§ Commons Amendment to Lords Amendment, and reasons for disagreeing to certain of the Lords Amendments considered (according to order).
My Lords, I rise to move that this House do not insist upon the Amendments to which the Commons have disagreed. I can assure the House that my having once more to inflict a disquisition upon your Lordships on the subject of this Bill is not owing to any desire of my own, but, as the Bill has now reached a somewhat critical period of its existence, I hope I may be allowed to trespass for a few moments on the patience of the House in tracing how it has arrived at this stage. The Bill was originally introduced into the House of Commons by a private Member. In the debate on the Second Reading the Chief Secretary, speaking on behalf of the Government, expressed his approval of the contents of the greater part of the Bill, but criticised in principle two clauses—namely, Clause 5, which provided compensation for disturbance, and Clause 6, which provided for leasehold enfranchisement. He particularly criticised the principle of compensation for disturbance as applied in the original Clause 5 of the Bill. In Committee Clause 5 was remodelled and Clause 6 was omitted altogether in order to meet the views of the Government. In the autumn the Government, under the belief that they would be able to secure its passage through another place, 1607 starred the Bill. They have been at tacked elsewhere for their action in that respect, but I submit to your Lordships that in the early months of the summer it was absolutely impossible for any man to realise how long this autumn session, with all its joys of foggy days and midnight sittings, would last; and the Government have been criticised in this House because they have taken up the Bill at all There has been no change of attitude on the part of the Government with regard to this Bill. There has been no volte face, no reversal of front, nothing of that kind. The attitude of the Government has been straight forward and consistent throughout. The Bill as your Lordships are aware, underwent material alteration in this House, and it then returned to the House of Commons. The House of Commons have agreed to nearly all the Amendments which were introduced in this House, would like to show how very great and real those concessions have been. In Clause 1 they have accepted Lord Ashbourne's Amendment and Lord Arran's Amendment. In Clause 6 they have accepted Lord Donoughmore's clause almost in its entirety. They have accepted the substance of Lord Leitrim's Amendment, and they have accepted several new subsections introduced at the instance of Lord Clonbrook. They have accepted another clause introduced in order to meet certain objections by Lord Dunboyne, and they have ratified the arrangement which, on behalf of the Government, I made in this House to introduce new clauses covering the case of trustees and companies. They have accepted an Amendment of Lord Mayo to leave out clubs and other places of social amusement, and they have accepted, no doubt very much against their will, the Amendment of Lord Pembroke limiting the scope of the Bill to urban districts and villages. These are the concessions which the House of Commons have made, and I think that they are no small concessions. I may add that it has been no easy matter for the Government to induce the House of Commons to agree to make these very considerable concessions to this House. I submit that in so doing the House of Commons have deferred in this 1608 matter to the opinion of this House, and that they and the Government have done everything in their power to arrive at a compromise.
With regard to the Amendments which have come back to us from the Houseof Commons—and I do not deny for a moment that they are important Amendments—I think it will be for the convenience of the House if I outline what the attitude of the Government with regard to them will be. First, as regards retrospection. I do not wish to go into arguments which we have already had in this House with regard to that principle. I would only point out that there is a very real grievance in Ireland on account of it. It is a matter of common knowledge, and I do not believe any noble Lord in this House will deny, that tenants in Ireland have gone on renewing their tenancies from year to year, trusting implicitly in their landlord. In some cases landlords have taken advantage of that trust, and it is possible that in future landlords may take advantage of that confidence and that serious cases of hardship will arise. As I have said, the principle in the Bill is not a new one either in English or in Irish Acts of Parliament. Noble Lords from Ireland have argued, rather astutely it seems to me, perhaps to intimidate noble Lords who do not come from Ireland, that if you introduce this principle in this Bill, there is no doubt whatever that it will be introduced into English and Scottish Acts of Parliament. I confess I cannot agree in any sense with that. I am informed that the same argument was used with regard to the Land Acts of 1870 and 1881, and yet those principles have never yet been applied in England. I cannot see why Parliament should be frightened out of remedying an injustice in one part of the Empire simply from the fear that the principle may under certain conditions be applied in other parts. If you push that argument to its logical conclusion, you will never have any legislation at all, and you may as well shut up both Houses of Parliament at once. The cases of England and Ireland are entirely apart. They have been dealt with separately on their merits the past, and they must be dealt with separately in the future.
