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New Clause B—(Date For Permitted Increases For Increases In Rates)

Volume 529: debated on Thursday 8 July 1954

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B.—(1) Subsection (2) of section three of the Act of 1920 (which relates to the time as from which permitted increases of rent are recoverable from a tenant) shall have effect, in relation to increases permitted by paragraph ( b) of subsection (1) of section two of the Act of 1920 (which provides for increases of rent in respect of increases in the amounts payable by the landlord for rates), subject to the following provisions:—

  • (a) any such permitted increase shall be recoverable from, and in respect of the period beginning with, the day specified in the next following subsection;
  • (b) where at the time when the notice of increase is served the tenant is a statutory tenant, the amount of any such permitted increase may include an amount in respect of a period immediately preceding that mentioned in the last foregoing paragraph and beginning not earlier than six weeks before the date of service of the notice of increase nor earlier than the beginning of the statutory tenancy, and any amount so included shall be deemed to be rent due on the day specified in the next following subsection.
  • (2) The day referred to in the last foregoing subsection—

  • (a) where at the time of service of the notice of increase the tenant is a statutory tenant, is the next day after the service of the notice on which an instalment of rent is payable under the terms of the statutory tenancy.
  • (b) in any other case, is the day after the date on which by virtue of subsection (1) of section one of the Rent Restrictions (Notices of Increase) Act, 1923, the notice of increase operates to terminate the tenancy.
  • (3) Where under any tenancy the amount of any such permitted increase for rates as is mentioned in subsection (1) of this section is recoverable without a notice to terminate the tenancy being necessary in order to make the increase effective, the foregoing provisions of this section shall apply as they apply where at the time when the notice of increase is served the tenant is a statutory tenant, but with the substitution of references to the tenancy for references to the statutory tenancy.

    (4) In this section the expression 'notice of increase' means the notice of intention to increase rent served in conformity with subsection (2) of section three of the Act of 1920.

    (5) In accordance with the foregoing provisions of this section the said subsection (2) shall be amended as follows:—

  • (a) after the words 'no such increase shall' there shall be inserted the words 'save as provided by section (Date for permitted increases for increases in rates) of the Housing Repairs and Rents Act, 1954';
  • (b) the words 'or, where such increase is on account of an increase in rates, one clear week' shall cease to have effect.
  • Read a Second time.

    I beg to move, as an Amendment to the Lords Amendment, in subsection (1), to leave out paragraph (b).

    I hope that the eloquence of my hon. Friend the Member for Widnes (Mr. MacColl) will convince the Minister.

    I hope that it will be possible for me to explain our attitude to this new Clause which has been proposed in another place, and to give a general picture, without unduly trespassing outside the rules of order.

    As I understand the position, this new Clause is designed ostensibly to meet the recommendation contained in the second Report of the Ridley Committee issued in 1945. It deals with the problem of making adjustments in controlled rents in order to meet increases in rates. Under the present legislation a landlord who receives a demand note for an increased rate may add to the weekly rent an increase of a comparable amount. The difficulty which has arisen is that the landlord may get caught in two ways.

    In the first place, he has to give one clear week's notice before he raises the rent, and that may miss the next rent day, and therefore he may be a fortnight or so in arrears. The second problem with which the new Clause deals is that the demand note may arrive some time after the resolution has been passed by the council making the new rate. One gathers that there are people fortunate enough to live in the area of a local authority where this sort of thing happens. In most cases it arrives too quickly. One gathers that there are cases where it may arrive some weeks after the new financial year—or the six months, it may be—has commenced. Then, although the landlord may know, he cannot reimburse himself from the tenant because he has not had the demand note. I understand that those are the two points which the new Clause is designed to meet.

    Our first objection is that this is no time and this is no Bill in which to introduce such a provision. In Committee upstairs we made many proposals for reforming the Rent Acts to meet injustices to the tenants. The most notable example was the problem of succession to a tenancy on the death of the tenant and the widow. There were other examples where we tried to deal with practical cases and to soften the impact of the Bill upon the tenant. In almost every case the Minister stonewalled by saying, I am not reforming the Rent Acts; "I am dealing with a very specialised and narrow point, namely, the increase of rents to meet repairs."

