opinion, can never be carried through. It enacts that the tribunal,if satisfied that the improvement is of such a nature as to be calculated to add to the letting value of the holding at the termination of the tenancy,may certify that the improvement is a proper improvement. There is no tribunal on this earth that can say whether an improvement will add to the value at the end of the tenancy. It is beyond the human mind to make any such prophecy. Indeed, according to my experience of valuations in America, where they are carried out much more effiicently than here, in many cases such a thing as this might happen: An improvement is effected, and, after some time, it is discovered that, owing to local development in the area, what might have been regarded at the time as a distinct improvement was discovered long before the end of the tenancy to be an incumbrance on the property and not an improvement at all. This instruction which is given to the tribunal can never be carried out.
I come now to the famous Clause 4, and here I would commend to the Members of the House of Commons, irrespective of party, a re-reading of the speeches delivered in Committee on this question of goodwill in connection with Clause 4. I tried to make it clear on the Second Reading and in the Committee, and I adumbrate the same idea now, that it is a difficult task for the most learned of lawyers to disintegrate what might be termed site value from what is called goodwill. I maintained that position in Committee, and I want to congratulate the Home Secretary, even in his absence, on the manful way in which he came forward and accepted it. I would call the attention of the House to the remarks that he made here in this 1309 Chamber when the Bill was being reviewed on Report. He said:I want to say that we tried very hard to keep ground values out of the Committee stage upstairs, and, like King Charles's head, it cropped up from time to time.The Home Secretary went on to say—and these are the words which I want to be re-read and appreciated:There is no more right for the increase which is due to the public ground value to belong to the tenant than to the landlord."—[OFFICIAL REPORT, 8th November, 1927; cols. 100–101, Vol. 210.]12 n.
That opinion was strengthened by a notable speech by the hon. Member for Cambridge University (Mr. Withers). As the Bill stands, with the Amendment, added by the Home Secretary, instructing the tribunal to disregard in its valuation of goodwill any value attributable to the site occupied by the premises, it makes me think that the poor tenants will discover that the amount of goodwill they will receive from any tribunal under this Bill will be a minus quantity. There are other points in the Bill, which I will leave to others to discuss. There is much by way of criticism that one could advance, and I want rather to state, following what has been said from the front Opposition Bench to-day, that we are not anxious in any way to impede the progress of this Bill. With all its faults, and it has many, with all its difficulties—and, indeed, there are Clauses in it which I cannot understand, and I question very much if even lawyers could make them clear—all that notwithstanding, we are anxious that this Bill should become law, because it marks a new point of advance. The old historic power of the landlord to dictate terms to the tenant—and not only to the tenant of the land immediately under his charge, but to the tenants of the land contiguous to his own property—is implicitly challenged by this Bill. If anyone had told me years ago that a day would come when, in the British House of Commons, a Conservative party would have fathered such a Bill as this, I should not have believed it. It seems, however, that the days of miracles are not past. This Bill, in my opinion, is a momentous measure. Concentrating as I do almost entirely in this House on the land question, which I believe to be fundamental to every other question—while we are talking about Russia and 1310 Timbuctoo and other odds and ends by way of plasters on social sores I keep my eyes on the land question—it will be understood why I appreciate this Bill. I look upon it as something that will be a marked page in history, to which we can always point, and for which we can give credit to those dear old Conservatives who in 1927 had the courage to evolve it. They are building better than they know.
I am quite sure that there is not a real property lawyer on the other side of the House who is not deeply apprehensive of what is going to develop out of this Bill. The rank and file of the House, even on this side, are oblivious of the implications of the Bill, but I think I am speaking the truth when I say that, if one could only get one's ear to the consciences and inner feelings of the real property lawyers on this question, they do not like this Bill at all, because of what it will mean. It is the beginning of something which we, as an advanced party in this House, will make much of in the future. It is the first indication in law that the landlords are not the absolute masters of the land and property in this country, but that the tenants have some right against them. What they will receive under this Bill will amount to very little—little or nothing at all. The hon. Member for Spelthorne is, perhaps, quite right in suggesting that, apprehensive of what might be involved in any decision of this tribunal, many of them will have recourse to private arrangements outside the Bill. That may be so, but I should also like to remind hon. Members opposite that not infrequently in Committee the wiser and more far-seeing of the landlords' advocates went so far as to say that, if this Bill becomes law, it will be the utter end and ruin of the leasehold system in England. I hope they will say so on the Floor of this House to-day.
I wish this Bill well, because it is something that we shall make more of in the future. There are ways and means whereby a courageous Government, determined to give the tenants the full value of the product of their labours during their tenancies, will be able to do so without this circumlocution, this bureaucratic, hamstringing method called the Landlord and Tenant Bill. Such a method will be adopted, no doubt, when a courageous Chancellor of the Exchequer 1311 comes to that Box. I hope that in the near future much of the argument that has been used for and against this Bill will be repeated when the question of ground values comes up for consideration. That wonderful thing called the law of rent and economics, which most men do not see, that unstable quantity which emerges into the distribution of wealth, evades men when they try to understand it, and gives rise to disproportionate appropriations of wealth in the community—that same thing called rent has been invading and eluding the grasp of the analysts of this Bill. I hope that a Chancellor of the Exchequer more bold than his predecessors will endeavour to appropriate the ground values of this country in a national tax—for that evidently is what this Bill is trying to do. The Home Secretary said that he had tried to keep Ring Charles' head out, but it came in. I hope in the future, when that is done, a man who wishes to use his land either for business purposes or any other kind of useful function will be left undisturbed in the enjoyment of the result of his own labours and that the parasitic growths which have for long cut in and taken from him that which was his will be dealt with in another way than by a Bill of this kind. However, the Bill will have the support of all our colleagues on this side, and even the diffident support of those who are afraid to oppose it on the other side, and will become law.
§ Sir JOHN POWER
I should like to remind the hon. Member that there is such a thing as killing the golden goose, and if he succeeds in entirely killing the landlord, he is going to put a great disability on the tenant. I doubt whether any trader would like to find the capital to pay for the premises in which he carries on his business. That is a very doubtful point, and one which should be borne in mind. I spoke strongly against this Bill on the Second Reading, because I thought, as drafted, it was a very unjust Measure, and would do far more harm than good. I think my objection to it has been entirely justified by the drastic manner in which it has been altered in Committee. Two main points of my objection to it were in regard to the Clause dealing with improvement and that dealing with goodwill. I should like to illustrate my objection to the Clause in regard to improvements as it originally 1312 stood. An unfortunate landlord might well have lost the whole of his property without any benefit either to himself or to the tenant, in this way. A landlord who had a mortgage on his property might be served with a notice by his tenant that he wished to carry out certain improvements. The landlord, being without ready cash, probably impecunious, struggling on, would say, "I cannot carry out these improvements for you. I have not got the money." The tenant would take him to the Tribunal, and the Tribunal would say, "The trader's requirements are perfectly reasonable and must be carried out, but since you have not got the money to carry them out the trader must carry them out himself." Let us suppose he proceeded to do so. The lease would come to an end by effluxion of time, and he would be in a position to say to the landlord, "Pay me for my improvements." Again the landlord would say, "I have not got the money to pay for them", and another case arises for the Tribunal.
You will see how important this Tribunal is going to be in the life of the landlord in future. The Tribunal would go into the matter and say, "We consider your improvements have added so much to the annual rent of the premises, we will capitalise that annual rent, and you must pay this sum to your tenant." The landlord will then be in the position of holding the premises, which are mortgaged to their fullest extent, without ready cash to pay the tenant's claim, and the probable result of this extra charge being placed on the premises would be the calling in of the mortgage, the forced sale of the premises, probably for what the mortgage amounted to, plus costs and expenses, and the landlord might find himself turned into the street, having lost his premises, without the money to pay the tenant, and it might end not only in losing his entire property, or the equity of it which belonged to him, but also in being made bankrupt by his tenant on account of the charge for improvements which he had not the money to pay. That to my mind was a most unjust state of affairs, and it has been removed in Committee. Now, anyone who makes a claim for compensation for improvements at the end of his lease saying to the landlord, "I do not want your premises any more," leaving the landlord to translate the improvements 1313 into cash, will not get any compensation if the landlord offers him a fresh lease. In that way all the very grave injustice, to my mind, has been removed.
On the question of goodwill, another very serious point, the landlord might easily have found himself in the position that, having let his premises to a tenant, after a short space of time he had entirely lost control of his property, and under the Bill as originally drafted, a sort of dual ownership, or dual control, had been set up and the tenant, having proved that he had created a goodwill, was entitled to a fresh lease for an undetermined period. That to my mind would not only have been unjust to the landlord, but would have been a fatal blow to the leasehold system. That objection has been met by limiting the length of lease that the tenant can obtain to 14 years, and. in a great measure my objection is met. I think it is to be deplored that the Bill was introduced under its present title, and a line drawn with the landlords on one side and the tenants on the other. Prejudices are aroused, and when prejudice comes in at the door, reason goes out of the window. This is not a subject to be lightly treated. This is an amendment of the leasehold system, and the leasehold system has been of advantage to the community generally. I will not say there are not bad landlords, and I am certainly not going to say there are not bad tenants, but when all is said and done, the leasehold system provides a tenant with premises in which to carry on his business at a rate of interest which he would not look at himself. The trader has a certain amount of capital which he employs in his business. He may turn over at four or five per cent., and he may do that once a month. He cannot, therefore, as a matter of economics invest his capital in buildings, which pay on an average 5 per cent. or 6 per cent. per annum. He cannot afford to do it. I do not say there are not special cases where a trader for exceptional reasons may wish to own the freehold of his building, but generally speaking, some of the biggest traders have refused to buy their premises because they say their shareholders expect a much higher dividend than 5 per cent. or 6 per cent., and they cannot afford to lock up their capital in permanent buildings.
1314 This Bill is a very serious amendment of the leasehold system. It is going to do a certain amount of good, there is no doubt of that. There are unscrupulous landlords, just as there are unscrupulous people in every walk of life, and it is going to give tenants, though not in all cases, a measure of protection that they have not had before, and no reasonable man objects to their having it, but it would have been a great advantage to the House, if the Home Secretary, in introducing this very far-reaching change in the leasehold system, had given the House some idea of the number of hard cases. The House has very little knowledge beyond the general talk, which is not of very much value, as to how many authenticated cases of real hardship there have been to justify the introduction of this Bill. There may have been a great many. Personally, I do not think that there have been as many as one would think; because most of these cases of so-called hardship—I do not deny that there are real cases of hardship—[Interruption]—I do not deny it at all. There are unscrupulous men in every walk of life, and even among landlords. But I know from my own experience that when you come to analyse most of the cases which are talked of and in which it is stated there has been very great hardship you find that there is no hardship whatever. It is very difficult for the tenant who has been sitting at a low rent for 20 or 30 years to stand the strain of having his rent put up to the modern day figure, which is the .ordinary market value. Immediately the tenant's rent is raised, he thinks he is being put upon and that he has something about which to complain, whereas if he goes into the matter he will find that what has really happened to him is that his rent has been raised to the market value. I know of many cases that on investigation have turned out to be based on no grievance whatever.
This Bill is going to do a very important thing, and it is a very serious one, not only to the tenant, but to the landlord. It is going to take out of the investment class the whole of the trading premises of this country and place them into the hands of the business class. Shop property, and it is shop tenants who are so much in our minds 1315 in connection with this Bill, has always been a favourite form of investment with people who want to have very little trouble. These people are content with a small interest. They let their shops usually on a 21 years full repairing lease, and all they have to do is to collect their rents once a quarter, and they have no trouble or worry. What is going to happen in the future? Any tenant who so chooses can always pick a quarrel with his landlord, which means that the landlord will have to employ surveyors, solicitors and counsel to defend him against those attacks. Anyone who has any experience of the law knows that you never, even if successful in your case, recover the whole of your expenses. Consequently, the landlord of the future is bound to have an additional expense put upon him. That is a matter to which I do not think he can object; it is all a question of economic justice. But what I want to point out is, that that sort of thing will happen. The result will be that anyone who owns business premises to any extent will in the future be in the hands of his surveyor, solicitor and counsel, as my hon. Friend the Member for Spelthorne (Sir P. Pilditch) said on the Second Reading Debate, "from the cradle to the grave." The Bill will confer a great benefit on the professional men whom I have enumerated. There is no doubt whatever about that fact. What I am anxious to know is, will it confer a benefit upon the tenant? Because all these charges are a charge on the industry of owning business premises, and, as legitimate charges, they will be paid by the person who enjoys the benefit of the premises, namely, the tenant. Naturally, it will take some time for it to happen. But in the long run, if you are going to increase the cost of premises by six, seven, eight or nine per cent., or any percentage you like to fix in your mind, the man who enjoys the benefit of the premises will have to pay the additional charge.
I look upon this Bill now very much in the same light as I looked upon it on the Second Reading, namely, as a sort of experiment. We shall have to see how the Measure works, but I do not think that there is any going back on a matter of this kind. If it is going to curtail the market for business premises, it will really 1316 be a very serious matter. We know what was the effect of the Budget of 1909-10 which was supposed to be a very good thing by those who introduced it. It had an effect upon housing in this country from which we are suffering to-day. As soon as the demand for the purchase of houses ceased the supply ceased also. If you are going to make the holding of business premises so onerous, so worrying and so vexatious, the same will happen here. I want my hon. Friends, opposite really to give the matter their consideration, because it may mean—I hope that it will not—a great falling off in the supply, and as the price depends upon supply and demand, the rents will go up, and the time may come—I hope that it will not—when tenants may desire to be saved from their friends. The Bill as it stands at the present time gives the tenants that measure of protection which they desire and which we all desire. I think that harm can only now occur in a general way and not in a particular way, and therefore I have no objection to sup-porting the Bill.