1609 I now come to the other point upon which the Commons have disagreed with your Lordships— namely, compensation for disturbance. I would venture to remind you that this is not the clause as it stood in the original Bill. It was introduced at the instance of the noble Earl opposite, Lord Donoughmore. What has been done in the House of Commons is this. Towards the end of the clause they have struck out these words—Provided that such compensation shall in no case exceed three years' rent of the holding.I think there is a very good explanation and reason for that, viz., that it is impossible to calculate the amount of goodwill by a number of years rent. That is an entirely fallacious test. It is possible that the rent of a holding may be very high and the goodwill very small, but the converse is also possible, that the rent may be very low whilst the goodwill is relatively high. It is possible to suppose a case of a shop rented at, say, £20 or £30 a year, where the goodwill is equal to £200. My noble friend the Lord President of the Council, and, perhaps, in a humbler degree, myself, have in this House done our best to arrive at a compromise in regard to this Bill. We have made many concessions, but at length the limit of concession is reached, and I have to state on behalf of His Majesty's Government that unless this House can see its way to accept these two Amendments which have come back from the House of Commons the Bill must drop.
I would like to call attention to the division which took place last night in the House of Commons on the principle of retrospection. In that division the Government had a majority of 229, only some thirty-six Members, I think, being found to vote against the Bill. Now, my Lords, 229 is a very respectable majority. I think that even my noble friend Lord Waldegrave, satiated almost to the point of indifference by the huge majorities he can command in this House, will admit that 229 is a substantial majority; but I am aware that there are Members in this House with whom that argument carries no weight at all. They do not mind whether the majority is 229 or any higher figure. But I would ask 1610 their attention while I briefly analyse the division list and point out certain striking features. In the first place, only three Members representing Irish constituencies were found to vote against the Bill. The great majority of the Ulster Party abstained from the division. The Leader of the Ulster Party, MR. Walter Long, abstained from voting, and I think I am right in saying that he has refrained from taking partin any important division in the other House against this Bill. More than this, there were three Members from Ulster who spoke on behalf of the principle of retrospection, and three Ulster Members went into the Lobby with the Government in favour of the principle. I have been given to understand that one swallow does not make a summer, but if you take three swallows together, I submit that that is an indication that milder atmospheric conditions are close at hand; and the fact that three Ulster members went into the Lobby with the Government shows that those who were at first strong opponents of the Bill now adopt towards it a more favourable attitude.
I have stated what I have to say in no minatory or aggressive spirit. Everyone knows, I believe, that certain noble Lords opposite would regard the statement that the Bill under certain circumstances will drop, not as a threat, but rather as an inducement to vote against these Amendments. Certain noble Lords opposite do not regard the Bill with any very great amount of favour. But I assure your Lordships that I have no intention of using a threat of any sort or kind when I say that we shall be obliged, if your Lordships cannot agree to these Amendments, to lose the Bill. In conclusion, I would only say one word, not to noble Lords from Ireland, for I fear their mind is already made up, but to English and Scottish Peers in this House. I would venture to point out to them that, if this question is not settled now, this is only the beginning of a long series of acrimonious debates in both Houses of Parliament. Further, it will be a source of agitation in Ireland, a source of serious disturbance, and probably of breaches of the peace in that country. The Bill is asked for with, perfect unanimity by the whole of the 1611 Irish people, and I ask noble Lords opposite to hesitate before they deny a wish expressed with almost entire unanimity by a nation. That is all I have to say. I have endeavoured to outline clearly what the policy of the Government in this matter is. It is for noble Lords opposite to decide what course they will now pursue. With noble Lords opposite rests the decision and the responsibility for that decision.
§ Moved, "That this House do not insist upon the Amendments to which the Commons have disagreed."—(Lord Denman.)
§ LORD ASHBOURNE
My Lords, the noble Lord who has just spoken has assumed in his manner that he was addressing a hostile audience, incapable of conviction or modification of view, and that, in fact, he was wasting his powers in attempting to argue the case at all. But what is the good of putting down a Motion for consideration if we are told at the outset that it is no good considering the matter? I claim to be a moderate and not an unreasonable man, and when I hear a debate opened I am always prepared to discuss on temperate lines what are the main issues. The noble Lord has given his Government a character of which any Government might be justly proud. He has suggested that there never was a more judicious Government, that they are always willing to do what is fair and right; in fact, that no people could be better. I have lived a great many years longer in the world than the noble Lord, and I have come to the conclusion that it is always wise to approach every question in a temperate spirit. No doubt the Government, composed of able men, of course of varying intelligence but with a high average of prudence, good sense, and ability, recognise the reasonableness of meeting some Amendments by modifications and others by acceptance. We consider the matter from exactly the same point of view. We accepted the views of His Majesty's Government on a great many points, and we did not press anything we thought unreasonable. Let the Government, if it makes them happy, take credit for having accepted Amendments to which they did 1612 not see their way to make any legitimate resistance.
