§ (1) For the purposes of Rule 8 of No. V of Schedule A as amended by Section thirty-two of the Income Tax Act, 1945 (which grants relief in respect of maintenance, repairs, insurance and management of property), a person occupying any premises as the tenant thereof shall be treated as if he were the owner thereof if, under the covenants contained in the lease or agreement by virtue of which he occupies the premises, the whole of the burden of repairing the premises falls upon him.
§ (2) The provisions of this Section shall have effect as from the sixth day of April, nineteen hundred and forty-six, and accordingly in Subsection (1) of Section thirty-three of the Income Tax Act, 1945, the words "or, in the case of expenditure by a tenant, could, if he had been the owner," shall be omitted.—[Viscount Hinchingbrooke.]
§ Brought up, and read the First time.
§ Viscount Hinchingbrooke (Dorset, Southern)
I beg to move, "That the Clause be read a Second time."
On the Committee stage of this Bill the Solicitor-General undertook to look into the point which I then raised. I therefore put this Clause down in the hope that the House might receive a considered reply from him. He said at the time that my purpose seemed to him then to be not far away from the present state of the law. If that proves to be the case, I hope that the Government will consent to accept this Clause. It leads one to reflect how difficult it is for hon. Members on either side of this House to move a Clause which affects the law in any degree at all, but, on the other hand, how extraordinarily easy for hon. and right hon. Gentlemen on the Front Bench opposite to initiate whole Acts of Parliament, which carry out revolutionary and overwhelming changes in our society.
I would like to remind the House what this Clause does. It applies the procedure of the maintenance claim to the last remaining class of property which is not covered by it. I am sure that the House is already familiar with the procedure of the maintenance claim under the successive Income Tax Acts, particularly under Schedule A, and I will not go into that. I think it is sufficient to say that all 916 owner-occupiers, whether rural or urban, are already covered by the principle of the maintenance claim, likewise, all tenants whose repairs are undertaken by the landlord, and that applies, of course, equally to agricultural estates and urban properties. Again, all tenants are covered by this principle of the maintenance claim who retain a financial interest in the property, that is to say, where the Schedule A assessment is in excess of the rent. Perhaps I ought to say, not wholly covered but partially covered. They may claim back from the Revenue tax on the cost of repairs up to the limit of the difference between the rent and the Schedule A assessment.
The law has hitherto generally held—I say "generally held" because two inroads, to which I will refer in a moment, have been made into it in recent years—that the Income Tax Acts only grant maintenance relief against tax levied in respect of the property, and also, and this is what is important, where it is borne by the person who maintains the property. I suggest that in these days that is becoming a bad principle, because it takes account of the status of the person who pays the tax and not the status of the property. The true object of the State should be to stimulate repairs of property, and it ought not to matter who pays the tax.
I suggest to the House that Parliament has already recognised that this is a bad principle in two respects, by two separate pieces of legislation. They constitute my precedents in moving this Clause. First of all, the Finance Act, 1940, provided that tenants with a lease of over 50 years were to be treated as if they were owners, and, apart altogether from what was the class of property or what was the relation between the rent and Schedule A, these tenants were enabled to put in a full maintenance claim on the ordinary statutory repairs, in exactly the same way as owners. Secondly, the Income Tax Act, 1945, Section 32, which provided that the relief which the owner of agricultural property can obtain is not to be restricted to the Schedule A Tax, but can be allowed 917 against other sources of income. That piece of legislation vitiates the principle that a tenant cannot get relief because he does not bear tax in respect of the property.
I would like the House to consider the kind of property I have in mind. It may be a row of fairly old valuable houses, which belong, shall we say, to the Crown Lands Commission or to the Ecclesiastical Commission. They are let to tenants, each of whom has a lease of under 50 years. Every one of these tenants, as the law now stands, can only repair that property out of his net income. None can get any relief by way of maintenance claim. Taxation being what it is, such properties will tend to deteriorate more rapidly than properties in other classes. That cannot be of advantage to tenants, to owners or to the State. I suggest that by a simple enactment it will be possible to raise this class of property, as regards maintenance, to the ordinary level of other property. Very often these tenants have to undertake enforced expenditure; local authority by-laws or the terms of the lease require them to paint the property at certain definite times, and keep it up to a certain standard. That now falls on them for payment, and they can claim nothing back from the Revenue.
