Clause 37. — (Liability for repair, maintenance and insurance of fixed equipment.)
Orders of the Day — Agriculture Bill
Mr Thomas Williams (Don Valley)
I beg to move, "That this House doth disagree with the Lords in the said Amendment."
The explanation I shall give is very short, and very simple. Clause 35 allows arbitration at the end of three years on the question of rent by either party, and it is suggested that where a new tenancy is created at any time before the expiration of three years, if one or other of the two parties has tried to drive too hard a bargain on the question of maintenance and repair, one can go to arbitration on rent before the expiration of three years. The Amendment inserted in another place insists there can be no arbitration on rent within the period of three years.
The right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) asked a short time ago whether we take into account the relationship between landlord and tenant. Here we have taken into account the relationship between landlord and tenant, and we think the fact that either one of the two parties can go to arbitration on rent before the expiration of three years will compel both of them to be reasonable to the other party. Therefore, we feel that to accept this Amendment inserted in another place would rob the Clause of the very object which we had in view. For these reasons I hope the House will feel that it is right and proper that we should take away the power to either party to exploit the other, by leaving the power of arbitration there if need be. If the terms agreed on are reasonable and fair, neither party need fear having to go to arbitration. If they are unreasonable and not fair, they ought to go to arbitration. Therefore, in the interests of the good relationship between landlord and tenant, I hope the House will disagree with this Amendment.
Lieut-Colonel Geoffrey Clifton-Brown (Bury St Edmunds)
I hope the Minister will reconsider this, as I think he is going to make it extremely difficult for landlord and tenant to trust one another. All they need do is to draw up a lease, and then say, "It does not matter." The signature will mean absolutely nothing. A tenant does not go into the business of obtaining a farm with his eyes shut. He is not an infant. He goes into a lease pretty carefully. If he thinks the landlord has been a bit quick, there is no reason for him to take it. They are both absolutely free parties. On the other hand, if there is a tenant coming along and saying, "Oh, it does not matter; I'll sign anything because I can go straight to arbitration," that will not make for a spirit of co-operation between landlord and tenant. I think that is the kind of thing that will happen as a result of this Amendment not being agreed with. I think everyone wants to see the best relationship between the two sides. If there is the feeling that one cannot trust a fellow's signature, there will be an awful lot of trouble in the future, and I think that one will find growing up one or two very quick practices by sharp people on one side or the other. If that comes about, it will be because the Bill allows it. Then one will find coming into the industry men—either tenants or landlords—who will be the last sort of men one wants to have if that industry is to be properly run.
Therefore, I cannot see how we can have one type of Clause, for rent, and another for equipment, improvement or maintenance, which appear together in the same lease. They are all in the one lease, and if one gets two separate judges, one will find that the thing will not work to plan.
If it had been for rent, we should have had no objections; but my hon. Friend's point was that a landlord and tenant may have entered into a contract in the tenancy of a farm, and the landlord may have got the tenant to agree that he would do the repairs, and the rent be put at a lower figure accordingly. It seems to me that what may happen now is that a tenant may enter into a contract with his landlord to do his repairs and get a farmer to lower the rent. Then he may turn to the landlord and appeal for arbitration on that repair clause. Then the onus of repair can be put on the landlord. It does seem unfair that liability for repair can be dealt with without the rent being considered at the same time.
I think the arguments the Minister used first are absolutely conclusive in favour of our case, and I do not see how he can go back on them when he apparently voiced them with such sincerity. He said he wanted repairs arbitration to go back to what it was when the Bill left this House, and when it coincided with the term "arbitration for rent." We have always asked that the repairs arbitration be put on the same basis as rent arbitration. Now it appears that another place have done that. The Minister put that argument to us a minute or two ago. Before the House comes to a decision, I hope he will think again, because he is really supporting the Amendment, which I am sure all Members will support if they understand the point at issue. I hope the Minister will also answer the question whether an arbitrator who is considering varying the repair and maintenance clause in the agreement can at the same time vary the rent, because that is an important point we should clear up.
Mr Gerald Williams (Tonbridge)
One hon. Member has pointed out how unscrupulous a tenant could be under this Bill, but a landlord could be equally unscrupulous. He could promise all sorts of things to a tenant. He could promise to do repairs, and could a sign a contract accordingly; but immediately the contract was signed, he could go to arbitration. It is going to make all contracts a mockery if that is to be the case, and we think that there should be a period of three years first. After all, if the parties have signed a contract and have taken legal advice, they should be able to know what they are signing. If not, it will have a very unsettling effect on all contracts between landlord and tenant.