There are two Amendments put down for discussion to-day that we are invited not to discuss. Being tolerably familiar with Irish questions and with the Irish Land Code, I can hardly conceive two Amendments that would lend themselves more to fair, reasonable, and temperate examination. The first of them is what is called the retrospective Amendment. The clause as originally introduced by the Government provided that tenants, subject to a qualification taken from the Act of 1870, whether the improvements were made before or after the Bill came into operation, should be able to make a claim for improvements. That was dealt with elsewhere by the suggestion that, having regard to the facts, retrospective action was not reasonable. It was pointed out that this was a perfectly new development, and that it was an extremely strong measure to give retrospective effect to legislation dealing for the first time with towns. The Government resisted that objection in the House of Commons. Then the Bill came here and we dealt with it, and I think we did so in a not unreasonable spirit.
There are two aspects of retrospection—one in reference to the date of the holdings, and the other in reference to the date of the improvements. Your Lordships drew a distinction between improvements made on holdings before the passing of the Bill and those made after the Act had come into operation. This House did not think it reasonable that the provision should extend to improvements made before the passing of the Act, when no one had the faintest conception that such a startling change in the law would take place, a change applying legislation for agricultural holdings to houses in Irish towns and villages. Now, this particular clause is presented to us by the noble Earl in hardly the language of persuasion, though he has told us that the language he used was not threatening language. I prefer to deal with the subject in the language of reason and commonsense.
What was done in the House of Commons? The House of Commons 1613 put back the clause in its original shape. The principle that they contend for is this, that retrospective action must be recognised. That is, that improvements made in the past are to be recognised and dealt with as subject-matter for compensation. The earlier legislation, the Act of 1870, provided that there should be certain safeguards. That Act recognised that improvements made before the passing of that legislation had to a certain extent to be safeguarded. MR. Gladstone was Prime Minister of that day. He made himself a master of everything connected with tenure in Ireland and took an active part himself in all these measures, and the way he sought to safeguard the matter was this. He provided that in reference to all improvements made before the passing of the Act, compensation could only be obtained for permanent buildings and for improvements made within twenty years before the passing of the Act. Sub-section (5) of Clause2 of this Bill was an excerpt from the Act of 1870. MR. Gladstone recognised that when you are dealing with a principle of this kind a difference must be observed between improvements made before and improvements made after the passing of the Act. You cannot say that improvements made before the passing of the Act are to be dealt with in the same way as improvements made subsequently. There is a distinction, and the necessity of certain safeguards must be recognised. I am not aware whether this is a particular aspect of the question on which the House of Commons voted, but I do not find that that particular aspect had attention concentrated upon it. If I were anxious to arrive at a moderate conclusion in reference to this matter, I would apply myself to see whether the qualifications that are to be found in the sub-section I refer to should be modified in reference to the position in which we find ourselves. I think the point is open to careful examination whether safeguards appropriate to land in the Act of1870 can be applied without change to the different subject-matter of buildings. I do not myself think it is reasonable. The subsection was framed to deal with a different matter. Is it reasonable to say, in reference to towns, that the buildings might be claimed for at all times without 1614 a qualification of years? I think myself that that is too strong.
The only other clause that the noble Lord has applied himself to is that in reference to compensation for disturbance I should approach that with great misgiving, except that I have perfect confidence in my desire not to say anything in the slightest degree disagreeable or offensive to noble Lords opposite. What is that clause? We are familiar with the term "compensation for disturbance. "This is an effort to introduce that principle into towns in Ireland. The clause is taken almost verbatim from the Land Tenure Bill, and there are no qualifications of any importance grafted on to it except the frank admission that goodwill is an element which may be taken into account. That was a very substantial thing to do. My noble friend Lord Donoughmore at first proposed that the compensation should be limited to one year. That was inserted in Committee. It was then pointed out by the noble Lord in charge of the Bill and also by the noble Earl the Lord President of the Council that that was not adequate, and that a higher figure should be inserted. On Report, the noble Lord in charge of the Bill, acting for the Government, moved that instead of one year five years should be inserted. In the discussion that took place the Lord President indicated that one year was entirely inadequate, and that three years, the period in the Lands Clauses Consolidation Act in reference to a similar subject-matter, would be more appropriate for consideration. When Lord Denman subsequently proposed the insertion of five years, my noble friend Lord Donoughmore took exception, and expressed his willingness to accept three years as mentioned by the noble Earl the Lord President, and three years has now been assented to by the Government as a modification of their proposal for five years. Is it reasonable for us to be told that if we do not forget and ignore an Amendment put in with the sanction of the Government the Bill must die, and die at our hands? I do not think it is reasonable to ask us to unsay everything that has been said, and to ignore the concessions of the Government in reference to this subject.