In this time of shortage of houses, there should be no discrimination against particular classes of property. Every house capable of repair should be repaired, and all should receive the equivalent financial assistance from the revenue. I do not know whether the Solicitor-General is going to accept this Clause; he has a rather stern expression on his face, and it may be that he is going to refuse this. I hope that in that event serious consideration will be given by the Treasury to the rather anomalous state of the law in respect of this class of property, and that satisfactory changes will be made during the course of the next year.
§ 5.30 p.m.
§ Mr. David Eccles
I beg to second the Motion.
I am not a lawyer, and, therefore, I do not know precisely how tenants are placed in all circumstances in regard to repairing allowances. I wish to support the Clause in respect of agricultural property. I know instances of smallholders in par- 918 ticular who have very considerable capital expenses placed upon them as tenants. I wish to know whether the tenant in that case does, or does not, get the benefits of the 1945 Act. If not, would it not he possible for the tenant to have those benefits if the Clause becomes law? As an example, there are smallholders, tenants of Wiltshire County Council, who have very heavy expenses in keeping up a road which goes to a dozen or more of their smallholdings. If the expenses of maintaining that properly fell on the landlord, he would get the allowance. But I understand that the smallholders do not get it, because they are tenants. Yet, under their leases, they have to spend that money. There are other agricultural tenants on Salisbury Plain, for instance, who take blocks of land from the War Office, who are the owners of the land for training purposes. In their leases they undertake to spend money on the capital equipment of the land. Although they are tenants, do they rank for allowances under the 1945 Act? I think not. It would be a very good thing, in regard to their cottages, which they have to keep up, if the Clause were put on the Statute Book.
Mr. McKie (Galloway)
I wish to support the new Clause. The noble Lord the Member for South Dorset (Viscount Hinchingbrooke) instanced a class of people who would be unable to do anything towards keeping property, which they hold on lease, in proper repair. He also instanced people holding property under the Crown Lands Commissioners and the Ecclesiastical Commissioners. They were tenants of those two bodies and, as the Income Tax Acts at present stand, they would be precluded, because they have no maintenance claim for carrying out very necessary repairs to the property. I have great sympathy with that class of people, because they are people of small means, on whom the burden of taxation rests very heavily indeed. Here we are deliberately precluding them—that is if the Solicitor-General turns a deaf ear to us, and I hope he wilt not—from carrying out necessary repairs to property. It is necessary that any Government should have proper repair and maintenance of property very much in their minds and at heart.
The class of persons of whom the noble Lord spoke, are not bloated capitalists whom the Chancellor always seems to 919 suggest he wishes to do down at every turn. I hope that he or the Solicitor-General will indicate that they are either prepared to accept the Clause, or that at the next opportunity during the passage of the Finance Bill next year, they will do something about the matter. There are other people affected besides those mentioned by the noble Lord, and by my hon. Friend the Member for Chippenham (Mr. Eccles). I suppose I shall not meet with much response from the Chancellor on this point. There are many large properties in the country, where there may be dwelling houses or farms let on repairing leases. It may be that the landlord is unable to carry out the necessary repairs. The property may be in the hands of trustees, and let on repairing leases. What incentive is there to the persons occupying those premises, or agricultural lands, to carry out the necessary repairs to keep the property in proper order? We on this side of the House are not asking for any doles for landlords. I hope we shall not have any hon. or right hon. Member resisting the new Clause on that assumption.
§ Mr. Scollan (Renfrew, Western)
If this Clause were carried, would it not facilitate the existing habit of landlords transferring the burden of repairs to tenants?
If the hon. Member had studied the matter a little more carefully, and if he will study it in the future, he will see that the point he has sought to make is not a point at all. There is not a landlord desirous of shelving his liabilities on to the shoulders of the tenant. When the hon. Member interrupted with that quite irrelevant question, I was hoping that the Chancellor would have something to say in the way of accepting this new Clause, or, at all events, that he would tell us that proper care of property is a matter which concerns the Government very much. I and my hon. Friends have no desire whatever unduly to benefit either the landlord or the tenant, but we simply wish that property should be kept in order.