Mr Christopher York (Ripon)
We seem to have got into rather difficult waters, and perhaps the first speech of the Minister is the cause. On a former Clause the Minister was in agreement with the principle that the rent should not be altered within three years of the commencement of the tenancy. Although he argued rather to the contrary a moment or two ago, he does agree that that is a legitimate point of view, and one that should remain in the Bill. On this Amendment the Minister argues—or rather, we think he means to argue—that there should not be a three-year period before the conditions upon which the rent is based are altered. That seems to me to be completely inconsequential. You cannot have it that, on the rent itself, there shall be a three-year period of grace, but on the conditions on which the rent is based there shall be no such period. You must, surely, be logical, and condition the whole of the rent negotiations on the same basis. If the Minister were to argue that he disagreed with the three-year period before an alteration could take place, then we could understand him arguing that this Amendment should be rejected, but this is not so.
A rent is fixed according to the general conditions contained in the tenancy agreement; that is to say, if a tenancy agreement happens to contain clauses making it obligatory on a tenant to repair cerlain parts of the farm buildings—maybe to paint the Dutch barn roofs, or something like that—that particular expense of the tenant is taken into consideration when the rent is fixed. If that condition of repair, as it would be in this case, is altered by a reference to arbitration, it is obvious that the rent fixed for the farm must also be altered to correspond with the alteration in the terms of the tenancy. It is, therefore, apparent that alterations in the terms of a repair condition is a direct alteration in the terms of the rent. If that is the case—and I think everybody will agree it is—then surely the Minister ought to accept the conditions under which the rent is protected for a three-year period. I hope the Minister sees that there is an absolute and direct comparison between the two examples I have given. On the one hand, he accepts the principle, and on the other hand he rejects it. At least, he ought to make it plain how he reconciles his attitude on these two points.
Mr Thomas Williams (Don Valley)
I think the point is a very simple one. The statutory clause for maintenance and repair is available. Then there will be the yardstick of how far the terms of any agreement relating to maintenance and repair differ from the statutory maintenance and repair clause. There can be no similar yardstick for rent. Hence the difference between the terms of the two.
Sir Charles Mott-Radclyffe (Windsor)
I am not at all convinced by the right hon. Gentleman's reply. I do not see how he can distinguish, or put into watertight compartments, rent on the one hand and repair and maintenance on the other, because the two obviously hang together, as my hon. Friend the Member for Ripon (Mr. York) said. I should have thought it was essential that the wording in respect of repair and maintenance should closely follow upon the wording in respect of arbitration for rent, otherwise a wholly impossible position could arise. In the case of a repairing lease, which is a very common form of lease, we could have one of the signatories of the lease, the day after having put his name upon it, saying, "I did not know what I was signing; these terms are rather harsher than I thought them yesterday,"and taking the whole thing to arbitration. It would be an absolutely impossible situation for the landlord or the tenant, as the case might be, if either agreed to play that sort of game. I should have thought that the right hon. Gentleman, who, at all stages of the Bill, has argued in favour of the security of the tenant, should now use a similar argument in favour of the security of the contract.
Sir Eric Fletcher (Islington East)
I am beginning to doubt whether hon. Gentlemen opposite, who are opposing the Motion that we should disagree with the Lords Amendment, have read the Clause or are conscious of the argument they are trying to put before us. It is quite clear that Clause 37, which gives the Minister power to make regulations, then provides that those regulations are to be deemed to be incorporated in a contract, except in so far as they impose on one of the parties to any agreement in writing, a liability which, under the agreement, is imposed on the other. Both the hon. Member for Ripon (Mr. York) and the hon. Member for Westmorland (Mr. Vane) put before the House an argument that the tenant, or, for that matter, the landlord, may enter into a lease, undertaking a liability to repair, and then ask that that liability be transferred. No such case could possibly arise under this Clause, because this Clause merely gives the Minister power to make certain regulations, and then provides that those regulations shall be deemed to be contained in certain contracts, unless express liability has been undertaken in writing by one of the parties. So, if there has been an express undertaking to repair generally in the lease undertaken by the tenant, those regulations by the Minister do not arise. Therefore, it is completely irrelevant for hon. Members opposite to say that the rent is fixed for three years.