THE EARL OF DUNRAVEN
My Lords, what my noble and learned friend describes as compensation for disturbance is really compensation for loss of goodwill. As regards that particular Amendment, my position is perfectly clear. I have always objected to limiting it in any way by any number of years rent. It appears to me that if you limit it as it is limited in the Bill to three years you are really giving with one hand and taking away with the other. The House accepts the principle that compensation should be given under certain circumsstances for the loss sustained in the shape of goodwill, and it is then limited to three years'rent. Imagine the case of a shopkeeper, with a good little business, who pays £10 a year rent. He may be practically forced out of the holding by onerous conditions. He may be unable to get equally good premises in the same town, and, what is exceedingly likely to occur, he may not get any other premises in the town at all. The goodwill in connection with that business might have been created by the tenant's grandfather, his father, and then himself, and it would be farcical in such a case to say that £30 would be any compensation. I prefer the provision as it was in the Bill when it came up to your Lordships. I think the amount of compensation ought to be left to the decision of the Court.
I should like to say a word or two upon the Commons objections to the Amendments of this House, as I was responsible for some of those Amendments. I objected to the retrospective character of the Bill for three more or less distinct reasons. First of all, I objected to the principle that you should take away a man's property without any compensation; in the second place, I objected because I thought it would have a bad effect upon the peasant proprietors who are so rapidly being created in Ireland; and I objected, in the third place, because I felt that the retrospective character of the Bill would entail hardship upon owners of town property, and, more especially, upon the small owners of town property. As far as the principle is concerned my objections still hold good. I dislike the principle. Yesterday in the other House the Attorney-General for Ireland spoke 1616 of the owner having a legal and technical right to property which in equity and justice ought to belong to the tenant. I accept that for the sake of argument. I admit at once that there is perfect justification for legislation to alter that condition of things in the future; but to urge that it is legitimate on the part of Parliament to take away property to which a man is legally entitled appears to me, even though you think he ought not to be entitled to it, to be another matter altogether. I still think that interfering with the legal rights of these small owners will have a prejudicial effect upon occupying tenants throughout Ireland. These men are buying their freeholds; we are inviting them to invest their capital in developing them, and their security is a Parliamentary title. It surely cannot be a very good object lesson to these small owners for Parliament to interfere with legal rights and legal titles in the way proposed. I entertain the same objection now that I did before on these two points.
As regards the hardship that the retrospective action of the Bill may entail on owners of town property, I must admit that I have considerably modified my views on account of other Amendments which were moved and which remain in the Bill, and especially on account of an Amendment moved by the noble and learned Lord. As the Bill now stands, no compensation can be given for any improvement in excess of the capitalised value of such addition to the letting value of the holding as the Court shall determine to be the direct result of such improvement. Moreover, the time during which the tenant may have enjoyed the advantage of the improvement has to be considered, and no compensation can be claimed if the landlord has made a reasonable offer of a new tenancy or of the continuance or renewal of the tenancy. Surely that makes a very considerable alteration in the Bill as it came up to your Lordships' House. The time during which the tenant has enjoyed the advantage of the improvement he has made has to be considered, and there can be no compensation, as I understand it, if the value of the improvement has been exhausted during the time in which the tenant has been in 1617 the enjoyment of it. He can only claim compensation for the unexhausted value of the improvement, and if the landlord offers to renew the tenancy so as to give sufficient time for the Value of the improvement to be exhausted, no compensation can be claimed.
In the very worst case which can be imagined, if the improvement was made, say, the day before this Bill becomes an Act, if it does become an Act, the compensation is limited to the capitalisation of the increased letting value directly consequent on the improvement. It appears to me that the landlord in that case, if he has to pay compensation for an improvement, recoups himself in the increased letting value in the same way, or practically in the same way, as if he had made the improvement himself and charged the tenant interest for doing so, as he is entitled to do under the Bill. In these circumstances I am bound to say that, as far as any hardship that the retrospective character of the Bill can inflict on the owner of town property, the Bill as it has been amended in this House by the insertion of provisions which have not been objected to in the House of Commons has been profoundly modified; and, so far as that is concerned, I do not entertain the same objections to its restrospective character as before.