§ Mr. C. Williams
In looking at a matter of this kind I have often asked myself what is the really guiding word and the objective of the Clause. The guiding word of this Clause is undoubtedly "maintenance." I think we should examine the object of the Treasury in 920 granting maintenance to the landowner. It is not that the Treasury is benevolent, kindly, or even hard-hearted. It is purely that the Treasury looks at the matter from the point of view that, if property is not maintained, the Treasury will cease to get income. That is the only reason why the landowner is enabled to get maintenance for the repair of his property. I know of no other reason. The Treasury catches it both way—if the property goes out of repair and the owner dies, he does not pay much in Death Duties, and if it goes out of repair and he does not die, he does not pay Income Tax on it. To take the matter a step further, we come to the question of why there has been this vital difference between the tenant who does repairs and the landowner who does repairs.
We have had previous Chancellors of the Exchequer who did not change it. I think it was in 1940 that we had a Chancellor of very great skill who introduced a system whereby tenants who had a lease of over 50 years were allowed a maintenance claim. I believe that was one of the first innovations in this connection. We have arrived at the position when it is no good the Chancellor saying, "This is against precedent and against our habits and customs," because the innovation has begun.
Let us consider why it is better to give maintenance to a landowner than to a tenant. I can conceive lots of reasons, and I have no doubt that hon. Gentlemen opposite can see good reasons, but I do not think, from any fundamental sense of fairness, we can possibly justify a tenant, who has to put on, say, a new roof, getting no relief for the maintenance of the house which he maintains in order that the Chancellor of the Exchequer may get Income Tax out of it. I see no reason why he should have to do it out of his net income without any relief while the landowner gets relief. I happen to be a landowner and hon. Gentlemen opposite, therefore, cannot say that in this matter I am seeking to protect my own interests. If this suggestion is accepted, it will help a considerable number of agricultural properties and a very large number of smaller properties. It will also help considerably in future development I urge the Chancellor, if he wants to keep up his revenue and if he wants to keep factories, works, and houses in a high state of repair, to 921 apply the law with the same kindliness and fairness to the tenants as he does to the landlords in this respect. It is only fair that he should benefit both. That is the main argument in favour. I notice that hon. Gentlemen opposite, who are not so virulent or in such force as they are at times, do not seem very well disposed towards this new Clause. I am puzzled at that. I should have thought that they would have supported it. This is the kind of Clause which I should have expected not from a noble Lord and a Tory, but from some one who believes in helping tenants rather than owners. We have the rather curious anomaly of the Tory Party supporting the tenants of the property—of course, most of us have a a very large number of tenants who vote for us, and we are getting more and more supporters every day—and the Socialist Party remaining completely and utterly dumb, unable to say any word on behalf of the tenants. I am not surprised. I know, "Orders is orders," so to speak. I could never do a thing like that myself.
In view of the fact that we know the policy of the Government with regard to the renting of houses, might we not expect the Chancellor of the Exchequer to accept our point of view and to put it into effect? The Chancellor often tells us that he is not a short-sighted person. Many of us would be quite willing to take his word if only he would give us a little illustration. He should remember that over the years to come revenue would swell enormously if this was brought in because it would encourage the development of property very considerably. He should not take the short view that he may lose a few hundreds or thousands of pounds in the next year. For those reasons I support the Motion. I do not know whether I shall get any support from hon. Gentlemen opposite or from any other hon. Gentlemen on this side of the House. The good work, begun so well in 1940, which had to be stopped because it was difficult to do anything of the sort during the war, should be continued. I should have thought that this work in favour of the tenant who tries to develop his house and property was the kind of work which the Government, with their urge to progress and advancement, would seize upon and that they would exempt one and all.
§ 5.45 p.m.
§ Sir John Anderson (Scottish Universities)
The Chancellor of the Exchequer has been kind enough already today to give effect to a suggestion of mine on Income Tax law. As I was not in my place when he moved the Clause in question, I should like at once to acknowledge his kindness in that respect, and to build on that kindness the hope that he will at least listen to what I should like to submit to the House on the proposal which we are now discussing. I ought to say at once that I am a tenant of a leasehold property. I am not interested in this particular proposal because the lease of my house runs for more than 50 years.. Being in that position, however, I know something of the facts of the case, and I should like to make quite clear just what is the issue that arises in this connection and just why there is, as a matter of historical fact, this rather curious difference in treatment between the landlord and the tenant—a difference in favour of the landlord.