§ Major OWEN
On the 23rd of February of this year I had the honour of introducing a Measure dealing with the question of landlord and tenant which expressed, as I said then, the policy of the party to which I have the honour to belong. On that occasion, I said that I should be glad to find the Government taking a leaf out of that policy and introducing it in the Measure that they were about to bring before the House. I am very glad to-day to be able to congratulate them on having introduced, at any rate, an instalment of justice to leaseholders in this country. It is a partial Measure dealing only to a certain extent with a very great and serious difficulty that arises between landlord and tenant. While the Bill was upstairs in Committee, those of us who are anxious that this measure of justice should be carried into law were greatly perturbed by the massed battalions of the supporters of landlordism and their attempts to introduce into the Bill certain Clauses and Amendments which would have, in our opinion, at any rate, wholly destroyed the effect and the benefit of this Bill to tenants in towns. There is one thing, however, we were glad to notice, and that was, that quarterly tenancies were included in the scope of the Bill. We were also glad to find that here in the 1317 House on Report the period was extended to 14 years. I only regret it was not extended to 21 years. There are many features in this Bill which have been taken, adopted or borrowed, whichever phrase you like, from the policy as laid down in our book "Towns and the Land." We are glad to notice that the tribunal, with one exception, the introduction of the President of the Law Society, is exactly the tribunal that we suggested in this book. There are, however, certain regrets which we feel. One regret is that professional men have been omitted in so far as good-will is concerned. That would, I think, in the case of certain classes of professional men have been only a very necessary measure of justice.
Part II of the Bill, dealing with the amendment of the law as between landlord and tenant, leaves out one very important thing. It does affect the law as between landlord and tenant, but it omits the householder. At any rate, those of us who represent country constituencies know the difficulties that the householder, the leaseholder, has to go through. In my own constituency there are many villages where all the houses are held under the leasehold system; the tenure is a short one, ranging from 40 to 60 years, and many cases have come within my own experience where a man has built a house and before he has finished all his work, and so on, the house goes out of his possession. To remedy that state of affairs is a measure of justice which we hope the Government will, in time, adopt. The hon. Member for Burslem (Mr. MacLaren) congratulated the Government on having created something in the way of a revolution in regard to this matter. Our only regret is that the revolution has not been a more complete one; but we welcome the Bill as it is as an instalment of a greater measure of justice to leaseholders throughout the country. For that reason, I, personally, and those behind me will only be too glad to support the Third Reading of the Bill.
§ Mr. WOMERSLEY
Last year I had the honour to introduce a Town Tenants Bill, and I was informed on that occasion by many hon. Members of my own party that I had as much chance of getting that Bill through the House of Commons as a cat had of getting through Hades. It looks as if this cat is going to emerge 1318 from the place I have mentioned, although I am sorry to say that it is a little burnt and scorched in places. None the less, on behalf of the Town Tenants' League, I welcome the Bill even in its present state. I am sorry that the Home Secretary is not in his place, because, on behalf of the League, I wished to offer him my sincere congratulations on the way he has stuck to the principles which he outlined on the Second Reading of the Bill, in spite of rather strenuous opposition on the part of people who he had hoped would be friendly to him. I would like also to extend to him the thanks of the members of the League for what he has done for them in this Bill. Further, I would like to congratulate the late Under-Secretary, the hon. and gallant Member for Chorley (Captain Hacking) who did his part very well on occasions when his chief could not be in Committee, and I would like to congratulate the new Under-Secretary on his speech this morning. There is only one point to which I would like to take exception, and that was where the Under-Secretary referred to the Bill as an experiment. I cannot agree on that point, because the Bill is not in the nature of an experiment. The principle has been embodied in Acts of Parliament before. It has been tried out in the case of Ireland by the Irish Town Tenants Act, 1906, and all the reports we get from Ireland show that it has proved an unqualified success. Let me quote the testimony of a learned judge who, in giving information on the working of the Irish Town Tenants Act said:It has been a success and has prevented a very large number of evictions of tenants. Up to 1920"—that is, from the time it was passed in 1906—494 cases only have had to go before the courts of Ireland under this Act.That proves beyond the shadow of a doubt that when the Act of Parliament was passed which gave equal justice to the two parties affected, there was very little need to go to law to settle points. As the law has existed in this country, the real weapon was in the hands of the landlord, the owner of the property, and the tenant had no weapon with which to fight. This Bill does give the tenant a weapon of a kind and, therefore, I anticipate, as stated by the hon. Member for 1319 Spelthorne (Sir P. Pilditch) that there will be very few cases that will have to go to the tribunal, or will have to go further and proceed to, the Courts. Experience proves that in regard to the Irish Act. A similar Act has been passed in France, and from the information which we have received it is working very smoothly and satisfactorily there.
The hon. and gallant Member for Carnarvonshire (Major Owen), who introduced a Landlord and Tenant Bill this year, complained of certain omissions as regards this Bill. I have a complaint against his party on this matter, and that is, that although one or two of them did give us a fair amount of support in Committee, generally speaking, we did not have their help to the extent that I had hoped. I do, however, wish to congratulate the hon. Member for West Waltham-stow (Mr. Craufurd) who put up a good fight on behalf of the town tenants in Committee and brought his great knowledge of the question to bear on many occasions, to great advantage. I also wish to congratulate the members of the official Opposition, the Labour party, on the Committee, who did sink many of their own feelings and helped in every way possible to get the Measure through, although they regard this Bill as a very milk-and-water affair. I and the members of the Town Tenants' League are very grateful to them.
Let us consider this question in its historical aspect. I took part in the movement when the Town Tenants' League was formed in 1905. It was formed as a non-political body to bring about some reform in regard to town tenants and their leases. In those days we did not receive the support of any political party, but as time went on and the agitation grew, and it looked as if it were going to be of advantage to someone, we received an assurance from the Liberal party that they would do something for the town tenants. A deputation waited upon the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) about 1913 and he told us that he had great sympathy with all we were asking for and that he would do something for us. He was then Chancellor of the Exchequer, and he promised that a Bill would be brought forward to remove the grievances 1320 of the town tenants. What happened? Nothing at all. We received the promise, but nothing happened. I am glad to say as a supporter of the Conservative party that it is my own party which has, at last, brought forward a Bill which is a measure of justice to town tenants. If we look back into the history of legislation in this country we find invariably that it has been the Conservative party which has brought about reforms in many cases.
§ Mr. WOMERSLEY
I am reminded by the hon. and gallant Member for Carnarvonshire that it has been after they have been taught by someone else. Whoever may have taught them, they have been doers and not talkers, and that is my point. Although it may be truly said that certain Members of the Conservative party on the Committee have obstructed the Bill and tried to stop its progress, that does not mean that the general hulk of the Conservative party are not in favour of something in the nature of a reasonable reform on evolutionary lines and not on revolutionary lines. This Bill is another token and proof that the Conservative party, as a party, is alive to what is required for the betterment of they people, and always prepared to do the thing in the right and proper way, and I am proud to be able to support them. I am sorry that some Members of the Liberal party are not quite of my opinion. I would like to quote from a certain gentleman who was once a Member of this House, and I will do so for the benefit of the hon. Member for Loughborough (Mr. Rye), the hon. Member for Wimbledon (Sir J. Power) and the hon. Member for Speltherne, so that they may have a little consolation at lunch after this Debate. That gentleman is Dr. Macnamara, who was speaking on the question of the leasehold system generally and the relationship between town tenants and their landlords. He referred to this Bill as a poor anæmic sort of thing, which gives tenants the right to a renewal of lease but no right to acquire the freehold, and in other respects treated with every sort of tenderness and solicitude the landlord's position. That was what, says Dr. Macnamara, was likely to emerge from the present Tory House of 1321 Commons; a ludicrously inadequate contribution to the treatment of one of the most indefensible of the many injustices inflicted by land monopoly in the country. I want the hon. Members I have mentioned to bear that in mind, and think of what might have happened if a Labour or Liberal Government had brought in this Bill. I prefer, however, the opinion of an hon. Member of this House, who was a member of the Committee which dealt with the Bill. I mean the hon. Member for West Walthamstow. I regard him as one of the strongest supporters of the case of the town tenants. He says:The Measure is as much as, perhaps even more than could be reasonably expected from the Government, but at any rate the power to exploit and dispossess tenants of shops has received its first check.I think the Government deserve every credit for having had the courage to tackle this involved problem. And it is involved. It has been the cause of very great trouble to town tenants in this country for many years. They have suffered grave injustices. The hon. Member for Wimbledon warns us that the effect of the Bill will be a shortage of shopkeeping premises, but I would remind him that there will be no shortage of these premises in the provinces when it is possible to buy a house for £280, put in a shop front, let it for £120 a year and sell it at the end of ten years for £5,000. That sort of thing has happened. The hon. Member says that cases of hardship are exceptional. I can assure him that we can produce many hundreds of authentic cases which have occurred during the last year or so; and he knows that there are many cases of hardship. The Government know it, too, because they made a full inquiry before introducing this Measure. I hope the Bill will receive no worse treatment when it is passing through the other place than it has received in this House. I am told that the Lord Chancellor will be in charge of it and, if that is the case, I am quite satisfied because, he has made a study of this subject and knows exactly the position both from the landlord's and tenant's point of view. I do not think he will allow the Bill to be mutilated. Finally, may I say that I am indeed a proud man to-day, knowing as I do that the Bill will receive a Third 1322 Reading. It is a Bill which marks a wonderful step in advance in the law between landlord and tenant, and will be received with great satisfaction by the trading community of the country.
§ Mr. RYE
I want, first of all, to clear up a fear which is in the mind of the hon. Member for Burslem (Mr. MacLaren). He seemed to think that lawyers would be much concerned as to the effect of this Bill, as in his opinion it meant the end of the leasehold system Speaking as a lawyer, may I say that we welcome this Bill. No finer suggestion has ever been made for bringing grist to the lawyer's mill.
§ Mr. MacLAREN
The hon. Member has quite misunderstood me. I said that lawyers were authorities on real property and referred to the effect of the Bill on the question of real property and the leasehold system. That this Bill will give an enormous amount of work to the lawyers, if it comes into operation, I heartily agree.
§ Mr. RYE
I am sorry if I misunderstood the hon. Member, but I would like to emphasize this fact, that from the professional point of view this is one of the most delightful schemes any Government ever brought forward. But none the less I am against the Measure root and branch. I stated on the Second Reading that I did not like the Bill, that it was unjust and unfair to landlords and would do an immense amount of harm. I have said so throughout the Committee stage, and I propose to say so again to-day. Unfortunately, owing to an urgent business engagement, I was not present when the Under-Secretary spoke, but I understand that he referred to the Report of the Select Committee on Business Premises issued in 1920, and said that he does not consider it is necessary in all cases to precede legislation by any inquiry whether by Royal Commission or a Select Committee of this House. I suggest that the Under-Secretary is wrong and that where it is intended to bring in legislation which will make a drastic alteration in the law which has existed for centuries between landlord and tenant there should at least have been an inquiry by Select Committee of this House. I also suggest that the Government might, at least, have read and paid some attention to 1323 the Report of 1920. The Under-Secretary himself was a member of that Committee. If reference is made to that Report it will be found that there was no recommendation that a Bill of this character should be introduced, and I am rather astonished to find the Under-Secretary supporting a Bill which differs so materially from the very Report for which he was partly responsible.
§ Sir V. HENDERSON
It does not materially differ. The hon. Member has not read the recommendations of the Committee.
§ Mr. RYE
I am sorry the Under-Secretary should tell me that I have not read the recommendations of the Committee, and more sorry that he should say they do not materially differ, because if he will refer to the Report, he will find that the Committee only recommended a temporary measure of legislation for a period of 2½ years. This Measure is a permanent one. He will find further that he and his colleagues recommended that a small expert Committee should be set up to inquire before any further legislation, beyond that which they recommended, was introduced. No such Committee has been set up to make any such inquiry. Then again—I am astonished to hear the Under-Secretary's statement—he and his colleagues also stated that they considered that any building which was in course of erection on the 2nd of April, 1919, or was built after that date should be exempt from any legislation which was brought in. Is that the case to-day? This Bill is to cover every building in course of erection from April the 2nd, 1919, every building put up since, and every building that is to be put up; and yet the hon. Member tells me that there is no material difference. There is a vastly material difference between the legislation suggested by that Committee and the legislation now under discussion. I want to draw the attention of the House to this statement—I hope the Solicitor-General will bear this point in mind—that in their Report the Committee stated that having made careful inquiry and examined 32 witnesses they had come to the conclusion that the great majority—I emphasize the word "great"—of land- 1324 lords of business premises had acted fairly and not unjustly towards their tenants.
The Government have not thought it necessary to set up any further inquiry. All they have done is to have what I call hole and corner meetings. This is something which has been done in a corner, something which can only be placed on the Statute Book by the assistance of the Socialist Members of the House. The Government know perfectly well that if this Measure were allowed to go to a free vote they could never carry it. In Committee, who carried the Amendments? The Socialist Members on the other side. It was not the Conservative Members. I want to draw attention to a further fact. The right hon. Gentleman the Home Secretary, on the Second Reading, referred to one or two cases which had come to the notice of the Government, cases of gross injustice. As a matter of fact, he referred only to one and he did it in a most dramatic manner. I do not know whether the right hen. Gentleman, at the moment, thought he was back in the past, and, like Burke, casting a dagger on the Floor of the House, but he held out this wonderful bill headed "Leasehold Injustices," issued by Mr. John Pearce, restaurant proprietor. The very cases which were cited by the right hon. Gentleman were, as a fact, untrue. An hon. Member proved to the House that one of those cases was not correct and the other statement was not correct either. It was open to the Government to have made inquiry. There was a Member in this House who could have given them information on one of those grievances and accusations. As far as I know, not the slightest attempt was made by the Government to look into the matter and to see whether John Pearce, restaurant proprietor, was telling the truth or not.
I do not understand whether the Government fell in love with John Pearce, restaurant proprietor, or whether they were working under the hypnotic influence of the hon. Member for Grimsby (Mr. Womersley) and the hon. Member for North Paddington (Sir W. Perring), but, whatever the reason, the result was that we have this Bill. I can imagine the scene and the interview with Mr. John Pearce, the ex-parte statement made by him, and those who heard him holding up their 1325 hands in horror and saying, "This is deplorable and dastardly and disgraceful and should be stopped." I can almost picture the right hon. Gentleman hurrying to the Cabinet and taking with him John Pearce as the physical evidence in support of the Bill. I can almost hear the Prime Minister saying, when he heard the case, "This is a most shameful thing. The accusation is disgraceful. I believe, as you will all believe, that it is true, and I, therefore, ask you, St. Joynson, to go hence, put on your suit of armour, or rather your second best, with the Socialist gorget and Socialist breastplate, and slay this dragon of landlordism." They might have remembered that it was the same, this dragon, that had been responsible in the past for the erection of half London; this dragon that has granted leases that have allowed tenants to obtain thousands and thousands of pounds and enormous benefits; this dragon, composed in part of poor people, not millionaires or dukes or the rich, but many a poor widow and poor person. But no! This dragon had to be killed. I am bound to confess that the right hon. Gentleman struck it a number of serious blows. How far the dragon will recover from these blows, time alone will show.