    That was the basis upon which the right hon. Gentleman introduced the Bill. That was the basis on which he resisted Amendments proposed by the Opposition in Committee. It was on that understanding that the Bill went to another place. Therefore, I suggest that it really is intolerable that in a Bill dealing with that narrow point which has been carefully considered in this House, another place should take it upon itself to insert this proposal making a change in the ordinary rent restriction legislation.

    The proposal has nothing to do with repairs at all. It is irrelevant to the main purpose of the Bill, which is to deal with the problem of the cost of repairs. This deals with a problem which has existed now for many years. This flaw, if it be a flaw, in the Rent Acts goes back to 1920, I suppose. I was not frightfully active before then and I cannot remember whether it was in the 1915 or the 1920 Act. I remember noticing the point when I read the 1920 Act. It may have been in the 1915 Act; I do not know. There it is. We got along quite well without too much difficulty.

    Every argument which the Minister used to resist our proposals for amending the Bill in favour of the tenant could be used against this proposal which merely deals with an anomaly which has become accepted because it is something that has gone on for some time. Therefore, our first objection is that it is wrong to put in a proposal of this sort which will have the effect of increasing the rents of the tenants.

    There is a second difficulty to which I should draw attention. The proposal is that a landlord shall be able to claim six weeks' arrears of increase. It is true that the amount of the average increase on a weekly rent will not be very much. It may be that the amount involved in six weeks will not be very large, but the whole point of the weekly tenancy is that the tenant knows where he is. He knows his obligations, and the first charge on the weekly wage is the rent. The rent is put on one side and paid over to the landlord on a Monday morning. The payment of the rent is regarded as a primary obligation. This is not something which the tenant has avoided. It is the local authority which is to blame.

    9.30 p.m.

    This proposal will create debts for tenants. They will be faced with substantial claims for six weeks' arrears of the increase. That is a basic factor affecting the daily lives of weekly tenants which this House ought not to accept. The Bill was passed in this House for another purpose, and I object to another place tacking on to it a proposal to raise rents in this manner. We should object to it on the grounds that if we are going to reorganise and reconstruct the Rent Restrictions Acts, we shall do the job as a whole and look not only at the things which will help landlords but also at the things which will help tenants.

    I shall try to deal with the third point which arises if I can do so without getting out of order. It is the problem arising from the fact that the proposal is unilateral in its effect. It is extremely disingenuous for anyone to suggest that this is carrying out the proposals of the Ridley Report. The problem which arises is what happens if rates fall. It may seem strange to the House, but in the 1920 Act it was not at all clear that when rates fell the tenant could cease to pay the increase. In 1924, in the case of Strickland v. Palmer, the divisional court decided that the tenant could not claim a reduction in his rent if there was a reduction in the rates. That decision was upset by the Court of Appeal, and it is upon the decision of the Court of Appeal in that case that the present law rests that it is possible for a tenant to get back the increase when the rates fall.

    The decision arises out of the interpretation of Section 2 (1, b) and Section 12 (1, d) of the 1920 Act. I need not bother the House by reading the whole of the judgment of Lord Justice Acland on the subject, but I strongly recommend it to any of my hon. Friends who require a pleasant evening's reading. The proposal of the Ridley Report in paragraph 74—

    I do not know that it is quite clear to me either, Mr. Deputy-Speaker. I am only trying to avoid bothering the House by making two speeches. The point arises mainly on the second Amendment, which relates to the fact that the proposal is not bilateral in that it is for the benefit of the landlord and not for the benefit of the tenant. If that is your direction, Mr. Deputy-Speaker, I will happily make another speech on the subject in a few moments' time.