Take the case of two houses which are, in all respects, exactly similar, assessed at the same amount—old houses upon which the burden of repair is very great. In one case, the landlord is responsible for the repairs, and in the other case the tenant is responsible, because of an arrangement between landlord and tenant. When the landlord executes the repairs, he gets relief; when the tenant executes the repairs, he does not get relief. Why does that arise? It arises because when the landlord incurs the expense of repair, that expense reduces his income and he pays on a reduced amount; but when the tenant executes the repairs the cost of executing the repairs is a charge which the tenant has to meet out of income, the income itself remaining unaffected. Therefore, in accordance with the well established principles of Income Tax law, the landlord gets relief, and the tenant does not.
That did not matter very much—no doubt the point was not regarded as of any material importance—when the rate of tax was low. But when the rate of tax is high, it is of very real importance. I imagine it was for that reason that in 1940 a change was made in favour of the tenant, notwithstanding that it involved a breach of the commonly accepted principle of Income Tax law that one looks at the amount of income, and takes 923 account of anything which is a deduction from the income, but takes no account of the charges which have to be met by the possessor of the income. The principle in fact admits of exceptions. The whole system of allowances in respect of family obligations represents a breach in the first principle by which income is determined for the purpose of levying Income Tax.
It seems to me that here, when we are doing it with our eyes open, we might well recognise that there is not, in fact, any justice in treating a landlord in this matter more favourably than a tenant, simply because he is a landlord and because a certain amount of money in his hands is income, and, in regard to the tenant, it is not, technically, income. I hope, therefore, that the Chancellor will give consideration to this matter, and, even if he is not now prepared, so far as he has been able to consider the matter, to agree to the suggestion, he will go into it and will store it up as one of the various acts of benevolence to which he hopes to be able to treat the community later on. I think, although I made it perfectly clear that the differentiation between landlord and tenant in this matter is something which can be justified in argument by reference to the principles on which the Income Tax structure was erected, we should, at the same time, recognise that, with tax at the level at which it now stands, there must, inevitably, if hardship is not to be inflicted upon taxpayers, be some well-considered exceptions or departures from the logical principle, as it might be automatically applied, and I suggest, for the Chancellor's consideration, that there is here a case for favourable treatment.
§ Mr. Bowles (Nuneaton)
May I ask the right hon. Gentleman why, since the tax was high when he was Chancellor of the Exchequer, he did not do it himself?
§ Sir J. Anderson
I am quite prepared to answer that question, though it is not particularly relevant to the case I have put. I had a great many suggestions to consider. I agreed, in certain cases, to make very important departures from what had been regarded as almost sacred principles of Income Tax law. I could not do everything at once; I did not do everything at once, and I do not ask the Chancellor to do something now to which I would not be prepared to give sympathe- 924 tic consideration had I been in his place at this moment.
§ The Solicitor-General
The right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) invited us on this side of the House, and my right hon. Friend in particular, to store up and consider the arguments which have been advanced, and that invitation the Chancellor readily accepts, and he will give the most—
§ The Solicitor-General
I will say why my right hon. Friend feels that he cannot do it now, and why we feel that we can only store it up and consider it, which we shall readily undertake to do. I was surprised to hear the right hon. Gentleman, as I was surprised to hear the noble Lord, say that, in circumstances such as they outlined, tenants would not be able to claim relief in respect of repairs under Rule 8 of No. 5 of Schedule A. I am not speaking of tenants with leases of over 50 years but of tenants with leases under 50 years. The tenant who occupies land at a rent which is less than the rack rent, has a beneficial interest, and, for the purpose of Rule 8 of No. 5 of Schedule A, he is treated as the owner, and is entitled to claim the allowance which Rule 8 provides in respect of maintenance and repairs.
§ Sir J. Anderson
I am reluctant to interrupt the learned Solicitor-General on a legal question, but is not the extent of the relief which the tenant, in those circumstances, can claim, limited to the difference between the rent which the tenant in fact pays, and the full Schedule A value?
§ The Solicitor-General
That is so. He cannot get relief beyond the amount of his Schedule A tax. That I quite accept, and it is perfectly reasonable. That represents the extent of his interest, and it is what we expect the Act to provide. That is the position of the landlord, so that, in that respect, the tenant and landlord, if the tenant is a beneficial owner, are on precisely the same footing. If bon. Members will look at the new Clause, they will see that its proposals, in respect of the relief afforded by Rule 8, place the tenant on the same footing as the landlord. If and in so far as the tenant is a beneficial owner, he is already in the position of the landlord, and can claim precisely the same relief in respect of his repairs.