The most practical point, after all, is the effect the retrospective provision may have on owners of town property. So far as the principle is concerned, as the Duke of Devonshire said the other night, it is perhaps better at times to be unprincipled. At any rate, we have to consider the probability that if your Lordships insist on your Amendments the Bill may be lost. Personally I should be exceedingly sorry to see the Bill lost. The Bill contains a great deal that is very good and very beneficial, and, therefore, the position I find myself in is this. I have to consider whether I am justified in running the risk of losing a Bill which I consider to be a good Bill in most respects, in order to maintain a principle which I am bound to say appears tome to be inoperative so far as this measure is concerned—a principle which will really not affect owners under the Bill. In these circum- 1618 stances I should not feel justified in asking your Lordships to maintain the Amendment which I myself moved, and thereby to imperil the Bill.
THE EARL OF MAYO
My Lords, your Lordships will remember that you decided, on 11th December, by a large majority, not to admit the principle of retrospection in this Bill. I have no complaint to make of the way in which the noble Lord in charge of the Bill brought forward the disagreement of the Commons with our Amendments. There was only one thing which he said at the end of his speech to which I would call attention, namely, that if we insist on our Amendment regarding retrospection the Bill must drop, and that in consequence there may be trouble and breaches of the peace in Ireland. Now, we are quite accustomed to that sort of thing in Ireland. That really does not impress me very much. I am perfectly certain that the Government know how to deal with that sort of thing. But I doubt whether this House, having adhered to a principle, is likely to go back upon it. I take exception to the statement that town tenancies in Ireland are different from those in Great Britain. Town tenancies are in exactly the same position in England, Scotland, and Wales, and if you admit the principle for Ireland it will undoubtedly cross the Channel and be adopted here.
What is the effect of the retrospective provision? Noble Lords have tried to belittle its effect. The effect of it will be that small owners who have invested their savings in these houses will be ruined; they cannot possibly face the law suits that are likely to ensue. Let me take the case of a landlord who has a row of houses in a town, the leases of which fall in. He desires to improve the property. The tenants claim compensation in each case, and the money which he intended to spend in improving the property goes into the hands of the lawyers. A great deal of the Bill is taken up with safeguards for its future working which I allow are excellent. The safeguards are—the tenant must give notice, the landlord may make the improvement himself, he may dispute the necessity for the improvement, and he 1619 may register the improvement. But there is not one of those safeguards with regard to past improvements. If it is so necessary that future improvements should be safeguarded in this way, why is there no safeguard in the matter of improvements made in the past?
It is entirely wrong to imagine that we wish to wreck the Bill. The noble Lord in charge of the Bill seemed to think that noble Lords from Ireland had entirely made up their minds on this subject. That is so; but they are open to arrangement and to a certain amount of compromise. Subsection (5) of Clause 2 in the Bill as brought from the Commons read as follows—A tenant shall not be entitled to claim compensation for any improvement made before the passing of this Act except permanent buildings unless made within twenty years before the date of such claim.We feel that the Bill ought not to be lost, and we suggest that instead of "twenty" you should insert "ten" years. I do not know whether the Government can see their way to accept that compromise. If they do not accept it I hope noble Lords will support me in the matter. I am not anxious that the Bill should be lost, but I think your Lordships should try to arrive at some arrangement by which the retrospective action should be limited to some extent.
§ Lord CASTLETOWN
My Lords, I had not the opportunity of speaking on the Second Reading of this Bill, and therefore I hope I may be pardoned if I say a few words at this stage. I would venture very humbly to ask the noble Lord in charge of the Bill and His Majesty's Government to reconsider, if they possibly can, the hard and fast decision at which they have arrived in regard to the retrospective clause. In my judgment this clause is unnecessary and unwise, and will, I am afraid, be destructive of the confidence which all of us who live in Ireland know is growing up there among the middle classes in investing not only in land but in buildings. There is also a feeling that these sudden changes in legislation are dying out, and that we are arriving at a more peaceful epoch. I have stated that the clause is unnecessary, and I shall be able to show that it was strongly opposed by the Chief 1620 Secretary and, I think, the Attorney-General before it was inserted in the Bill in another place. It was imported into the Bill because it was felt by a large number of members from all parts of Ireland that it was a very good thing to conciliate a certain number of voters in small villages. That accounted for the insertion of the clause, the harm that would be done by the clause not being considered.