    Our real object in seeking to delete the paragraph is that, although it sounds a complicated problem, there is a very important principle behind it, which is that, having had this dreadful Bill foisted upon us, we should restrict its mischief as much as possible. The Minister took the line that he was dealing only with the problem of the repairs. If that is his line, he must harden his heart against another place and stick to that line. Therefore. it is not something which should be brought in at this very late stage. That is the first point.

    The second point is that, of all proposals to introduce into a Bill of this sort, the one least to be expected by the House was that which places tenants in the position of having to meet six weeks' arrears of increase of rates when it is not their fault at all that those arrears have been occasioned. Surely, the whole principle in weekly tenancies is that the tenant knows where he is from week to week, and can be quite sure that, having paid the landlord on Monday morning, he need have no more fears.

    It is difficult to discuss this Amendment without relation to the Clause which it is proposed to alter, and indeed the hon. Member was allowed to explain what the new Clause did. He explained it extremely well, and has really saved me the trouble of doing it again, because he put the case very fairly and clearly.

    Perhaps it would also help our discussion if I indicated that we propose to ask the House to accept the second Amendment, which seems to us to be perfectly fair and logical. Indeed, I indicated that to the hon. Gentleman when we thought that this matter was to come before us on another day, and we arranged that the correct wording should cover the point which the hon. Gentleman had in mind. Therefore, this Amendment is a negative of the new Clause, because, if carried, the new Clause would really cease to be operative, so that, in arguing that point, the hon. Gentleman was right and in order, because he was arguing on the basis whether or not the new Clause should be added to the Bill.

    I was very conscious of the strength of the point which the hon. Gentleman made. He did not try to argue against the Clause as such, and I think he was fright, because it is fair, logical and it removes an anomaly. I think that it was for this reason that Lord Silkin said that, on the whole, it was a reasonable Amendment, and, after all, the noble Lord speaks with a good deal of authority. I think, therefore, that there is no objection to the substance of the Clause—which this Amendment would destroy—but that one should ask whether it is timely and whether it is right to put it in at this stage.

    I shall be perfectly frank with the House and say that I have, broadly speaking, resisted any attempt to use this Bill, which is mainly to deal with the problem of keeping houses in repair, for undertaking a general review of the rent restriction system, but, like all good resolutions, there have been some exceptions to it, and the two major exceptions were both agreeable, I think, to the Opposition.

    The first was to meet the point in the case of the passing of a tenancy where a woman was separated from her husband, which led to some anomalies and hard- ships. It was not strictly to do with my main purpose, but I accepted it. The second was really more important and covered a point which had aroused a great deal of interest in the Opposition and carried support from them. That was to prevent abuse of the power of getting control of an agricultural cottage by buying the cottage, then declaring it to be an agricultural cottage, and thereby obtaining possession of it. That was quite a large issue. On those two occasions I thought it right to advise the Committee to go a little wider, and to break our own rule.

    Therefore, having done that on one or two occasions, I hope that I may be forgiven for saying that it is not unreasonable—the proposed new Clause being generally agreed to be a good one by both sides in another place—to say that it meets a point, and that we could perfect it by accepting the second Amendment to the Lords' Amendment, to deal with this happy situation. I should have done it myself, but I frankly admit that I did not think the problem of falling rates was likely to be very oppressive. The Amendment certainly makes it logical. I admit that it is a breach of our general rule, but there have been the other breaches. I hope that the House will feel that it is right on this occasion to agree with the Lords Amendment.

    I am afraid that on this side of the House the matter does not take on the same rosy view as it does with the Minister. I confess that by announcing that he intends to accept the second Amendment he makes the position much more logical than it stood originally on the Order Paper.

    It is fair that we should point out that at the earlier stages of the Bill we strongly pressed for many valuable Amendments to be made to the Rent Restrictions Acts. The Minister has referred to one or two small but valuable changes which he made, after great agitation from this side of the House. It seems rather extraordinary that, after the Bill had gone to another place, there should arise this quite novel point, in the sense that it had not been the subject of discussion in the Committee. I do not mean that it has never been raised in public discussions.