925 The noble Lord instanced the case of old houses owned by the Ecclesiastical Commissioners and let on leases of under 50 years. If, as presumably would be the case in a tenancy of that kind, the tenant has a beneficial interest, in that he occupies the property at less than the rack rent, he can claim the allowance under Rule 8. If he has not got a beneficial interest, he cannot claim the allowance, and there is not the smallest reason in the world why he should. A tenant who occupies on terms under which he has not got a beneficial interest, in that he does not get it at less than the rack rent, will, presumably, have had his rent adjusted according to whether he bears the burden of repairs or not. If he is under an obligation to pay for the repairs, clearly his rent will be proportionately lower. Conversely, if he does not have to pay for the repairs, he has to pay more in rent, and that is perfectly fair and reasonable, so that the thing is adjusted and balances itself. It is only in the case where the tenant has a beneficial interest that the question of claiming a right to an allowance under Rule 8 arises, and he has that right. Except in the case of the tenant who has no beneficial interest, the proposed new Clause does not alter the situation in the least, and does not give the tenant any right which he has not got already. In the case of the tenant not having that beneficial interest, the rent is adjusted according to whether the burden of repairs falls on him or on the landlord. Although we will certainly ponder over and consider with the greatest care the arguments that have been advanced, we feel certain, so far as our considerations have taken us hitherto, that there is no ground for accepting the new Clause.
§ Mr. E. P. Smith (Ashford)
May I point out to the learned Solicitor-General a personal experience that recently occurred to me? About three and a half years ago I had to take a couple of empty agricultural cottages in order to house two workmen. I had to pay a high rent for these cottages, and had to take them on a lease. Both cottages badly needed repairs, but I could not get the landlord to do anything at all or to make any concession to me in the way of allowance for repairs. Consequently, I repaired them myself. I could, had I so chosen, have allowed my workpeople to live in the cottages as they were, but I do not happen to be that kind of a man, and I 926 spent a considerable sum of money—I think, the £100 which was then allowed —on each of these cottages for repairs. I obtained no relief from Income Tax in respect of the repair of these cottages; and this proposed new Clause, had it been in existence then, would have rightly benefited me and would have encouraged me to do what, in fact, I did do, and such a Clause might well encourage other people, less interested in the conditions under which their workpeople are housed, to do the same. That is a real point, especially in rural districts, which the Chancellor of the Exchequer might well ponder.
§ 6.0 p.m.
§ Mr. I. J. Pitman
In some ways, I regret that I did not catch your eye sooner, Mr. Deputy-Speaker, because I think I could have cleared up what was, I submit, a misunderstanding by the learned Solicitor-General of what my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) was saying. My right hon. Friend was trying to make a point which, as I say, was clear, but was misunderstood. I started my sentence by saying that I thought the learned Solicitor-General had misunderstood what was said. My right hon. Friend propounded the story of two adjoining houses. The whole point at issue is that the difference between the gross assessment and the net assessment, which is the notional figure allowed for repairs to the householder who is a tenant doing repairs, is very often totally insufficient, and then a situation arises which is very unfair on the tenant. In a similar situation, if the landlord is doing the repairs, or if the tenant has been a tenant for more than 50 years, the benefit, for Income Tax purposes, of the cost of repairs, due to some piece of bad luck, would not fall on the short lease-holding tenant as the law is at present. This Amendment is an endeavour to right that obvious wrong.
I speak from experience. Drains can be a most expensive form of repair. It is extraordinarily bad luck, but if a tenant paying a fair rent for a house, having regard to the fact that he has to do repairs, the allowance in respect of repairs allowed to him is, in effect, the difference between the gross and the net assessments. There can be cases in which the actual repairs come to many hundred of pounds more than the notional amount allowed, and that is the issue we are considering, 927 not the one put by the learned Solicitor-General. I want hon. Members opposite to appreciate that this is in the interest of the tenant and not of the landlord.
In the case of many small cottages, particularly if they are in quantity, the landlord has to do repairs because they will not otherwise get done. In this case, the landlord is getting the benefit of maintenance. I want hon. Members opposite to believe me when I say that there are cases of small men who let a cottage to other small men with the repairs falling on the tenant. It is very unfair that, where the repairs are considerable, the difference between the notional and the actual repairs should fall on the tenant without any Income Tax benefit, whereas, if they were falling on the landlord, he would get the Income Tax benefit. That is the purpose of this Amendment.