I do say that if ever there was an unreasonable and unfair attack upon landlordism it is the attack that is now being launched by the Government. I do not know what the consequences will be. Personally, I am of opinion that it will materially reduce values. It has done so already. I know that some hon. Members say that that is not the case. Let me give an instance. There was a sale by auction of a ground rent in Denman Street, Piccadilly Circus, a few months ago. It was a ground rent of £105, secured upon a new building. All that it fetched was £1,925, not even 20 years' purchase. That was because of this Measure of oppression. The hon. Member for North Paddington, the man with a hypnotic eye, who got the Home Secretary in his pocket and intimidated the Conservative Government to bring in a Measure of Socialism, will say that no harm is done to the landlord. No harm? Is it no harm to reduce the capital value of a man's property, to force upon him a number of lawsuits in the shape of appeals to tribunals? We have all heard the old saying that only a fool buys a law- 1326 suit. Unfortunately, landlords under this Bill will not buy lawsuits, but will have them rammed and crammed down their very throats. Is it fair to saddle a landlord with a claim for compensation for goodwill which may never exist and may evaporate if it has existed? Is it fair to make a landlord pay for goodwill when he has pulled down his own premises or let them for another trade? That may happen under this Bill. Is it fair to let a landlord get into trouble with his mortgagees and have his mortgage called in or his rate of interest increased? Is that fair? Is it justice, from the Conservative party of all parties? It is grossly unfair.
Apart from that there are fundamental flaws in the Bill. The main feature of the Bill is compensation for goodwill. And there is no definition. You can search the Bill line by line, from the title to the schedule, and you will not find a single definition of goodwill, that goodwill in respect of which compensation is to be paid. The Home Secretary tried his hand at making a definition. He came to the Committee and admitted that he had failed. He said, "It will not work." He then appealed pathetically to the friend on whom he leaned, the hon. Member for Cambridge University (Mr. Withers), and said to him, "Will you try to make a definition," and the hon. Gentleman tried his hand. He came back with it, and the right hon. Gentleman said, "I am very sorry. I do not think your definition is any good." The hon. Member for Cambridge University got up and said quite frankly, "I agree that I have not made a success of the problem." So we have the extraordinary position that a definition which could not be found by the Home Secretary, in spite of all his legal experts and advisers and friends, is to be left to a number of tribunals scattered all over the country, composed of men who may or may not be lawyers and who certainly will not have the great skill and knowledge of the Home Secretary's legal advisers.
That is a fundamental objection to the Bill, and on that objection alone the Bill should fall. Apart from that, there is the gross injustice. I have been told that I have endeavoured to wreck the Bill, that I am a bitter opponent of the Bill. Was not Lord Balfour, when Mr. Balfour 20 years ago, a bitter opponent of the Irish Town Tenants Bill, a Bill which was 1327 nothing like as strong as this? What did Lord Balfour then say of the proposal for payment for disturbance? There was no question of renewal of leases and the tying up of a man's property and taking it from his control. He said it was neither more nor less than downright highway robbery. He voted against the Bill, and into the Lobby went the late Mr. Bonar Law, a fair-minded and just man, and the present Foreign Secretary and many others who now adorn the Treasury Bench. It was good enough for Lord Balfour to describe as highway robbery a Bill that was mild compared with this. I have never gone as far as that. I have never used such words. I should be loath to say that of anything proposed by a Conservative Government.
If ever there was a measure badly conceived, badly thought out, unjust and unfair, it is the Measure that is now under discussion. It is something that was done in a corner. It was not done openly. It was done under the influence of the hon. Member for North Paddington. So far, his personality has not intimidated me, but it has had a most remarkable effect upon the Home Secretary and, I believe, the Solicitor-General also quails before the hon. Member's gaze. We are asked to vote for this Socialist Measure. The hon. Member for Camber well (Mr. Dalton) said that he doubted whether any one would go into the Lobby to vote against this Bill. I am going into the Lobby against it. Although I hate the thought of voting against my party, I decline, and I shall continue to decline, to take a single step along the path of Socialism that is pointed out by our leaders.
§ Mr. WITHERS
I think to whatever party we belong, we must all congratulate the hon. Member for Loughborough (MT. Rye) on his very eloquent manner of putting forward his views. I shall not endeavour in any way to emulate his forensic flights, but simply address myself in a few words to certain points which I think are of importance. First, I should like to acknowledge the quite undeserved compliment which has 'been paid to me. I disclaim any credit which is not shared by many Members of all parties who sat in the Committee and tried to make the Bill a workable one. 1328 There are two points which I think are rather serious. The first is the question of tribunals. I have all along been very anxious not to create new judicial bodies, and I have been anxious that these questions of mixed law and fact should be sent to trained bodies. I was particularly anxious that they should go to the official referees of the High Court if possible, and I fail to see now why they should not go there. My hon. and learned Friend the ex-Solicitor-General very kindly proposed an Amendment, or at any rate supported an Amendment to this effect, but when the time came he or his supporters ran away.
§ Sir HENRY SLESSER
I did not run away from the Amendment. I was engaged in another place when the Amendment was taken. Had I been present I should certainly have supported it.
§ 1 p.m.
§ Mr. WITHERS
At any rate the hon. and learned Member was not present. I do not know at what speed he went away. I hope when the time comes in another place this question will be reconsidered. There is another point which puzzles me. It is the fact that while powers are given to the tribunal to force improvements upon a landlord, no direction is given to them to consider questions of public policy. As the matter stands now, the question is only to be one between the landlord and the tenant, and the tribunal might quite well force upon the landlord an improvement which would be a barbarous outrage on the neighbourhood. I do not think that is right, and when the matter arises in another place I hope the Government will carry out the promise given to me by the Home Secretary that the question would then be reconsidered. The argument which the Home Secretary used was that it would never do to allow a third party to come into the discussions between landlord and tenant. That is not really a fair answer to the point, because in an action in the High Court where a plaintiff brings proceedings againsta defendant, the defendant can plead that the claim is against public policy. If he can do so, without importing a third party into the High Court action, I do not see why a landlord should not be able to plead before a tribunal that the improvement demanded is against 1329 public policy, because it disfigures the amenities of the district. Subject to these points, I support the Bill, which I think will carry out the general object claimed for it, namely, to do away with a large number of injustices without doing harm to anybody.
§ Mr. HARDIE
As a member of the Committee which considered this Bill, I wish to begin my remarks by stating that this Bill is here to-day for its Third Reading, chiefly through the efforts of those who are described as the Socialist party. We have had ample evidence of that fact in the .speech of the hon. Member for Loughborough (Mr. Rye). The hon. Member dealt with a point that he ought to have left alone, and he showed a lack of understanding of the question. He made a quotation about Lord Balfour, and compared the attitude of mind thus indicated with the present attitude of mind of his own party, from which he dissents. He seemed to forget that in the meantime there has been 30 years of Socialist propaganda in the country, and, since Conservative opinion is always behind the cart and not before it, one can easily understand why they are being dragged now into supporting even a basis of common justice. The hon. Member for Wimbledon (Sir J. Power) appeared to be confused about the golden goose. I should have imagined that the hon Member, having such connections as lead to his intense interest in this Bill, would have got down to the real meaning of these matters, and he might have remembered the old saying of John Ball's time about the goose being stolen from the common and the common being stolen from the goose. He can think of Wimbledon Common as one instance in that respect.
The suggestion has been made to-day that the leasehold system has rendered a tremendous service to the community. That argument will not appeal to anyone who reads the history of the leasehold system in London, and who sees the tombstones of those men who, by personal industry and energy, built up that which has been absorbed by the landlords. Everything that came from their industry went info the maw of the landlord; the tenant was sucked dry. It is no use for hon. Members to try to tell tales upon this subject. Some of us, though we are not Englishmen, read history as 1330 a general question, and do not limit ourselves to the history of one country. The hon. Member for Wimbledon also said that the Bill would mean a falling off in the number of shops. If he thinks so, he should not be opposed to the Bill, because, according to his own argument, that will mean higher rents for him. I do not see why the hon. Member cannot get these questions into proper alignment, so that we might understand what he is dealing with. I want the Solicitor-General to deal with a point in Clause I, Subsection (2), where it says:—After such demolition … the improvement will not add to the letting value of the premises.I would like an explanation as to what is meant by the English language there. When you speak about something as an improvement that had got a value, why should it be necessary to say that after the demolition of such improvement, the improvement will not add to the letting value of the premises?
On the general question, this Bill is a fight between two interests. The two interests are not interested at all in the national aspect of things., and that is always what interests one most in this House when Bills of this character come up, that the national aspect, the community aspect, is lost. Here you have a fight between one section that say they own the property, and another section that say they have created something that is theirs. That fight brings out this fact, that the man who is claiming good-will says: "By my endeavours I create something that I call goodwill," but no matter how efficient that man may be in business, if he is in an area that, for some reason or other, becomes depopulated, what is the advantage of all his industry and all his business capacity? The only expression that can come to that business capacity is a number of people as customers, and therefore it is the community that really creates what is claimed to-day by the shopkeepers as goodwill. Suppose you take any community to-day that has grown up in the last four or five years owing to the extensive building operations that have been carried on, and you get shopkeepers there, and suppose that all the people leave the neighbourhood, what is then the value of the shopkeepers? The best man you can think of, the man with the most ability in that direction, will be as 1331 nothing when the customers disappear. Therefore, I hope the House will see that anything in the form of goodwill as known to-day is simply that which belongs to the community by its purchasing power.
Under this Bill the difference between Clause 4 and Clause 5 means that the landlord is going to get whatever there is to get, because what is given in Clause 4 is simply sneaked away in Clause 5, and the poor shopkeeper will get nothing. I come now to the question raised by the hon. Member for Spelthorne (Sir P. Pilditch), who said that this Bill was going to induce landlords and tenants to come together. When he said that, he seemed to forget that in a previous part of his speech he had stated that there was no need for this coercion at all, because the relations between landlord and tenant were always good. But where are they going to meet? They are going to meet in the Tribunal, and when they have gone through the Tribunal they will meet in the Courts. It is not a question of the landlord and tenant coming together as friends or as people who are interested in each other's well-being.
Now that the hon. Member for Loughborough has come back to the House, I want to say that I give him unadulterated credit for the manful way in which he has stuck to his opinions from beginning to end of this Bill. He has fought for what he says he believes in a way that must make any man admire him, but he is the most vicious type of what I call the landlord thief. He has absolutely no shame in making the claim that he, as a landlord, has the right to take everything from the industry of anybody who is compelled to use the premises he occupies because there are no other premises elsewhere in which he can make a living, and because such business men are driven into places held by that type of landlord, the landlords say, quite unashamedly, that they are ready to bleed them.
§ Mr. HARDIE
While I have been making a personal remark, I was taking the hon. Member as exemplary of the general landlord system. He may be a good landlord himself, but he has been supporting the system.
§ Sir HENRY CAUTLEY
The hon. Member for Springburn (Mr. Hardie) must be thinking of Scottish landlords, and this Bill does not apply to them.
§ Mr. HARDIE
I am not thinking of Scottish landlords, but if this Bill had been applying to Scotland, they would have got it just the same way. Here comes the Secretary of State for Scotland, and he knows that if we were dealing with the landlords of Scotland in this Bill, he would be ashamed to hear what we can say of the landlords in that country. There is nothing to choose in any way between landlords, so far as my reading of history goes; it is the same all over the place. The only people who should have any credit, in my view, for their dealing with these things are the Irish people, who shot their landlords and got something back. Returning to the question of goodwill, it has not been determined anywhere in this Bill. There has never been any court where the question has come up to be discussed and where any definition has ever been given; finally, there has always been an arrangement arrived at. There is no case that I have known—and I have read as much as I could lay my hands on in connection with this subject—where there is a definition of goodwill. Where there may have been a row about it, and the parties have gone to law, it has always been a question of some mutual arrangement in the end, because neither side could define what they were after.
§ Sir H. CAUTLEY
There are plenty of cases of legal definitions of goodwill, but not of the goodwill specified in this Bill. This is a new thing.
§ Mr. HARDIE
I would be glad if the hon. and learned Member could define now what is the goodwill specified in this Bill. The Home Secretary was not able at any time to define what was meant by the word "goodwill." I have no doubt that the hon. and learned Member for East Grinstead (Sir H. Cautley), whom I respect for his great knowledge, has a definition for the goodwill in this Bill, but that is not what we are dealing with. I am arguing that the Govern- 1333 ment have been absolutely incapable of meeting the demand for a definition of the word "goodwill" in this Bill. With this fight that is going to take place, what will happen in the Courts?
§ Mr. HARDIE
I quite agree. I can see nothing other than chaos, but the landlord, if he has any money at all, is going to involve his tenant in the case and will then take him into court, and the expenses are going to be used to compel the tenant to accept the landlord's conditions. That seems to me to be how it will work out, and we are not getting down here to the case of the poor shopkeeper who has no money with which to fight the case. The earnest, honest man, the small business man, will have to lose anything he has in his pocket in legal expenses. What is the use of Tory Members or Members of any party in this House boasting that this is some big Measure, some great step forward? It is nothing of the kind, and the years, as they go on, will show in your courts that it is absolutely of no advantage to the tenant. [An HON. MEMBER "It is a wash-out!"] Yes, it is a wash-out. I come to contracting-out. After having spent months and months on the Bill, we find that it is not to apply, and cannot apply, where an agreement is made between the landlord and tenant. That is to say, contracting-out becomes one of the real things in this Bill. The conditions are such that contracting-out means again the question of riches and the question of poverty. It means that if a man is poor and cannot fight the owner of the property, he has got to accept his terms.
I come to the professional people. They ought to have been included in this Bill. With the great development in medical science to-day men in that profession have got to have all kinds of electrical and other apparatus, special kinds of baths and lights. In the same way as the ordinary business men, they ought to come under this Bill for any good or bad that is in it. All these people who are running a business—because, after all, a doctor is running a business—ought to have been included in the Bill. Then I come to the dangers that have to be met in the tribunal. This question caused a great deal of trouble upstairs, because, as an hon. Member opposite said, when you start 1334 with this thing, you are bound to come to the legal aspect. You are going to call in a local surveyor to deal with a question of law. I am not saying anything disrespectful of any surveyor, local or otherwise. They are all efficient men at their own job, but when you ask them to decide what only legal minds can decide, the whole thing is absurd. Here is an efficient surveyor, who is looking after roads and drains, to be called in to decide some question of law. He may even be called in to decide what constitutes goodwill.