The retrospective clause was also imported into the Bill as a kind of scourge for certain landlords who have acted unwisely, but in reality it will not have the deterrent effect supposed, for the simple reason that the majority of these landlords are rich men and will not mind either the litigation that will ensue or the payment of large sums by way of compensation. The clause will very severely punish the men who have saved money and invested it in houses in towns and villages, and who desire to live upon their small incomes. The speeches of the Attorney-General in the other House show that when he dealt with the retrospective clause he felt that he was not on very strong ground; and when replying to Sir E. Carson, who urged the protection of these middle-class investors, the Attorney-General used very remarkable words, and words which I think tend to show that my view of the case is the correct one. Sir E. Carson held that, if it was necessary to protect those who entered into future contracts, it was still more necessary to protect those who had already entered into contracts. The Attorney-General replied—Such a person took over all the obligations of the previous holder, and if he were a prudent man he would, when purchasing the property, employ a solicitor to see what obligations he was taking over. Under these circumstances he would take over the business with all the existing assets and liabilities and a prudent man would inquire what they were before he purchased.That, my Lords, is the short and simple answer as to the unwisdom of this retrospective clause. If such a person had gone, as the Attorney-General suggested, to his solicitor, he would have been told that the law did not compel him to pay retrospective compensation for damages, and that he would not have to pay for all the improvements he had purchased from some other landlord. 1621 Such a provision as this in the Bill will shake the confidence of everyone in the country who wants to invest money in this type of property. I am thoroughly in accord with the Bill as regards the future, for men will know exactly the position they are in when they invest their money. Living among these people and hearing from them what they feel on this subject, I would appeal to His Majesty's Government to reconsider if possible the form of the retrospective clause. I think the words suggested by the noble Earl opposite, if accepted by the Government, would lessen the injustice which I fear will be inflicted on the persons concerned I hope the Government will look into the question if it is not too late.
My Lords, as I had the honour of moving the Amendment which it is now suggested the House should abandon, I should like to say one or two words. I fully retain my objection to the retrospective action of this clause; in fact, I should even have been prepared to move that the House insist on its Amendment. But, at the same time, taking into consideration what we have heard as to imperilling the passing of the Bill, and having no desire to see the Bill dropped, I shall not take that course, but I hope His Majesty's Government will accept the proposal of my noble friend Lord Mayo.
I still object to retrospection. I think it is most unfair that a man who has made an improvement with the full knowledge that he was not going to receive any payment for it, and who has enjoyed the advantage which that improvement conferred upon him during his tenure, should be able to come forward and claim compensation. I also support what has fallen from the noble Lord who just sat down as to this not being a case of wealthy landlords and large towns. The people concerned are small struggling people in small towns. They are generally middlemen, and though they will be able under a subsequent clause to recover from the head landlord, a considerable interval may elapse before they are able to do so. They can only recover at the close of their tenure, which may be a much longer one than that of the tenant. 1622 Struggling people of that kind are, therefore, exposed to absolute ruin by these provisions. The noble Lord in charge of the Bill spoke of the different position of town tenancies in Ireland and England, but the difference is by no means material. I would draw attention to the Report of the Select Committee in 1886, that the difference between the respective positions of town tenants in England and in Ireland was not great enough to call for any legislation applying to one which did not apply to the other. I commend this to all noble Lords from England as a warning that they may expect a similar measure extending to this country. On the whole I still retain my objection to the retrospective effect of the clause, and I trust the Government will see their way to accept the proposal of my noble friend Lord Mayo.
§ *THE EARL OF CREWE
My Lords, the noble and learned Lord on the front bench opposite, in replying to my noble friend behind me, seemed to take some exception to the note of warning that if your Lordships were to insist on this Amendment, altogether striking out retrospection, the Bill would be grievously endangered. I am quite certain that my noble friend had no intention of addressing your Lordships opposite in anything like a peremptory tone. On the contrary, we always desire to approach the majority in this House in a tone almost of Oriental deference, not so much on account of the individual merits of noble Lords opposite, great though they are, but on account of the fact that they possess an overpowering majority in this House. It appears that we are following what has become a practice in both Houses in taking these Amendments in globo, but as they are not very numerous I do not know that that course produces any particular inconvenience on this occasion.
I will, if your Lordships will allow me, first deal, out of its order, with the Amendment in Clause 5. The noble and learned Lord recounted what happened at an earlier stage in regard to his Amendment, and he gave an account if it, which I need not say was substantially correct, although he omitted one important fact, that in the kind of 1623 provisional agreement which we gave to the insertion of these words we bore in mind the fact that, after all, it was not our clause, but the clause of the noble Earl; and, therefore, we did not take the same degree of responsibility in joining in its Amendment as we should have done if it had been our own.
§ *THE EARL OF CREWE
The term of five years, or three years, whatever it was, suggested by the noble Earl, has it is quite evident, caused considerable dissatisfaction not only in another place but also here. My noble friend Lord Dunraven, who has not been by any means a thick and thin supporter of the Bill, takes strong exception to this proposal on grounds which certainly seem to me to be well founded, namely, that it is important to bear in mind the remarkable difference which exists between three or five years rent of a town holding and three or five years rent of an agricultural holding. The rent bears a very large proportion in the agricultural case to the total interest of the tenant, whereas in the other case the proportion may be, and often is, exceedingly small. I do not know in what form your Lordships may choose to send clown this Clause 5, but I am afraid it is not possible for the Government to say that they could rely upon its being accepted in the form in which your Lordships have left it. Therefore, it really is for noble Lords opposite to consider whether it is worth while, in view of what was said by the noble Earl, Lord Dunraven, to insist upon this Amendment to Clause 5.