§ Mr. Beechman (St. Ives)
In a very few words, I wish to express my regret that the hon. and learned Solicitor-General has not, on behalf of the Government, found it possible to grant the relief we are suggesting. I understand that the matter will he considered, but I should like to have heard now that the consideration was going to be a favourable one. In Cornwall, we have a number of leases based on third parties. It is a peculiar system and one which very often involves a considerable hardship for the tenant, who is quite uncertain for how long the lease is going on because it terminates when the life of some third party comes to an end. For this special reason, as well as for those already stated, I should like to have seen this relief given to the tenant.
§ Lieutenant-Commander Joynson-Hicks (Chichester)
I am very glad that my hon. Friend the Member for Bath (Mr. Pitman) has been able to clear up the misunderstanding which the learned Solicitor-General threw about the House. I rather suspected that there must be some misunderstanding to be cleared up, as we have not heard from the hon. Member for South Cardiff (Mr. Callaghan) on the subject. Not having been in his place a little earlier, he was not in time to hear the speech of the learned Solicitor-General. I cannot accept the argument as to the effect of the incidence of Schedule A upon the beneficial owner. But even if one were able to accept it, surely there could he no objection to the acceptance of the 928 provisions of this Amendment because they would not adversely affect the receipts of the Treasury? If the Treasury is not going to suffer, surely it cannot object to extending the relief in order to right a wrong which has been pointed out?
Personally, I should like to go further, and abolish Schedule A altogether. But this is a step in the right direction because the incidence of this tax does not really fall where Income Tax was originally intended to fall. As I understand it, the origin of Income Tax, including Schedule A, or particularly with regard to Schedule A. was a tax upon income or upon the notional income that the value of a house represented. In this particular case, where the value of the living accommodation is reduced to the tenant by the fact of his having to bear the cost of repairs, it is only fair that, as in the case of the landlord, he should be entitled to benefit by setting off the expense of repairs up to the limit of the tax which the house represents, or the notional income which the house should produce represents.
There is one argument which has not so far been advanced, and one which I think should appeal to the Government. The majority of cases with which this particular Amendment deals concern the larger type of house. It is not so much the cottage upon which the tenant has to bear the cost of repair; it is generally the house with the longer lease, which is larger than the cottage. In those cases, the present occupants are having very great difficulties indeed. In practically all those cases the incomes of the tenants have been reduced, but in this case where they are also liable for the cost of the repairs, the cost of the repairs has gone up, and in addition to that, the tax has increased as well. Therefore, they are hit in all directions. It is no longer profitable, and in many cases it is no longer convenient, for them to be able to occupy the whole of a house, but owing to the reduction in their income, caused partly by the increase in taxation, they are unable to incur the expense which would be involved in dividing the house into two or more habitations which would result in the increase of accommodation and would also enable them to live more within their income. If, in making such alterations to the house, it were possible for the cost of the necessary repairs to be counted as a deduction against their income tax, the 929 money would not have to be found out of their net income, and it would be a substantial encouragement to people to increase the amount of accommodation which at present is available in the houses which are nowadays too large for one family to live in alone, but which are unable to be converted.
§ Mr. Diamond (Manchester, Blackley)
Would the hon. and gallant Gentleman tell us whether he is talking about maintenance expenditure, or capital expenditure in respect of which the relief is not allowable to landlord or tenant?
§ Lieut.-Commander Joynson-Hicks
I am talking about the words in the new Clause:which grants reliefs in respect of maintenance, repairs, insurance and management of property.I will not detain the House further, but I do wish to urge upon the Treasury, and upon the Chancellor in particular, that there is in this whole question of Schedule A a very real line for him to pursue, and I believe that this relief for which we are asking will be a very good starting ground for him.