I want to finish as I began by saying that if it had not been for the Socialists upstairs, the landlord power in the Tory party would have boshed the Bill, and to those who say we are out for the whole hog all the time—and we are if we get the power—I would point out that we do not fight against anything that contains even a part of our policy, and we try to fight for those outside who have no redress. I regret, from my point of view, that this Bill gives not the slightest redress to the business man, and I say that many people in business who are jubilant to-day because of this will have cause to regret if they come within the claws of the tribunal.
§ Sir H. CAUTLEY
It is refreshing to find the hon. Member who has just sat down, who has himself no interest whatever in this Bill, and whose constituents can have none, taking such an interest in it. This Bill being so thoroughly condemned by a quite impartial person, I shall welcome the hon. Member's presence in the Lobby against it. I think it well that I should at once say that I have no interest as a tenant of business premises at all, and that I have no interest as a landlord of business premises at all, and I am utterly untouched by any provisions in this Bill. I heard what the hon. Member for Burslem (Mr. MacLaren) had to say, and I gathered that his objection is that the Bill does not go far enough, and that if he had his way he would adopt his panacea which, stated generally, is to make the State the universal landlord. For the benefit of those Members who sit beside him, and for the benefit of an enormous number of tenants outside, may I point out that within the last five or six years we had an instance of State landlordism of the most drastic and im- 1335 moderate kind committed by the Department of Woods and Forests in Regent Street, where the sitting tenants had literally blood-money wrung from them.
That is what we have to expect if we ever have foisted upon us this Socialist idea of State landlordism. It has been pointed out with great force by many speakers before that the Home Secretary, and now the Under-Secretary, as well as the Solicitor-General, but the Home Secretary more particularly, had to rely, in the main, on the party opposite and on the Liberal party for sup-port for this Measure when it was in Committee. I venture to say that the Bill stands suspect on that ground alone. Our Government are not in office to pass Measures by means of votes of the Opposition contrary to the votes of their own friends, and I ask hon. Members on this side to look very carefully at the provisions of the Bill before they give it support.
I am rather sorry that the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) is not in his place to-day. He claims the credit for this Bill as being part of the book issued by his party under the ægis of the leader. He gives it his blessing for that reason. I wish there had been more Members in the House, because I want to look very carefully at that blessing. Remember the advice given by the right hon. Gentleman the Member for Carnarvon Boroughs and carried out, with a view to improving the position of people who live on the land and by the land, in his Budget of 1910. The result of that advice and of that legislation was that building entirely stopped in this country, and, by putting these costs on to the land, who were the people that suffered? They were the poor people who wanted houses, and under this Bill it will be the people who will suffer. The landlord undoubtedly will suffer more, but—and I am making this speech, because I am not going to give a silent vote—I warn my hon. Friend the Member for Paddington (Sir W. Perring) that the people who will suffer and will live to curse him and his friends will be the tenants for whom he is speaking and for whom he is asking this Government to pass this Measure. Why do I say this? This Bill deals with every business premises in the country. It is not limited 1336 to shop tenants; far from it. It applies to every single business premises. It applies to every class of works, to every little shop, however small, where the tenant of a cottage sells a few sweets. It applies to every tenancy down to a weekly tenancy.
I have tried as well as I can to ascertain to how many business premises this does refer, and I would ask my hon. Friend the Solicitor-General to give his view. I calculate that as there are 40,000,000 people in this country, there are about 8,000,000 houses, and I should say that, roughly, one-eighth of these will be business premises. I consider, therefore, that I shall not be very far out if I say that there will be 1,000,000 tenancies who will become subject to this Bill. I do not speak ever in this House with any great exaggeration. What is the result? Every tenant under this Bill is to be at liberty to tear up the bargain that he makes between himself and his landlord, and treat it as a dead letter, and to alter his premises, to alter the decoration, to alter the frontage, and to alter the whole of his business premises subject to this condition, that he can go before some hole and corner tribunal sitting in the dark, subject to no Regulations and no supervision by public opinion, and get some surveyor out of a job to say to the tribunal that at the end of the tenancy—it may be a tenancy of 60, 80 or 100 years—this improvement is likely to increase the letting value. This is the position we are going to bring about in every single tenancy in this country. Having got the decision of the tribunal, he can make the improvement, and at the end of the tenancy there is to be another hearing to decide what is the value of these improvements to the landlord. Mark this, that at the end of the tenancy these improvements may be of no value at all.
§ Sir H. CAUTLEY
If the alteration be no value, but is, in fact, a detriment and has to be removed, why should not the tenant have to remove it, and why should not the tribunal be entitled to say that it should be removed? But that is a minor matter. The point that I am on is this. What is the staggering amount of costs with which you are going to saddle these premises? Have the Home 1337 Office formed any estimate of the gigantic charge that is being put on to these million premises in the country, including all our great works if they happen to be let? And, mark you, it is the poorer people who are the tenants. The Bill does not touch the freeholder. It is not only when the Act is put into operation that these charges arise. Let us take the case where it does come into operation. You have a surveyor to prepare your plan and you have your solicitor to advise you as to the legal position. Not a single layman will be able to become a landowner, or merely to be a tenant, without legal advice as to his position under this Bill. No ordinary layman can be absolutely certain of his rights. Well, he proceeds under this Bill. He is advised by his surveyor and notices have to be given, steps have to be taken, and the hearing has to be given by the tribunal, attended by at least one witness on either side and possibly counsel. Then at the end of his tenancy, in order to get the value of his alterations, he is going to have the same sort of proceeding. What is the cost of it all going to be? On the other hand, what is the cost in between? Every estate owner in the City of London, or elsewhere, will have to keep a separate surveyor and to incur an extra charge for a solicitor all the way through, that is, where there is a large property with a large number of tenants, because he will be daily expecting such requests. Where there is not a large property, but only a single tenant and a single landowner, what is going to be the position? The same provisions will have to be made, and as the charge cannot be spread over the properties and averaged, the position will be relatively worse than in the case of the large property owner.
Has the Solicitor-General any estimate of the cost? Has he ever ventured to go into this matter at all? One hon. Member, I forget who it was, suggested that there ought to have been some inquiry. If we were a business assembly, if we had a businesslike Government, of course there would have been an inquiry, and we should have had some figures showing what charges we shall be putting upon property. Who is going to pay the charges? [An HON. MEMBER: "The tenant!"] I hear a voice say, "The tenant." In my own opinion it will be 1338 the tenant, in most cases. This is the benefit which the hon. Member for North Paddington is giving to these tenants, who are holding their meetings and their rotary dinners and sending telegrams to the Home Secretary which the Home Secretary is foolish enough to believe as representing a considered view of this legislation. I disagree with the views of the hon. Member for Burslem, but he gives great attention to these matters, and I rather wish he had gone into this aspect of the matter and told us who was going to pay. The hon. Member for Springburn (Mr. Hardie) says the poor man will be "outed" every time. I do not altogether agree with that, but there is a good deal in it. When a poor man gets mixed up with the law and with lawyers and surveyors, he will be "outed" by the weight of the money bags against him. There is not so much in that as the hon. Member thinks, but he will pay.
In my opinion things will follow the operation of the law of supply and demand, and where premises are difficult to get—and those are the occasions when the Bill will be put into operation—most of these charges will become a charge on the tenant. When premises are difficult to get is the time when landowning is profitable.
§ Sir H. CAUTLEY
I know that raises a cheer from my hon. Friend the Member for Burslem, but what about those places in the agricultural counties, about which I know more, perhaps, where landowning is unprofitable, and where land is going down in value? As the hon. Member for Paddington knows, there are plenty of districts which are growing districts, where shopkeeping is very prosperous; but the character of a district may entirely change, and what about the places where property is going down? In those places, in all probability, this Act will not be used so much, but where the value of premises is going up the land-lord has more power to demand rent, and it is in those circumstances that a tenant will have to pay under this Bill. This charge will then fall on the tenant.
§ Mr. MacLAREN
Is it the suggestion of the hon. and learned Member for East Grinstead (Sir H. Cautley) that the landowner will take advantage of heavy competition to get sites, and that, under circumstances of that kind, he will merge the costs involved under this Bill and charge them as a rental?
§ Sir H. CAUTLEY
The hon. Member for Burslem has put in better language what I was endeavouring to say. In my view that is what will happen. Where there is a landowner with a large estate the expenses will not be so heavy, because they will be averaged over the whole property. If that estate is in a rising neighourhood, where there is a greater demand for shops, the landlord will be in a position to take advantage of the market, and the cost of this Bill will fall on the tenant.
§ Sir H. CAUTLEY
In many cases the landlord does not get the most he can now, but, assuming the hon. Member to be right, is not that all the more reason for not putting an extra charge on?
§ Sir H. CAUTLEY
I do not think the hon. Member is representing it quite as it works out in practice. If there is a rising market and the expenses have to be put on, you may be certain that the landowner will take such steps as he can to shift the burden on to the tenant, and in my opinion will be able to do it. If there is a fall in value and shops are becoming empty, the Bill will probably not operate to anything like the same extent; there will not be a demand to put the Bill into operation, though if that does happen the landlord may have to pay, and in that case the tenant may get the benefit. The retail trader is the class of person who has been doing so well in the country during the last five or ten years. He has been the man getting the profit, yet here he comes howling to Parliament to have this special benefit conferred upon him. I should like to see his profits cut down.
§ Sir H. CAUTLEY
A point that I regard as serious is this. The Bill applies to all business premises—in the textile industry, to all the small tenancies, where the occupant has so many rooms and so much power; to every little steel-making place; to every little grinding shop. I have not sufficient experience of these trades to speak on this point in real detail, but I knew a little. I know of those steel-grinding places in Sheffield. Every small man who is striving to raise himself from the position of an artisan into that of a small employer takes premises of that sort. Every one of those men will be subject to the provisions of this Bill, and we are putting this charge on them. I have no sympathy for the landlord who takes the benefit of improvements, no sympathy with that sort of thing, but I say this is the most clumsy and expensive method of trying to stop it that could ever have been devised. A much simpler way could have been found if proper care and attention had been given to the question.
Let me now turn to the next branch of this matter. It is really appalling from a business point of view to think that these weekly and other tenants, numbering quite a million, are going to have a claim at the end of their tenancies to be paid goodwill by the landlord. I understand what goodwill means in its common interpretation. It is something that can be bought and sold. A good-will is a list of customers who can be circularised, and who have been in the habit of dealing with a particular business. That is something that can be sold and protected by agreement with others not to enter into competition with the tenant. It simply means the tying of the customers to one particular individual, and that is something which can be bought and sold.
It has been said that there is no definition of goodwill in this Bill, and that is a fact. When the Home Secretary tried to define goodwill he could not do it. You are leaving all these difficult questions to be settled not by the landlord and the tenant, not by a lawyer in open Court where fixed principles could be adopted, and where regular rules could be laid down, and some uniformity obtain; you are not adopting a system 1341 under which a judge would decide under the public gaze and where the evidence would have to be given in public and where a decision would be given which would commend itself to the public, but you are proposing instead something which is indefinable. You are setting up a Tribunal which will have to settle these matters without legal knowledge, without any knowledge of goodwill, sitting in dark places, carrying on in secret, and all this will only create friction between landlord and tenant. That is what you are going to saddle upon every tenant of business premises in the country.
What is goodwill? If I had been speaking to lawyers or to people who were simply devoting their attention to this particular thing, I should have read to them Clauses 4 and 5, which give the Sections that have to be taken into account and the matters that have to be excluded. I say that it would puzzle anybody except the Chief Justice and the Solicitor-General. I ask this House, as a business assembly, before it passes this Bill, to put aside its views of hostility to the landlord. I am not sticking up for the landlord, but for the tenant, because the tenant is the man to whom the injury is going to be done by this Measure. The tenant is not going to gain by this Bill, although he has been led to believe that he will. I ask hon. Members whether, in their sane and sober senses, they mean to saddle this business-like community with the burdens of this Bill.
Why has the country been doped about this matter? Why has this Measure been sent to a Committee upstairs, and why has not a word appeared in the news-papers in regard to the proceedings of the Committee? How does the Solicitor-General justify the setting up of a separate tribunal to deal with the relations of landlord and tenant? I can see some reason for it when it is a matter in which the State is concerned. I never objected to the system which was set up under the Acquisition of Land Bill when it was a question of taking land for public purposes after a public inquiry. I did not object in that case to a separate tribunal to value all these matters, but in this case we are dealing with ordinary individuals of the State. In some instances, the landlords are very poor and the tenants are rich. I am afraid agricultural landlords are often poor people, but there 1342 are many poor landlords who own small property, and why should a separate tribunal be set up to settle these questions between landlord and tenant when the Law Courts of the country are open to them. The Law Courts are open to everybody to settle disputes between citizens, and that is the best and cheapest method of procedure.
There is no precedent for this Bill. We have been told that this Measure follows the line of the Agricultural Holdings Act, but that is a perversion of the truth. Under the Agricultural Holdings Act there is no power given to the tenant to alter in any particular the buildings or premises without the consent of his landlord; there is no power to alter the layout of the farm, or the proportion of land that is arable land and grass land without the consent of the landlord. This Bill allows a business tenant to alter the whole layout of the premises, or alter the building. It is true that the Agricultural Holdings Act did give compensation for good farming and for the application of manure in the course of working the land entrusted to the tenant. The Agricultural Holdings Act said, very rightly, that compensation in the case of a dispute should be settled by arbitration.