Now I come to the really more important point of this question of retrospection. You were warned yesterday by the Duke of Devonshire against talking too much about questions of principle. I think it certainly cannot be denied that the difference which has existed between the two sides of the House in this matter, and also between noble Lords on each side of the House, does rest to a considerable extent on a question of principle. One class of opinion rests entirely upon the sanctity 1624 of contracts and does not seek to inquire not merely whether those contracts were fair, but whether they were made with a real freedom of bargaining on either side. The mere fact, they say, that contracts exist is enough, and they ought to be respected. The other point of view, which I confess to be mine, is that if you are going to say that a contract need not necessarily be observed on the ground that there really was not free bargaining between the two sides, it does not matter whether that bargain is going to be made five years hence or was made a year ago. On that I suppose it will be impossible for us to agree.
But when we come to the facts of this particular case I hope it may be possible to agree. My noble friend behind me who spoke last but one put, I am afraid, a rather sinister interpretation on the remarkable majority in another place which carried retrospection. But how ever that may be, I think we cannot in this House ignore the fact that Members on both sides of the House of Commons not merely voted in favour of it, but supported it by speeches. I repeat what I said before, that it certainly does seem to me that if you leave this in, as I hope you will in some form, the practical effect is not likely to be very great. I do not think that, in relation to past contracts, tenants are likely to receive, if they quit their holdings, large sums under this retrospective clause. It is perfectly true that the safeguards which are applied in the case of future agreements cannot, in the nature of the case, all be applied in the case of past agreements; but it seems to me, bearing in mind the fact that this matter is going to be tried before a purely judicial tribunal, that the Court is therefore far less likely to give the benefit of the doubt to the tenant unless he is able to prove clearly that he was really responsible for the improvements which added to the value of the holding than if the matter were to be settled by arbitration, or on more rough and ready lines.
In the circumstances we think that it would be reasonable to accept the compromise offered by the noble Earl opposite, Lord Mayo, and supported, as I was glad to notice, by Lord Clonbrock, 1625 namely, that whereas no limit of date should beset on compensation obtainable for buildings, yet for all other improvements ten years should be substituted for five in the old sub-section 5. In order to do that, when my noble friend comes to the Amendment to which the Commons disagree he will have to move that the Amendment be disagreed to and then alter the words in the necessary way. I am in hopes that if your Lordships agree to that course being taken the noble Lord will not press the proviso to Clause 5.
§ *THE MARQUESS OF LANSDOWNE
The nobly Earl commenced his speech by assuring us that his colleague who had charge of the Bill did not intend to use peremptory language to this House. I do not think any of us ever imputed to him that he used peremptory language, but he did hint that extremely disagreeable things might happen to us if we did not accept these Amendments; and amongst other untoward consequences he suggested that the Bill would be dropped. I think it quite conceivable that some of my noble friends behind me may not be greatly dismayed by that prospect, but we shall no doubt consider this Bill without reference to such considerations as these.
What weighs with me is the fact that, after a very long discusion, we have at any rate very nearly come together. I think the noble Lord who has charge of the Bill was fully justified when he reminded the House that His Majesty's Government had accepted a number of very valuable improvements at the instance of noble Lords on this side. Again, of the four Amendments which have lately been before the House of Commons two have been accepted, so that the two remaining Amendments which we have been discussing are really all that stand between us and a settlement of this troublesome question. May I say one word, in the first place, with regard to the Amendment dealing with the retrospective character of the Bill? I have been greatly impressed by the avidity with which the dictum of the Duke of Devonshire with regard to principles has been accepted by this House. I think it was quoted by the noble Earl for the third time within twenty-four hours. I do not know whether we shall be able to 1626 adopt as our motto the old-fashioned saying that—A merciful Providence fashioned us hollow. On purpose that we might our principles swallow.I hope we shall not come to that; but I think it is true that in Irish legislation we have, and I regret it, to a considerable extent left sound principle behind us. What is however remarkable in the case of this Bill is that for the first time we find this abandonment of principle applied, not to agricultural holdings, but to property in towns. That is no doubt a very serious innovation. Nevertheless I prefer to argue the question as a practical one and without regard to theory. There is one practical argument which I think makes very strongly in favour of those who have desired that the clause should not be made retrospective. It is an argument which I do not think has been noticed to-night. It is this, that in the case of improvements executed after the passing of the Act the landlord has to receive notice of the improvement. He has the opportunity of making it himself, and, in short, has means of protecting himself which obviously are beyond his reach in the case of old improvements executed before the passing of the Act. On the other hand, I think it is true that the Bill as it now stands does to a great extent safeguard the landlord. Let me remind your Lordships, quite briefly, what those safeguards are. In the first place, the tenant can only claim on quitting his holding, and not if he leaves voluntarily. He can only claim if he can show that he has been capriciously discharged by the action of the landlord. In the next case, the landlord can bar the claim altogether by a reasonable offer. Again, it is provided that the landlord has not to pay except for the ascertained addition to the letting value of the holding which results from the improvement. Besides that, the court is held bound to consider the time during which the improvement has been enjoyed, the rent, and any other benefits accruing to the tenant. Finally—and this is a most important reservation—there is no compensation where there has been a contract for valuable consideration, including a building lease. Therefore, in all cases where there are building leases, and I presume that in every case where the 1627 premises have any value or importance there is such a lease, the question of compensation would not arise.