§ Mr. Assheton (City of London)
My noble Friend the Member for Southern Dorset (Viscount Hinchingbrooke) has done the House a good service in moving this Clause, because it has given an opportunity for discussing a subject which, although bristling with technical difficulties, demands serious consideration by the Government. The learned Solicitor-General put his case quite clearly, but I do not think he yet appreciates the full force of the case which we have put from this side of the House. I do not feel that I can make this very technical subject crystal clear. My right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) did make his point crystal clear, and I would like to ask the Solicitor-General, in connection with the case which my right hon. Friend put, for example, in the case of a medium term lease entered into between parties some years ago, when the cost of repairs was much lower and when the rate of Income Tax was much lower, whether there is not a case there which needs further examination and a more detailed reply than the hon. and learned Gentleman gave us.
930 I think it is not fully appreciated that where, in the case of the landlord, the whole of his income is eaten up by repairs, no tax is payable, but the tenant does not find himself in quite the same position. I think one good thing will -come of this Debate, if it is possible for the Press to find room for it tomorrow, and that is that tenants may learn what their rights are under Rule 8, No. V, Schedule A. I only learned what my rights were in this matter by chance. It so happens that, as an owner, I knew something about maintenance claims:in agricultural property, and when I became a leasehold tenant when I came to London some years afterwards, I asked myself how it was that something of this sort did not apply in the case of tenants with repairing leases. I inquired and found that it did apply, but few of my neighbours were aware of the fact. Therefore, I hope that whatever else may come of this Debate, many people who have not heard of this particular form of relief will acquaint themselves with it and will take advantage of it. The Solicitor-General did not give us much encouragement about next year. He has rejected this new Clause, and we on this side of the House do plead, after the cogent case put forward, that rather more serious consideration will be given to the case before next year. I hope the Chancellor will undertake to give that consideration.
§ 6.15 p.m.
§ Mr. Dalton
I am sure the Opposition would like to go to a Division on this Clause, and I do not wish to delay them. I have listened with great attention to what is a difficult topic, and, although as at present advised it does not seem to me that this Clause should be accepted, I undertake to put this question on the list —it is not a short list—of matters to which I will apply my mind between now and next year. There may be other ways of dealing with this matter. Schedule A has been referred to, and I may approach the question from that angle. However, I do not want to dissuade the Opposition from dividing the House.
§ Mr. Leslie Hale (Oldham)
I urge the Chancellor to consider this matter more seriously before he gives any more undertakings.
§ Mr. Hale
I know, but my right hon. Friend has given the pious promise of further consideration, which makes it incumbent upon me to advance one other argument. The noble Lord the Member for Southern Dorset (Viscount Hinchingbrooke) made out a modest and proper case for this Clause, but the arguments which he put forward were exploded by the hon. Member for Torquay (Mr. C. Williams). I always listen to the hon. Member with fascination, if not with exhilaration. So far as I was able to trace his argument, it was reminiscent of the lady who wrote to Sir Robert Ball and said, "I am sorry, I cannot attend your lecture on sun spots. The fact is, I am liable to freckle so easily." I have been a practising solicitor for 20 odd years, and I have drawn leases and tenancy agreements in four counties, but I have never drawn one which would come within the terms of this Clause. When the noble Lord was submitting his case it occurred to me that there might be a special practice in Dorset. There are various leasehold practices in different counties. For instance, Kent has a special practice. It occurred to me that a special case might be put forward for a particular locality, but when the hon. Member for Torquay said that the acceptance of this Clause would affect many cases and it would be of tremendous importance to tenants up and down the country, he exploded the noble Lord's argument and showed that would, in fact, happen.
§ Mr. C. Williams
If I am allowed to make a second speech, may I say that I could give the hon. Gentleman cases ranging from London to Scotland and from Scotland to Penzance? There are a number of them in different areas.
§ Mr. Hale
That may be, but if it is going to affect a large number of different cases, it will be for the reason put forward by one of my hon. Friends who spoke a little earlier. The landlord will dictate as a term of the lease that there shall be a complete obligation on the tenant to take over the whole cost of repairs. At the moment, in the ordinary lease of an ordinary house, the tenant does indoor repairs and the landlord does external repairs. There are special clauses. I contend that this would mean that the tenant would be forced to accept an additional obligation, in circumstances when the housing position means that he cannot bargain too closely about the rent. For 932 that reason, I ask the Chancellor to consider this matter carefully before he makes any concession.
§ Viscount Hinchingbrooke
In view of the undertaking given by the Chancellor that he will look into the terms of this proposed new Clause, and review the Debate we have had upon it, I beg to ask leave to withdraw the Motion.
§ Motion and Clause, by leave, withdrawn.