Only a short time ago I had an experience of how this matter worked in the case of a small farm of only 60 acres. On this farm there was a small house which was let to a workman at 2s. 6d. a week. The tenancy was given up, and a heavy claim was made for dilapidations. It went to arbitration before an arbitrator appointed by the Board of Agriculture, and I was on the spot and saw what happened. The tenant's valuer of this farm, the rent of which was about £60 a year, drove up in a Rolls-Royce car, and the landlord's valuer drove up in a Lanchester car. The landlord's agent, also, motored down from London, some 40 odd miles, to take part in devouring the corpus of this small valuation. The arbitrator had to be paid, witnesses had to be called, and all these expenses under the Act had to be borne by this small man; and this is what the House of Commons is putting on to every town tenant in this country. I do ask whether we are going to pass this Bill and allow the surveyors to batten on business premises in the way that is proposed. I say nothing about 1343 the solicitors. The solicitors know, and they took the view that I did. The report of the Law Society agrees with every word I have said, and is against this Measure. They are going to profit as much as the surveyors. The surveyors, on the other hand, did not take that—
§ Sir P. PILDITCH
My hon. and learned Friend was not here when I spoke earlier in the Debate. If he had been here, he would have heard that I very strongly urged that both landlords and tenants should not make use of the Bill by going before the tribunal, but should settle these matters between themselves.
§ Sir H. CAUTLEY
Be that as it may, I cannot support this Measure, which is going to saddle the business premises of this country with this very heavy charge owing to the necessity for going to arbitration instead of using the county court, which is the proper place.
§ Mr. JAMES HUDSON
The emphatic declaration of the hon. and learned Member for East Grinstead (Sir H. Cautley), that it was not his job to look after the landed people, came to me somewhat as a surprise. I have not been very long in Parliament, but, during the time I have been here—less in these Debates, perhaps, than in others—I have always got the impression that, when the landed interests came to be dealt with here, they usually found an extremely good friend and advocate—I will admit from disinterested motives, of course—in the hon. and learned Gentleman. I cannot accept the view that he quotes with regard to the incidence of the cost of this scheme, when he suggests that the landlords will shift the burden upon the tenants ultimately, through the arrangements they will make with tenants in the future. In spite of the fact that the hon. and learned Gentleman knows of certain honourable exceptions, and I, too, know that there are such exceptions, I believe that the landlords who are likely in the future to take all that they can under the new conditions will be taking all that they can now under the present arrangements. How it can be argued that those land-lords in the future who are going to establish their utter selfishness possess at the present moment some virtue which holds them off from taking what they can, I am quite unable to follow.
1344 I thought that the hon. and learned Gentleman started his case against us, the Socialists, rather unfairly by quoting the example of the one case that he found where a Socialist scheme had been tried in these questions of landlord and tenant. Of course, in any case where Socialism is practised by a party which is pledged to oppose Socialism and all that it means, you will expect, in connection with the practice of that Socialism the breakdown of the fundamental principles of the Socialist system. Whether it be in the Forestry Department, or in any other Department, whenever Socialism is practised by a Conservative Government you will get the sort of example that the hon. and learned Gentleman has quoted. I have said exactly the same thing about other Measures—
§ Major PRICE
Will the hon. Member, in order that we may follow him, define what he means by Socialism?
§ Mr. HUDSON
It is not necessary. Members of the hon. and gallant Gentle-man's own party have spoken at great length about the practice of Socialism by the Conservative Government, and I am quite sure that hon. Members opposite, without any assistance from me, will have all the knowledge that is necessary, for they interlard their speeches here and in the country with ample references to Socialism.
§ Mr. DEPUTY-SPEAKER (Mr. James Hope)
The hon. Member is in order in replying to something that has been said, but I do not see anything in this Bill with regard to Socialism.
§ Mr. WALLHEAD
The argument on the other side was that State landlordism had been tried in Regent Street with disastrous effects, and I submit that my hon. Friend was justified in replying to that.
§ 2.0 p.m.
§ Sir H. CAUTLEY
The hon. Member is quite right. It was only in answer to a point made by the hon. Member for Burslem (Mr.MacLaren). He was saying that he preferred State Socialism to this Bill, and I only answered him by pointing out that he had had his illustration of State Socialism.
§ Mr. DEPUTY-SPEAKER
The hon. Member was quite in order in giving an answer, but he must not allow himself to be diverted into a lengthy argument on Socialism.
§ Mr. HUDSON
The matter is very interesting in this sense, that not only the hon. and learned Member for East Grinstead, but others during the Debate, particularly the hon. Member for Loughborough (Mr. Rye), have declared against this Bill on the ground that it was a sort of second-hand Socialism, a Socialism worn by the Tory Government as a sort of second-best suit of armour. I am trying to show that, in spite of the declarations against Socialism which have come from the other side, whatever has been done in the past, and whatever will be done now, in the way of the practice of Socialism by this Government or any other Conservative Government, will in the long run lead to disastrous results. If Socialism is to be worked at all, we had better be left to work it as we propose to work it.
I have been most interested during this Debate by the contentions made earlier by the hon. Member for Grimsby (Mr. Womersley). While, of course, I agree that he is to be excused, now that the Debate has gone on for so long, for having gone away, I wish he had been present to hear a reply to his remarks. He made the claim that we have now got from the Conservative Government an admirable example of just dealing towards the tenant, and particularly, as I assume from what he said, towards the poor tenants of this country. I do not at all believe that he is correct in that claim. I agree entirely with the hon. and learned Member for East Grinstead and with my hon. Friend the Member for Springburn (Mr. Hardie), that the poor tenants in particular, on account of their inability to face legal charges and to work their way through even such a tribunal as is to be created—through their natural fears of submitting to third-party judgments, as they have had much experience in the past of the ineffectiveness of tribunals set up under our present system—will still be great sufferers under this legislation; but, even if that be so, if other tenants receive protection by this legislation, I am willing to support it, so that ultimately, by further amendment and extension of this legislation, and by the pro- 1346 vision of a better system of tribunals, that protection may be extended to all.
I agree with much of the criticism that has been made in regard to the differences between surveyors and lawyers, but that can be remedied later, and I would express the hope that, when the necessary remedies are found, we shall be able to provide for all types of tenants the protection which this Measure intends to try to confer. The hon. Member for Grimsby went on to make a very mild claim often heard in this House that here at least we have the truth about the Conservative Government, that it is the Conservative Government always that does things while other people talk about them. What happened—and it was practically confessed later on by the hon. Member—is that a steady propaganda and pressure has been carried on in this country for years. There was the approach to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), but the hon. Member said that party did nothing. It talked and promised, but failed, to effect anything. What then was the real fear of the hon. Member? He expressed himself perfectly distinctly when he turned to his hon. Friends on the opposite side, particularly to the triumvirate which has had most to do in Committee with the opposition to the Government proposals, and warned them that what might have happened was a Bill of a very different character if the other parties had brought it in, and therefore, rather than have something worse from their point of view, they had better take this Bill. I believe there you have the exact explanation of the present situation. The Conservative Government has introduced a Bill in-finitely worse than it ought to have been and has introduced it deliberately, as they hope, to spike further legislation later on that we, the Labour Government, when we get an opportunity, would certainly bring in dealing not merely with these particular tenants' rights that we have been discussing now but with the whole question of the landlord and the power he at present has in our legal system.
I agree with the first speech made by the hon. Member for Spelthorne (Sir P. Pilditch) that what has happened in this Bill is that a new challenge has been 1347 thrown down against the old privileges that the landlords have had in our legal system. I agree with him that a wedge has been driven in between those two types of capitalists in the past, the land-lord on the one hand and the trader, the profiteer, on the other, which later we can drive in very much further, but I entirely disagree with him when he explains the process by which he says the landlord to-day carries out his functions. He stated that the landlord provides land at a low rate of interest. As the hon. Member for Burslem (Mr. MacLaren) has said, he does not provide the land and the rate of interest has nothing to do with it in the amount that he obtains as the result of the permission he gives for someone else to use the land. He forgets, as Conservatives generally forget, that the law of rent operates irrespective of rates of interest and wages because it has given facilities to a comparatively few people to hold what the whole community requires.
§ Sir H. CAUTLEY
Does the hon. Member really say that the rents of farms do not depend on wages or the rate of interest?
§ Mr. HUDSON
I say again that rent emerges because the law has given to a certain number of people rights of property which they use to this extent, that they take the whole surplus that they can extract after the competition of the trader has been allowed for, after the competition of wage earners has compelled them to take the lowest wages, and in the process of extracting the surplus the question of rates of interest and the other issues which have been raised have nothing whatever to do with it. Until we take away this legal privilege that we have given to the landlord to obtain rent in the form that we do, the sort of injustice that we are dealing with in this Bill will continue to confront us, particularly in the case of those poorer tenants about whom so much has been said. I realise, therefore, that we shall snake no radical advance towards real justice for all the tenants of the country, but I accept this Bill because a challenge has been thrown down against the power of the landlord to take exactly what he thinks fit to take, and what will now happen will be that the power of the 1348 landlord to make a bargain with the tenant and compel him to keep it is now going to be cancelled. That is the nature of the challenge against the whole land-lord system.
§ Mr. HUDSON
It means that there will be no more contracts ultimately, when we arrive at the logical conclusion of the legislation we have now started upon, based upon a particular power of a landlord whose rights are obtained from the law to impose conditions upon industry to such a point that he takes a surplus which he has done nothing to create, which should belong to the community, and which one day the community will take in the form of a tax that it will place upon the landlord. Because this challenge is thrown down I am very glad to have an opportunity to support the Bill, because in some cases some tenants will obtain protection. I am certain, in spite of the fact that there have been many complaints which have not been put before us, that there is not a constituency in the country where Members have not received at some time or another legitimate complaints from tenants of the rapacity of landlords. If we only hold back those landlords to some extent I am glad this Bill will give the opportunity it proposes to give, and for these two main reasons I shall have pleasure in supporting it.
§ Sir W. PERRING
As one who has taken a very wide interest in this subject for over 20 years and has had a share in the agitation which has led up to the Bill, it is perhaps appropriate that I should say a few words on the Third Reading. I should like to say to the hon. and learned Member for East Grinstead (Sir H. Cautley) and the hon. Member for Loughborough (Mr. Rye) that I do not accept their suggestion of the great influence I exercised in framing the Bill and the influence I have had on the Government. I can assure them that if I had the influence they suggest I have this would have been a very different Bill. I realise that for generations past most of the improvements that have been made to shop property and business premises have been made by the tenants. Millions have been spent by tenants 1349 invariably for the benefit, ultimately, of the landlord. The landlord has had the privilege in the past of increasing the rentals when circumstances permitted it at the expense of the tenant.
§ Sir H. CAUTLEY
Will my hon. Friend explain why, with all these charges, they can make their retail profit so high?
§ Sir W. PERRING
Many other remarks of the hon. and learned Gentleman, I venture to suggest, expressed disapproval of the Bill in terms which were not entirely justified. It is the prosperous and successful tenant who makes the improvement and not the poor tenant. Reference has been made here to the poor tenant. In very few cases will the poor tenant have any occasion or desire to go before the tribunal or to quarrel with his landlord, because he will neither make improvements nor will he enhance the value of the property by goodwill. It is the enterprising, energetic, capable tenant who, with all the resources which he possesses, and the profits which he makes and puts back into the business in order to make improvements, who enhances the value of the property, and of which, in years gone by, the landlord has availed himself. I am surprised that a small number of my hon. Friends who sit behind the Government have thought fit to oppose this Bill because of a desire to perpetuate that condition of things. This Bill simply desires to prevent a landlord profiting by something which has been created by the tenant.
In its passage through the Committee stages I am bound to say that the hon. and learned Member for East Grinstead and those associated with him have endeavoured, with all the influence and pressure which they could bring to bear, to insert in this Bill more safeguards than were in it when it was introduced. Clauses and Sub-sections have been introduced into the Bill whereby it will not be possible for the tenant to succeed in securing compensation for the improvements or the goodwill that he has created; safeguards have 1350 been inserted in the Bill so that the land-lord shall not suffer in any possible way. Why anybody in this House or outside it should desire to continue the conditions that have obtained for many, many years I fail to understand. From my own experience, I am quite satisfied that probably 80 per cent. of the landlords are good, straightforward landlords, and the tenants have no trouble with them. But it is against that small number of rapacious landlords, those speculators in property, those who desire to buy up short leases with a view to taking advantage of the tenant, that this Bill is designed to protect. I cannot for the life of me understand why anyone should desire to continue this state of things, and not stop all that gambling of the speculators who have hitherto bought up property for the mere purpose of exploiting the tenant. If this Bill will in a small degree, and it is only in a small degree, protect the tenant from that kind of thing, then everybody in this House ought to be satisfied. I am far from believing that this Bill is going to do a great deal for the tenant. If I had to advise the tenants, then, notwithstanding all that has been said on the other side of the House, I should advise them every time to make the best bargain with the landlord and not go before the tribunal. I should like in the few minutes at my disposal to draw the attention of the Solicitor-General to Clause 4 where language is used to interpret how the compensation should be calculated. It says:The sum to be awarded as compensation for such goodwill shall not exceed such addition to the value of the holding at the termination of the tenancy.I venture to suggest that no tribunal can accurately ascertain what that sum is, for this reason. Assume the tenancy is for 20 years. They may ascertain the value of the holding at the termination of the tenancy, but there is no record of the value—or there very seldom is a record—of the holding at the commencement of the tenancy, and, if there is no record of the value at the commencement of a tenancy, how are you to ascertain the additional value? That is going to create a very great difficulty when the tenant comes before the tribunal. It would have been very much better to have left the Clause in the form in which it was originally drafted and to have put 1351 the capitalised value of the additional letting value, because we know the letting value at the commencement of the tenancy as the lease contains it. You can ascertain the rental value at the end by the structure of this Bill, and then ascertain the capital value between the two different sums. As things stand at present, I see very great difficulty in ascertaining the value and how it should be appraised. There is another piece of loose drafting in Clause 2 to which I would like to call the attention of the Solicitor-General. It says:The tribunal in determining the compensation for an improvement shall in reduction of the tenant's claim take into consideration any benefits which the tenant or his predecessors in title may have received from the landlord in consideration expressly or impliedly of the improvement.How are you going to define the benefits the tenant has received from the land-lord impliedly? I beg to suggest that it would be desirable in the interests of both and in order to avoid unnecessary expenditure before the tribunal on the part of the landlord and the tenant to insert language here which is clearer and less ambiguous. I regret that the hon. Member for Loughborough (Mr. Rye) should have thought fit, at the last stages of this Bill, to identify himself with such a matter. Whatever may be said here to-day, I hope that when the Bill gets through another place it will be fully appreciated that whatever the Bill does, either for the landlord or for the tenant, it has been so safeguarded in Committee that all that possibly can be done to protect the landlord has been done, and that the tenant is not going to receive very much as a result of the Bill. But little as it may be and having regard to the past history of the relationship between landlord and tenant, I welcome the Bill—bad as it may be, weak as it may be—because it is an attempt in some small measure to set up a new principle, subject to all the safeguards which the Bill provides for the landlord, and there is some possibility of a certain number of tenants being protected. Though they may be small in number, I would rather have the Bill than no Bill at all. I therefore have pleasure in supporting the Third Reading, and, in conclusion, thank the Government for the efforts they have made to combat all the attempts that 1352 have been made to kill the Bill and destroy the little good that it contains on behalf of the tenant.