Mr Christopher York (Ripon)
I think the hon. Gentleman has missed the point. Under Clause 35 there is a condition which makes it impossible for the landlord or the tenant to vary the rent of the holding. Unless there is a provision in the proviso to Clause 37 (2) to make the same three years apply, whether the tenancy agreement is in the model clause, or provided by the regulations, or in the tenancy agreement, the landlord or tenant can take the tenancy agreement or model clause to arbitration.
Sir Eric Fletcher (Islington East)
This seems to me to be perfectly reasonable. If at any time after the passage of this Bill the Minister makes regulations prescribing the terms of maintenance repairs, insurance, fixed equipment, and if those regulations contain a conflict with anything contained in an existing lease, then it seems perfectly proper that either the landlord or the tenant should take that matter to arbitration immediately, without having to wait a period of three years.
Mr Charles Williams (Torquay)
I would like to have some explanation from the Front Bench opposite of what we have just heard, because it is contradictory of what the Minister himself has said. He has contradicted himself once, or even twice and I think he meant to accept this Amendment. I thought that in a very quiet voice he said he would accept it, but then when he spoke more loudly, I thought he proposed to reject it. I am not sure that in reality he might not think that his first words were the right ones. I am going to emphasise not so much what these repairs might mean to a landlord, but what is going to happen to a landlord who is not keeping his part of the lease and trying to get out of repairs under this Clause, as a tenant might do.
I think it can be said that throughout this country on the average—at least, in England and Wales, because I cannot speak about north of the Border—both tenant and landlord, if they make a bargain, honestly try to carry it out. It seems to me that, from everything the Minister has said, it is quite possible at any time under this Clause, unless one puts in this Amendment, that one could really have a very unsettled position with a bad tenant or, similarly, a bad landlord. It would seem that by rejecting this Amendment the Minister is doing precisely what an hon. Member behind him just now tended to quarrel with, and that is, causing a situation in which the bad man can take advantage of the good. That is what we want to prevent. Unless this is in the Bill, one is giving the landlord or the tenant the opportunity to take unfair advantage of the other. The Minister does not look very determined about this. He does not look as though he is going to fight it to the last ditch; so, surely, it would be wise of him to say, "I will make this concession on this point; it is not a big point, and I will accept it." I am asking the Minister to do that entirely from the point of view of the tenant, because a tenant will be in a difficult position in some cases if this Amendment is not agreed to.
Hon. Lancelot Joynson-Hicks (Chichester)
I approach this Amendment with an entirely open mind. I venture to think the Minister did not completely assimilate the whole substance of the argument. Let me put my case in this way. In the present state of transition, when the Chancellor of the Exchequer is upsetting the financial market, all sorts of people are investing money in land, and as a result there is an entirely new type of landlord in the agricultural industry. Those persons are purely speculators. Times may change, even under a Socialist Government, and it may well be that that new speculative landlord will find himself without a tenant and will have difficulty in letting his farm. The type of person to whom I refer might well enter into an agreement whereby he would render himself responsible for many things which, under the standard clause which the Minister advocates in these agreements, the tenant would normally be liable. In those circumstances such a landlord might agree to a lower rental than would normally be accepted. Unless this Amendment is accepted, the landlord will then in a few months time, when the tenant has moved into that farm, when he has incurred the necessary and essential costs which that involves, and which are substantial, and when he has a natural disinclination to move out again or to give notice, have the right to go to arbitration in order to alter the onus which he has accepted in his agreement, and get that onus thrown on to the tenant, and, presumably, unless that is entirely unreasonable, to have the rent correspondingly increased. I am sure that the Minister does not intend that to happen, but it is a possible consequence of the position under this Bill.
Colonel Sir Alan Gomme-Duncan (Perth)
The Minister mentioned a yardstick, and I would like to know if he really thinks that it is practicable over the whole of England and Wales to have a yardstick, when there are so many different conditions all over the country.
Mr Thomas Williams (Don Valley)
Yes, I believe it is quite possible on the standard matters affecting maintenance and repair, and since the expert committee would be responsible for suggesting the statutory clause, I have no doubt at all that once they are given that duty, they will be able to meet it.