In these circumstances I should have ventured to advise my noble friends not to insist to the full extent on their Amendments, and I am the more disposed to advise that course as I understand the noble Earl the Lord President of the Council is ready to accept the suggestion that there should be a ten year limit beyond which there should be no claim on account of what I may call remote improvements other than buildings. To my mind that is a very important safeguard, because it is no doubt difficult for a landlord to protect himself in the case of improvements executed at a comparatively remote period of time. Therefore, I hope we shall accept the compromise advised by the noble Earl.
One word only as to the other point. I confess that I was a little surprised, and heard with regret, that His Majesty's Government were going to recede from the position they took up the other evening when they agreed to accept three years rent as the maximum of the claim which might be put forward for compensation owing to the loss of goodwill. But that change has been supported by arguments which I think are worth consideration, notably, if I may say so, by the strong argument put forward by my noble friend at the Table (the Earl of Dunraven.) Again, in the case of this clause I look from the particular point we are discussing to the other safeguards which are to be found in the Bill, and which seem to me to be of very great value to the landlord. Let me very briefly mention them. The tenant can only claim this compensation when he quits his holding owing to the arbitrary conduct of the landlord. Then I find in the second subsection a most important limitation under which it is laid down that the clause only operates in the case of business premises; that it includes only yearly tenancies created after the passing of the Act; that a lease of thirty-one years, if granted after the passing of the Act, bars a claim altogether; so that the clause, as I understand it, will not operate either in the case of old leases or in the case of new leases for 1628 more than thirty-one years. The landlord can therefore stop the whole thing by granting his tenant a thirty-one years lease, and an ordinary building lease would no doubt cover him altogether. Putting aside the question of principle, I do not think the owners of property of this class have very much to fear from the Bill as it now stands; and, looking to the fact that we have been met in a not unreasonable spirit and that a number of important Amendments have been accepted at our instance, I should hope the Bill would be allowed to go through without further modification.
*LORD BALFOUR OF BURLEIGH
My Lords, I want to say a single word on this particular question. I have listened attentively to this debate, which has been conducted almost entirely by those interested in the conduct of the Bill or in Irish land. I am not myself moved in this matter by the argument of the noble Lord who is responsible for the Bill, either about the size of the majority in another place, the acrimonious debates which may arise, or the possibility of breaches of the peace; I shall not take to myself any responsibility for interfering with the concordat which has been arrived at. All I want to do is to put in one word of caution. I find myself in a strange territory when I am dealing with questions of property and leases in which the tenants make all the improvements. That seems to me to differentiate the case from those contracts with which I am most familiar; and all I rise to say is that I hope, that being the case, that the fact that we are allowing a certain amount of retrospective action here will not be taken as a precedent against this House. It seems bad enough to interfere with the right of adult men to make contracts in the future, but that is as nothing in my mind to not regarding as sacred and binding contracts already made. I hope that, if the House consents to this compromise, those of us who deal with matters on this side of St. George's Channel will not be afterwards told that we are barred from raising the question of principle when we are confronted with requests for the breaking of contracts dealing with our own affairs.
§ On Question, Commons Amendment to Lords Amendment agreed to; several of the Amendments to which the Commons have disagreed not insisted on.
THE EARL OF MAYO
I now move, that this House do not insist on its Amendment leaving out subsection 5 on page 2, lines 20 to 23, but that subsection 5 as proposed by this House be amended by omitting the word "twenty" and inserting the word 'ten."
§ On Question, Motion agreed to.
§ Bill returned to the Commons with the Amendment.