§ Mr. A. M. WILLIAMS
The last speaker in the last two sentences did condescend to give the Government some thanks for what they had done. Up to the present my support of the Bill has been in the form of absolute silence, and those hon. Members who were in Committee upstairs will appreciate that that was the most valuable support that one could give. Whether the future of this Bill is going to be good or bad, I do not pretend to prophesy, but I do not want hon. Members opposite to go away with the idea that all the credit for having passed that Bill is their's. There were a number of us in Committee who were silent supporters of the Bill who helped the Government through. Speaking for myself, the view that I took in Committee was that undoubtedly under the present system abuses exist, but whether they are as widespread as hon. Members opposite would suggest is a matter of opinion; I do not think so. I believe that the abuses are not so much a part of the system as individual, human weaknesses.
I believe this Bill is an attempt to remove or keep in check the advantages that bad landlords take of their present position under the existing system; but I do not believe that under any system you will ever get perfection. I am a supporter of the present system. Even if hon. Members opposite got the system which they desire, I believe they are deceiving themselves if they think that there would be no abuse, so long as we remain human beings. It has been said that this Bill is a wedge which is being driven into the present system. In a sense it is a wedge, but not a destructive wedge. I believe that it is a strengthening and supporting wedge in the present system, and as far as I have been able to follow this very intricate and complicated Measure, I believe it will tend to remove more abuses than it creates.
§ Mr. WELLOCK
I desire to say a few words in support of the Bill. I have been highly amused at the delight which hon. Members opposite have shown at having encroached if only for a very small distance on the rights of landlords. After something like 500 years of Parliamentary 1353 existence, it is not much, that has been done in that direction, even in this Bill, and if one has to wait another 500 years until a further encroachment is made upon the rights of landlords, the country will want another party in power long before that time. I was intensely amused also that the hon. Member for Loughborough'(Mr. Rye) should speak of landlordism as a dragon, and expect that we should be frightened by that simile. We have always been taught that dragons are things to be feared. Even if this kind of dragon does not survive, the land will remain. Hon. Members opposite sometimes say that Socialism will drive the capitalist from the country, but, in the same way, the factories, mines, and workshops will be left behind. In the Committee, the thought which impressed itself upon my mind was that we were being asked to say whether A or B should have that which belonged to C. As the hon. Member for Burslem (Mr. MacLaren) very well said, we were discussing very largely the future of site values, and deciding whether the landlord, the tenant, or the community should have them. This question is very deeply involved in the question of goodwill, and the rights of the landlords to enjoy the values.
Let me take a very simple illustration. Through the constituency which I have the honour to represent, there has lately been built a new arterial road, which was opened about 10 days ago by the Prince of Wales. I refer to the road from Wolverhampton to Birmingham. That road has been made by the public authorities, with public money, and yet, during the next number of years, what shall we see as a result of that public enterprise? We shall see a very large amount of value that ought to belong to the community going, some of it, into the pockets of the landlord, and some of it into the pockets of the tenants, but not so much into the pockets of the latter as into the pockets of the former. The site values of the land alongside that road have been increased by scores of thousands of pounds. Omnibuses are now running along the road, and traffic is increasing every day. Before long, a large number of business houses will be established along the road, and there will be increasing custom owing to the nature and the geographical situa- 1354 tion of the road. The improvement that has been made by the local authorities in that district will mean increasing custom for any shops that happen to be along the road. Those shopkeepers who, by virtue of good business qualities, are able to draw a considerable amount of custom into their shops will, by this Bill, be able to receive compensation for any goodwill that may be due to their individual initiative. This Bill supports those people, and for that reason one ought to be thankful. Otherwise, all the values on the termination of the leases would have gone into the pockets of the land-lords. Nevertheless, there will be very extensive values that will go into the pockets of the landlords which ought to go into the pockets of the community at large. That indicates the steps that will have to be taken in the future, and we, as a Socialist party, will certainly endeavour to take those steps.
The hon. Member for Loughborough reminded me of children going to play in the water on the seashore in the summertime. Just as the Tories are delighted that they have got their toes a little way into the sea of site values, so to speak, and that they have made this encroachment upon the territory of the landlord, the hon. Member for Loughborough warned them that that particular sea is Socialism. The first step has been taken, and we can assure hon. Members opposite that, in due course, we shall go very much further into that sea of site values and land values, and bring them more and more into the control of the community. For the reason that this Bill goes some way in the direction of breaking up the power of landlords in this country, and especially their hold upon site values, which belong to the community, I welcome it.
§ Mr. CHARLETON
I have been somewhat amused and surprised listening to some of hon. Members opposite in their discussion of present day landlords. We are told that landlords do not take advantage of the opportunity to raise rents when there is a chance of getting higher rents. As far as I have been able to understand the political philosophy of the party opposite, I have always understood that this competition, this case of each for himself, was the very essence of our society, and that out of it would emerge a great and stable State. Yet 1355 here, to-day, for this purpose, hon. Members opposite seem to deny that. We welcome this Bill, because it does seek to deal with a grievance which some hon. Members opposite deny.
I had a striking example sent to me from my constituency. It is the case of a tailor who took a lease of some premises for seven years, and spent £700 in making the shop suitable for his business. About 21 months before the lease was due to terminate he went to the landlord, who happens to be a Company, and asked about the renewal of the lease, and was told that he might renew it at four times the rent. Unfortunately, there was no agreement to that effect; but on the strength of that promise he spent a further £400 in putting in new floors and a new staircase. Six months later, when this work had been done, he went to fix up about the lease, and he was told that the lease had been sold over his head. The unfortunate man was placed in this position, that with only 15 months of the lease to run and having spent a further £400 in improvements, the lease had been sold over his head by this parasite company. I do not know whether it is true; but my only regret about this Bill is that it is not respective and will not deal with the people who have treated my constituent so badly.
A good deal has been said in the Press and this House about railway freights, which are largely what they are owing to landlordism. Hon. Members opposite may laugh at that; if they knew as much about the history of railways as I do they would not laugh. They would acquiesce. Anyone who knows anything about the history of railways knows that many hundreds of thousands of pounds were spent in law suits because land-lords held up their land, and that railway companies had to pay exaggerated prices when they were able to get the land. The reason is not far to seek. At the time when railways were being laid down the landlord classes were in power in this House, they always are in power in another place, and the landlord classes were able to extract whatever terms they liked. I have examined the accounts of railway undertakings; I have made it a study, and I say that millions and millions of pounds have been spent in lawyers' fees and in excessive prices 1356 charged for the land. The hon. Member opposite who made some reference to the Labour party, which was not quite in order, was completely mistaken and apparently has been reading Liberal papers like the "Daily Mail" and the "Daily Express." If he would read our own literature he would find that we are evolutionists. We do not say that when we have achieved the evolution in society we desire that all will be well. We do not say that if we can lay down any form of society our grandchildren will agree to it. We realise that each generation will express itself in its own terms. There is no finality so far as the evolu-of society is concerned.
§ Sir H. SLESSER
The Debate to which we have listened for some considerable time this afternoon has been concerned principally with the principle which underlies this Bill, the respective rights of landlord and tenant as they exist at the present time, as they will be modified by the Bill and, perhaps, certain extraneous matters. I propose to direct my remarks for the short time I shall address the House to the Bill itself, because, as the hon. Member for Peckham (Mr. Dalton) has said, there is no question that we on this side of the House welcome the principle embodied in this Measure.
§ Sir H. SLESSER
The hon. Member asks why the Labour party voted against the Second reading. For this reason, that although the principle in the Bill is sound in our opinion it was then useless, is slightly improved now; and I propose to explain to the Committee that while in our opinion this Bill is better than no Bill at all, and we shall not oppose it for that reason, it is so ill-constructed, so carelessly thrown together, the legal and administrative machinery which is being used is so incompetent, that I hope nobody in this House or in the country will believe that the Labour party is satisfied with it as it leaves this House. We are not. Other hon. Members have already explained that part of the dissatisfaction which we feel is due to the omission of certain matters which we think ought to have been dealt with. We object to the fact that it is not retrospective and to the 1357 exclusion of the professional man, and other matters which have already been referred to which are not in the Bill. I am going to deal solely with the matters with which the Bill does deal and to suggest that if we limit ourselves to these particular matters this Bill is very incompetent to give the tenant the relief which he deserves. What the tenant will require in the end, if the Bill becomes law, is not principle or theory; he will require to have some money or an adequate new lease and, therefore, if the Bill is apt to break down in practice, as we think it will,—although we are glad that the principle of the right of the tenant has been established—we say that unless there is considerable amendment the tenant will get very little. At the centre of the Bill, the machinery by which the tenant is going to benefit, is the tribunal, and on this matter I associate myself entirely with what has been said by other hon. Members, that it is extraordinarily inapt, when you are dealing with matters of such complexity, involving drastic changes in the Common Law, and all kinds of provisions and considerations, to set up a special statutory body to be presided over by a man who may be presumed to have no knowledge of the law or how to weigh evidence.
In the Town Tenants (Ireland) Act, which has been referred to, the county court is set up as the authority. The hon. Member for Peckham has stated that it is the policy of the Labour party in this and similar Measures that the courts should be used, so that there shall be proper and adequate publicity apart from efficiency in the consideration of these matters. We said that our idea was that the cheapest, fairest and most desirable, tribunal to deal with this matter in small cases was the county court. Our proposal was that claims up to £500 should be considered in the county court, as indeed is the case under the Irish Act and that the larger cases should go to the High Court. I put down an Amendment to that effect in Committee but unfortunately I was not there when it was reached, but the result of my Amendment was that Clause 20, which gave no right of access to the courts at all, was considerably modified. The Government practically admitted that they were seeking to impose a system of administrative law upon us by withdrawing the Clause and drafting it in such. a way that appeals become 1358 possible. The position now is very serious. Under Clause 20 all questions of law may be tried in the High Court and a Judge may order that a claim should be tried in the High Court. In my opinion every single case under this Bill will involve a question of law, so that in every case it will be possible for the landlord to appeal and thus multiply the costs. We shall get into the High Court in the end and there will be no saving of money whatever.
Nor can anyone say that I am speaking in the interests of lawyers, seeing that these provisions will make even more work for the law than if the cases had gone originally to the County Court. I think I am in order, on this point, in saying that this is a principle, an inclination of the Government which we see in one Measure after another to-day—to set up secret tribunals sitting behind closed doors and composed of salaried officials to determine rights between one subject and another. The Judges have over and over again spoken against the vice of this disease, and I hope that the party to which I belong at any rate will always work for the principle that all considerations of rights between subject and subject should be tried openly and publicly and not by paid Government officials. The Government appear to have been guided almost entirely by the Bolsheviks, the people who in Russia, where some experiments have been tried in the abolition of legislatures, have set up all kinds of special tribunals to deal with special matters. The Government who, in their desire to cut out of our Common Law one matter after another, have set up one statutory body after another and in effect destroyed the operation of the Common Law, must have borrowed their principles from the Bolsheviks, whom in other matters they affect so much to despise.
But, seriously, we do protest against it, particularly in this Bill, because this is not a Bill dealing with some special public rights, like the acquisition of land, but is dealing with ordinary disputes between subject and subject. Imagine the confusion that would arise. All the ordinary questions as between subject and subject and landlord and tenant, the right to keep a tenancy, the right to repair, damages, the performance of covenants—all these matters are to be retained in the High Court. Yet although 1359 Part II of the Bill openly alters the ordinary Common Law of the land with regard to breaches of covenant, to repair and notices of assignment, yet here you are introducing into the general texture of the law of landlord and tenant a special power given to some untrained person—untrained in legal matters—to deal with the situation. What is so serious is not merely that you are introducing a wholly vicious principle into the Bill, but that the Bill is thereby going to be made absolutely unworkable.
I pass now to consideration of the particular Clauses that are going to prove absolutely unworkable if they are placed before an incompetent surveyor; I mean incompetent in a legal sense. Take Clause 4. It has been said by several Members and never denied that the cardinal word on which the whole of Clause 4 depends is undefined. We do not know what the goodwill is to be for which the compensation is to be given. It may be that, in spite of that absence of definition, if this matter were brought before a judge versed in the existing law on the subject he might be able to construct out of case law some definition of goodwill. But the gentleman who is to tell us what goodwill is to mean is a surveyor, and in every case he has to decide it again. No appeal from the particular facts of the particular case before the surveyor will give him sufficient guidance to deal with the next case. There is a later Clause which says that he is not to have consideration of the site value. I stated, during the debate on the Report stage, that it was quite impossible for this tribunal to tell what was site value or what was not. Some hon. Members tried to make party capital out of that by suggesting that that was an admission that it was impossible in any circumstances to assess the site value. It is nothing of the kind. Given adequate Treasury machinery and given an adequate tribunal of competent persons, you can assess site value all the time. My point was that a surveyor under this Bill is quite incompetent to perform such a function. So that you cannot, in fact, expect the surveyor to dissect a site value from the goodwill.
The hon. and learned Member for East Grinstead (Sir H. Cautley) suggested that this was a Bill in favour of the tenant and that the Amendments 1360 made had been in favour of the landlord. I hope the House will not forget that the Bill modifies the existing law of land-lord and tenant, which now decides these questions in favour of the landlord. Therefore, if the tenant fails to bring himself within the definition of goodwill, whatever that is, the landlord will benefit and not the tenant. If you exclude from goodwill the definition of site value, one undefined term deducted from another undefined term, it will be open to the surveyor to make the distinction and dissection in such a way that it will really be impossible to say that the tenant is necessarily to get any adequate goodwill at all. I know that the hon. Member for North Paddington (Sir W. Perring), in the simplicity of his heart, is grateful to the Government for the Bill, and some hon. Members on the Labour Benches are grateful also; but what they are grateful for, I think, is what the hon. Member for Peckham called "the thin end of the wedge." I do not think that the tenants who come under the Bill will find that they have very much for which to be grateful to the Government or anybody else when it comes to collecting compensation. I think that this Measure on the whole, though I support it on principle, is more likely to produce costs than any adequate compensation.