    The hon. Member may recall that on the Report stage my hon. Friend the Member for Bedfordshire, South (Mr. Cole) and myself moved an Amendment with the very point in mind that is contained in this Lords Amendment. It is therefore not a novel point. Perhaps the hon. Gentleman was not listening on that occasion.

    We did not press the Amendment, because the Parliamentary Secretary said exactly what the hon. Member for Widnes (Mr. MacColl) has just said about amending the Rent Restrictions Acts.

    The landlords' association has a much stronger influence in another place than its representatives have in this House, which is a sad commentary upon the constitutional position of this House. If we are to have the pressure of the landlords, let us have it here and not in another place where we tend to lose sight of what happens.

    Seriously, I do not think we should quite brush aside the point that although the sums involved may be small, as we admit, this does not count very considerably with many of the people who are likely to be affected by the Bill. This is a small, further annoyance and difficulty that many tenants may have to face. Because of that, we think the Minister should have thought again about whether it is worth while bringing in the whole of this new Clause at all.

    I make this final appeal to the right hon. Gentleman on what I am sure he will regard as a relatively small matter—whether it would not be worth his while to say to their Lordships that, in view of the whole background of the matter, it is hardly worth while pursuing it.

    Amendment to the Lords' Amendment negatived.

    9.45 p.m.

    I beg to move, as an Amendment to the Lords Amendment, in subsection (5), at the end, to add:

    (6) Where for any period for which a rate is demanded (hereinafter referred to as "the rating period") the amount of the rate is increased, and by virtue of paragraph (b) of subsection (1) of this section the amount of any consequent permitted increase for rates includes an amount in respect of a period preceding that mentioned in paragraph (a) of that subsection, paragraph (d) of subsection (1) of section twelve of the Act of 1920 (which provides that any increase in rates payable by a landlord shall be deemed to be payable by him until the rate is next demanded) shall not so extend the period for which the increase is recoverable as to make it longer than the rating period.
    The Minister indicated that the words on the Order Paper had benefited from the assistance of the draftsmen in finding words to meet the purpose of the Amendment which was down in the names of myself and some of my hon. Friends. As the House will be aware, my hon. Friend the Member for Widnes (Mr. MacColl), speaking on the last Amendment, just got to the interesting point of discussing the Ridley Report when it was deemed better that we should make it to more purpose on this Amendment. I hope, therefore, that my hon. Friend will have the opportunity of catching your eye, Mr. Deputy-Speaker, so that he may continue the discussion.

    I am grateful to the Minister for one thing. Those of my hon. Friends who have sometimes wondered whether or not I was an asset on this side of the House, will now realise what an asset I am. It would appear that a speech from me led the right hon. Gentleman to accept an Amendment for once in a way from this side of the House, which is a very unusual thing for him to do. However, as he has accepted it, I think it would be unbecoming of me to refresh the House with an account of what the Ridley Committee had to say about the matter, and how, in the original form, its recommendation had been disregarded.

    As my hon. Friend said, there were originally two Amendments, one of which I drafted. It occupied four lines on the Order Paper, whereas we now have an Amendment which is more satisfactory and which occupies eight lines. I realise now that it is an unpardonable thing to try to impose something short and the more ample language of the Parliamentary draftsmen is more satisfactory.

    The right hon. Gentleman said that this did not amount to anything. Of course, we do not know what the right hon. Gentleman has got up his sleeve for next Session. He talked in a big way about the reform of local government. Perhaps it would be inappropriate to ask what his intentions are, but we should be very grateful, nevertheless, if he would tell us.

    There is another point. Under the new valuation proposal, it is quite possible that some types of property might have a fall in rates, although the general amount collected in rates did not fall. Adjustments of rates from one property to another might make the fall quite substantial, and, therefore, in justice we feel that we ought to press this matter in our Amendment.

    Amendment to the Lords Amendment agreed to.

    Lords Amendment, as amended, agreed to.