Consider how the matter works out. Clause 4 does not define goodwill. Therefore you do not know what that means. When you come to Clause 5 you get the proposition that where a tenant alleges he would be entitled to compensation for undefined goodwill, if he cannot get enough he may, in certain circumstances, be entitled to a new lease. But the right to the new lease depends on his not getting the compensation. How that is to be ascertained when the whole basic matter, that is the goodwill, is entirely undefined, I fail to understand. All these considerations are cogent arguments for placing the consideration of these points before a properly constituted Court of Law and not a kind of special bureaucratic body of this sort.
There is another matter. All these Clauses are laced round with provisos. The tribunal is net to consider even the simple question whether there is goodwill or not. It has to consider the proviso, many provisos, exceptions, sub-ex- 1361 ceptions, contingencies, negations of contingencies, every possible right and counter-right is provided in these various Clauses. When we come to Clause 7 we are plunged into the problem of the rights of mesne landlords. Again, that is raising all sorts of legal problems as to how the rights of the head landlord or the mesne landlord are to be reconciled with the provisions of the Bill. I ask, are these really matters which a surveyor is competent to discuss? No, Sir. It really is time that we made a protest in this House against this habit of the Government and their advisers of destroying the functions of Courts of Common Law. The Judges, of necessity, must be restrained in their language, but even they on public occasions have said what they think about this habit. Here we need not be so restrained. I tell the Government and the Solicitor-General frankly that neither in this House nor out of it is there any approval of this modern tendency of the Government to destroy the functions of the Courts of Law and to set up these special bodies. On the question of appeals it is quite true that in Clause 20 of this Bill the Government provide a rather complicated method of appeal:Provided that where a claim for compensation or the grant of a new lease has been made under this Act, and it appears to the High Court or a Judge thereof, on an application made for the purpose by the claimant or other person affected by the claim, that on account of the magnitude of the claim and the, questions of law involved the case is one which it is desirable should be tried in the High Court, the High Court or a Judge thereof may order that the claim shall be tried in the High Court.That seems to me a very objectionable provision. It is not a question necessarily of the magnitude of the claim which is to be considered and the questions of law. There are cases which would very much more properly be disposed of in the county court, and what will happen will be that in every case the tenant will be in terrorem lest the landlord should come along and try to persuade the court that the particular case is one which ought to go to the High Court. He will never know where he is, and the jurisdiction of the cheaper, smaller and more efficient court may be altogether ousted. At the outside there is great weight in the criticism made by the hon. Member for Loughborough (Mr. 1362 Rye) that this matter ought to have been considered by a specially trained committee set up to deal with this difficult subject—and if there were not a single politician from any party on such a committee it would be an advantage. Such a committee should have been set up to consider all the difficulties, and we should have been presented with an exact report as to where the hardships were, how to meet them and the legal machinery required to achieve such an object.
What happened, in fact, was that we had first a sort of dummy Bill on Second Reading. I use the expression "dummy Bill" because it seemed to disappear in the course of the arguments upstairs. As one hon. Member said, in the Committee we had blast and counter-blast going on all the time. The right hon. Gentleman the Home Secretary recently legislated against threats and intimidation. My recollection of the threats and intimidation used upstairs in Committee rather reconciled me to legislation of that sort. We had Amendments scribbled out at the last moment and thrown at our heads; we had pieces knocked off to conciliate one section or another, and the result of this manœuvring and counter manœuvring, of concessions to one interest and to another, and lack of consideration of the real object in view is, that we have now one of the worst-drafted, worst-considered incompetent Measures ever produced for dealing with what I believe to be a real need. There is a necessity for a proper competent Bill to relieve the necessities of the tenant. I congratulate the Government on having recognised the rights of the tenants in theory, but I am not going to congratulate them on having given the tenant anything substantial in practice. I think there is a great deal still to be done by a Labour Government or any Government which is not wedded to the policy of these statutory tribunals but which wants to proceed on constitutional lines. I know the difficulty in this respect which confronts Governments with a past like that of the party opposite; but that will not affect other Governments who have always proceeded on constitutional lines. When our time comes I hope we shall produce a proper Bill with adequate machinery, properly presided over and administered by the courts of the land, 1363 and not a mere pretext at legislation, to deal with a really difficult and crucial subject such as this.
§ The SOLICITOR-GENERAL (Sir Thomas Inskip)
The vigour of the hon. and learned Member's speech is in inverse proportion to the futility of its conclusions. After so much anger and passion had been expended upon the follies, weaknesses, and shortcomings of the Bill, I expected that anybody with a logical mind, such as the hon. and learned Member claims to possess, could arrive at only one conclusion, namely, that he would not support the Bill. The Bill, according to him, is ill-constructed, carelessly drafted, absolutely unworkable in all its provisions, extraordinarily inept, incompetent to achieve its designed object—and yet it is going to secure the unanimous support of the Socialist party. If so, it is not the first time that the Socialist party have supported proposals to which these epithets were or ought to have been attached. This Debate has been most interesting to those who have closely followed the Bill since its introduction. I think, with the exception of the hon. and learned Member for East Grinstead (Sir H. Cautley) and the hon. Member for Loughborough (Mr. Rye) every single person who has spoken proposes to support the Bill. As long as we secure the almost unanimous approval of the House for the Measures we introduce, we shall not complain if some hon. Members allow their tongues to run riot as the hon. and learned Member for South East Leeds (Sir H. Slesser) and the hon. Member for Loughborough did.
The position of the official Opposition is difficult. They have to play a part which is never easy to play. They know that this Bill is popular in the country. They desire to blame the Government, if possible, even for a Bill to which they are compelled to give grudging approval, but at the same time, knowing that the Bill is popular in the country, they realise that it is necessary for them to peg out a claim for some of the credit of passing it into law. So, both the hon. Member who opened the Debate on behalf of the Opposition and the hon. and learned Member who concluded the Debate on behalf of the 1364 Opposition have been at great pains to explain to the House and the country that it was only with their assistance that this Bill passed through the Committee and Report stages. I have no doubt that on a thousand platforms, when the town tenants of the country begin to appreciate the benefits of the Bill, hon. Members opposite will say, "It was we who did it, and to us be the credit and the honour." But the some-what awkward efforts which hon. Members have made to walk along this narrow path will, I think, be judged at their proper value, not only by this House but by the country at large.
There was another claim, much more modest, on behalf of the Liberal party, who are, I think, more entitled to a little credit, but I cannot allow the claim which has been made on behalf of that party to all the credit. Not so very long ago—on 30th September—a pamphlet was being distributed on behalf of the Liberal party in which not only was the Bill misrepresented and statements made quite contrary to the truth—I have no doubt inadvertently—but the Bill was described as vicious and wanton from start to finish. Now, however, the hon. and gallant Member for Carnarvonshire (Major Owen) has spoken this afternoon with modest appreciation of his own efforts and the efforts of the hon. Member for West Walthamstow (Mr. Crawfurd), claiming they are at any rate entitled to some of the credit which the two Oppositions together appear to desire, to the complete exclusion of the Government, who are really responsible for bringing in the Bill at all.
The hon. Member for Burslem (Mr. MacLaren), whose theories about the land always interest the House, even if they are irrelevant to the subject under discussion, directed a good deal of destructive criticism to some of the proposals of the Bill, and he made some inaccurate observations. I am sorry he is not here now, in order that he might hear me correct one or two of his mistakes. He said, for instance, that the private householder gets nothing under the Bill, but he appears to have overlooked Part II ,of the Bill, and what the private householder gets under Part II, in connection with the much discussed and often oppressive claims for dilapidations, is something which was in the Bill 1365 when it was introduced. I am glad to see the hon. Member for Leith (Mr. E. Brown) nod approval of that, because his pamphlet says—
§ The SOLICITOR-GENERAL
His party's pamphlet says that there is no provision to give protection against dilapidations being charged where the premises are about to be pulled down. As the hon. Member for Leith recognises, the Bill contained such a proposal when it was introduced, and the proposal has been made more explicit and emphatic in the course of the Committee stage, so that the hon. Member for Burslem is entirely inaccurate in saying that the Bill gives nothing to the ordinary private householder. The hon. Member for Burslem made another complaint, which the hon. and learned Member opposite echoed when he said that the Bill was not retrospective. I am more accustomed to hear the official Opposition complain of the fact that Bills are retrospective than that they are not, but, according to the usual practice of the Socialist party, they choose the complaint which happens to suit the particular moment, regardless of the principle involved. Yesterday their complaint was that a Bill was retrospective; to-day their complaint is that a Bill is not retrospective. The principle to which we adhere is that. we do not legislate retrospectively to affect bargains into which people have entered unless notice has been given in this House that such legislation will be introduced, and our practice is, from that date, to date the legislation. We will bear in mind the objection of hon. Members opposite, of the failure of this Bill to act retrospectively, and perhaps they will refrain from criticism of Bills in future on the ground that they are retrospective in the qualified degree which I have mentioned. The hon. Member for Burslem discussed the question of site value, and I will say nothing about it, because I am not sure that it is really relevant to this Bill. It is very dear to the hon. Member's breast, is this question of site value, and when he dies, like the word "Calais" on Queen Mary's heart, I am sure the term will be found written on his.
But really this Bill deals not with such recondite matters as site value, but with what most people recognise does exist, 1366 namely, improvements and goodwill in connection with business premises. The complaints made from this side of the House are matters to which I may be allowed to refer for a moment. My two hon. Friends, the hon. and learned Member for East Grinstead and the hon. Member for Lough-borough, are alone, so far as I know, in. their intention to oppose the Bill, and they complain that it is not the result of inspiration from a Select Committee. The hon. and learned Member opposite joined in that complaint. He apparently would like to have delayed this reform by what I thought was always regarded as a species of postponing action, namely, the appointment of a Royal Commission or a Select Committee. But the Government conducted their own investigations. There is no reason why, if we have opinions of our own, and we think that we can introduce remedial legislation, we should not act upon our own convictions, even without the assistance of a Select Committee. My hon. Friend the Member for Lough-borough referred to hole-and-corner methods, but he appears to have crept in sometimes to these hole-and-corner conferences, if my information is correct. I do not know how many times he has had the advantage of seeing my right hon. Friend the Attorney-General in connection with this Bill. My right hon. Friend's name appears on the back of the Bill—
§ The SOLICITOR-GENERAL
But before this Bill was introduced, I think he did, and he has certainly seen the Home Secretary in what he would describe as "hole-and-corner meetings." I do not accept his description of the meetings.
§ The SOLICITOR-GENERAL
The hon. Gentleman, presumably, refers to meetings which others attend but not those which he attends as hole-and-corner meetings This Bill has been the result of fair and legitimate inquiry and discussion between the responsible Ministers and their advisers, and the hon. Gentleman has no right to suggest that hole-and-corner meetings, by which, apparently, he intends to convey improper methods of making a corrupt bargain, have been held in connection with this Bill. This Bill is the fruit of proper investigation to deal with grievances which most people, I think, except my hon. and learned Friend the Member for East Grinstead, recognise to exist. Then my two hon. Friends have really not been able to agree as to the devastating results of this Bill. The hon. Member for Lough-borough told us that in his experience recently a house in Denman-street, Piccadilly, had sold for a much smaller sum than it would have fetched if this Bill had never been introduced. That is a suggestion that landlords are going to lose a tremendous sum as the result of this Bill; that capital values have depreciated. My hon. and learned Friend the Member for East Grinstead on the other hand has told us that it is going to result in loss to the tenant, because the landlord will pile the burdens on him.
§ The SOLICITOR-GENERAL
But my hon. and learned Friend said the result of this Bill would be to raise the rent and pile upon tenants the increase in cost of administering property, which would otherwise have to be borne by the land-lord.
§ Sir H. CAUTLEY
That is not a true statement-[HON. MEMBERS: "Order!"]—that is not a correct statement of what I did say. What I did say was that where the land in a district was appreciating and values rising, the landlord would put the burden on the tenant, and that in a district where land was diminishing in value the landlord would have to bear the burden.
§ The SOLICITOR-GENERAL
My hon. and learned Friend knows that even from my own point of view the last thing I woud desire would be to misrepresent him, though I might misunderstand him. I understood his argument was, that the tenant would not gain anything by this Bill, and he taunted the hon. Member for North Paddington (Sir W. Perring) with having secured by this Bill measures for which, eventually, tenants would curse my hon. Friend. I understood his argument to be that the increased cost which this Bill would bring about would fall upon the tenant. That is not the argument of the hon. Member for Loughborough, but I would ask my two hon. Friends, do they deny that a grievance exists? Do they deny that when a tenant makes an improvement with the consent of his land-lord, not unreasonably withheld, he should be entitled to fair compensation when his tenancy comes to an end? Do they deny the justice of that claim?
§ The SOLICITOR-GENERAL
I have been successful at any rate, or the House has been, in securing the assent of my hon. Friend to one important part of the Bill, namely, that part directed to improvements which the tenant has made. Then we come down to a very small point so far as my hon. Friend is concerned, and that is the principle of compensation for goodwill. Supposing you have a value for goodwill, does he deny the proposition that it is just as proper a subject for compensation as the physical improvement which the tenant may have made to the building? If my hon. Friend does dispute that proposition, it is too subtle for me. I do not understand, in 1369 principle, any difference between good-will by which the tenant has added to the value of his building and the value of his building which is being made by physical structure.
§ The SOLICITOR-GENERAL
The whole theory of compensation for goodwill is that it also is retained and in possession. It is no doubt difficult to define these matters. It is difficult to value. Exactly the same criticism might be made of the task of every tribunal that has been charged from time immemorial with the duty of assessing sums by way of damages for injuries that have been received. This is just as difficult, as elusive, and as impossible to prove by arithmetical calculation and demonstration, and yet just as capable of being done by a sensible and honest tribunal. I now pass to the criticisms that have been directed to the tribunal. The hon. and learned Member for South-East Leeds (Sir H. Slesser) gave what I am bound to describe as a parody of Clause 20 of the Bill. Let me remind the House, first, what the hon. and learned Member said about it, and then we will look at the Clause.
§ The SOLICITOR-GENERAL
We will see whether the hon. and learned Member read it out correctly. That is the point. What he said was that this Bill proposes to set up a statutory body presided over by an incompetent surveyor, and that the members of this tribunal would be salaried Government officials.
§ The SOLICITOR-GENERAL
The hon. and learned Member agrees with the correctness of my rendering of his observations. Let us see what is the fact. First of all, it is not a body that will try each of these cases, but a single person. That is the first mistake. The next mistake is that he will not be a salaried person at all, and there is no provision in the Bill to pay him a salary. He will be remunerated in exactly the same way as any arbitrator is remunerated under the procedure that has been adopted since the Land Clauses Act.
§ Sir H. SLESSER
It was very important that the House should know this fact. Is it suggested, as a fact, that the parties are going to pay the expenses of the surveyor? I assume that the Treasury are going to come forward with a Resolution to pay him.
§ The SOLICITOR-GENERAL
I cannot be responsible for the hon. and learned Gentleman's assumptions. I should like to ask him to point to me a single line in the Bill which justifies the description of the members of this panel as salaried Government officials.
§ Sir H. SLESSER
I would like to ask the hon. and learned Member to point to any provision in the Bill for the expenses of these persons, who have, apparently, to travel about the country and exercise jurisdiction, being discharged in any other way than from public funds?
§ The SOLICITOR-GENERAL
If there is no provision in the Bill for paying the expenses of these gentlemen, that appears to be a singularly slight foundation for the suggestion that they are salaried Government officials.
§ Sir H. SLESSER
Are we to understand from the hon. and learned Gentleman that these surveyors are going to be unpaid; and if they are going to be paid, by whom are they going to be paid?
§ The SOLICITOR-GENERAL
I have never made any such suggestion. I am dealing first of all with the hon. and learned Member's inaccurate description of the position. They are not Government officials; they are not salaried Government officials. As the hon. and learned Member ought to know, we deliberately refused a suggestion made in the Committee that we should set up for this purpose salaried persons—not Government officials, that was never suggested—but salaried officials such as exist under the Acquisition of Land Act. We refused that because we thought it was undesirable to incur the expense which that course would necessitate. The hon. and learned Gentleman then asked, "Who is going to pay these persons?" They will be paid in precisely the same way as an arbitrator appointed under the Lands Clauses Act. He will be paid 1371 the fee which the parties either agree to pay or are directed by him to pay. [Laughter.]
§ The SOLICITOR-GENERAL
I am not surprised at the hon. Member laughing, because he is not familiar, as is the hon. and learned Member, with the procedure which has been invariably adopted for providing remuneration for men of integrity and ability who are accustomed to undertake the task of arbitrating in friendly proceedings between persons who are not able to agree. It is all very well to laugh and say the price is not a trade union rate, but everybody knows that arbitration is much cheaper than litigation in the Courts. [Interruption.]
§ The SOLICITOR-GENERAL
I must leave my two hon. Friends on either side of the House to reconcile their differences.
§ Mr. MACQUISTEN
Is not the difference between arbitration and litigation this—that in arbitration you employ solicitors and counsel and skilled people, and you have, in addition, to pay your Judge?
§ The SOLICITOR-GENERAL
I think that is very likely accurate, but I think I am right in saying that arbitration conducted in a friendly and accommodating spirit is much cheaper than litigation, in which you not only have to pay large fees to the legal representatives, but Court fees for the privilege of taking proceedings. At any rate, whether we are right or wrong in that, we deliberately adopted the plan of having a panel of persons from whom an arbitrator could be selected. It is a complete travesty of the facts to say that the arbitrator, who would be chosen by the responsible committee named in the Bill, is a salaried official. The hon. and learned Gentleman went on to point his remarks by saying the Judges have repeatdly expressed their opinion about this practice of appointing Government officials to do the work which ought to be done by the Courts. If, as I believe, the hon. and learned Gentleman's description is a travesty of Clause 20, he has no right 1372 to bring the Judges into the matter, and to suggest they have disapproved of the practice we are following in this Bill. We have adopted this plan because we believe it to be the cheaper plan on the whole. No one will be prevented from going to the Courts on any point of law; there can be an appeal to the Court of Appeal; and I venture to think the lawyers will have quite enough out of such appeals to the Courts without the hon. Gentleman's plan being adopted of compelling everybody to go to Court, with the certainty that the case would go to what we know by the name of the Official Referee.
Perhaps I have taken up too much time in dealing with the criticisms of this Bill. Hon. Members opposite, of course, do not like the Bill, but they have to give it their grudging support, because it is a popular Bill. They do not like any Bill that does not involve the expropriation of the property of the land-lord. We recognise that that is what they want and they will not be content with anything short of that. I remember at the time, when the right hon. Gentleman the Member for Shettleston (Mr. Wheately) was Minister of Health, he said that they were going to make it impossible for a landlord to exist, and on this point the hon. Member for Dumbarton (Mr. Kirkwood) gave him the lead. They do not like any Bill that is going to sweeten the relations between landlord and tenant. On the other hand, some hon. Friends of mine on this side of the House who do not like this Bill seem to be ready to bury their heads in the sand and to refuse the redress of admitted grievances. I believe my two hon. Friends who have taken up this attitude will be remembered hereafter not only for their amiable qualities but for their eccentric opposition to proposals which every reasonable man is prepared to accept.
§ The PRESIDENT of the BOARD of EDUCATION (Lord Eustace Percy) acquainted the House that he had it in command from His Majesty to signify to the House that His Majesty, having been informed of the purport of the Landlord and Tenant (No. 2) Bill, gives his consent so far as His Majesty's interest is concerned, that the House may do therein as they shall think fit.1373
§ Further acquainted the House that he had it in command from His Royal Highness the Prince of Wales to signify to the House, that His Royal Highness, having been informed of the purport of the Bill, gives his consent so far as His Royal Highness's interest is concerned, that the House may do therein as they shall think fit.1374
§ Sir V. HENDERSON rose in his place, and claimed to move, "That the Question be now put."
§ Question put, "That the Question be now put."
§ The House divided: Ayes, 149; Noes, 64.1375
|Division No. 353.]||AYES.||[3.28 p.m.|
|Albery, Irving James||Goff, Sir Park||Meyer, Sir Frank|
|Ashley, Lt.-Col. Rt. Hon. Wilfrid W.||Grant, Sir J. A.||Monsell, Eyres, Com. Rt. Hon. B. M.|
|Baldwin, Rt. Hon. Stanley||Grattan-Doyle, Sir N.||Nelson, Sir Frank|
|Barclay-Harvey, C. M.||Greene, W. P. Crawford||O'Connor, T. J. (Bedford, Luton)|
|Beamish, Rear-Admiral T. P. H.||Greenwood, Rt. Hn. Sir H. (W'th's'w, E)||Penny, Frederick George|
|Bellairs, Commander Carlyon W.||Grotrian, H. Brent||Percy, Lord Eustace (Hastings)|
|Berry, Sir George||Guinness, Rt. Hon. Walter E.||Pilcher, G.|
|Betterton, Henry B.||Gunston, Captain D. W.||Pilditch, Sir Philip|
|Blades, Sir George Rowland||Hall, Capt. W. D'A. (Brecon & Rad.)||Power, Sir John Cecil|
|Boothby, R. J. G.||Hammersley, S. S.||Pownall, Sir Assheton|
|Bourne, Captain Robert Croft||Hannon, Patrick Joseph Henry||Price, Major C. W. M.|
|Bowater, Col. Sir T. Vansittart||Harrison, G. J. C.||Rawson, Sir Cooper|
|Bowyer, Capt. G. E. W.||Hartington, Marquess of||Remnant, Sir James|
|Brassey, Sir Leonard||Harvey, G. (Lambeth, Kennington)||Rhys, Hon. C. A. U.|
|Bridgeman, Rt. Hon. William Clive||Harvey, Major S. E. (Devon, Totnes)||Richardson, Sir P. W. (Sur'y, Ch'ts'y)|
|Briggs, J. Harold||Haslam, Henry C.||Roberts, E. H. G. (Flint)|
|Briscoe, Richard George||Hawke, John Anthony||Roberts, Sir Samuel (Hereford)|
|Brocklebank, C. E. R.||Headlam, Lieut.-Colonel C. M.||Ropner, Major L.|
|Bullock, Captain M.||Henderson, Capt. R. R.(Oxf'd, Henley)||Russell. Alexander West (Tynemouth)|
|Burton, Colonel H. W.||Henderson, Lt.-Col. Sir V. L. (Bootie)||Samuel, A. M. (Surrey, Farnham)|
|Cadogan, Major Hon. Edward||Henn, Sir Sydney H.||Sandeman, N. Stewart|
|Campbell, E. T.||Hogg, Rt. Hon. Sir D. (St. Marylebone)||Sanderson, Sir Frank|
|Cecil, Rt. Hon. Sir Evelyn (Aston)||Hope, Capt. A. O. J. (Warw'k, Nun.)||Sandon, Lord|
|Churchill, Rt. Hon. Winston Spencer||Hopkins, J. W. W.||Savery, S. S.|
|Cobb, Sir Cyril||Horlick, Lieut.-Colonel J. N.||Slaney, Major P. Kenyon|
|Cochrane, Commander Hon. A. D.||Howard-Bury, Colonel C. K.||Smith-Carington, Neville W.|
|Colfox, Major Wm. Phillips||Hudson, Capt. A. U. M.(Hackney, N).||Smithers, Waldron|
|Cope, Major William||Hume, Sir G. H.||Somerville, A. A. (Windsor)|
|Couper, J. B.||Huntingfield, Lord||Stanley, Hon. O. F. G. (Westm'eland)|
|Crookshank, Cpt. H.(Lindsey, Galnsbro)||Hurst, Gerald B.||Storry-Deans, R.|
|Dalkeith, Earl of||Iliffe, Sir Edward M.||Stott, Lieut.-Colonel W. H.|
|Davies, Dr. Vernon||Inskip, Sir Thomas Walker H.||Streatfeild, Captain S. R.|
|Davison, Sir W. H. (Kensington, S.)||Jones, G. W. H. (Stoke Newington)||Tasker, R. Inigo.|
|Dawson, Sir Philip||King, Commodore Henry Douglas||Thomson, F. C. (Aberdeen, s.)|
|Dean, Arthur Wellesley||Kinloch-Cooke, Sir Clement||Thomson, Rt. Hon. Sir W. Mitchell-|
|Dixey, A. C.||Loder, J. de V.||Titchfield, Major the Marquess of|
|Edmondson, Major A. J.||Looker, Herbert William||Tryon, Rt. Hon. George Clement|
|Ellis, R. G.||Lowe Sir Francis William||Vaughan-Morgan, Col. K. P.|
|Erskine, James Malcolm Monteith||Luce, Maj.-Gen. Sir Richard Harman||Warner, Brigadier-General W. W.|
|Everard, W. Lindsay||Lumley, L. R.||Watson, Rt. Hon. W. (Carlisle)|
|Fairfax, Captain J. G.||Lynn, Sir R. J.||Wells, S. R.|
|Falle, Sir Bertram G.||MacIntyre, Ian||Williams, A. M. (Cornwall, Northern)|
|Fermoy, Lord||McLean, Major A.||Williams, Com. C. (Devon, Torquay)|
|Ford, Sir P. J.||Macmillan, Captain H.||Williams, Herbert G. (Reading)|
|Forestier-Walker, Sir L.||Macnaghten, Hon. Sir Malcolm||Winterton, Rt. Hon. Earl|
|Forrest, W.||Macquisten, F. A.||Wolmer, Viscount|
|Ganzoni, Sir John||Maitland Sir Arthur D. Steel-||Wood, Sir Kingsley (Woolwich, W.)|
|Gates, Percy||Makins, Brigadier-General E.|
|Gibbs, Col. Rt. Hon. George Abraham||Malone, Major P. B.||TELLERS FOR THE AYES.—|
|Gilmour, Lt.-Col. Rt. Hon. Sir John||Margesson, Captain D.||Major Sir Harry Barnston and Major|
|Glyn, Major R. G. C.||Marriott, Sir J. A. R.||Sir George Hennessy.|
|Alexander, A. V. (Sheffield, Hillsbro')||Buxton, Rt. Hon. Noel||Hamilton, Sir R. (Orkney & Shetland)|
|Ammon, Charles George||Charleton, H. C.||Hardie, George D.|
|Attlee, Clement Richard||Cluse, W. S.||Harris, Percy A.|
|Baker, J. (Wolverhampton, Bilston)||Dalton, Hugh||Hore-Belisha, Leslie|
|Baker, Walter||Davies, Evan (Ebbw Vale)||Hudson, J. H. (Huddersfield)|
|Barnes, A.||Day, Colonel Harry||Kennedy, T.|
|Batey, Joseph||Duncan, C.||Kenworthy, Lt.-Com. Hon. Joseph M.|
|Bondfield, Margaret||Dunnico, H.||Lansbury, George|
|Bowerman, Rt. Hon. Charles W.||Evans, Capt. Ernest (Welsh Univer.)||Lawrence, Susan|
|Broad, F. A.||Gardner, J. P.||Lee, F.|
|Bromley, J.||Gosling, Harry||Lindley, F. W.|
|Brown, Ernest (Leith)||Greenwood, A. (Nelson and Colne)||Lowth, T.|
|Buchanan, G.||Groves, T.||March, S.|
|Maxton, James||Slesser, Sir Henry H.||Wellock, Wilfred|
|Morris, R. H.||Smith, Rennie (Penistone)||Welsh, J. C.|
|Naylor, T. E.||Snell, Harry||Westwood, J.|
|Oliver, George Harold||Stamford, T. W.||Wilson, C. H. (Sheffield, Attercliffe)|
|Potts, John S.||Stephen, Campbell||Windsor, Walter|
|Saklatvala, Shapurji||Thomas, Rt. Hon. James H. (Derby)||Wright, W.|
|Salter, Dr. Alfred||Thorne, W. (West Ham, Plaistow)||Young, Robert (Lancaster, Newton)|
|Short, Alfred (Wednesbury)||Thurtie, Ernest|
|Sitch, Charles H.||Viant, S. P.|
|TELLERS FOR THE NOES.—|
|Mr. T. Henderson and Mr. B. Smith.|
Question, "That the Bill be now read the Third time," put accordingly, and agreed to.
§ Bill accordingly read the Third time, and passed.